Europe, you’re on the ropes


by Rohin
13th February, 2006 at 7:45 pm    

As Asia rises, will we see Europe fall?

Several American writers have recently damned Europe, insisting a “pall of doom” hangs over the continent [Link]. The criticisms many of them make (Theodore Dalrymple, Michelle Malkin, Fareed Zakaria and more) are quite revealing as to how Americans and some others from both political leanings think of Europe.

Dalrymple asks whether Europe is doomed and seems to think that we and the French experience a “deep sense of existential unease to live in a country perpetually in decline, even if that decline is merely relative.” However he chooses the broad brush so many American commentators use when speaking of Europe, using it to tar us all. Europe’s obsession with Social Security seems to be the root cause of Europe’s fall from grace and power, causing us to be fearful of the future. It is true that especially on the continent, rigid social structures have made change difficult. But if I were to select one major country that allowed fear to dominate its agenda, it would not be on this side of the Atlantic. However, he rightly highlights a vague sense of protectionism which has pervaded the job market in Europe.

Returning to the UK and France, Dalrymple puts forward a somewhat unlikely scenario:

Hundreds of thousands of young Frenchmen, despairing of finding a job at home where about a quarter of people in their twenties are unemployed, have crossed the Channel to take advantage of Britain’s relatively flexible labor market: which, however, the British government is in the process of destroying by means of ever-closer regulation in the French centralist style.

Taxes may have increased under Blair, but I cannot believe that Britain is a significantly business-unfriendly nation. Where are these hundreds and thousands of young Frenchies? I haven’t seen any! Probably because I’m in a drug-induced haze:

The dependent population does not like the state and its agents, indeed they hate them, but they soon come to fear the elimination of their good offices even more. They are like drug addicts who know that the drug that they take is not good for them, and hate the drug dealer from whom they obtain their drug, but cannot face the supposed pains of withdrawal. And what is true of Britain is true, with a few exceptions, everywhere else in Europe.

There is plenty more including a de riguer attack on France. He’s not too nice about Islam either. What is more interesting are his views on integration, where he believes America to be a bastion of multicultualism and Britain to have spent years with no “cultural confidence” or “social pride” (it’s in the past tense as he clearly supports the citizenship test as a test of national pride). Sunny has written about different European strategies for integrating immigrants. He ends with a Trevor Phillips-esque “Europe is sleepwalking into further relative decline.”

Old Europe, traditionally thought of as Germany, France and Italy (I’m not sure if we’re included) can be divided from countries like those in Scandinavia, which are enjoying an economic growth. The job markets are more flexible, unemployment is lower and the welfare state carries a stronger emphasis on job creation and retraining, which Britain has been unsuccessful in instilling. Sweden and co. also buck the theory that high taxes mean less jobs – as while income tax is high, corporate tax isn’t. However, two Swedish researchers, Frederik Bergstrom and Robert Gidehag, last year said that “40 percent of Swedish households would rank as low-income households in the U.S.”

Fareed Zakaria points to a Paris-based group who published a report entitled Going for Growth this week, which damns the European economy. The study estimates that in twenty years, the average American will be twice as rich as the average French(wo)man or German, with Britain somewhere in between.

A key problem is the EU’s reluctance to tackle the large farm subsidies – which goes straight to the heart of the protectionism debate. But Zakaria also identifies areas like biotechnology as fields where Europe’s dominance has been eroded. Is this a decline or just globalisation? Irrespective, apparently in ten years, the main companies in the pharmaceutical industry will be (wait for it) America, India and China.

What does all this add up to? Less European influence in the world. Europe’s position in institutions like the World Bank and the IMF relates to its share of world GDP. Its dwindling defense spending weakens its ability to be a military partner of the U.S., or to project military power abroad even for peacekeeping purposes. Its cramped, increasingly protectionist outlook will further sap its vitality.

The decline of Europe means a world with a greater diffusion of power and a lessened ability to create international norms and rules of the road. It also means that America’s superpower status will linger. Think of the dollar. For years people have argued that it is due for a massive drop as countries around the world diversify their savings. But as people looked at the alternatives, they decided that the chief rivals, the euro and the yen, represented economies that were structurally weak. So they have reluctantly stuck with the dollar. It’s a similar dynamic in other arenas. You can’t beat something with nothing.


              Post to del.icio.us


Filed in: Current affairs,Economics,The World






55 Comments below   |  

Reactions: Twitter, blogs


  1. StrangelyPsychedelique — on 13th February, 2006 at 7:58 pm  

    Im not so sure Europe is on its way down….but unsteady it certainly is.

    *waits for China*

  2. Jay Singh — on 13th February, 2006 at 8:09 pm  

    Dalrymple is not American – he is British.

  3. soru — on 13th February, 2006 at 8:28 pm  

    Sweden and co. also buck the theory that high taxes mean less jobs – as while income tax is high, corporate tax isn’t.

    I think the core reason for that is explained by the case of Sven Goran Erikson.

    He’s left the country, using his marketable skills to earn much more money, and pay less tax, than he would in Sweden.

    And, for a swede, his behaviour is really unusual (well, that bit of it anyway). Swedish people tend to put a very high value on living in sweden – Finns in Finland even more so.

    If a significant portion of your upper middle class chooses to leave the country, there’s going to be less tax receipts to go round, meaning less public spending, meaning a worse education system, meaning lower productivity jobs, meaning the country looking shabbier and poorer, meaning more people leave, …

    Britain’s particularly susceptible to that, as there are so many countries that speak the same language – there is no Finnish equivalent of Australia, Canada etc.

    soru

  4. Rohin — on 13th February, 2006 at 9:05 pm  

    Oh crap Jay, I got him completely muddled up with someone else. Of course I know Theodore Dalrymple – he’s a doctor! Thanks.

