Posts tagged with: europe

Blog author: jcouretas
posted by on Wednesday, November 3, 2010

A new article from Acton Research Director Samuel Gregg published today in Acton News & Commentary. Sign up for the free, weekly email newsletter here.

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A Tale of Two Europes

By Samuel Gregg

The word “crisis” is usually employed to indicate that a person or even an entire culture has reached a turning-point which demands decisions: choices that either propel those in crisis towards renewed growth or condemn them to remorseless decline.

These dynamics of crisis are especially pertinent for much of contemporary Europe. The continent’s well-documented economic problems are now forcing governments to decide between confronting deep-seated problems in their economic culture, or propping up the entitlement economies that have become unaffordable (and morally-questionable) relics in today’s global economy.

While some European governments have begun implementing long-overdue changes in the form of austerity-measures, welfare-reforms, and labor-market liberalization, the resistance is loud and fierce, as anyone who has visited France lately will attest.

No-one should be surprised by this. Such reforms clash directly with widespread expectations about employment, welfare, and the state’s economic role that have become profoundly imbedded in many European societies over the past 100 years. Yet it’s also arguable this is simply the latest bout of an on-going clash of economic ideas which goes back much further in European history than most people realize.

Certainly the contemporary controversy partly concerns the government’s role during recessions. From this standpoint, Europe (and America) is rehashing the famous dispute between the economists Friedrich von Hayek and John Maynard Keynes in the 1930s about how to respond to the Great Depression. Should we, as Hayek maintained, react by giving markets the flexibility they need to self-correct? Or do we prime the pump à la Keynes? (more…)

An interesting call for papers from H-Net, “Almshouses in Europe from the late Middle Ages to the Present – Comparisons and Peculiarities”:

Within the field of poor relief and welfare, research interests have recently shifted towards the history of private charity and charitable foundations. Among these institutions, which contributed to the early modern and modern mixed economy of welfare, the almshouse played an important role as a particular form of social housing. Almshouses originated in the Middle Ages and many of them still exist. They offered elderly people at risk of impoverishment cheap or free accommodation, often alongside clothing, food, fuel and money – the actual alms. Many were founded by private benefactors. Almshouses usually consisted of a limited number of small apartments for one or two persons. Unlike other welfare institutions in early modern Europe (hospitals, orphanages etc.) almshouse apartments allowed their occupants to run an autonomous household under respectable living conditions and considerable privacy.

Apart from these defining common features, almshouses could differ considerably, although much of their history is still in the dark. The studies available suggest that almshouses were confined to Northwest Europe, namely the Netherlands and Belgium, England and northern Germany, but geographically by no means evenly distributed.

Foundations of almshouses are clustered in the late 15th and in the 17th centuries, at least in the Low Countries and Northern Germany, but not in England where a different pattern emerges, and where almshouses appear to have been founded in a rural rather than an urban setting. Were almshouses inexistent in the rest of Europe? How can the geographical distribution and the waves of foundations be explained?

To ensure a coherent comparative perspective, papers for this conference should deal with almshouses according to the definition mentioned above and address the following issues:

1. Almshouses appear to have been founded predominantly by private benefactors. Who were they and what made them devote a considerable capital to this type of charity? Why did they prefer founding an almshouse to other forms of charity?

2. Who lived in an almshouse? What do we know about the occupants’ social status, family situation, occupation and religion? Could all persons apply or was a recommendation needed? Did the occupants’ legal civic status alter upon moving in, as it did in hospitals? What was the share of almshouses in the overall care of the elderly poor? What was living in an almshouse like?

3. Almshouses must be considered part of a local poor relief system. How many people could be accommodated in relation to those relying on outdoor poor relief or on other institutions like hospitals? What other options did elderly people have when their household income dropped because of infirmity and physical decline? Were almshouses connected with town or parish councils? Can almshouses be regarded as safety valves for the (lower) middle class?

The Conference will be held on 7-9 September 2011 in Haarlem, in co-operation with the Stichting Landelijk Hofjesberaad. We hope to be able to provide the conference attendants with accommodation and meals.

