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Can Europe Be Saved?

Basil Enwegbara

When one watches American commentators such as Lou Dobbs screaming to save American jobs and the middle-class economy, one quickly wonders why their European counterparts are so silent. In other words, as Americans fight the “unfairness” in today’s globalization in an effort to save middle-class capitalism, European counterparts are looking the other way; they are fighting to save the European type of capitalism -- capitalism that guarantees social equality. Little wonder Europe is more of a spectator than an active player in the globalization game.

But why did Europe choose this form of capitalism? Has Europe simply given up after being subdued for decades by America and Japan? Can Europe fight back and become a serious competitor? For how long will Europeans live in global insecurity? Isn’t it time the old continent recognized that the present direction is a dead end?

Conventional wisdom has long answered that Europe is the victim of its own failures -- failures to abandon its colonial and aristocratic mentality. The inability to recognize that the once held assumption of cultural superiority belongs to a far away past. While the richest country in the world, the United States, has refused to permit citizens a free lunch, even when its superior economic power could allow it to do so, Europe persuaded citizens to believe the right to citizenship is an entitlement to economic security, once sustained by colonial exploitation. Simply unchallenged and untamed, social capitalism has permeated in all the lifeblood of European economic endeavors that any effort to dismantle will be fierecly opposed as a non-European way. Europe has falsely allowed citizens to prefer the comfort zone as long as they are Europeans.

What better place to begin to see the devastating impact than in the areas of unemployement claims and social compensation, a situation increasingly complicated by an aging society? But the unaviodable question to ask is: how can everyone want a larger share of the pie without wanting to help the pie grow? I am not suggesting Europe to embrace raw capitalism -- capitalism simply driven by crooked corporate officers, the looting of pension funds, the defrauding of stockholders, and the wholesale firing of hardworking employees as has been the case in recent times in the US. Nor am I in favor reckless capitalist affluence that erodes family values, that eats away our sense of community and devastates our natural environment. What I am trying to convey is a healthy capitalist system that is driven by competition and that rewards the winner well enough to justify the risk and the sacrifice.

Before anyone jumps to the contrary, one should first take a look at the state of education enterprise in Europe -- that is, halls of academe littered with all forms of decay simply because there is no competitive environment. And unlike their American counterparts constantly in the struggle to remain on the frontier of generating new knowledge, knowledge that is critical to their survival, most European universities depend fully on government budgetary allocations and seem less concerned about the quality of the products. And the fact that there is little wage differential between the best and worst educated seem to create no interest in the pursuit of better education.

Worsened by the fact that everyone is guaranteed the non-negotiable right to job protection with a good a living wage, those who dare venture to seek a competitive lifestyle seem to be punished for even dreaming of class capitalism by being forced to carry all sorts of tax burdens.

Companies wanting to be entrepreneurially competitive are fiercely discouraged through taxes and other social obligations. Little wonder most of today’s European corporations were all the product of colonial gains, while many of their top-performing American counterparts, including Wal-Mart, Microsoft, Intel, Verizon, Hewlett-Packard, and others, were founded recently out of sheer entrepreneurial bravery.

Little wonder today America is restless with the growing threat from China and India, as it fears finding itself where Europe did at the beginning of the 20th century. Europe seems content to pick from what is leftover. What once was the center of events where global decisions were made unilaterally is increasingly becoming irrelevant.

Europe can only be saved when Europeans come to the painful realization that they can no longer continue business as usual -- that is, that there are no two forms of capitalism. The only option that remains for Europe to reinvent itself and become a relevant player in the global economic system of this century is to release the power of entrepreneurial competition to citizens, and to allow the gains that go to those who win be fully theirs, even if that will mean attractive tax incentives including foreigners who are willing to take the investment risks. Handing over of most of its currently public-dependent universities to private hands could be another place to start the European transformation. But what is the likelihood of these things happening? Pretty slim.