  5. j0nz — on 13th February, 2006 at 10:04 pm  

    I’m all for boycotting France and Germany, the bastards.

  6. contrarymary — on 13th February, 2006 at 11:00 pm  

    The EU’s basic problem is that economic integration can’t happen without social and political integration, so instead we’re left with this half way house where we’re ruled by both westminister and to a lesser degree brussels.

    personally I’m all for the EU, it’s the only strong enough force to stand upto American foreign and environmental policy – at least until Chindia’s rise in 10-15 years

  7. Don — on 13th February, 2006 at 11:07 pm  

    Hundreds of thousands of frogs? It can only lead to one thing.

    http://www.sunderlandtoday.co.uk/mk4custompages/GetImage.aspx?ImageID=16972

  8. j0nz — on 13th February, 2006 at 11:08 pm  

    Well I’m glad you want to stand up to American foreign policy. Destryoing the facist Taliban, liberating the Iraqis. Fuckers eh? I mean why don’t they just leave things to the UN? The UN always does the right thing. Apart from Rwanda. And Darfur.

  9. contrarymary — on 13th February, 2006 at 11:12 pm  

    Jonz – I’m not going to buy the bait. let’s just american say wholly selfish american foreign policy has caused more harm than good in the world over the 50 years.

    are you also going to defend america’s environmental policy and practices?

  10. Sunny — on 13th February, 2006 at 11:33 pm  

    This kind of pseudo-intellectual claptrap that pervades the American right is becoming so regular, its hilarious.

    Clive Davis wrote in today’s Times about the exaggerated stances taken by Michelle Malkin and others (Melanie Phillips) about a ”European Intafada’ after the Paris riots as an example.

    It’s too bad that Fareed Zakaria has also fallen for pulling bullshit out of the air just to put forward an agenda. Let me take this apart a bit.

    The study estimates that in twenty years, the average American will be twice as rich as the average French(wo)man or German, with Britain somewhere in between.

    That assumes American growth will remain the same, when they never do. During the 80s the Americans were stressing about the Japanese buying out California given their growth rates, but that never happened. Europe is going through an elongated period of re-structuring but it doesn’t mean things will remain the same forever. Any junior economist with a bit of historical perspective can tell you that.

    A key problem is the EU’s reluctance to tackle the large farm subsidies – which goes straight to the heart of the protectionism debate.

    Thereby completely ignoring that America also spends a lot of money subsidising its own farmers. In fact Bush has increased farm subsidies in recent years otherwise they’d be wiped out by competition from South America and Africa.

    But Zakaria also identifies areas like biotechnology as fields where Europe’s dominance has been eroded.

    Just because we’re resistant to GM technology doesn’t mean all is lost, or that we’re forever going to be left behind. We will soon be ahead on stem-cell research, which America is resisting.

    Irrespective, apparently in ten years, the main companies in the pharmaceutical industry will be (wait for it) America, India and China.

    India and China have big pharmas because they have to develop generic drugs for their relatively poor populations, and can draw on a big, educated labour force. If they spend tons on R&D, then there’s no reason they can’t overtake American firms.

    Europe’s position in institutions like the World Bank and the IMF relates to its share of world GDP.

    Who cares about the WB or IMF anymore? They’re outdated institutions which should be killed off anyway. Is this is barometer of influence? A bit shaky then.

    Its dwindling defense spending weakens its ability to be a military partner of the U.S., or to project military power abroad even for peacekeeping purposes. Its cramped, increasingly protectionist outlook will further sap its vitality.

    Funny that, given America is asking Europe to contribute more towards Nato since it has become more economically tighter since adopting the Euro. So what if Europe doesn’t want to spend on defence?

    America spends about 16% of its GDP on health yet it still has millions of people uninsured. Maybe America should worry more about health spending than defence spending.

    But as people looked at the alternatives, they decided that the chief rivals, the euro and the yen, represented economies that were structurally weak.

    Pure rubbish as usual. China and Japan continue to accumulate huge dollar reserves because America is their primary buyer and importer of products. But for most of last year and before, Euro was stronger than the Dollar.

    Japan has been weak for a while but its unemployment is still lower than America’s and still has a strong manufacturing and service base. To call is structurally weak is the talk of a man who has no clue about economics.

  11. Siddharth — on 13th February, 2006 at 11:40 pm  

    Old Europe? You know thats a Rumsfeldian Americanism because only Americans equate old age with a bad/decrepit/useless/over.the.hill/un-American value-system.

    Whats New Europe? European countries which are with the Coalition – Blair, Berlusconi etc?

    So then, Old American? The Democrats? Anti-Republicans?
    And New-Americans are what – New Patriots? NeoCons?

    I know where I stand.

  12. Rohin — on 13th February, 2006 at 11:42 pm  

    I’m glad you know more about this than me Sunny, I wasn’t sure about everything, but just tried to highlight how even people like Zakaria, who is normally someone whose writing I agree with, has followed this path.

    In terms of stem cell research – East Asia will lead the way.

    Pharma – India would have ALREADY begun to dominate the industry if it wasn’t continually thwarted by Big Pharma patents. India supplies more people with medication than any other country – but most of these people tend to be poor.

    Defence spending – about 5 of the pieces I read when writing this emphasised that Europe should be more concerned about security and defence. It’s a perpetual issue for many Americans, hence what I said about fear motivating policy. The number one concern is “we’re going to get attacked, let’s boost defence spending.”

