Posts tagged with: europe

Writing on The American Spectator website, Acton Research Director Samuel Gregg looks at the strange notion of European fiscal “austerity” even as more old continent economies veer toward the abyss. Is America far behind?

Needless to say, Greece is Europe’s poster child for reform-failure. Throughout 2011, the Greek parliament passed reforms that diminished regulations that applied to many professions in the economy’s service sector. But as two Wall Street Journal journalists demonstrated one year later, “despite the change in the law, the change never became reality. Many professions remain under the control of professional guilds that uphold old turf rules, fix prices and restrict opportunities for newcomers.” In the words of one frustrated advisor to German Chancellor Angela Merkel, “Even when the Greek Parliament passes laws, nothing changes.”

Politics helps explain many governments’ aversion to reform. Proposals for substantial deregulation generates opposition from groups ranging from businesses who benefit from an absence of competition, union officials who fear losing their middle-man role, to bureaucrats whose jobs would be rendered irrelevant by liberalization. The rather meek measures that Europeans call austerity have already provoked voter backlashes against most of its implementers. Not surprisingly, many governments calculate that pursuing serious economic reform will result in ever-greater electoral punishment.

In any event, America presently has little to boast about in this area. States such as Wisconsin have successfully implemented change and are starting to see the benefits. But there’s also fiscal basket-cases such as (surprise, surprise) California and Illinois that continue burying themselves under a mountain of debt and regulations.

Read “Why Austerity Isn’t Enough” by Samuel Gregg on The American Spectator.

In a new analysis in Crisis Magazine, Acton Research Director Samuel Gregg examines “the shifting critiques” of the pontificate of Benedict XVI including the latest appraisal that the world is losing interest in the Catholic Church particularly because of its declining geopolitical “relevance.” But how do some of these critiques understand relevance?

On one reading, it involves comparisons with Benedict’s heroic predecessor, who played an indispensible role in demolishing the Communist thug-ocracies that once brutalized much of Europe. But it’s also a fair bet that “relevance” is understood here in terms of the Church’s capacity to shape immediate policy-debates or exert political influence in various spheres.

Such things have their own importance. Indeed, many of Benedict’s writings are charged with content which shatters the post-Enlightenment half-truths about the nature of freedom, equality, and progress that sharply constrict modern Western political thinking. But Benedict’s entire life as a priest, theologian, bishop, senior curial official and pope also reflects his core conviction that the Church’s primary focus is not first-and-foremost “the world,” let alone politics.

Read “Benedict XVI and the Irrelevance of ‘Relevance’” on the website of Crisis Magazine.

On The American Spectator, Acton Research Director Samuel Gregg observes that, “as evidence for the European social model’s severe dysfunctionality continues to mount before our eyes, the American left is acutely aware how much it discredits its decades-old effort to take America down the same economic path.” Against this evidence, some liberals are pinning the blame on passing fiscal and currency imbalances. No, Gregg says, there’s “something even more fundamental” behind the meltdown of the post-war West European social model. (Thanks to RealClearWorld for linking).

… this reality is that the Social Democratic project is coming apart at the seams under the weight of the economic policies and priorities pursued by most Social Democrats (whatever their party-designation) — including the American variety.

From the beginning, post-war Social Democracy’s goal (to which much of Europe’s right also subscribes) was to use the state to realize as much economic security and equality as possible, without resorting to the outright collectivization pursued by the comrades in the East. In policy-terms, that meant extensive regulation, legal privileges for trade unions, “free” healthcare, subsidies and special breaks for politically-connected businesses, ever-growing social security programs, and legions of national and EU public sector workers to “manage” the regulatory-welfare state — all of which was presided over by an increasingly-inbred European political class (Europe’s real “1 percent”) with little-to-no experience of the private sector.

None of this was cost-free. It was financed by punishing taxation and, particularly in recent years, public and private debt. In terms of outcomes, it has produced some of the developed world’s worst long-term unemployment rates, steadily-declining productivity, and risk-averse private sectors.

