A memo to Europe on idled resources and the opportunity in meltdown

posted at 10:05 pm on September 27, 2011 by J.E. Dyer

Mark Steyn wrote over the weekend about the meltdown of the Eurozone and the impending “end of the world as we know it.”  Although it’s football season, and there’s plenty of fun stuff to do, it’s worth taking the time to point out some things about this global collapse deal, one more time.

First, the collapse of the Eurozone, which does look likely to happen, is the death of a Big Idea.  It represents more than the collapse of a common currency.  It’s the death of an idea of human life, regulated and directed and comprehensively administered by the state.  The collapse represents a triumph of reality over hallucination.  You can’t, in fact, build a sustainable model for having the state organize most of the investing for the people, and use its resulting power to tell the people what they are allowed to think and say, how much electricity they can use, and what medical services they will be allowed to have recourse to.

It is impossible to maintain a sound currency – much less a sound fiscal policy – when that’s your going-in proposition.  And it’s good news that we are reaching the breaking point.  The collapse of the Eurozone means Europeans cannot keep doing what they have been doing.  They will have to do something else.

There are millions of people in Europe who will all still be there the day after the official collapse, however that ends up being marked.  The collapse represents a gigantic opportunity for them, if they will take it.  Each nation already has a mechanism for choosing new representatives, people with different ideas, to govern it.  I am not convinced that there is no one left in Europe who has the discipline and character to chart a new course, instead of collapsing in the gutter, whimpering.  There is a colossal infrastructure in Europe, and what it needs is not solicitude and life support but a release of the clamps in which it is immobilized by the 20th-century “European idea.”

America is not that far behind Europe.  We have deceived ourselves that we don’t intend to end up overregulated and overspent like Europe, but the Obama presidency has demonstrated with disastrous clarity just how vulnerable we already were – had already made ourselves, long before January 2009 – to Sudden Overregulation and Sudden Overspending.  If we are to recover, politically and economically – not to mention spiritually – this cannot stand.  We, too, like the Europeans, have to do something else.

At the heart of the European idea is ratcheting up the “civilization premium”:  the extra that it costs us to earn our bread and lodging in a complex society, as opposed to foraging for nuts and berries while we wait to be eaten by the local wildlife.

In many ways, civilization and complexity make things more efficient for us.  But paying for civilization pulls against that effect in a perpetual dynamic.  And the very purpose of the Euro-nanny-state is to add a growing premium to every unit of work effort or purchasing power, in order to pay for civilizational goals.

It has been a long time since anyone in Europe, or in the rest of the modern, post-industrial world, has worked almost entirely to pay for his own needs. The most productive are working at least 4 out of 12 months to pay the civilization premium levied directly by the state through taxes. We then work some months after that to pay the premium imposed indirectly by regulation.

Obviously, we have to pay for police and fire services.  We want to; those services create a stable environment for family life, property, and business.  But paying government regulators to withhold water from us, terminate oil-and-gas drilling, and maintain a system of litigation in which we can be made to pay rent to others for exhaling, doesn’t do that.  It doesn’t enhance our well-being or economic prospects; it merely makes the necessities of life cost more.  It makes us work harder to pay for the same things.  Very often, that’s not worth it to us, and one of the costs of civilization becomes a systematic discouragement of our efforts at the margin.

Today, America and Europe are drifting on a sea of resources idled artificially by government policy.  To begin with, we have a combined population that is less well-educated than its ancestors.  That is a huge idled resource.  The same population operates increasingly on a mental attitude of entitlement and resentment, and that idles it further.  Both of these conditions were created by the implementation of the European idea in the public schools.  Our people – the ones walking around right now – would be much more productive without these handicaps.

To me, this is the most important idled resource, but it cannot be unleashed without removing the clamps of regulation and taxation.  Regulation has taken the place of taxation as the worst imposition on our daily economic life.  It is a silent, mostly invisible killer.  I would like to see the American capital gains tax rolled back, but it’s not our capital gains tax that is destroying our economy, it’s regulation.

Don’t forget the words idled resources.  I’m not talking here solely about capital available for investment, although I’m talking about that too.  I’m talking about how much more you could accomplish, and how much more you could save and buy (with cash), if the government didn’t keep driving up your basic costs (and, indeed, the cost of everything else) with regulation, while diverting 30-60% of what you’re worth to your employer in the form of taxes, mandated benefits, and “social investment.”

