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.
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.
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.
In a recent article in the Washington Post, Juan Forero and Michael Birnbaum recommend that in the face of the looming specter of Greek debt default, Europe may learn a few lessons from South America. In particular, they point to the good example of Uruguay and the bad example of Argentina.
According to the authors,
In a story that may provide a lesson for Europe, one country, Uruguay, that was on the edge of financial oblivion organized a fast, orderly and negotiated response that revived the economy and ended a run on banks. Another, Argentina, spiraled into a chaotic default and remains a pariah in world financial markets.
The article lists a variety of reasons, such as tax evasion, political stagnation, and civil unrest, with regards to why Greece is in danger of becoming the next Argentina. There is one aspect, in particular, though, that sheds some interesting light on current monetary practice. According to the article,
Greece is hamstrung by its ties to the euro, which it cannot devalue to make its exports cheaper, and leaving the currency zone might prove even more painful.
Though currency debasement has been possible since time immemorial, it has become easier ever since the “Nixon Shock” of 1971, when the United States ended its tie to the gold standard, affecting every other nation which had tied its own currency to the U.S. dollar for the sake of stability. However, from that point on, most countries have been operating with purely fiat-based currency; a government’s central bank can print as much or as little money as they desire, since its value has no stable grounding. (Grounding the dollar’s value to a specific amount of gold prevented the U.S. from printing more money than gold that it could be exchanged for.)
In a recent article in the Journal of Markets & Morality, James Alvey highlights the analysis of James Buchanan on the ethics of public debt and default. With regards to default, Buchanan identified two common means: open default or concealed default through inflation. By inflating its currency, a country can, in effect, cheat its bondholders out of the amount promised to them by repaying its debts with debased money. To do so is effectively concealed default. Notably, Alvey writes, “Buchanan says that the U.S. government did ‘default on a large scale through inflation’ during the 1970s,” the very decade in which we left the gold standard.
What is fascinating about the current crisis with Greece is that its central bank does not have sole control of the euro. Despite being a fiat currency, its decentralized nature gives it a certain stability. Concealed default is not an option for Greece, forcing it to make the hard decisions necessary to avert defaulting on its debt or to do so openly.
For more on the history and moral implications of currency debasement, see Juan de Mariana, Treatise on the Alteration of Money, recently translated and published by Christian’s Library Press.
The aggrandizement of the European Union’s powers, particularly of its regulation, has had a steady growth within Europe, and is now looking to move outside European borders. Namely in one American industry, the airline industry, passengers may soon be paying higher air fares, not because of factors within the American financial market, but because of a carbon emissions tax that the EU will be imposing on American airlines which service flights to EU member countries.
For example, if an American carrier flies from New York to London, only a small percentage of the flight would be in the EU, but the U.S. carrier would be held responsible for the emissions from the entire flight. Just a few weeks ago, the European Court of Justice ruled that the EU is justified in levying fees on American flights than enter Europe. According to Patrick Michaels, a senior fellow in environmental studies at the Cato Institute, “Starting next year, the EU will tote up all the miles a plane flies to or from any European city, factor in the fuel usage and charge a ‘”carbon levy”‘ for all emissions that are more than 85 percent of 2002 levels. No airline is going to eat that cost, so you’ll get the bill, perhaps listed as an ‘”environmental surcharge.”‘
Even though some analysts are predicting a steep decline in airline profits next year, American carriers expect that the EU’s carbon plan would cost them more than $3 billion over eight years. Up until this point, Europeans have been content to go it alone with their climate taxes, thinking this will somehow serve to save the world. But now, Europe is seeking to force this mentality on other corners of the globe. These taxes are indeed costly, and even within Europe, their implementation is not gratefully accepted by all. In the UK, the Financial Times reports that there are concerns that the government is “in retreat from its green agenda.”
Noting that the EU’s Climate Action and Renewable Energy Package will cost the UK economy an exorbitant £ 20.2 billion by 2020, Open Europe, an independent European think tank, argues that the EU could find a much more cost-effective way to address climate initiatives. It argues that a much more effective and righteous approach would be for the EU to set overall carbon emission targets and then allow for individual member states to decide how best to reach them. At least in this approach, the EU would not be imposing direct government regulation on its members.
Within the issue of climate taxes within the EU, and their proposed extension into the United States, it is important to note the role that the government should and should not play. The main role of government should be to promote the common good, that is, to maintain the rule of law, and to preserve basic duties and rights. Free actions should not be overtaken by the government. The principle of subsidiarity is violated when governments over reach, usurping the ability of perfectly capable human beings, by way of the market, to operate effectively. The EU’s climate regulations on member states are indeed dubious, but it is particularly egregious when these regulations are allowed to extend to other countries.
With Europe’s traditional moral framework – Christianity – under increasing attack, the Roman Catholic and Russian Orthodox churches are drawing closer in order to combat the forces of secularism and “Christophobia.” Rev. Johannes L. Jacobse looks at efforts to set aside long held theological disputes and forge a unity of action on social questions. Subscribe to the free weekly ANC and other Acton publications here.