  13. Sunny — on 13th February, 2006 at 11:44 pm  

    BTW – the biggest threat to the rise of China and India won’t be Europe, but American hegemony. Try as it might, Americans are not going to like being amongst two other 800lb gorillas who have their own way of looking at the world.

    Taking the recent example of Iran – America had a real hard time persuading China, and had to sweeten India with some nuke technology (typically hypocritical stance) so it would take its stance.

    Say in 20 years China and India say fuck off to America. What is it going to do? Jack shit. By then they’ll want to have control over their own energy supplies and establish local fiefdoms.

    Europe in one sense will be caught in the middle, but its becoming a multi-cultural pot that is establishing tight links with both countries, and treating them as partners rather than kids. That is what will enable better relations with those countries.

    Ultimately, American govt arrogance of its own military dominance is more likely to lead to frayed relations than anythign else.

  14. inders — on 13th February, 2006 at 11:50 pm  

    Since when was America a free market ? Heavy, heavy subsidies in farming, the miltary and IT.

  15. reformist muslim — on 13th February, 2006 at 11:55 pm  

    Great comment Sunny – one interesting thing about Zakaria is that unlike just about everyone else in America he has always been optimistic about the EU.

    It fits in with his very persuasive argument that too much democracy is a bad thing and that a certain amount of resistance to public opinion would be quite useful for policy makers.

    Of course the fact that the ‘neo-liberal’ services directive and the constitutional mess have affected things but not fatally. I think if one wants a sensible critique of how the EU can improve one should look to what Chris Patten has to say about it -highly intelligent as always.

  16. Sunny — on 13th February, 2006 at 11:56 pm  

    It’s a perpetual issue for many Americans, hence what I said about fear motivating policy.

    exactly! By the way, scandinavians also have fairly rigid economies, with nanny states that go from cradle to graves, yet I don’t see them dying off. Germany still hasn’t been able to deal with re-unification and is therefore dragging France down with it… but this thesis that social security is killing all sorts of creativity is pure rubbish because they conveniently ignore Scandinavia on that.

    Essentially, neither Dalrymple nor Zakaria demonstrate a good understanding of what makes Europe tick, and neither do they understand the nuances of what is affecting each country. They’re painting with one broad brush, demonstrating their own lack of proper knowledge.

    As for Malkin, the less said about her intelligence, the better.

  17. raz — on 14th February, 2006 at 12:10 am  

    “BTW – the biggest threat to the rise of China and India won’t be Europe, but American hegemony. Try as it might, Americans are not going to like being amongst two other 800lb gorillas who have their own way of looking at the world”

    Sunny, what do you make of Iran, India and Pakistan being granted observer status of the Shanghai Co-operation Organisation. If this leads (as it probably will) to permament
    membership, then you would have a potential bloc of China, Russia, India, Pakistan, Iran and the central Asian nations. Wonder what USA/Europe would think of that? :)

  18. Old Pickler — on 14th February, 2006 at 12:47 am  

    Not only is Theodore Dalrymple British, he is God.

    Even the barmy left, Madeleine Bunting, no less are coming round to his, or should that be His way of thinking.

    Good to see him being quoted here, even if in a negative light. I realised that Harry’s Place was on the turn, in a good way, when they started linking The Telegraph. Even HP have quoted Dalrympe favourably. There is hope for Britain yet.

    If anything he is soft on Islam, but that’s another story.

  19. Sunny — on 14th February, 2006 at 1:09 am  

    If OP thinks Dalrymple is god, then I feel vindicated with my stance :D

    then you would have a potential bloc of China, Russia, India, Pakistan, Iran and the central Asian nations. Wonder what USA/Europe would think of that? :)

    Its a positive step… and any sort of cooperation is positive IMO. But I wouldn’t hold my breath. Blocs in Asia are dime a dozen. Probably more than any other region in the world.

    Unfortunately they seem to be doing very little. Inter-Asia trade remains pitiful, except for between China and Japan, which is growing but I think both still trade much more with the USA. If there was more inter-Asia trade, politics in the region would be so much better. For a start I’d love to see a huge ramping up of India-Pak trade.

  20. mark — on 14th February, 2006 at 2:11 am  

    Truly enjoy the sophisticated, nuanced one or two liners, I have come away much more enlightened!

    “wholly selfish american foreign policy has caused more harm than good in the world over the 50 years” Would love to see your tally sheet (and no fair peaking at Chomsky or similar!). How would you rate peoples lives and the environment under communism vs. the dreaded AngloSaxon model? Maybe we could measure that by comparing the number of people who have died in each direction crossing both the Berling Wall and in/out of Cuba?

    Broad brush, indeed. Don’t think it is very helpful for echo chambers to reinforce pre-existing prejudices regardless of which side of the Atlantic or political spectrum one sits.

    “Any junior economist with a bit of historical perspective can tell you that.” Yes, and any junior economist will factor in demographic and structural problems, which most of these analyses have most likely. Restructuring? Like the Lisbon 2000 agenda? Or all the bold plans that the public and private sectors unions are so helpful in pushing?

    The general theme of a lot of these essays and studies seems to be will Europe answer a wake up call or happily slumber in their security blanket? It seem more a case of statism vs. dynamism (rather than right vs. left); will Europe and/or the US be better positioned for the coming “Asian century”?

    Broad brush, indeed. Don’t think it is very helpful for echo chambers to reinforce pre-existing prejudices regardless of which side of the Atlantic or political spectrum one sits. Isn’t a part of the reason for these essays to facilitate honest open debate, rather than tired knee jerk reactions? As much pride as some take in Amerca being at fault for nearly everything wrong in the universe, how many comments here take a look in the mirror (I know that may be slightly more difficult and require more than a knee jerk reaction)?

