Like many moderately intelligent (but ill-informed) teenagers, I spent much of my high school career imagining myself as socialist rebel. And like many since, I defended my beliefs by pointed to various countries in Europe as an example of how successful the "democratic socialist" model was. And then I grew up. But the argument that Americans should emulate Europe persist, and our current President is a strong advocate of policies that would make the United States more like the European Union. He has already reversed the 1996 welfare reforms of Bill Clinton (the last president to make any significant free market reforms), he has signed legislation to advance the process of state run health care, and, having failed to get our Congress to pass a burdensome Cap and Trade bill on "carbon" emissions, has authorized the EPA to regulate carbon even more severely to the detriment of energy production and economic growth. If the latter policies are not soon reversed, the time will soon come when $5 a gallon for gasoline will seem like a bargain. But what of it? Critics of American policies will respond that Europeans have long paid high gasoline prices and they are prosperous. Why should we not follow their lead? The answer is because the European approach has not been nearly as successful as various left wing ideologues would like to believe. In fact, absent US subsidies, Europe would be even poorer than its current declining standard of living suggests.
Of course, these facts are not widely known, and are rarely reported. But this delightful little book by Daniel Hannan, a member of the European Parliament, takes apart many of the myths that idealistic members of the left promote. Indeed, one suspects that one reason they promote these lopsided claims is because most Americans aren't really familiar with actual conditions in Europe. Hannan, however, is intimately familiar with them. Yes, it is true that the European social democracies experienced tremendous growth from 1945 to 1974. It is also true that they had an educated and disciplined work force, were starting from an artificially low economic output due to the effects of World War II, received a huge amount of subsidies from the Marshall Plan, and, because the US was footing most of their defense bill, did not have to devote a significant part of their budget and research to national defense. It would, Hannan notes, have been incredible if they had not experienced growth. But that growth did not come from the implementation of state socialist policies. It came in spite of such policies. And since 1974, growth has been non-existent. Indeed, even as the European Union, so recently praised by President Obama has strengthened, standards of living have declined significantly. In 1974 the 15 non communist members of today's EU made up 36% of the world's GDP. It has fallen 10% as of 2011 and will fall a further 11 percent in the next decade. Even more frightening, outside of Great Britain, Europe does not produce private sector jobs. And, as the US has adopted the European model of bailouts, increased regulation, and in some cases nationalization of industries, our unemployment rates are starting to emulate theirs.
In addition to describing the broad economic trends, Hannan covers the tragedies that result from state run health care, especially in Great Britain, how the permanent welfare state breeds resentment and actually promotes domestic terrorism, and considers some of the reasons why the population of European countries are declining, even when you include the effects of immigration. It is, in all, not a pretty picture. Yes, as our leftist friends constantly tout, European workers (ie., those lucky enough to have jobs) work less than their American counterparts. They also produce less, pay more in taxes, face higher prices for all consumer goods and get poorer health care as a result. (As an aside, I would like to have seen Hannan detail precisely how many European countries manipulate their health care statistics in a way the US never would. That information is available elsewhere, but the broadside format of Encounter books does not allow that sort of detailed analysis.) In short, the standard of living for all but the governing elites is significantly worse in Europe. And if the US continues to follow the path set by our current president, we too will enjoy the same results.
Valuable as this book is, I doubt it will have much effect on those who like to cite the European model as an approach for American politics. As this book points out, they overstate their case, at best, and refuse to admit the shortcomings of that approach. But the reality is, leftists today who want America to follow the path of Europe do not, for the most part, actually believe it will improve our standard of living. They know, for example, that carbon taxes and regulation depresses an economy. They also know that socialized health care leads to rationing and limits advances in medicine and treatment. But they advocate these policies because deep down, they are sympathetic to an aristocratic sensibility. This world view seeks to control people, not liberate them. And reading between the lines of Hannan's essay, one immediately sees that behind the leftist rhetoric of a fair and just society, the abandonment of American exceptionalism, and the promotion of social welfare, lies a deep rooted conservatism. Indeed, one suspects the new left is little different from the Tory aristocracy of centuries past. We can do better than that.