Attendants are kindly requested to have their travel costs reimbursed by the institution they work for, if possible. Deadline of Submission of Abstracts: 1 November 2010 (300-500 words) Deadline of Submission of Papers: 1 July 2011 Organizers:Frank Hatje (Hamburg University), Marco H.D. van Leeuwen (Utrecht University) and Henk Looijesteijn (International institute of Social History)

Contact: hlo@iisg.nl (Henk Looijesteijn)

Acton’s Research Director in the American Spectator:

Europe’s Broken Economies

By Samuel Gregg

During September this year, much of Europe descended into mild chaos. Millions of Spaniards and French went on strike (following, of course, their return from six weeks vacation) against austerity measures introduced by their governments. Across the continent, there are deepening concerns about possible sovereign-debt defaults, stubbornly-high unemployment, Ireland’s renewed banking woes, and the resurgence of right-wing populist parties (often peddling left-wing economic ideas). Indeed, the palpable sense of crisis left many wondering if some European economies have entered a period of chronic decline — one which might eventually reduce Europe to being a bit-player on the world stage.

Obviously we should avoid over-simplification. In Germany and Sweden, for instance, unemployment is declining while economic growth and exports are rising. Not coincidentally, both countries have implemented significant economic reforms over the past ten years. To the audible disappointment of the world’s left-wingers, Sweden is no longer Social Democracy’s poster-child.

Nor can Europe’s present woes be explained in mono-causal terms. Like America, property-bubbles and over-leveraged financial industries played a role in some countries’ meltdowns. But not every European nation presently enduring economic hardship experienced banking crises on the scale experienced by Ireland and Britain.

It will be decades before economists and historians completely diagnose what’s happened to Europe’s economies since 2008. Many, however, will likely conclude that many European countries’ economic culture helped them lurch into seemingly unending crisis.

“Culture” is one of those heavily over-used words. But in sociological and historical terms, “culture” is a way of describing, among other things, the approach to life, the values emphasized, attitudes toward work, the understanding of law, and ultimately the view of science, the arts and religion prevailing in a given society. Over time, these form a type of inheritance that can remain relatively stable in particular historical settings over several generations. (more…)

This week’s Acton commentary from Research Director Samuel Gregg. Sign up for Acton News & Commentary here.

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Benedict’s Creative Minority

By Samuel Gregg

In the wake of Benedict XVI’s recent trip to Britain, we have witnessed—yet again—most journalists’ inability to read this pontificate accurately. Whether it was Queen Elizabeth’s gracious welcoming address, Prime Minister David Cameron’s sensible reflections, or the tens of thousands of happy faces of all ages and colors who came to see Benedict in Scotland and England (utterly dwarfing the rather strange collection of angry Kafkaesque protestors), all these facts quickly disproved the usual suspects’ predictions of low-turnouts and massive anti-pope demonstrations.

Indeed, off-stage voices from Britain’s increasingly not-so-cultured elites—such as the celebrity atheist Richard Dawkins and others whom the English historian Michael Burleigh recently described as “sundry chasers of limelight” and products of a “self-satisfied provincialism”—were relegated to the sidelines. As David Cameron said, Benedict “challenged the whole country to sit up and think.”

Of course the success of Benedict’s visit doesn’t mean Britain is about to return to its Christian roots. In fact, it’s tempting to say present-day Britain represents one possible—and rather depressing—European future.

Pope Benedict XVI celebrates mass at Westminster Cathedral


In an article welcoming Benedict’s visit to Britain, the UK’s Chief Rabbi Jonathan Sachs observed, “Whether or not you accept the phrase ‘broken society,’ not all is well in contemporary Britain.” The facts cited by Sach were sobering. In 2008, 45 percent of British children were born outside marriage; 3.9 million children are living in poverty; 20 percent of deaths among young people aged from 15 to 24 are suicides; in 2009, 29.4 million antidepressants were dispensed, up 334 percent from 1985.

Such is the fruit of a deeply-secularized, über-utilitarian culture that tolerates Christians until they start questioning the coherence of societies which can’t speak of truth and error, good and evil, save in the feeble jargon of whatever passes for political correctness at a given moment.

But what few commentators have grasped is that Benedict has long foreseen that, for at least another generation, this may well be the reality confronting those European Catholics and other Christians who won’t bend the knee to political correctness or militant secularism. Accordingly, he’s preparing Catholicism for its future in Europe as what Benedict calls a “creative minority.” (more…)

Last month, in “Europe’s Choice: Populate or Perish,” Acton Research Director Samuel Gregg observed:

At a deeper level … Europe’s declining birth-rate may also reflect a change in intellectual horizons. A cultural outlook focused upon the present and disinterested in the future is more likely to view children as a burden rather than a gift to be cared for in quite un-self-interested ways. Individuals and societies that have lost a sense of connection to their past and have no particular interest in their long-term destiny aren’t likely to be worried about a dearth of children. Here Europe’s generation of 1968—which promoted a radical rupture with the past and is intensely suspicious of anything that might broaden people’s outlooks beyond the usual politically-correct causes—has much to answer for.