    Looking forward to following up on this in 20 years!

  21. Asma' bint Marwan — on 14th February, 2006 at 2:14 am  

    Theodore Dalrymple someties is mistaken for that Islamophile William Dalrymple. They are not related, Theodore also writes under the name Anthony Daniels, is probably safe to say that most of you guys don’t read the Spectator or the Telegraph(except Old Pickler) so you have never come across his writings. In America he writes for the quarterly “City Journal” and the biweekly “National Review. I believe he has abandoned Britain and lives in the Langeudoc. Smart move.

    Sunny

    “Say in 20 years China and India say fuck off to America. What is it going to do? Jack shit. By then they’ll want to have control over their own energy supplies and establish local fiefdoms. ”

    Is this a wet dream of yours Sunny? I bet after they say “fuck off” to the Yanks they will still insist on the right of their citizens to emmigrate there. It seems that you want these two future superpowers to act with the same arogance that you blame the America for. Morever, I don’t see China and India becoming two 800lb gorillas anytime soon. And I find it interesting that your rooting for a country that has killed more of its own people that Hitler and Stalin combined. What possible good is going to come of China’s accendency?

  22. Sunny — on 14th February, 2006 at 3:05 am  

    Mark – There is a lot to be admired about the American economy, but I’m looking at this from an economics pov.

    Yes this is that dynamism vs statism argument, and we’ve been here before plenty of times. But given that neither Malkin and nor Dalrymple are really economists, their inference seems to be that its the state’s social security system and allowing in (Muslim) immigrants that is the problem.

    Given that the American economy is built on immigration, and that we’re quite happy with the NHS/BBC etc, and resist efforts to privatise them, you might get an idea that this is more of an ideological issue than anything based on facts or people’s demands.

    What will keep the American economy growing is allowing in more immigrants that keep the population young and keep wages low. That is not happening in Europe, and has possible dire consequences for Japan. But my point that basing economic projections for the next 20 years on the past 10 years or so is a fools game.

    And just counting GDP growth, while not taking into account general feelings of happiness or standard of living is also being short sighted I feel.

    Asma:
    I bet after they say “fuck off” to the Yanks they will still insist on the right of their citizens to emmigrate there.
    Well, India has sometimes complained about a brain drain, sometimes its happy about the money coming back from its diaspora. This isn’t a wet dream, its based on realpolitik. Why should China and India continue to toe US line on every issue? the more poweful they get, the more they will flex their muscles. That is a certainty.

    Morever, I don’t see China and India becoming two 800lb gorillas anytime soon.
    Neither do I. Though maybe China in 20 years and India in 40.

    And I find it interesting that your rooting for a country that has killed more of its own people that Hitler and Stalin combined.

    Not rooting, just basing it on economic facts. It’s past is irrelevant, what matters is how much democracy is allowed to develop in China. If I was living in the past, I’d go back to how many people were killed worldwide during the British imperial era.

  23. Steve — on 14th February, 2006 at 10:55 am  

    Sunny: I think there are a few problems re your interpretation of the past, present and future of China.
    Past: not irrelevant, even from a strictly economic point of view, in the sense that the Communist Party is unwilling to learn from the past (e.g. its official formulation that Mao was ’70% good’), which has implications for the present and future.
    Present: China has serious problems with inefficient state-owned industries, a mountain of bad debt (the two are related, of course) and vast unemployment and corruption problems. Because China (unlike India) has poor political/ legal institutions, there is a significant risk that these problems won’t be corrected adequately.
    Future: China also has a serious problem (probably more serious than ours) re unfunded pension commitments. Also, they seem to be making some dubious friends in Africa – Sudan and Zimbabwe for instance – which is economically relevant if they are relying on, say oil from Sudan. How reliable would you say Sudan is as a partner? One could see the Chinese scramble for Africa as a sign of new confidence or of desperation – perhaps even both.
    Add all these problems together and it looks unlikely that China will continue its current boom indefinitely. Historically there have been many times when China has looked very impressive to foreigners – those times often being followed by periods of bloody chaos. I would love to see a peaceful evolution towards accountable government in China alongside stable economic growth – but I really don’t think it likely with the current bunch of kleptocratic thugs in charge.
    PS it’s inaccurate to say that China toes the US line on every issue – for instance, China has proliferated missile technology to Iran and North Korea, amongst others.
    PPS are you suggesting that China and India will form an alliance that is as close (say) as that between the US and Japan? Given the political differences between the two, plus a track record of rivalry (albeit they are being polite to each other at the moment), it doesn’t seem likely, absent political transformation in China.

  24. Asma' bint Marwan — on 14th February, 2006 at 11:27 am  

    Sunny

    “Not rooting, just basing it on economic facts. It’s past is irrelevant, what matters is how much democracy is allowed to develop in China.”

    So millions should be relegated to the memory hole, I guess the Germans should just get on with it and quit apoligizing for their past. Many of us are not too optimistic about democracy in China. Their beligerance towards democratic Tawain does not give one comfort.

    “If I was living in the past, I’d go back to how many people were killed worldwide during the British imperial era.”

    Your joking right?

  25. Francis Sedgemore — on 14th February, 2006 at 1:50 pm  

    Sunny refers to Scandinavia. I’d like to expand on that a little, and discuss (or ramble on about) a few other things.

    Norway’s economy is pretty rigid, and their wealth is based pretty much on oil alone. Now that we’re passing the production peak for North Sea oil, the Noggies could be in serious trouble unless they can free up their economy and diversify. I see little evidence of this happening yet, but they still have time to sort themselves out.