I’m talking about the natural resources we could be making use of if the state weren’t literally putting them off-limits to us.  I’m talking about what each of us could do to escape the industrial-job straitjacket if the cost of starting a small business weren’t so prohibitive.  Above all, I’m talking about the new lease on life the younger generations could have if their heads weren’t being filled with hate-thoughts about normal human life 24/7.

Imagine how the economies of the Western industrial nations would surge to life if people were allowed to profit from deciding to work however long it took to do profitable things.  A simple proposition, but fewer and fewer of us can do that today.  The idea of profit in any form is demonized; major segments of profitable work are effectively prohibited, either outright or through regulation; “jobs” are defined in terms of what benefits must accrue to them, rather than in terms of what needs doing; and when there is a profit, it gets hunted down and confiscated in one way or another.  If the capital gains tax doesn’t get you, the regulation will.

Government, as Reagan said, is the problem.  There is nothing we can’t do if we will allow the people to put our idled resources back to work.  Those idled resources represent trillions of dollars in wealth and revenues.  And those trillions would pay down an awful lot of debt.  But they can’t be extracted from a controlled, limited, managed citizenry; they can only be produced by people who are free to labor and profit on the basis of their own motivations.

The impending collapse of the Eurozone is proof of the first truth.  It represents the biggest opportunity Europe has had in a century to acknowledge the second, and act accordingly.

Europe, get rid of your failing welfare state, your unsustainable national health systems, your religious belief in regulation, and your “multiculti” hate-management schemes.  Unleash your people.  Get the demons of self-hatred and institutionalized discouragement off your back.  This is the chance of a lifetime.  Go ahead.  Show us the way.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

This post was promoted from GreenRoom to HotAir.com.
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I’ll just repeat what I posted earlier in the Green Room:

Best piece yet, J. E. Dyer.

I particularly like this:

Obviously, we have to pay for police and fire services. We want to; those services create a stable environment for family life, property, and business. But paying government regulators to withhold water from us, terminate oil-and-gas drilling, and maintain a system of litigation in which we can be made to pay rent to others for exhaling, doesn’t do that. It doesn’t enhance our well-being or economic prospects; it merely makes the necessities of life cost more. It makes us work harder to pay for the same things. Very often, that’s not worth it to us, and one of the costs of civilization becomes a systematic discouragement of our efforts at the margin.

Thank you.

hillbillyjim on September 26, 2011 at 2:44 PM

hillbillyjim on September 27, 2011 at 10:19 PM

Dang HTML

This:

Obviously, we have to pay for police and fire services. We want to; those services create a stable environment for family life, property, and business. But paying government regulators to withhold water from us, terminate oil-and-gas drilling, and maintain a system of litigation in which we can be made to pay rent to others for exhaling, doesn’t do that. It doesn’t enhance our well-being or economic prospects; it merely makes the necessities of life cost more. It makes us work harder to pay for the same things. Very often, that’s not worth it to us, and one of the costs of civilization becomes a systematic discouragement of our efforts at the margin.

There.

hillbillyjim on September 27, 2011 at 10:21 PM

Dang HTML

hillbillyjim on September 27, 2011 at 10:21 PM

Dang hillbillies!

Kidding aside, this was a grand slam analysis. Didn’t I see it posted/quoted at Ace’s last night?

John the Libertarian on September 27, 2011 at 10:34 PM

And my own contribution, linked into hillbillyjim’s comment:

GDP is normally defined as C (consumption) + I (private investment) + G (government spending) + [x - i] (net exports), but there is a fundamental flaw involved.

All of these assume that the result is desired: Consumption because people want to consume; Government spending because people want bridges and roads; net exports because other nations find value in our goods.

But Consumption is Consumption, even if it’s heroin; Government spending is included in GDP, even if it’s useless boondoggles like trains to nowhere or Solyndra. These are included in GDP even if they adversely impact the public.

And, when it comes to government spending, a great deal of government projects can actually be worse than useless — not only do they flush money away today to no benefit, but they create continuing obligations to flush money away tomorrow. A train to nowhere today wastes ever dollar of its construction….but also creates an obligation for continuing maintenance or wind-up costs on termination.

The reason that people feel that we’re still in a recession, though the GDP numbers might show otherwise, is because a large amount of the GDP is government deficit spending of zero or negative utility.

cthulhu on September 27, 2011 at 10:36 PM

Way too optimistic…the left will never, ever relinquish their root power unless forced.

JIMV on September 27, 2011 at 10:38 PM

Excellent post.

As a worker in education, I say, give up on the public high school and universities. Start after school programs and summer camps that talk about free enterprise and Milton Friedman, liberty and the Founding Fathers. Believe me, our grad students have never heard of most of this.

Parents need these child care programs, so they will sign up. You can start teaching the children what they should now before education destroys them.

PattyJ on September 27, 2011 at 10:42 PM

Europe – the world in general – has never predicated higher civilization on the voluntary association of ordinary strangers facilitated by a limited governnent, and probably never will. If America doesn’t vindicate that idea it will go dormant.

Seth Halpern on September 27, 2011 at 11:07 PM

It is almost revolutionary thinking to imagine going back to the way things were just a few decades ago.
I agree with JIMV that the liberals will not go quietly.

GaltBlvnAtty on September 27, 2011 at 11:18 PM

That’s not a “civilizational premium.” That is socialism.

AshleyTKing on September 27, 2011 at 11:31 PM

If we are to recover, politically and economically – not to mention spiritually – this cannot stand.

And therein, lies the problem. The core of the problem is the Atheist religious system that has taken over both in Europe and here.

Reference The Book of the Revelation, chapter 6, verse 6:
“And I heard what seemed to be a voice in the midst of the four living creatures, saying, “A quart(1) of wheat for a denarius,(2) and three quarts of barley for a denarius, and do not harm the oil and wine(3)!”

[1] Greek choinix, a dry measure equal to about a quart
[2] A denarius was a day’s wage for a laborer
[3] Oil and wine were symbolic of wealth

Are we there yet? No. But we do appear to be closing in on it.

oldleprechaun on September 28, 2011 at 2:34 AM

Excellent article!

The one silver lining to the dark fiscal clouds looming o’er the horizon is that the collapse of the socialist welfare state will force societies to scale back government. The experiment only ran for the last half century by rolling credit cards, but the charges are about to be denied.

There will be prolonged pain amid much wailing and gnashing of teeth but, if we only heed the warning of the failed systems, a better construct will reemerge: the American system which raised us to dominate the world’s economy in the first place.

Adjoran on September 28, 2011 at 4:28 AM

If we are to recover, politically and economically – not to mention spiritually – this cannot stand. We, too, like the Europeans, have to do something else.

Which is why choosing Romney is the second worst thing we could do. It guarantees we won’t do “something else”.

SKYFOX on September 28, 2011 at 6:32 AM

Europe ‘doing something else’ would require breaking with historic cultural patterns of denial of human rights. For a brief period from 1648 to around 1790 there was a flourishing of the understanding that human rights are not granted by government, but are a part of Nature as given by Nature’s God. That we have human rights separate from that of the civil realm is self-evident: you are the actor in your life that matters, you make decisions for yourself, and when you are restricted from doing either you are a slave. The concept of government being the organ of society that is the defense against our negative Natural Liberties, those things which degrade society and are harmful when individuals no longer respect the positive Natural Liberties of others, means that we also vest government with the power to act on those items.

The background of England (and the unwritten local Common Law) and the Norse (where the King understood that he is accountable to his subjects) were fused with Westphalia and the respect stated by all involved for the right of the individual to worship as they pleased within the confines of the main strands of Christianity. While prior works examined such things, it was this fusion that created the environment of understanding to expand the concept of personal freedom with government accountability under a known system of laws acceptable to the governed that led to critical understanding that was to be distilled in America. Our understanding of human liberty and human rights as something separate from government is the exacting product of those who worked on understanding this change in human events, this new order in the world. That spark that started in Europe could only be kindled in the aftermath of a horrific war that saw so many dead in the name of the Prince of Peace by temporal leaders and having the understanding of other societies infused into the post-1648 Eternal Peace on this subject.