In “America’s Parent Trap,” Washington Post columnist Robert J. Samuelson picks up the same theme noting that, “Our society does not — despite rhetoric to the contrary — put much value on raising children.” He takes a closer look at tax policy, among other factors, and the way it financially punishes parents.

While having a child is a deeply personal decision, it’s also shaped by culture, religion, economics and government policy. “No one has a good answer” as to why fertility varies among countries, says sociologist Andrew Cherlin of Johns Hopkins University. Eroding religious belief in Europe may partly explain lowered birth rates. In Japan, young women may be rebelling against their mothers’ isolated lives of child-rearing. General optimism and pessimism count. Hopefulness fueled America’s baby boom. After the Soviet Union’s collapse, says Cherlin, “anxiety for the future” depressed birth rates in Russia and Eastern Europe.

In poor societies, people have children to improve their economic well-being by increasing the number of family workers and providing support for parents in their old age. In wealthy societies, the logic often reverses. Government now supports the elderly, diminishing the need for children. By some studies, the safety nets for retirees have reduced fertility rates by 0.5 children in the United States and almost 1.0 in Western Europe, reports economist Robert Stein in the journal National Affairs. Similarly, some couples don’t have children because they don’t want to sacrifice their lifestyles to the time and expense of a family.

We need to avoid Western Europe’s mix of high taxes, low birth rates and feeble economic growth. Young Americans already face a bleak labor market that cannot instill confidence about having children. Piling on higher taxes won’t help. “If higher taxes make it more expensive to raise children,” says demographer Nicholas Eberstadt of the American Enterprise Institute, “people will think more about having another child.” That seems common sense, despite the multiple influences on becoming parents.

Read Samuelson’s column on the Washington Post website.

Are the Old Continent’s farmers showing that they have a real entrepreneurial spirit and serving as role models of courage and innovation during the Great Recession? Surely not all of them, but there are some inspiring examples to be found in Central and Southern Europe.

This is somewhat surprising as Europe’s agricultural sector is usually among the most traditional, least open to market innovation and product flexibility, and heavily reliant on EU funding to keep the sector competitive. Alas, European leadership in international food trade has been slowly whittled down in the last 3-4 decades.

Some European farmers, however, are resilient and are pulling rabbits out of hats these days by risking and investing heavily to implement creative new forms of business on their farms – many of which had been on the brink of failure.

It is primarily the French and Italians who are showing their true entrepreneurial spirit and vocation to agriculture. They appear to be some of the most tenacious and creative. Just like the Michigan dairy farmer, Brad Morgan, the protagonist of Acton’s documentary The Call of the Entrepreneur, these farmers have turned to undervalued and completely overlooked assets to build lucrative profit-making ventures that often double and triple their old incomes. They have begun reshaping the way their traditional industry operates, and at a time when Europe has lost its competitive edge to cheaper food suppliers from Africa and South America.

Making matters worse has been the total evaporation of their once abundant workforce. In France, for example, rural industry employees currently make up a mere 3% of the nation’s workers, when it once boasted over 40% at the turn of the last century (cf. August 2010 Time article “How to Save Rural France”). And figures for those farmers who have registered as operating “professional” establishments in France’s campagne have dropped from 2,000,000 to 350,000 in the last fifty years. As noted out in a 2006 Acton commentary (“French ‘Security’ and Economic Reality”), this is not at all surprising: the vast majority of France’s youth dream of careers as civil servants, or want to secure life-long union protected contracts, and furthermore claim to generally dislike or distrust free market economics.

A final blow to European farming may come in a few years when the industry’s most heavily relied upon system of public subsidy – the Common Agricultural Policy – is set to undergo reform in 2013. And no one is quite certain what the consequences may be, as EU finance officials nudge the sector to become more competitive and market orientated.

Just what are they doing?


While some major industries in France, like auto manufacturing, have received generous public subsidies to remain competitive, French farmers are beginning to rely on their entrepreneurial spirit and genuine vocation to agriculture to turn their sector around.

They are achieving this by doing exactly what entrepreneurs are called to do: take risks through investment and creatively diversify their business offerings to customers.

For example, entrepreneurial farmers in the southern Ile-de-France grain producing region have utilized the bucolic beauty of their wavy golden fields and soft rolling hillsides to create profit-making ventures. The same beauty that inspired France’s great impressionnistes, now lures thousands of international vacationers to their prime holiday centers built out of once dilapidated grain storage facilities with glorious hill-top views.