    Denmark and Sweden, on the other hand, have cradle-to-grave welfare states, but they also have very open and dynamic market economies, with little labour market regulation and protection for employees. Corporate taxes are relatively low, which I guess helps mainly larger enterprises, but maybe they are not so friendly to small firms and sole traders.

    The welfare state the Scandinavians see as a necessary counterbalance to the free market economy, and most citizens support high levels of personal taxation to pay for the welfare state. What’s important is not so much the overall tax burden on the individual, but the resulting quality of life.

    It’s interesting that in the UK and US people talk mainly about their gross salaries, not what they actually see at the end of the month. In Scandinvia my experience is that few are really interested in that. Instead, they negotiate pay packages based on projected take-home pay and other benefits.

    Many in the UK and US mistakenly believe that income tax levels are far lower than elsewhere. In the UK, income tax is not “Income Tax” alone, but National Insurance also. Then, when you also take into account Council Tax, it all mounts up. In the US the Federal Income Tax is low, but some states have fairly hefty income taxes.

    In most EU states, the tax system is fairly rational, in that taxes are raised at local level, and a proportion passed upwards to the central state. And the citizen knows how much goes to each level of government. There’s none of the nonsense we have in the UK, where local councils raise some of their income through local (property) taxation, and then rely on “grants” from central government to make up the rest. The tax system here is hideously complicated, and Gordon Brown has done nothing but make it worse.

    The criticism of Europe – old or otherwise – comes from the US. Yes, the Americans are an enterprising lot, but they’re also extremely bureaucratic and protectionist, their government is opaque and inefficient, and while employees tend to work longer hours than their counterparts in Europe, and have less holiday entitlement, they tend to actually get less done.

    As for Britain, we cannot afford to be complacent, or look down on our continental neighbours. Our economy is based increasingly on service provision (much of it of dubious value), public sector borrowing is spiralling out of control (cheers, Gordon!), and we are a people living on tick.

    Back to the main theme…

    Theodore Dalrymple is a windbag parroting – with some eloquence, it must be acknowledged – the standard US neocon line on the EU. I don’t see much substance in the economic arguments these people put forward. It seems more like an ideological rant against a potential superpower rival. But the Cato Institute is not all bad, and they have published a couple of good articles dissenting from Dalrymple’s apocalyptic vision. The first is by Anne Applebaum, but it’s a bit hand-wringy in my opinion. The other, by Charles Kupchan, is far more vigorous. Definitely worth a read.

  26. Ceridwen Devu — on 14th February, 2006 at 2:15 pm  

    There is of course the small matter of Iraq. Why not boycott the countries who started this little folly. Oops! Then we would have to boycott ourselves. I’ll make a start right now. I’m not going to talk to myself all day. At least the Germans try to come to terms with their past. I’ve not noticed many Brits doing that lately. As for the Americans they think they can force the whole world to follow their agenda. At least leaders like Chavez and Morales are trying to liberate their people from American dominance. What about the millions of Indians who died of starvation under the British Raj? What about the Aborigines in Australia? What about Native and African Americans? Why do we all bow down to the stupid white men?

  27. Sunny — on 14th February, 2006 at 2:15 pm  

    Thanks for that informed opinion Francis, much there to chew on. I agree on the analysis largely too…

    Steve
    in the sense that the Communist Party is unwilling to learn from the past
    Well given that they’ve jettisoned much of the communist way of doing things, and people are now largely free to flaunt their wealth, I’d disagree totally.

    China has serious problems with inefficient state-owned industries, a mountain of bad debt (the two are related, of course) and vast unemployment and corruption problems.

    Agreed, but so far its been exporting its way out of trouble while slowly trying to sort out the industries. I think they realise the potential dangers. But given they have approaching a trillion dollars in foreign currency reserves, I think they’re shielded from any big external shocks to the system. And America/Japan won’t want China to suffer anything.

    Corruption happens in all economies, and as the USA was industrialising, it also had rampant corruption. I believe in time this will ease.

    Add all these problems together and it looks unlikely that China will continue its current boom indefinitely. Historically there have been many times when China has looked very impressive to foreigners – those times often being followed by periods of bloody chaos. I would love to see a peaceful evolution towards accountable government in China alongside stable economic growth – but I really don’t think it likely with the current bunch of kleptocratic thugs in charge.

    Disagree, the Chinese are merely following a model that the Taiwanese, South Koreans, Thai and Malaysians have set out. These countries have all had very tightly run economies dominated by technocrats. China has a long way to go still in economic development. So far its growth has been export led… as people’s incomes catch up, that growth will be sustained and expanded by domestic spending. So don’t play it down anytime soon.

    Asma:
    I guess the Germans should just get on with it and quit apoligizing for their past.
    Yeah, they should. And so should the Japanese.

    Your joking right?
    Why should I be joking. Just because you’re ignorant about history doesn’t mean I won’t raise the necessary points when we are delving into history.

  28. Ceridwen Devi — on 14th February, 2006 at 2:44 pm  

    “There is absolutely no evidence that extreme weather events are on the increase.” The Cato Institute! Well look who always comes out of the woodwork criticizing old Europe. The climate change denial lobby.
    Wikipedia
    To be fair they were against the war in Iraq. If BP and Shell paid the full environmental costs of their activities they would be making losses not profits. The so-called “free markets” are part of the problem not the solution.

  29. Old Pickler — on 14th February, 2006 at 3:28 pm  

    Theodore Dalrymple is no windbag, whatever you may think of his views. His precise, elegant prose is a joy to read. Rather like my own.

  30. Steve — on 14th February, 2006 at 3:39 pm  

    Thanks Sunny. I disagree with your disagreement,
    though.

