Stagnation and Stubbornness

It is almost cliche to point out that Europeans look down upon Americans. It is also almost cliche to note that many American Best-and-Brightest have long and longingly looked at Europe as how America should be. While it is true that European cultures are longer, deeper, and richer in many ways than that of a comparatively young America, what's not true is that Europeans have higher living standards.

Which puts both almost-cliches into the rubbish bin.

As I recently blogged, decades of slower growth in Europe have caused living standards to lag, to the point where the poorest American states are doing better than most European countries. While apologists will point at the enormous welfare states that provide via government much more than America's does, they ignore the cost of those cradle-to-grave entitlements.

They also ignore the stagnation that is caused by the giant government apparatuses that administer them, and by the broader preference for big government that comes with them.

Market forces are inexorable. They can be slowed, or shunted for a while, but they are as water flowing down hill: impossible to resist forever. This came to mind as I read this WSJ article about European stock markets being abandoned by European companies, IPOs in Europe withering, and:

European leaders see the withering of these historic exchanges as an emergency—and one of the culprits behind Europe’s economic stagnation, low productivity, and the widening wealth gap between its citizens and Americans.

They miss the forest for the trees. Stock market exodus is a symptom, not a culprit. The culprit is too much government. Too much regulation, too many mandates that reduce the freedom needed to grow business, too many obstacles to new ideas. In France, a company that has 50 or more employees must fulfill a whole batch of rules and obligations that smaller companies to not, so naturally many companies keep themselves at 49 employees to avoid the costs and headaches and mandates. This is a massive impediment to growth, but suggest that this be undone and you are nothing more than a filthy capitalist looking to exploit the working classes.

Businesses are not the equivalent of humans in The Matrix, i.e. mindless entities that exist to be perpetually sapped of the wealth they produce in order to fund government largess. They are run by people who desire those businesses to succeed, and those people will make decisions that improve the chances for success.

So, color me not even slightly surprised that companies are fleeing Europe for America. Color me not even slightly surprised, as well, that European leaders don't recognize that the government structures they've built are the cause for that flight. It's the arrogant stubbornness of the modern socialist.

I must note a parallel problem - the enormous damage that multiculturalism has done to the Continent. Huge waves of Middle Eastern and North African refugees, who have not only refused to assimilate to the cultures of their new homelands but were actively encouraged not to assimilate by the Best-and-Brightest, are dooming the long-standing liberal values of many European nations. And giving rise to nationalist movements among the native citizens. As noted by Konstantin Kisin, multiethnic societies can (and do) work, but multicultural ones cannot.

Yet the same arrogant stubbornness prevails among the ruling classes. They close their eyes to the "grooming gangs" in the UK, because confronting them would require they abandon the "no culture is better or worse than any other" stupidity that has made them feel like they are better than the rest of us for so long. Reality doesn't care about their closed eyes, though.

Between economic stagnation, cultural chaos, and catastrophically low birth rates among native Europeans, the Continent is proper ***ked. Its citizens are paying the price for its leaders' hubris and pigheadedness. Reversing the decline would, at this point, be painful and perhaps even violent, and the old attitudes of "we know better" that still run deep are not going to go away that easily. So, the decline will continue, and the rest of the world should learn from it and plan accordingly.

I supported Brexit, simply because I believe that citizens need to have government as proximate as possible, and being governed from Brussels is far too great a separation between voters and “representatives.” I think the dissolution of the EU would help break Europe’s economic logjam, and I think that dissolution will eventually happen. Not without (a lot of ) pain - they are past the point of easy fixes - but pain is sometimes the only way forward.