It is these same farmers who are using abandoned wheat and barley fields as horse riding tracks. They are converting their dusty old barns into equestrian club houses. Others, like Rabourdin farms in Brie, have added premium beer making facilities to their production portfolios and now attract thousands to their own micro brew facilities and connoisseurs can order their products on-line.

While interviewed for the same Time article, agricultural entrepreneur Bernadette Porchelu said that for her Basque-country farm to succeed “it required a lot of work and investment.”

“But now,” she says, “We are hustling to keep up with the demand and have more than doubled our income. When we first decided to make this move, everyone said we’d fail. Today I wonder how most farms will survive if they don’t undertake similar diversification –which may be why some of our visitors include fellow farmers asking us how we made it work.”

It’s not just the French

One of Italy’s leading agricultural entrepreneurs hailing from Rome, Annibale Gozzi, says that while France is making headlines with its creative agrotourism, Italy is not lagging too far behind.

He says that “neither can Italian farms keep up with fierce international competition in food production…Manual farm labor in other parts of the world is ten times cheaper than in Italy and we simply cannot compete even with our tremendous advances farming methods and technology.”

“We too have been forced to try different things and strive for the full integration of our products, services and assets.”

Those farms that are most successful, like Gozzi’s own agrotourism south of Rome, Villa Germaine, are the ones that have become full-scale “multi-function” operations in addition to producing traditional agriculture.

Referring to his own agriculture establishment as an example, Gozzi says he has risked huge amounts of capital to maximize his farm’s business to include “integrative products and services” such as farming courses, horse riding, premium viticulture and olive oil production, tuffa cave wine and cheese tasting facilities, as well as a full-service hotel and restaurant. His establishment now even regularly hosts business luncheons and wedding receptions with lavish menus featuring his own fresh meat and produce.

He says he does this with dedication and pride, a dream to “do a first-class job for what I love”. Gozzi’s thriving business at Villa Germaine not only has allowed him to maximize his farm’s assets and profits, but truly exemplifies what it means to combine entrepreneurial spirit and tradition all in the same business.

He adds that Italians are catching on to but this type of inventiveness, “but it is still much more appreciated by foreigners and France is clearly leading the way.”

Why they really do it

Vastly increasing revenue has been a driving factor for the survival of European farmers – especially knowing their major public financial support may dramatically change in a few years’ time and as their industry is being swept away by international competition.

Even if Europe’s few remaining die-hards simply had more public financing, it doesn’t mean they would come out on top. It has not worked for decades and surely it does not provide the answer to their future.

Rather, we must follow the lead of those real entrepreneurs who in the toughest economic times are true to their vocation and come up with ingenious solutions to their sector’s woes. If there is a future at all, they are providing viable alternatives. And to do so, they must not only be highly creative. They must also be willing to take risks –a courageous attitude undertaken by those who genuinely live out a vocation and exhibit a real passion for their trade.

(This article is the first of a regular monthly series dedicated to entrepreneurship in Europe.)

One of the charges sometimes leveled against classical liberal thought is that it opposes all authority; that it seeks to reduce society to an amalgamation of atomized individuals, eliminating the role of religion, community, and vibrant social institutions.

The Place of Religion in the Liberal Philosophy of Constant, Tocqueville, and ActonHistorian Ralph Raico seeks to argue the very opposite in his dissertation, The Place of Religion in the Liberal Philosophy of Constant, Tocqueville, and Lord Acton. The work has been republished for the first time by the Mises Institute. (A particularly interesting note is that the chair of Raico’s dissertation committee was none other than F.A. Hayek).

Raico argues that these classical liberal thinkers did not, by any stretch, subscribe to the secularist views of some of their liberal contemporaries. Instead, they found compelling religious justifications for liberty. Contrary to the assertions of some critics of classical liberalism, they also did not oppose all authority: They recognized the essential value of family, church, and other vibrant and flourishing social institutions. These possess what I would venture to call a “natural authority,” a kind of authority and social standing that naturally arises from the workings of a free society (as distinct from the coercive authority of a government or state). Human beings congregate in these groups precisely because we are social animals, and because we identify these institutions as  conducive to our flourishing.

As Acton University faculty member Jeffrey Tucker notes:

What resources were available that highlighted this alternative liberal tradition? There weren’t many at the time. It was during this period that Ralph Raico went to work on his dissertation. He hit the target with an extended discussion of three massively important figures in the history of liberalism for whom a religious orientation, and an overarching moral framework, was central for their thought: French Protestant Benjamin Constant (1767–1830), French Catholic Alexis de Tocqueville (1805–1859), and Lord Acton (1834–1902).