    “given that they’ve jettisoned much of the communist
    way of doing things, and people are now largely free to flaunt their wealth, I’d disagree totally”

    I wasn’t thinking so much of the old-style puritanism
    and hostility to consumerism as other aspects of the communist way of doing things, such as arbitrary arrest, imprisonment, torture and killing of ordinary citizens who bring lawsuits against Party officials etc. I may be overstating the case because I’ve just been reading Ian Johnson’s book ‘Wild Grass’ which implies that the
    Party’s reluctance to accept criticism from citizens, and
    its brutality, have changed only slightly. Above all, the
    rule of law is not effective there, despite attempts to implement it – the more clear-headed Party bosses
    know that a modern economy depends on the rule of
    law and would like to have it, but they don’t want to give
    up on the Party’s monopoly of power and immunity from accountability.

    “Corruption happens in all economies, and as the USA was industrialising, it also had rampant corruption. I believe in time this will ease”

    True: the Gilded Age was an intensely corrupt time, as was eighteenth-century Britain. But the politics matters here too. A significant factor in reducing corruption during
    US industrialisation was political campaigning (e.g. by
    the Populists, muck-rakers and trust-busters), which of course depended on a free press and the ability to organise freely. Those things are only vestigially
    present in China. Do you mean you expect the Party to permit opposition parties and a fully free press? (If not, what is to produce the easing you expect?) It might happen, but I think you under-estimate the sheer inertia
    of the system, arising (in part) from thousands of mid-level Party bosses who have nice little rackets going that they don’t want exposed.

    “the Chinese are merely following a model that the Taiwanese, South Koreans, Thai and Malaysians have set out”

    They are certainly trying to follow that model, so far as
    they can. But all of those countries eventually had to undertake political reforms, partly because those reforms were economically useful. Again, my question is whether
    the Party will accept a dilution of its monopoly of power
    in order to foster the rule of law and accountable
    government – both of which are needed to fully unlock
    the country’s economic potential.

    Essentially what I’m saying is that politics matter, and
    that one can’t simply say ‘look at the question from a purely economic point of view’. I think bad political decisions can undo a lot of good economic results, and that the Chinese government has made (and because
    of its authoritarianism, will continue to make) plenty of
    bad political decisions. India, by contrast, has accountable government and so is more likely to correct for its bad decisions. Which is why I’m more optimistic
    for India than China, in the medium to long term.

  31. Jay Singh — on 14th February, 2006 at 3:43 pm  

    His precise, elegant prose is a joy to read. Rather like my own.

    Old Pickler. Please click on this link

  32. Old Pickler — on 14th February, 2006 at 4:00 pm  

    Yes. Narcissists are annoying to those of us who really are perfect.

  33. Sunny — on 14th February, 2006 at 4:24 pm  

    Lol, you gotta love Old Pickler.

    Steve, I don’t think we’re on different wavelengths. I agree with most of what you say, and yes I’m much more optimistic about India as a global force for goo than China. I never said China would be a good influence, merely that it will be a big influence that will try and counter the USA when it feels its interests are being trampled upon.

    Do you mean you expect the Party to permit opposition parties and a fully free press? (If not, what is to produce the easing you expect?) It might happen, but I think you under-estimate the sheer inertia
    of the system, arising (in part) from thousands of mid-level Party bosses who have nice little rackets going that they don’t want exposed.

    No I don’t, and I am worried about the American companies who give in to Chinese censorship to make money. Who knows what the future holds, but you’re right in that politically we’re still staring into a dangerous abyss.

    But my point was never say to say ‘China is great and good’, only to say that it will be a 800lb gorilla. There is little denying that, economically.

  34. Asma' bint Marwan — on 14th February, 2006 at 6:53 pm  

    Sunny

    The Japanese have never apologized for anything. In fact whenever my great uncle (former POW held by the Nips) dines out at Japanese restaurants and the waiter asked him “can I help you sir” My uncle invariably answers, “Yes an apology would be nice”

    “Just because you’re ignorant about history doesn’t mean I won’t raise the necessary points when we are delving into history.”

    Sunny there is no reason to be chippy, you’re a Brit now. I recall a few years ago when I was at my fathers club. I was speaking to one of the many Indian members; he was a former colonel in the Indian army and looked quite smart in his blazer and regimental tie. To make a long story short, I in my undergraduate rage starting going off on the evils of colonialism, he looked at me as if I had smallpox, he leaned over and whispered in my ear and said. “Stop that damn fool nonsense, the best thing since the coming of Jesus Christ was the British Empire.”

    I think VS NAIPAUL and his late brother Shiva would agree( to some extent) of what the old soldier was saying.

  35. Jay Singh — on 14th February, 2006 at 6:58 pm  

    Sunny there is no reason to be chippy, you’re a Brit now

    Sounds like your Uncle is the one with a chip on his shoulder dude – give him some of your own advice and tell him to get over his Japanese experience ;-)

  36. Petals just fell from heaven — on 14th February, 2006 at 8:19 pm  

    Like many have mentioned agree, I agree that these countries need to examine their own infrastructurres.
    Integration should be a key focus as socialisation of different groups would have a positive impact on the economy and would create a general consensus.
    Or perhaps they should just celebrate valentines and be all merry?

    Am working to deadline 30mins to go until I wine and dine with my valentine.

  37. Asma' bint Marwan — on 14th February, 2006 at 9:08 pm  

    Thanks Sunny, but he already did. Within a year of liberation he regained the six stone he lost during his internment, of course the eye he lost during a beating could not be replaced, so a good glass replacement had to suffice. As for having a chip on his shoulder, I have never sensed one. His second wife is even Japanese-American. However, if I had ever felt he was dwelling on the past, I would never, as you suggested, been so churlish to suggest he get over it. I guess you and I were brought up differently.