Above all, it slowly strangled the living daylights out of economic freedom in much of Europe. Without Germany (which, incidentally, also engaged in welfare reform and considerable economic liberalization in the 2000s), it’s hard to avoid concluding that Social Democratic Europe would have imploded long ago.

Read “The American Left’s European Nightmare” by Samuel Gregg on The American Spectator.

A week ago, Dr. Samuel Gregg addressed an audience here at Acton’s Grand Rapids, Michigan office on the topic of “Europe: A Continent in Economic and Cultural Crisis.” If you weren’t able to attend, we’re pleased to present the video of Dr. Gregg’s presentation below.

Daniel Hannan, a British Member of the European Parliament, issued a strong warning to conservative Americans worried about their country’s future in a speech he delivered at the CPAC rally last week in Washington.

The self-proclaimed Euroskeptic and author of The New Road to Serfdom, warned U.S. political conservatives not to follow in Europe’s tragic footsteps by allowing their governments to seize too much power and create dependency on mismanaged socialized government programs — the very Welfare State culture that has a strangle hold on the Old Continent’s major economies such as Britain, France, Germany and Italy.

In Hannan’s opinion, Europe is “in the grip of a prolonged winter … of discontent” where there are nation-wide protests and grumbling every day against political and economic liberalization — but with little hope for actual change.  Europe is in such a dire state, he says, because it is has long lost its culture of enterprise and self-responsibility.

Hannan said he always admired Americans for their optimism and “anything’s possible” attitude, but they need to make sure their “rulers remember they are not rulers but representatives.”  He humorously noted that in Belgium, where he works in European Parliament, the country was without a government for nearly two years “and it was working brilliantly!”

Below you can watch Hannan’s interview and full speech delivered at CPAC.

[Thanks to RealClearWorld, ThePulp.it, NewsBusters and PewSitter.com for linking to this commentary.] Over at the American Spectator, Acton Research Director Samuel Gregg points to Europe’s “perceptible inability” to acknowledge some of the deeper dynamics driving its financial crisis. And these are primarily a “slow-motion population implosion” complicated by the exodus of young European Union citizens and the return of hundreds of thousands of immigrants to their homes in developing nations. That is an ominous development for a region where the dependency rate — the ratio of retirees per member of the labor force — has ratcheted up as the welfare state has ballooned over several decades.

Gregg:

These facts have made some Europeans willing to ponder the necessity of labor-market and welfare reform, not least because those countries that have weathered the crisis better than others (e.g., Germany and Sweden) actually implemented such changes in the 2000s. Getting Europeans to talk publicly about the continent’s population-trends and their economic consequences, however, is a different matter.

Why? One reason is that many Europeans have long been in thrall to the over-population gospel. Long before Paul Erhlich’s The Population Bomb (1968) — whose doomsday future-scenarios of a world devastated by famines, mass disease, and social unrest unleashed by overpopulation never materialized — numerous European economists had bought into this thesis.

In 1798, the Anglican vicar and one of the first modern economists, Thomas Malthus, published his Essay on the Principle of Population. This argued that growing populations would produce an increasing labor-supply. The result, Malthus insisted, would be lower wages and therefore mass poverty. “The power of population,” he claimed, “is so superior to the power of the Earth to produce subsistence for man, that premature death must in some shape or other visit the human race.” Another English philosopher-economist, John Stuart Mill, was so convinced by Malthusian arguments that he actually spent time in London parks distributing birth-control pamphlets to bemused onlookers.

Read Samuel Gregg’s “Europe in Demographic Denial” on the American Spectator.

Protesters outside parliament on May 5 in Athens, Greece.

