Tuesday, December 03, 2002

The European Collective-I'm going over comparative economics in my Macro class this week, and I'm having a hard time breaking out of the standard Socialist-Capitalist paradigms that the books tend to present. We're left with "mixed economies" as the word to describe partly-socialist systems. All the western countries would fit that moniker, for none are state-owns-everything socialist or state-owns-no-businesses capitalists. There is a difference between the American economic view and the European economic view that the standard macro textbook doesn't do justice to. The key difference between the two systems (as I see it this evening) is that the American system has the individual as the core operating unit of society while the European system has the state as the core operating unit. Power flows to the government from the people in the US, while power flows from the government to the people in Europe. European "market socialism" looks like the American system at first glance, but there are two different assumptions based on European collectivism and American individualism. The first is that the European systems assumes that it is the government's job to look after the individual while the American assumption is that the individual can largely fend for themselves. This leads to a larger, paternalistic government, with guaranteed health care, guaranteed income and subsidized child care and culture. That larger government leads to slower growth and less wealth, but the underlying collective cultural assumptions are hard to shake. The second assumption is on collective wisdom; Americans feel that the individual is wiser than the collective, while Europeans seem to think that the collective is wiser than the individual. This leads to a greater tolerance of government intervention and of centralization of both government and businesses. In economics, the diversity of ideas that is the free market makes smarter decisions than a central planner, but that runs counter to a collectivist mind-set. The "unilateralist" flaps in geopolitics is a subset of this; if the rest of the world thinks X and the US thinks Y, the Euroweenie thinks that the collective must be right. Paternalism and collectivism both lead to slower-growing economies, while individualism and dynamism helps create faster-growing and richer economies. The continental Europeans see that, but have yet to get rid of the old paradigm. When the French bash Anglo-American economics, they're retreating to their collectivist roots, even though they know it's inefficient. This verges on stereotype, but it seems to come fairly close to explaining the riff between continental Europe and the US. Americans (with the exceptions of the descendents of slaves) are the descendents of immigrants who independently left their own country to find a better life. Those immigrants were independent cusses, by and large, and that ethic still runs through our society( Idle thought-could blacks be more collective in their politics since their forebears were forced to be immigrants?). The UK is a hybrid, it has some of the European collectivism but also some of the individualism of the American. If you look at British history, the settlers are raiders from modern-day France and from Scandinavia, as the first millennia of their history was full of invasions and new peoples setting up shop on the island. A millennia of settling-down has mellowed out that exploring, independent spirit, but it's there. That makes them a bit less European and a bit more American. Australia's immigrant nature might make them a bit less collectivist than Europe as well. Here's three closing thoughts for the Peanut Gallery. Question 1-Is this collectivist nature in Europe for real or just my stereotype? Question 2-How many generations will it take to break this collectivist streak in Europe? Question 3-Will it take southern immigrants to break it?

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