  38. Jay Singh — on 14th February, 2006 at 9:12 pm  

    Asma

    Thicko. You addressed your post to Sunny, when it should have been addressed to me. Being a vulgar jackanape I am not surprised at such mental sloppiness. What I didn’t expect (because of my essential generosity of spirit) is the same chippiness that your Uncle still carries for his period of bamboo torture. Get that chip off your shoulder boy.

  39. Jay Singh — on 14th February, 2006 at 9:17 pm  

    Asma

    Does your uncle hide behind the sofa when Bridge Over The River Kwai comes on the TV?

    I kid, I kid! You nephews of Japanese POW’s need to relax a little it’s just a bit of ribbing old boy ;-)

  40. Asma' bint Marwan — on 14th February, 2006 at 9:36 pm  

    “Does your uncle hide behind the sofa when Bridge Over The River Kwai comes on the TV?”

    Don’t know, but I can tell you he was beaming from ear to ear when we watched the movie “Enola Gay: The Men, the Mission, the Atomic Bomb”

  41. Bikhair — on 15th February, 2006 at 12:54 am  

    Asma Bin Marwan,

    Where did you get that name from you are neither Muslim or Arab.

    “(former POW held by the Nips)”

    Nip is a racial slur. Dont use them around here lest the Pakis get all upset.

  42. Siddharth — on 15th February, 2006 at 1:05 am  

    Sheeeeit Bikhair, She’s a bint. A ‘bin’ is a receptacle for garbage. Bint is the female equivalent.

  43. Sunny — on 15th February, 2006 at 1:36 am  

    The Japanese have never apologized for anything. In fact whenever my great uncle (former POW held by the Nips) dines out at Japanese restaurants and the waiter asked him “can I help you sir” My uncle invariably answers, “Yes an apology would be nice”

    What stupidity. The Japanese have two main countries to apologise to. The Chinese – which they do every year around the time of the commemorations, and the Americans (for Pearl Harbour), for which they not only suffered two nukes, but also do apologise every year.

    Your uncle needs to learn his history before he asks people to start apologising. I suggest he goes to Germany if he wants apologising, though you may be surprised to hear they also have. Welcome to the 21st century… your uncle might not be here yet.

    he looked at me as if I had smallpox, he leaned over and whispered in my ear and said. “Stop that damn fool nonsense, the best thing since the coming of Jesus Christ was the British Empire.”

    Yeah – they have names for lap dogs of the British Raj too, who listen to their BBC World and reminisce about the good times when they were licking some officer’s boot.

    You may not like to hear this but the biggest films in India are usually the independence ones where the Indians fight together for freedom (I suggest: 194, a love story, Lagaan, and the currently showing Rang De Basanti).

  44. Rob — on 15th February, 2006 at 9:21 am  

    Sweden & Co. suffer from 20% of its employable population sitting out an average work day. This means that 20% of Sweden’s employable human capital does something other than generate taxable income every work day, and that’s dangerous for a society that believes in “sharing the wealth”. Obviously, wealth must be created first to be shared later, and those who refuse to create wealth but demand their “fair” share of it are bringing Sweden & Co.’s welfare state to ruin.

    Moreover, Sweden & Co.’s corporate income tax rate is relatively low to incentivize company owners to leave their wealth in companies. This incentive is re-enforced by the punitive taxation of company owners who sell their enterprises. Having read about some of the tax vehicles recently created to avoid this punative taxation, one can’t help but wonder how much of Sweden & Co.’s wealth is shipped abroad.

    No, Sweden & Co. are not “bucking the trend”, but rather are bleeding human and liquid capital while suffering corresponding economic and social decay.

  45. Bikhair — on 15th February, 2006 at 4:50 pm  

    Siddhartha,

    Oh shut up, you! You never heard of a typo?

  46. Sunny — on 15th February, 2006 at 5:20 pm  

    This means that 20% of Sweden’s employable human capital does something other than generate taxable income every work day,

    Rob – in other words you mean they take a day off to spend with the family? How scandalous! Such decay of society should be stopped immediately!

  47. john — on 18th February, 2006 at 4:43 am  

    To those who are uncomfortable with American power.

    My belief history as an American.

    In the seventy’s we were supposed to worry about Soviet Union.
    In the eighty’s we were supposed to worry about Japan.
    In the ninety’s it was EU.
    Now it’s China and India.

    Yep. I’m worried. Oh, wait, no, I’m not really.
    Competition is what makes you strong, keeps your claws sharp, so to speak. Study Darwin, same idea.

    Maybe ya’ll are right and the US is heading for a fall. Your not the first to think it, you won’t be the last, but what ever replaces us, it won’t be you. If it’s China or some caliphate super state, well enjoy the thought you won’t be under the evil American foreign policy. Because, as you can site historically, any country taken over by Communist or Islamic ideologies enjoy great renaissances and superior standards of living.

    Yep, please get the word out that America is an evil country with no social safety net. Maybe then all these damn immigrants who keep coming here to work (be exploited by evil American capitalist) will go back to their agrarian utopias that they came from. Why they keep returning year after year after year, or some times move to this satanic hell to make their lives, well who knows? And it’s not just the non-skilled, all these damn Chinese and Indian PhDs keep coming (you would think that people so smart would already know that America is about to collapse under its own non-sustainable greed).

    Good luck with the EU. Adding another layer of unaccountable bureaucracy, always a good idea.