With the Rise of Militant Secularism, Rome and Moscow Make Common Cause
By Rev. Johannes L. Jacobse
The European religious press is abuzz over recent developments in Orthodox – Catholic relations that indicate both Churches are moving closer together. The diplomatic centerpiece of the activity would be a meeting of Pope Benedict and Patriarch Kyrill of the Russian Orthodox Church that was first proposed by Pope John Paul II but never realized. Some look to a meeting in 2013 which would mark the 1,700th anniversary of the signing of the Edict of Milan when Constantine lifted the persecution of Christians. It would be the first visit between the Pope of Rome and Patriarch of Moscow in history.
A few short years ago a visit between Pope and Patriarch seemed impossible because of lingering problems between the two Churches as they reasserted territorial claims and began the revival of the faith in post-Soviet Russia, Ukraine and elsewhere. The relationship grew tense at times and while far from resolved, a spirit of deepening cooperation has nevertheless emerged. Both Benedict and Kyrill share the conviction that European culture must rediscover its Christian roots to turn back the secularism that threatens moral collapse.
Both men draw from a common moral history: Benedict witnessed the barbarism of Nazi Germany and Kyrill the decades long communist campaign to destroy all religious faith. It informs the central precept in their public ministry that all social policy be predicated on the recognition that every person has inherent dignity and rights bestowed by God, and that the philosophical materialism that grounds modern secularism will subsume the individual into either ideology or the state just as Nazism and Communism did. If Europe continues its secular drift, it is in danger of repeating the barbarism of the last century or of yielding to Islam.
The deepening relationship does not portend a union between Catholicism and Orthodoxy. Roman Catholics are more optimistic about unity because they are less aware of the historical animus that exists between Catholics and Orthodox. Nevertheless, while the increasing cooperation shows the gravity of the threat posed by secularism, it also indicates that the sensitive historical exigencies can be addressed in appropriate ways and times and will not derail the more pressing mission.
The cooperation has also caused the Churches to examine assumptions of their own that may prove beneficial in the long run. The meaning of papal supremacy tops the list.
On the Orthodox side the claims to a universal jurisdictional supremacy of the Patriarch of Rome have been rejected since (indeed, was a cause of) the Great Schism of 1054 (see here and here . That said, the Orthodox see the Pope of Rome as the rightful Patriarch of the Church of Rome and could afford him a primacy of honor in a joint council but not jurisdiction.
On the other side, the Orthodox do not have a Magisterium, a centralized Church structure that speaks for all the Orthodox in the world. This has led to some fractious internal wrangling throughout the centuries although doctrine and teaching has remained remarkably consistent.
It will come as no surprise for anyone to know that the Orthodox have difficulties with some of the claims made by the Catholic Church concerning the precise responsibilities and the nature of the authority associated with the Bishop of Rome. The Catholic Church has long recognized this as a basic difference between the Orthodox and Catholic worlds. The rise of militant secularism, however, and the cultural challenges this creates for Orthodox and Catholic Christians alike, have focused everyone’s minds on how they can cooperate to address these issues of ethics and culture.
Protestants have a stake in the outcome as well particularly as attitudes have softened towards Rome due in large part to Pope John Paul II’s exemplary leadership during the collapse of communism in the last century. Protestant ecclesiology has no real place for priest or pope which makes the nature of discussions between them and the Catholics or Orthodox entirely different. Nevertheless, as the soul denying ramifications of secularism become more evident, an increasing number look to the Catholic and Orthodox Churches for leadership.
The most visible ambassador for the Orthodox Church is Oxford-educated Metropolitan Hilarion Alfeyev of Volokomansk who runs the Department of External Church Relations of the Russian Orthodox Church. Observers report that a deep respect and even genuine fondness exists between Hilarion and Benedict which has contributed to the recent thaw.
Both of them note with alarm the increasing attacks on the Christian faith in Europe and on Christians themselves in other parts of the world, a development they term “Christophobia.” Hilarion brought these points forward several years back when he first challenged the European Union for omitting any mention of the Christian roots of European civilization in the EU Constitution. That earned him considerable worldwide notice and he has become increasingly outspoken towards any attempts to silence the Christian testimony or dim the historical memory of Christendom.
From the Orthodox side it is clear that the leadership that deals with the concrete issues that affect the decline of the Christian West is emerging from Moscow. One reason is the sheer size of the renewed Russian Orthodox Church. The deeper reason however, is that the Russians have direct experience with the suffering and death that ensues when the light of the Christian faith is vanquished from culture.
Decades before the fall of Communism was even a conceptual possibility for most people, Pope John Paul II prophesied that the regeneration of Europe would come from Russia. At the time many people thought it was the misguided ramblings of a misguided man. It is looking like he knew more than his critics. We are fortunate to have these two leaders, Benedict and Kyrill, to help guide us through the coming difficulties.
Fr. Johannes L. Jacobse is an Orthodox priest in the Antiochian Archdiocese of North and South America. He is president of the American Orthodox Institute and serves on the board of the Institute for Religion and Democracy. He writes frequently on social and cultural issues on his blog