By progressively abandoning the ideas of free enterprise and free markets over the course of the last hundred years, the United States has eventually given the Europeans what they had been hoping to get for a long time: the admission from the Americans themselves that capitalism cannot work (on its own).
This is perhaps the most worrisome development of the current financial crisis. Europeans such as Ivan Pongracic and I have a different (emotional) understanding of the situation than most Americans around us who have never really lived in a world where the state not only regulates and taxes but also owns (some of) the means of production and can impose a diktat on people’s lives.
In this regard, what is happening in Europe is very concerning. Even right-wingers such as Angela Merkel and Nicolas Sarkozy (although one shouldn't be surprised) have awakened in the last few weeks as crusaders for a new type of capitalism: one that has a more human face, one that does not suffer from crisis, one that is more controlled. Unless the US reacts to this development (and it is hard to see how this would be the case), there will be no one left on this planet to oppose the establishment of a new financial order based on wrong and corrupt ideas about capitalism. The tsunami wave of the new financial order à la Sarkozy will be so high that will cover the entire world.
Richard Ebeling explains this very well in a post today (The French have a Plan: Introduce more Socialism, but Call it Capitalism). Ebeling gets it. He is among the few Americans whom I know who deeply understand the long-term impact of current American policies on world affairs. Europeans are now rejoicing, there is a climate of fear, capitalism needs to be redefined, and there are plenty of candidates to do the job. The idea of the EU as a free trade zone died in 1992 but was really buried in 2008. The EU (meaning mostly France, Germany, and the UK) now wants to export its ideas to the rest of the planet by setting up the new international institutions that will oversee the world economy and its banks. Monsieur Colbert is not dead, he is still alive and well. Let's hope Adam Smith now lives in Asia.