All three were distinguished for

  1. consistent antistatism,
  2. appreciation for modernity and commerce,
  3. love of liberty and its identification with human rights,
  4. a conviction in favor of social institutions such as churches and cultural norms, and
  5. a belief that liberty is not a moral end in itself but rather a means toward a higher end.

[....] Raico provides a detailed reading of their work in all these respects and shows that one need not embrace statism, and that one can be a consistent and full-blown liberal in the classical tradition [...] Ours is a varied tradition of secularists, yes, but also of deeply pious thinkers. What drew them all together was a conviction that liberty is the mother and not the daughter of order.

As the case for liberty continues to be made, it is important never to neglect this extremely fruitful tradition in classical liberal thought.

Update: I stumbled across a Lord Acton quote that helps illustrate the distinction between the “natural” authority of voluntary institutions in civil society and the authority of the state:

“Authority that does not exist for Liberty is not authority but force.” – Lord Acton

Also this week in Acton Commentary, Acton Research Director Samuel Gregg observes that “Europe’s declining birth-rate may also reflect a change in intellectual horizons.”

Europe’s Choice: Populate or Perish

If there is one thing the global economic crisis has highlighted, it’s the need to make choices—sometimes very difficult choices. At the June G-20 summit, for example, several European governments made it clear to the Obama Administration that they do not believe you can spend your way out of recessions. Unlike America, countries such as David Cameron’s Britain and Angela Merkel’s Germany have chosen the politically-risky but economically-brave path of austerity and public-sector spending cuts.

In some instances, these measures may not be enough to prevent countries such as Greece and Portugal from sovereign-debt defaults. Still, the alternatives are ever-rising government debt-to-GDP ratios (which invariably prolong stagnation as has occurred in Japan since the 1990s) or attempts to simply inflate the debt away (thereby risking the terrible experience of 1920s Germany or America’s 1970s economic malaise).

In the end, however, escaping the Great Recession’s effects is going to require more than spending cuts. The only long-term way out is economic growth. Here, however, much of Europe faces a problem that most non-European countries do not. The challenge is one of an overall population decline and an aging population. As stated in a 2006 IMF report, “The population of the 25-member European Union in coming decades is set to become slightly smaller—but much older—posing significant risks to potential economic growth and putting substantial upward pressure on public spending.”

However one examines the statistics, the demographic picture for Europe—including Eastern Europe and Russia—is bleak. Statistically-speaking, the numbers of births per woman required merely to maintain a population’s size is 2.1 children. Not a single European country meets that figure today. Germany’s birth-rate, for instance, is 1.38. Italy’s is 1.41. Spain’s is 1.39. France and Britain are doing comparatively well at 2.0 and 1.94 respectively, but—you guessed it—Greece is the lowest in the EU.

Nor is any consolation to be found in the aging statistics. In Belgium, the percentage of the population over 65 will increase from 16 percent to 25 percent by 2050. In 2007, a World Bank document stated that by 2050 approximately half of Spain’s population will be 55 or older.

The reasons for these trends are many. The twentieth century’s two world wars tore large generational holes in Europe’s demographic landscape. Women are also having children later in life. There also seems to be a broad correlation between increasing material prosperity and diminishing population growth. Then there is the greater access to contraception from the 1950s onwards.

But more subtle cultural factors may also be at work. For one thing, it’s striking how many Europeans are reluctant to discuss the subject of their population decline. This may owe something to an association of calls to have more children with the population policies of totalitarian regimes such as Hitler’s Germany, Stalin’s Russia, Mussolini’s Italy, and Ceauşescu’s Romania. Another factor may be many Europeans’ susceptibility to population-growth alarmism, as manifested in many European governments’ aggressive promotion of population-control in developing countries (which strikes some as verging on neocolonialism).

At a deeper level, however, Europe’s declining birth-rate may also reflect a change in intellectual horizons. A cultural outlook focused upon the present and disinterested in the future is more likely to view children as a burden rather than a gift to be cared for in quite un-self-interested ways. Individuals and societies that have lost a sense of connection to their past and have no particular interest in their long-term destiny aren’t likely to be worried about a dearth of children. Here Europe’s generation of 1968—which promoted a radical rupture with the past and is intensely suspicious of anything that might broaden people’s outlooks beyond the usual politically-correct causes—has much to answer for.