On the blog of The American Spectator, Acton Research Director Samuel Gregg looks at how Europe refuses to address the root causes of its unending crisis:

Most of us have now lost count of how many times Europe’s political leaders have announced they’ve arrived at a “fundamental” agreement which “decisively” resolves the eurozone’s almost three-year old financial crisis. As recently as late October, we were told the EU had forged an agreement that would contain Greece’s debt problems — only to see the deal suddenly thrown into question by internal Greek political turmoil, which was itself quickly overshadowed by Italy’s sudden descent into high financial farce.

No doubt many of these dramas reflect commonplace problems such as governments having difficulty reconciling promises made in international settings with domestic political demands. The apparently unending character of Europe’s crisis, however, is also being driven by another element: the unwillingness of most of Europe’s political establishment to acknowledge the root causes of Europe’s present mess.

One such mega-reality is the unsustainability of the pattern of low-growth, big public sectors, heavy regulation, large welfare states, aging populations, and below-replacement birthrates that characterizes much of the eurozone. Even now, it’s difficult to find mainstream EU politicians who openly concede the high economic price of these arrangements.

Read “Can’t Face Economic Reality” on The American Spectator.


Pope Benedict XVI delivered inspiring remarks at the European Year of Volunteering (EYV) summit held in Rome this past Nov. 10-11. He explained why gratuitous giving of personal talent and resources is so important in restoring a healthy vocational perspective to everyday business.

As Benedict knows all too well, a culture of Christian charitable giving is not at its height in Ol’ Europe, where the modern Welfare State and Keynesian economics have played such a dominant role the past 70 years (see why in Michael Miller’s 2008 Acton lecture The Victory of Socialism and the strong opinion of other Roman pontiffs in my blog Popes Say No to Socialism). European government dominance of charitable enterprise has reduced much of the Continent’s generosity in terms of private giving and volunteer activities.

A pervasive “every man for himself” mentality is now infecting the hearts of European workers and households struggling to stay afloat. From their perspective, who can really blame them? Many wonder: Who has the money or the time to care for others when you and your family are just barely surviving?

During the EYV summit, the Holy Father commended leaders from European charitable non-profits and volunteer organizations for keeping a culture of generosity and self-giving alive. Benedict underscored the absolutely essential role their work plays in building up a society of free giving and virtue (altruism, generosity and selflessness) and restoring confidence in man’s innately good heart, now withered and tested by the intense pressures of today’s down market. These latter socially destructive tendencies are the ones the Acton Insitute attempts to thwart in its program for effective charity, The Samaritan Award and Guide.

European charitable enterprise leaders, so to speak, help create a “market of gratuitousness”, as mentioned in Benedict’s social encyclical Caritas in Veritate (Charity in Truth). This same abundance philosophy is argued so convincingly in Arthur C. Brooks’s Gross National Happiness (see book with Brooks’s research on wealth and charitable giving). The president of the American Enterprise Institute writes that charitable giving of time and resources makes us psychologically happier and more humanly fulfilled, which in turn increases our chances of being more happy and productive in the workplace, which consequently influence growth trends in corporations and entire commercial sectors.

This is the positive circle of growth and happiness that charity helps inspire. It is the exact reason why volunteer activity ends up paying real dividends in commercial enterprise, as business people flourish morally and spiritually. To understand further, watch Arthur Brooks’s Fox News interview regarding economic growth factors linked to generosity and happiness in the United States and with some heavy criticism of giant Welfare States like France, a country ranked a miserable 91 out of 153 nations surveyed for the latest Index (download 2010 PDF report and index). According to the Index, some of the most enterprising European countries (like Great Britain, Ireland, Switzerland, Germany and Holland), while battling the same destructive welfare culture and economic crises, all made the top 20 with the traditionally high-ranking United States (no. 5). By contrast, the same welfare dependent, economically troubled but far less enterprising Greece was ranked dead last in the Eurozone and in the bottom five of all 153 countries represented.

