This story is going viral: Europe’s traditional left is in a death spiral. Even if you don’t like the left, this is a problem
The entire article can be read here
The decline of the center-left has contributed to Europe’s contemporary economic and political problems and hindered finding viable solutions to them. The left is no longer able to play its historic stabilizing role.
After World War II, European societies were built on principles that owed a lot to center-left ideas. There was widespread agreement after the war that the political chaos and social upheaval associated with the Great Depression had been the consequence of unregulated markets, so the idea that they should be left unregulated again was an anathema. And so, when European political economies were rebuilt, they were designed to ensure that capitalism was reined in by governments. This postwar order worked remarkably well: The three decades after 1945 remain Europe’s period of fastest growth ever.
Politically, this order’s effects were equally important. Workers and employers became more willing to cooperate, and in place of the centrifugal dynamics of the interwar years, when tough times drove voters to the extremes, good times during the postwar years drove voters back to the center. Thanks to a new relationship between democratic governments and capitalism, Europe was able — for the first time in its history — to combine economic growth, well-functioning democracy and social stability.
Just because strong growth coincided with more regulation does not prove regulation helped growth. This is a simple confusion of cause and effect, that is all too common in journalism.
Although the Great Depression was a setback, the author ignores the decades of growth that preceded the depression. There is no statistically significant evidence that unfettered free market capitalism is a net-negative on economic growth. Although this may lead to more boom-bust cycles, the net gain afterwards is still positive in terms of new technologies, increases in productivity, and new businesses. When the technology bubble burst in 2000, the technologies themselves didn’t go away. The left assumes that asset bubbles, when they burst, undo all prior gains, but this doesn’t happen often. Also the Depression had more to do with an overvalued stock market and poor policy that made the depression worse, than deregulation.
Also, as quoted by Milton Friedman, you cannot have both a welfare state and open borders.
The fact that authoritarian economies and societies (UAE, Saudi Arabia, Singapore, etc.) have seen significant economic growth and expansions in recent decades further douses water on the author’s thesis that a liberal ‘social order’ is a necessary ingredient for strong economic growth. By contrast, South America and Southern Europe, both which have democratic governments, have had decades of corruption, for example Brazil and Venezuela:
Corruption is an important part of Brazil’s politics. For years, embezzlement and corruption have been involved in Brazilian elections, and yet the electorate continues to vote for the same convicted politicians.
In 2014 a bribery scheme surfaced within the state-owned oil company that gave the scandal its name. Executives at Petroleo Brasileiro SA (Petrobras) took bribes from contractors and funneled money into the campaign funds of the governing political parties.
Just going through a 1996 edition of Time magazine, a feature story, War Against Sleaze, lists a dozen countries with parliament/constitutional governments that have been afflicted by various corruption scandals typically involving bribery, election rigging, or misappropriation of public funds, in addition to sectarian violence.
Because monarchs are wealthy and have “indefinite political tenure” they are possibly less corruptible than politicians. Northern European countries such as Denmark, Norway Sweden, and Netherlands have monarchies and have among the lowest rankings in corruption: