by John Lawrence
Frank Thomas and I have been reading a book by Steven Hill: Europe's Promise. Hill dispenses with the myths about Europe - that it is a nanny state coddling its citizens from cradle to grave - early on. Rather then being a welfare state, Hill describes European society as a workfare state. Seen in this light everything that is done that benefits the average citizen does so in order to enable him or her to be a better and more productive worker. Universal health care enables small business to concentrate on business without having to be responsible for health care in exchange for a tax that is far lower than what the average American small business spends on their employees' private health care plans. In this sense government takes the weight off small business' back. In the US there is an obsession with getting government off our back. In Europe government takes the weight off small business' back. Government is an enabler rather than a disabler of business, and as such, Europe has become an economic powerhouse far outstripping the US in many indices.
Europe has not only become an economic powerhouse, but it has done so in a way that widely distributes the rewards and produces far less inequality than does the US. Economic democracy is a way of life. Workers participate in management decisions at all levels. In the 1940s a group of economists based in Freiburg and Cologne proposed a new type of capitalist blueprint which was neither the US laissez faire capitalist model nor the communist state command model. They called it the "social market economy." It was founded on the principles of both pursuing the free market and of serving humanity. Far from being a boom and bust economy like the US, Europe pursues a slow growth steady state model. Slow and steady wins the race. If the US is the hare, Europe is the tortoise and we all know who won that race.
While the US main jobs program is its military - the US spends over 4% of its GDP on the military - Europe spends less than 2% on its military. The savings is spent on benefits for its people like universal health care, universal child care, free or near free education up through university level and massive infrastructure projects like high speed rail. On the other hand Europe pursues a carrot philosophy as opposed to the US' stick when it comes to foreign policy providing more than twice the aid to poor countries than does the US.
The EU also benefits from a close government-industry partnership that represents an industrial policy totally lacking in the US which leaves everything to private enterprise. This is also true of other countries that have a different model from the EU - China, for example. Hill states:
Today in the post-economic crash era, in which state regulation and state direction of economies have a new found legitimacy, this American free market fundamentalism seems nostalgically quaint, especially since the government owned sovereign wealth funds of China, Saudi Arabia, the Gulf states, and elsewhere manage about $3 trillion in assets and investments all over the world, and huge state-owned enterprises such as Russia's Gazprom, Saudi Arabia's Aramco, and China's SINOPEC rely on much greater government involvement than [Europe's government-industrial partnership,] Airbus. The economic rules have shifted dramatically. but the United States, even under the Obama administration, still remains in an antiquated free market ideology.
While other countries have vibrant and active interconnections between government and industry, the US has a government controlled by corporate paid lobbyists who work to use government as a paid adjunct to their particular business interests resulting in short-sighted payoffs to special interests which do nothing for the overall economy not to mention the average worker/citizen. Sovereign wealth funds introduce a state capitalist component to many countries including EU countries such as Norway which reaps 50% of off shore oil drilling profits which are then plowed back into Norway's social security program. While the US contemplates its social security program going broke, Norway is acting as a state capitalist in cooperation with private capitalists to extract oll from the North Sea, sell it on the world market and plow part of the profits (widely distributed) back into its own people. The US considers state capitalism to be socialistic and so remains, as a government, in huge debt with no idea how to get out of it except to reduce social programs that benefit its people. In the EU these programs are well and rationally funded.
To be continued ...