Yet, today, we hear little of these people from before the Founding that gave us this necessary spark, this necessary impetus to this great understanding. Even worse is that Europe has had its social fabric degenerate under the onslaught of civil government that sees its power as perfect within the realm of civil law and slowly distanced itself from the moral and ethical guidance of the people that are governed. As we understand it government is a necessary evil because men are not angels, in Europe government is seen as a vestment point for imperfection and given positive liberties to dispense so that such governments have both the whip and carrot with which to abuse its population.

There are some exceptions in the EU or EZ, but they are few and relatively minor. Western Europe has degenerated from having a people that understood that to get good governance that they must be virtuous to that of saying that government is to provide the virtue that they now lack as the populations no longer wish to tend to their positive Natural Liberties. To ‘turn around’ Europe is not something that is fiscal, but it is to break with centuries of social order from government that now allows social decay so as to make better subjects, and soon better plebes and then onto slaves, of their own people. For a time spanning not more than 150 years, Europe was on the path to understanding this, but then turned from understanding that the good of government comes from a virtuous people and went to the glory of government as a redeemer of society. That started just a bit before the French Revolution and after it Westphalia was adhered to in spirit for a bit longer in other parts of Europe, then in name, and then not at all as government came to replace God with the effects all too well understood from history.

The tragedy isn’t that it happens, but that it is so predictable given the nature of man. If you want to help Europe, then encourage Tea Parties and the understanding that it is the place of the citizen to hold government accountable, and that means self-government at the very first stop as if you cannot control yourself, then nothing any other government can do can redeem YOU. That is why the Tea Party concept is so important: it isn’t just the fiscal realm, but the understanding that you are accountable for your actions to yourself and your family first and that to have that you need a set of morals and ethics to recognize the power of your own Natural Rights and Liberties. Too bad this isn’t taught in Europe… or America… any more.

ajacksonian on September 28, 2011 at 7:06 AM

I a way more pessimistic on what comes next in the US. I don’t see any practical way to rollback the laws and regulations that are choking the economy. Ending entitlements as we have them now is possible but will result in Greek like events (rioting, strikes, etc). It is much more likely we are in for a serious bout of inflation (somewhere along the spectrum from Carter to Weimar) and economic collapse. The question is what arises from that? The next Reagan or the next leftist fascist (an Obama given free reign to indulge his totalitarian impulses).

Rightyismighty on September 28, 2011 at 8:00 AM

I have been waiting for the EU to collapse since before it became a legal entity. When France came out with a proposed constitution four hundred pages long I expected the EU to last less than five years. The Euro was a similarly silly idea in my book. The Euro is now worth noticeably more relative to the dollar than when it was issued. Here we are decades later than both formations. I have given up hope that Europe will ever do anything right.

I am very discouraged about our own government. I lived through all of the New Deal. In that time and the rest of the last century we only had capable and ethical government a very small percentage of the time. In this century we have not had a capable ethical government yet. The only person who has run for president this year who I would be happy to vote for is Daniels. I will be reduced to voting against Obama.

burt on September 28, 2011 at 9:51 AM

The President that outlines this vision has my vote. Excellent piece.

MNHawk on September 28, 2011 at 9:58 AM

Excellent article, Ms. Dyer. Excellent!

Harrell on September 28, 2011 at 10:35 AM

The most productive are working at least 4 out of 12 months to pay the civilization premium levied directly by the state through taxes. We then work some months after that to pay the premium imposed indirectly by regulation.

Cost of Government Day The full cost of government. And remember working 4 months is the AVERAGE and includes the bottom 49% that pay no federal taxes and therefore low state and local taxes.

Amendment X on September 28, 2011 at 11:49 AM

First, the collapse of the Eurozone, which does look likely to happen, is the death of a Big Idea. It represents more than the collapse of a common currency. It’s the death of an idea of human life, regulated and directed and comprehensively administered by the state. The collapse represents a triumph of reality over hallucination. You can’t, in fact, build a sustainable model for having the state organize most of the investing for the people, and use its resulting power to tell the people what they are allowed to think and say, how much electricity they can use, and what medical services they will be allowed to have recourse to.

Its why socialists can never be allowed to control, anything.

Speakup on September 28, 2011 at 2:53 PM