Dreaming Europe in a Wide-Awake World

Dreaming Europe in a Wide-Awake World

Mini Teaser: When it comes to Europe's gilded future, success is always just around the corner. Europeanists need to wake up--or risk being left behind by an unlikely coalition.

by Author(s): James C. Bennett

Timothy Garton Ash, Free World: America, Europe and the Surprising Future of the West (New York: Random House, 2004), 286 pp., $24.95.

Thomas P. M. Barnett, The Pentagon's New Map: War and Peace in the Twenty-First Century (New York: Putnam, 2004), 320 pp., $26.95.

Christopher Booker and Richard North, The Great Deception: The Secret History of the European Union (New York: Continuum, 2004), 474 pp., $39.95.

Olaf Gersemann, Cowboy Capitalism: European Myths, American Reality (Washington, DC: Cato Press, 2004), 320 pp., $29.95.

Jeremy Rifkin, The European Dream: How Europe's Vision of the Future is Quietly Eclipsing the American Dream (New York: Jeremy P. Tarcher/Penguin, 2004), 434 pp., $25.95.

The world today is a vastly different place from what it was thirty years ago. Then the picture was dominated by the stark contrast between the generally prosperous and free First World, the economically stagnant and drably totalitarian Second World, and the seemingly hopeless Third World. Today, that disturbing but fairly simple tripartite classification has been replaced by a much more complex picture. What stands out in this new picture is the way winners and losers are emerging within each of the former categories. Within the former Third World, erstwhile basket cases such as China and India have become awakened giants, economically dynamic and increasingly more assertive on the international stage, while other Third World locations have become more of a Fourth World, sinking into a Conradian heart of darkness, breeding a seemingly endless mess of massacre and terrorism. The bright lights of Prague, Budapest and Warsaw signal a reborn eastern Europe, while Belarus and Ukraine struggle, and Russia wavers in between. Even in the First World, more and more is heard of Atlantic Divides and a growing feeling that America and a uniting Europe have less in common with each other and more in common with other parts of the world. Making sense of this complexity and illuminating a path forward is the intellectual task of today, one which becomes a metric for judging all international trends and policy analysis.

One of the most interesting analytical problems is that presented by the divergent paths taken by the developed nations of the First World, and their respective degrees of success. These are sometimes segmented out as Europe, America and Japan, but the more useful division is probably one of Japan, Continental Europe and what are variously called the "Anglo-Saxon" economies or, increasingly, the Anglosphere. In the early 1970s, all three of these regions were seen to be facing roughly the same set of problems: first, stagnation of a modified market economy defined by substantial economic regulation, high marginal tax rates, and a fairly high percentage of GDP captured by the public sector, as well as high wage levels and inelastic industrial structures reinforced by strong unionism; second, a declining birthrate, which promised trouble downstream for pay-as-you-go pension and benefits programs; and third, a weakening of the old sources of social cohesion, particularly religion, patriotic narratives in education and the media, and (in some countries) ethnic homogeneity.

From the end of World War II to the early 1970s, all three sectors of the developed world enjoyed a general economic expansion. Continental Europe and Japan in fact each experienced more rapid growth and development than the English-speaking nations, mainly from the spur of postwar reconstruction. However, as more and more of the Third World began adopting aggressive, export-driven industrialization strategies, the old cozy collaboration of government protection and passing wage increases on to the consumer began to fall apart.

The Anglosphere nations, led by the United States and Britain, reacted by reducing marginal tax rates, privatizing and deregulating markets, and refusing to subsidize declining smokestack industries. High levels of immigration were accepted, reversing the demographic patterns of decline. Continental European nations responded by increasing European integration, thus expanding internal market opportunities but retaining and even reinforcing the "social market economy"--legislated job protection and generous social benefits, particularly for the unemployed.

A wave of European Union-mandated privatizations ended the most egregious boondoggles, and small, protected national companies were absorbed into a smaller number of EU-wide champions, which were protected more subtly by disguised subsidies and ingenious non-tariff barriers. Meanwhile, most European nations accepted "guest workers", increasingly from North Africa and Turkey. But their assimilation into European national cultures was never aggressively pursued.