The opposite destructive vicious circle goes something like this: stinginess of heart leads to a lack of deep vocational interest in work and therefore a miserly contribution of one’s talent and resources, which directly lowers overall production and profits for enterprise, as worker pessimism and selfishness help undermine commercial potential. This is one good reason why markets stagnate, retract and eventually die when such negativity and selfishness swirl violently into a cultural vortex, sucking down an entire nation’s true economic potential.

We are not surprised to hear Pope telling EYV participants that volunteer work and charity “is not merely an expression of good will.” As he articulated this great teaching:

At the present time, marked as it is by crisis and uncertainty, your commitment is a reason for confidence, since it shows that goodness exists and that it is growing in our midst. The faith of all Catholics is surely strengthened when they see the good that is being done in the name of Christ… His grace perfects, strengthens and elevates that vocation and enables us to serve others without reward, satisfaction or any recompense. Here we see something of the grandeur of our human calling: to serve others with the same freedom and generosity which characterizes God himself.

A day later, during his Nov. 13 Sunday Angelus, the Pope reflected on giving and investment of human talent and resources in the context of Sunday’s gospel (Parable of the Talents: Matthew 25:14-30). As Acton’s President Rev. Robert Sirico argues in his monograph The Entrepreneurial Vocation, Benedict XVI invited faithful to respond thankfully and generously to their individual gifts for the advancement of God’s abundance on Earth:

In today’s Gospel…Jesus invites us to reflect with gratitude on the gifts we have received and to use them wisely for the growth of God’s Kingdom. May his words summon us to an ever deeper conversion of mind and heart, and a more effective solidarity n the service of all our brothers and sisters.

Finally, the Holy Father’s press secretary, Fr. Federico Lombardi, SJ explained what Benedict XVI meant in a interview released after the Pope’s EYV remarks:

We are in the midst of an economic crisis afflicting the whole of Europe, and raising tensions, worries and anxieties throughout the world. It is a crisis that challenges the intellects and abilities of politicians and economists. In the midst of this crisis, the Pope’s speech to the young people gathered in Rome for the European Year of [Volunteering] may provide a modest contribution to help rediscover a common hope. The Pope asks us to keep in mind the idea of ‘gratuitousness’, of giving freely —that is, not living solely for one’s own interests, but living in such a way that we are a gift to others.

“In short, man does not live on bread alone, but also on the relationships between men and women who are truly free, who respect one another and take care of one another and love one another, beyond selfish calculations. It is from these relationships that mutual trust is rebuilt between people and populations. It is the fulcrum that is needed to lift the world anew.

The generous and routine volunteering of one’s talent and resources instills everyday habits that market-based economies need and rely on for individual entrepreneurs and businesses to grow and succeed. It’s what makes or breaks businesses teetering on the edge of failure, when employees and professional collaborators give a little more of themselves to help enterprise lunge forward.

Apart from emboldening private initiatives to diminish the role of  European Welfare States and increasing our Gross National Happiness, the real output of charity is measured in the increased hearts and souls of generous, selfless business people. It is these same business people who take the gratuitousness they learned in habitual acts of charity and apply this virtue to generous forms of service with “other-directed” collaboration, products and services.

 

An Italian friend of mine recently complained to me while painfully witnessing the climax of the Italian debt crisis: “Cosi Berlusconi, cosi l’Italia!” (As with Berlusconi, so too with Italy!).

My friend’s comment was an allusion to the Italian Prime Minister’s personal responsibility in dragging the entire Italian nation down with him. News broke late on Wednesday that Berlusconi had agreed to step down from office, as he effectively admitted his 17 years of political power had done nothing more to fix a broken system and as more members of his loose PDL coalition defected to centrist parties.

Even with the likely passing of the European Union fiscal reform measures designed to control Italy’s reckless public spending, it all seems too little too late.

With Berlusconi’s suprise announcement and Italy teetering on national debt default, the European stock markets tumbled late Wednesday. Logically, my friend then said, “Vedi? E cosi anche l’Europa” (See? And so too with Europe).