Immigration is one way for European countries to escape these conundrums. After all, it has proved to be one of America’s engines of economic growth and continues to help the United States avoid the population trap in which Europe now finds itself. For decades, Western Europe relied on immigration, especially from Islamic countries, for cheap labor, especially for those unpleasant jobs some Europeans prefer not to do.

For the moment, however, increased immigration doesn’t appear to be an option for Europe. The policies of multiculturalism have failed and produced such deep fractures in many European societies that most European governments are presently reducing immigration from non-European countries.

Is demography destiny? It need not be. Demography is only one variable among many. Moreover individuals and nations can make choices, and choices change our future. Sometimes circumstances, such as the global economy’s present problems, can provide the incentive and opportunity to break away from apparently unalterable paths.

The clock, however, is ticking. The longer Europeans fail to address their demographic difficulties, the smaller becomes their room for maneuver, and the more likely Europe will be reduced to being a bit-player on the world’s political and economic stage.

The loss would be not only Europe’s, but ours as well.

Dr. Samuel Gregg is Research Director at the Acton Institute. He has authored several books including On Ordered Liberty, his prize-winning The Commercial Society, and Wilhelm Röpke’s Political Economy.

Blog author: jballor
posted by on Tuesday, July 13, 2010

You often hear that Europe is much more secular than America. Just take a look at the Netherlands, for instance. How much more secular can you get?

But one place in which this stereotype rings false is in terms of academic institutions. You can pursue (as I currently am) a degree in theology at a European public university. Can you imagine that in the United States?

No, here we have departments of “religious studies” in public colleges and universities (if we cover religion there at all, and to be sure, “theology” and “religion” aren’t identical). My friend Hunter Baker might point to this difference not as secularism in a strict sense, but rather an institutional separation between state and church (for more on his definition of secularism, check out his book, The End of Secularism).

And thus from accounts of the institutional differences between the academic study of religion and theological study in America, you might easily get the impression of a kind of intellectual or academic secularism. After all, to study theology in America, you have to go to a private college or seminary (as I also am currently doing). This perspective from the Chronicle of Higher Education is representative, “The Ethics of Being a Theologian,” in which K.L. Noll writes, in part,

I do not presume to tell theologians how to be theologians, and I will not attempt to define the value of theology. I simply request that theologians fulfill basic ethical obligations, such as the affirmation that theology is not knowledge and must position itself apart from those academic disciplines that try to advance knowledge, such as history, anthropology, religious study, and (perhaps especially) the natural sciences.

Meanwhile, in secular Europe, as ENI’s Stephen Brown reports, “European theology faculties warn of shift to religious studies.” Read the rest of Brown’s story after the break.
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This week’s Acton Commentary from Research Director Samuel Gregg.

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Europe: The Unjust Continent

By Samuel Gregg

In recent months, the European social model has been under the spotlight following Greece’s economic meltdown and the fumbling efforts of European politicians to prop up other tottering European economies. To an unprecedented extent, the post-war European model’s sustainability is being questioned. Even the New York Times has conceded something is fundamentally wrong with the model they and the American Left have been urging upon America for decades.

Western Europe’s postwar economies were shaped by an apparent concern for the economically marginalized and the desire to realize more just societies. This inspired the extensive government economic intervention, high-tax rates and generous welfare states now characterizing most contemporary European economies. After 1945, Communists and Christian Democrats alike rallied around these policies. For Marxists, it was a step toward realizing their dream. For non-Marxists, it was a way of preventing outright collectivization.

Even today, words like “solidarity” and “social justice” permeate European discussion to an extent unimaginable in the rest of the world. If you want proof, just switch on a French television or open a German newspaper. The same media regularly contrast Europe’s concern for justice with America’s economic culture. America, many Europeans will tell you, embodies terrible economic injustices in the form of “immense” wealth-disparities, “grossly inadequate” healthcare, and “savage” competition.

But while such mythologies dominate European discourse, it’s also true that Western Europe’s economic culture is characterized by a deeply unjust fracture. Modern Europe is a continent increasingly divided between what Alberto Alesina and Francesco Giavazzi called in The Future of Europe (2006) “insiders” and “outsiders”.

The “insiders” are establishment politicians of left and right, trade unions, public sector workers, politically-connected businesses, pensioners, and those (such as farmers) receiving subsidies. The “outsiders” include, among others, entrepreneurs, immigrants, and the young. Naturally the insiders do everything they can to maintain their position and marginalize outsiders’ opportunities for advancement.

So how do Europe’s insiders maintain the status quo?

(more…)