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Monday, October 3

Europe by the numbers

Eric T. Miller, one of Pundita's favorite WOMS,* reports in his latest column at Tom Brown's Bankstocks about two recent lectures given by experts on Europe and European foreign relations.

The speakers were Josef Joffe, editor and publisher of Die Zeit, the German weekly, and Dennis Bark, author of several books on Europe and its relations with the United States.

Mr. Miller's summary ranges over discussions about deteriorated US-European relations (and reminds of some bright spots in those relations) and looks at how the experts view the German election.

He also passes along observations about demographics and work habits in Germany, which I found striking in light of the demographics-based analysis of China and Iran I highlighted in yesterday's posts:
Josef Joffe asserted that Europe is dying because of its demographics. No European country has a birth rate that’s above the replacement rate -- which means that the population of Europe is headed toward long-term decline. Italy has the lowest birth rate. If Russia were to be included in the overall picture, the aging of Europe is even more dramatic.

In the past, there has been a close correlation between growth in the labor force and overall economic growth; Europe thus seems condemned to slow growth at best unless there’s some amazing breakthrough in productivity. Considering European labor intransigence and work attitudes, that doesn’t seem likely.

Both Joffe and Bark said that the one necessary ingredient for Europe to thrive again economically is for it to work much harder, which would mean wholesale changes in work habits and rules. If the Social Democrats retain an important almost role in the next German government, the opportunity for change in that country seems limited.

Joffe said that the Social Democratic mindset is entrenched, and that Social Democrats are intolerant of ideas other than their own. They remain determined to maintain the social welfare system in its entirety. Their central emphasis is on equality; they give short shrift to incentives that might spur growth.

To date, any assault on the Europeans’ welfare systems has come about as a result of the outside forces of globalization and Europeanization, but those assaults haven’t made any difference. If anything, Germany has moved further to the left, according to Joffe. And the country is further handicapped by the drag of the former East Germany, which, because so many people are on the dole there, is costing the country 4% of GDP. Joffe observed that the country is hooked on the welfare system; people are like junkies dependent on government assistance
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Here we find another example of Nature trumping ideology. Political, social and economic philosophies tend not to give much attention to climate changes that force large migrations and the social upheavals that accompany a steep decline in a settled population.

That observation holds as true for European socialist philosophy as for Chinese communism and Islamic theories of government. It holds true for philosophizing, in general.

(For those who argue that the revealed word of the divine is the best philosophy to guide human affairs: when the well dries up, there is Revealed Word that can't get lost in translation.)

During periods when Nature allows for stability in human affairs, people have great latitude in choosing what they wish to believe, and often without undue penalty. It's when Nature presents a reality check that the penalties can pile up fast if people are unwilling to make adjustments in their philosophy.

The advice from Bark and Joffe that the Germans must work harder to compensate for the decline in their population is a good reminder about bottom-line issues for humanity.

Societies might have the means to rise to a challenge from natural forces, if they choose to deploy them. This is provided they deploy the means within the window of opportunity time permits. The window generally does not stay open long.

To read the rest of Mr. Miller's report titled Old Europe click here.

* Wise Old Men of Wall Street
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