Why Can’t Social Change Happen in Western Europe?

Following on Pete’s post on Saturday, I’d like to expand a bit more on the issue of reforms in Europe. I just want to make four points.

1. Insiders. Europe has too many insiders that benefit from the current system and are not ready to bear the costs of change. This means that in countries such as France, two economies run “side by side”: on the one hand those who are exposed to competition (and have adjusted accordingly) and on the other those who are not (and who defend the status quo).

2. Things still need to become worse. Because insiders still gain more than they lose from the current system, it may imply that for European countries to reform, things have to become much worse. We haven’t reached the bottom yet, and knowing when this point has been reached is difficult. However, it is not as if reforms had never taken place in Europe; most European countries have had experiences with economic reforms in the past two decades, but major reforms have been limited to the UK and Northern Europe. We are still waiting to see grand scale reforms in other EU countries.

3. Voting systems. Also, Europe’s love for proportionality in electoral systems perhaps makes it harder to find a constituency that would impose reforms. Instead, we get coalitions that go nowhere and only revere the status quo (see here for a counter to this argument).

4. Ideology (and secularization). Another important issue is the necessary de-communization (or de-Marxization) of Europe that has not taken place yet. Theodore Dalrymple calls it the “obsession with social security” (see here and here). A counter to that argument is that there is often a gap between rhetoric and reality (Europeans say they dislike free market capitalism but de facto they accept the rules of globalized capitalism). Perhaps not. I also think that the relative secularization of Europe (which goes hand-in-hand with its Marxization) is a serious issue. As James Buchanan explains in Afraid to Be Free, 19th century socialism has replaced God and the family by the State. This goes to the heart of the difference between America and Europe. In Europe, the State has become an idol (in France it is called la République). In contrast, Americans still turn to God for help (and not the State) and thus by and large tend to abide by the saying: God helps those who help themselves.

What do you think? I’d like to know what those who are interested in this topic think. Comments are open. (Also The Economist has had a few good articles on the subject recently—see here, here, and here.)

Comments

[nPu]

The worst thing is that the policy and Brussels-bureaucracy is being glorified and followed by many central and eastern EU-countries, including Czech Republic in which I'm living since I was born and which used to be one of the satellite of USSR until 1989's Velvet Revolution took place. And, unfortunately, de-Marxization still needs to be carried out here as well.

[Dain]

I think rhetoric is the only substantial difference between the EU and the US. We have socialism here, but due to a long Cold war and a theistic outlook at odds with Marx's philosophical atheism, Americans believe they are representative of some inherent link between God fearing and the free market. We in fact are representative of God fearing and corporatism.

[Rafe]

Like Dain, I get the impression that there is a bipartisan push to hogtie the market order in the US. But all is not lost in France, not long ago someone asked for permission to translate my introductory essay on the Austrians into French for his website. Permission was granted. This is the piece, although I have not checked on the French site.
http://www.the-rathouse.com/hayaustriankey.html
This was written in 1985, a couple of years after I discovered the Austrians in the bookshop of a small and shortlived libertarian think tank in Sydney.

[noname]

What about genepool? Those who were risktaking and entrepreneurial left to the US or NZ! Those who never wanted to leave mummy stayed, (mummy was later replaced by government).