The domino effect is becoming a real potential. It is frightening. It is downright disturbing for anyone living and trying to survive in Europe. Still, we have to be careful of where we start pointing fingers.

My friend’s Berlusconi = Italy = Europe linear equation is not necessarily totally inaccurate.

The Italian Premier actually deserves some of the blame. For instance his center-right coalition government did recently raise capital gains taxes (from 10 to 20%!) along with corporate, personal income and VAT. This has further scared off the few serious local and foreign investors left in Italy and has sparked greater passion for the national pastime: tax evasion. This is the worst time to be raising taxes when economic growth is so wobbly at home. Berlusconi is an entrepreneur himself. He should know better. It is a total mystery why his business-friendly government is caving into Keyensian economic rebuilding.

All said, Italy and Europe is not a one-man disaster. Nor even a one-party disaster.

Italy’s national debt crisis is, above all, a crisis of national character – an Italian character that has become softened while shedding off its once great virtues of resilience, fortitude, integrity, self-reliance and innovation, just as we have seen in a paradigmatic shift in character with the rise of the modern Western European welfare states (watch Acton Media Director Michael Miller’s Acton Lecture – The Victory of Socialism, where he explains why socialism counts on citizens’ progressive external dependency on institutions and a loss of personal virtue).

France, Spain, Britain Germany Greece, Portugal, Belgium, Denmark. Take your pick: all have lost many of these same virtues of character in varying degrees. The Great Generation of post-World War II Europe is now too old to play the part of come-back hero.

No matter how great a vision or “business plan” the entrepreneurial Berlusconi had for Italy since the mid-1990s, no amount of collective cultural effort was ever possible when his country and Continent has lost its spirit of freedom and independence from big government and generous public programs.

National debt, while symptomatic of unsuccessful political regimes, is more the result of a national deficit of values and virtue.

“You’ve lost a good opportunity to shut up.” So said French president Nicolas Sarkozy to UK prime minister David Cameron as an instance of what BusinessWeek has dubbed “Europe’s Insult Diplomacy.” But it’s a retort that strikes me as equally relevant for the pontifications that pour forth from ecumenical officials in Geneva on almost every topic under the sun.

The latest instance of imprudence in the cause of desperately seeking relevance is the claim from Rev. Setri Nyomi, general secretary of the World Communion of Reformed Churches (WCRC), that the reformer John Calvin “would have been in the streets of New York or London with a placard,” joining the Occupy Wall Street movement.

I explore the dynamics of what I call the “ecumenical-industrial complex” in my book released last year, Ecumenical Babel: Confusing Economic Ideology and the Church’s Social Witness. One of the points I make in the book is that ecumenical officials like Nyomi cannot seem to resist the opportunity to weigh in on contemporary political and economic issues as if there is a single, univocal, and absolute Christian position.

The claim that Calvin and OWS are kindred is precisely the kind of obfuscatory rhetoric that we don’t need from ecclesiastical representatives, whether at the congregational, denominational, or ecumenical level. On the constructive side, in Ecumenical Babel I make the case that the ecumenical movement, rather than making absurd claims akin to that of Calvin and OWS, might “decline to issue doctrinaire and casuistical proclamations about this or that particular policy. Instead, the ecumenical movement would understand its role in this sphere to provide broad guidance rather than particular judgments.”

The upshot of such a change would be that “the ecumenical movement’s social witness would place correspondingly less emphasis on direct political engagement and advice…and correspondingly greater emphasis on providing moral guidance to the church.” As opposed to saying that JC (whether John Calvin or Jesus Christ) “would have been in the streets of New York or London,” as Nyomi claims, instead “the character of ecumenical statements on social issues…would be far more restrained and chastened than we find today.”

But as long as the mainline ecumenical movement continues to conflate unity with unanimity on particular social questions, don’t expect reform to happen anytime soon.