  48. Peter Pedersen — on 18th February, 2006 at 3:43 pm  

    Translated from B.T.:

    The danes most open ;-)

    Examinations from the Rockwool-foundation, Professor Lise Togeby, Aarhus University, Catinet research and EUs big opiniopoll-institute Eurobarometer have clerly shown, that danes towards immigrants – including 200.000 muslems, are more tolerant than most europeans, and that the tolerance have increased significantly i the years after the government change.

    In the same period foreigners living in Denmark have experienced a significant decline in discrimination.

    Furthermore you have surveys that show, that not only are the danes the worlds most content and happy people, but also the most “friendly and accomadation towards other” and “the most open to new ideas and opportunities”.

    The latter is a new result from a broad international scientific investigation af 51 countries done by 78 international scientists through interviews of 1000s of people in the different countries.

    These result are strictly opposed to the ongoing complain/campaign about the “ultra-right-wing” “Xenophobic” voters in Denmark who have supported the Fogh government and its supporting Party (DPP) since the 2001 elections.

    These emotions, which the angry critics wrongly interpret as Xenophobia and intolerance and closeness are in effect a simple but strong persistencty about a well-functioning society
    in a time where many from the priviledged “elite” have become disloyal to the cultual and national solidarity, and dream of a global “multi-culture”, in which the “elite” freely and luxuriously can move around.

    But even the most straight up, modern og disillusionist assesment, kan see the “danish values”

    Yesterday Forbes capital Hospitality index made an assesment, in which Denmark is rated “the most investorfriendly society in the World”.

    The index asseses the complete financial growt, international trade, as well as social factors like poverty, bureaucracy, technological development and corruption.

    We are friendly, open, rich and tolerant. This is certified.

    If this position creates hatred and smear-campaigns, it is obvious to see it as an example of envy.

    Peter Pedersen

  49. Siddh James — on 18th February, 2006 at 3:54 pm  

    in a time where many from the priviledged “elite” have become disloyal to the cultual and national solidarity, and dream of a global “multi-culture”, in which the “elite” freely and luxuriously can move around.

    Isn’t that the definition of xenophobia in the modern world though?

  50. Peter Pedersen — on 18th February, 2006 at 4:02 pm  

    @ Siddh James:

    I dont see the “fear-factor” in the article.
    More like a strong belief in your own cultures strenghts.

    What the writer implies is, that the global “multi-culture” merely benefits the people, but only the so-called “elite”.

    Pete

  51. Peter Pedersen — on 18th February, 2006 at 4:18 pm  

    @ Siddh James:

    Having reread the article i see where you are coming from, with regards to a level of cultural Xenophobia.
    But indeed the same can be said about the “pro” global “multi-culture” people.

    Anyways.. here is the Forbes article i was talking about :

    http://www.forbes.com/2006/02/03/capital-hospitality-intro-cz_jg_0206caphosp.html

    Pete

  52. El Cid — on 18th February, 2006 at 4:45 pm  

    Great post Rohin and a very interesting debate.
    I’m surprised I missed it.
    John, I couldn’t help laugh at your sarcasm. Very funny. But you must remember that much of the animosity in Europe towards the US is bound with your country’s foreign policy rather than with the American way. I mean any country that can churn out Kanye West, Curb your Enthusiasm, films like Crash, and win Olympic medals by the bucket load has still got a lot going for it.
    But you gotta admit, behaving like great big selfish bullies on the global scale is gonna lose you friends. That doesn’t necessarily turn them into your enemies though.

  53. El Cid — on 18th February, 2006 at 4:46 pm  

    Anyway, I certainly don’t think Europe – old or new is doomed, even if we could do better. So China and India are gonna become more important players in the future. Excellent, if we play our cards right we too can ride that growth as they become buyers and not just sellers.
    Europe in general is also more dynamic than people imagine. For example, did you know that European company profits as a proportion of European GDP is currently at a record high? A bit strange huh when you remember how sticky unemployment levels are and the slow pace of European growth?
    But what it means in this brave new world of “global employment arbitrage” — a horrible phrase i know, but it’s gonna catch on — is that production is being relocated elsewhere, largely to younger EU entrants but also to Asia and elsewhere, and our economy is becoming more service-based. Those younger EU entrants are also energising the region by boosting the internal market and creating fresh waves of migration.
    As for those parts of Europe that are held back by old thinking and by too much red tape: well, it’s not too late to reform, and in the grand scheme of things, it won’t be in 10 years time either.
    P.S. I HAVE come across quite a few Frenchies in London in recent years

  54. Caleb — on 23rd March, 2006 at 1:34 pm  

    Interesting debate.

    Regarding the whole notion of Europe being on the ropes, I’d be interested to read what people thought about the idea of a looming population crisis in Europe. No developed nation in the world is reproducing itself at the most fundamental level (including the new EU nations — I’m curious as to how they’re actually going to provide more immigration into western Europe without emptying their own nations in the process).

    This isn’t such a problem in the New World where nationhood isn’t bound up in ethnicity, and so new-comers can become much more an integrated part of the whole, and thus, continue the national cultural project. It seems to me that this doesn’t happen as readily in Europe, and so I’m wondering if indeed there really is the possibility that Europe the Idea will eventually cease to exist, to be replaced by something else, and only continued outside of Europe.

  55. immigration information — on 25th March, 2006 at 8:21 pm  

    Hello Everyone! I’m Mary Lou Oppinhimer, I’m from San Antonio Texas! You have a really nice blog site, I agree with the post. Lots of good info.

Sorry, the comment form is closed at this time.

Pickled Politics © Copyright 2005 - 2010. All rights reserved. Terms and conditions.
With the help of PHP and Wordpress.