Finally, Japan addressed essentially the same set of problems through aggressive use of automation and offshore production, honing their competitive capabilities, and continuing a rather blatant policy of domestic protection. Japan also employed other labor-saving strategies and a minimal number of temporary foreign workers, though making clear that they were expected not to become permanent residents.

So the world economy must today be considered as one vast experiment. The object of this experiment is to determine whether the developed nations might continue to enjoy at least their current levels of prosperity, while the large developing nations of India and China become major economic players and a host of smaller, newly industrialized countries acquire the capability to offer almost every sort of manufactured good and advanced service at the same quality and lower price.

Author Neal Stephenson once famously described this process ending with a global standard of living stuck at "what a Pakistani brickmaker would consider to be prosperity." The challenge for the developed world is to avoid this fate, while not retarding the emergence of these major new players. At the same time, we must deal with those parts of the world that, for whatever reasons, are not climbing the ladder to prosperity. Engagement with these disadvantaged areas is less a matter of philanthropy than of the acute security challenges presented by the current anarchy. These areas, instead of exporting trade goods, are supplying large numbers of desperate immigrants, legal and illegal, and smaller but highly troublesome numbers of criminals and terrorists.

It is in this global and historical context that we must examine Europe's present and future, and what they may mean for the United States. Any static view of Europe today, or one that merely contrasts Europe and the United States in a less-than-global context, is worse than useless. Whatever the relative standings of Europe and the United States may be today, they will be different tomorrow. For anyone seeking to understand Euro-American differences in this context, Jeremy Rifkin's and Olaf Gersemann's respective treatments of Europe relative to America provide examples of two dramatically contrasting approaches encountered in this debate.

One holds that the American approach is dynamic and responsive to competition, and thus it is progressive, and therefore good. The other holds that the European Union, by increasing the scale of its market beyond that of the United States, will overcome whatever inefficiencies remain from its social market capitalism and overtake the United States, and thus that it is progressive, and therefore good.

Gersemann's treatment is closest to the first position. Its particular distinction lies in addressing the "yes, but..." arguments made by Europeans and their admirers when addressing the visible GDP gaps between America and Continental Europe. These run "Yes, America has a substantially lower unemployment rate ... but that's because so many Americans are in prison", or "America makes more jobs, but they are low-wage, service-sector 'McJobs.'" (Gersemann characterizes the latter argument as "We can't actually make any jobs, but if we did, they would be good ones.") Gersemann systematically and persuasively rebuts such arguments.

Rifkin's book is a strange duck. It initially seems to offer a conventional example of the second Europeanist position. And in fact, it does include the standard Euro-critiques of the American socio-economic approach: prisons, McJobs, consumerism and so on. As usual, these arguments are used to fill in the argumentative gaps created by the shortcomings of actual, existing Europe, as opposed to the theoretically ever-more-efficient Europe beloved of the Wall Street Journal and the Economist.

Layered underneath these fairly standard approaches, however, is a deeper and more philosophical level of argument than Europeanists usually present. Rifkin argues that the European approach (The European Dream of his title) is precisely the abnegation of traditional progressivism in its most fundamental sense: the belief in the desirability of material and scientific progress, and the individual identity and freedom that accompany it. Thus, Rifkin's is a two-level critique of America contrasted with virtuous Europe. First, he asserts that Europe is surpassing America on the conventional criteria of prosperity. But he then adds that where economic success is absent in Europe, that's okay too, because progress is bad for you anyway.

Rifkin, therefore, requires critiquing on both levels. Gersemann, in debunking the general Europeanist criticism of America, (his book was written prior to the release of The European Dream) provides an excellent analysis of Rifkin's surface level. The case for the coming European triumph over America is quickly refuted. Gersemann, himself a German financial journalist (currently Washington correspondent for Wirtschaftwoche), convincingly refutes all of the prevailing Euro-legends about America, from the supposedly collapsing middle class to medical care to income inequality. He likewise documents the growing structural and demographic crisis of a Europe that has created more unfunded obligations than it can fulfill--while producing too few children to pay the bills their parents are racking up.

Essay Types: Book Review