Friday, February 27, 2009

Not Necessarily A Bad Thing

Charles Krauthammer's column in today's Washington Post has the spoken assumption (toward the end) that reorganizing our society along the lines of western European social democracy is a bad thing. Yet, I have to wonder.


Matt Yglesias approached this same emerging theme among many commentators, viz., that Obama is pushing the United States toward Europeanization, specifically the kinds of social democratic structures that conservatives insist are fundamentally erroneous. As Krauthammer himself says:
Conservatives take a dim view of the regulation-bound, economically sclerotic, socially stagnant, nanny state that is the European Union.

In this single sentence, Krauthammer makes several assertions as fact that are, surprisingly enough, easy to check. Are western European states "economically sclerotic"? According to Yglesias, not so much.
For the record, however, the most-taxed countries on Earth (i.e., the countries where revenue is the highest percent of GDP) are in order:
1. Denmark
2. Sweden
3. Belgium
4. France
5. Norway

In terms of per capita GDP these are, respectively, the 4th, 9th, 14th, 15th, and 3rd richest countries on earth while the United States is 17th.

Socially stagnant? I'm not even sure what he means by this, except perhaps that in many European states, the vestiges of feudal hierarchy - which some commentators have seen as the root social contract behind the success of social democracy - still exist, marking out the limits of social advancement from birth. I'm not sure how true this is, if this is what Krauthammer means.

Regulation-bound? In what sense? Would Bertlesmann Music Group - the single largest music-producer in the world (it outproduces SONY) consider itself too bound to make money? Would Volkswagen? How about BMW, which owns a majority share of Chrysler? Precisely because the markets are rigidly policed, there is far less a likelihood of the kinds of rampant fraud, irrational overinvestment (particularly leveraged investments) one sees in the US. Indeed, these same companies use different rules of the road in different countries, which is one reason the entire world economy is teetering right now; because of the lack of serious regulatory oversight, these companies made business decisions based upon American law that would have been unthinkable in their home countries.

Overall, having the kind of social democracy many European countries enjoy would be far more pleasant than other alternatives. Of course, their social democracy grows out of a fairly different social contract and history than exists in the United States. Yet, as I read Krauthammer's column, and reflected on Yglesias' column, I wonder what, exactly, is wrong with Europe?

Virtual Tin Cup

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