Home
/
RELIGION & LIBERTY ONLINE
/
Samuel Gregg: Europe’s Broken Economies
Samuel Gregg: Europe’s Broken Economies
Mar 18, 2025 11:44 AM

Acton’s Research Director in the American Spectator:

Europe’s Broken Economies

By Samuel Gregg

During September this year, much of Europe descended into mild chaos. Millions of Spaniards and French went on strike (following, of course, their return from six weeks vacation) against austerity measures introduced by their governments. Across the continent, there are deepening concerns about possible sovereign-debt defaults, stubbornly-high unemployment, Ireland’s renewed banking woes, and the resurgence of right-wing populist parties (often peddling left-wing economic ideas). Indeed, the palpable sense of crisis left many wondering if some European economies have entered a period of chronic decline — one which might eventually reduce Europe to being a bit-player on the world stage.

Obviously we should avoid over-simplification. In Germany and Sweden, for instance, unemployment is declining while economic growth and exports are rising. Not coincidentally, both countries have implemented significant economic reforms over the past ten years. To the audible disappointment of the world’s left-wingers, Sweden is no longer Social Democracy’s poster-child.

Nor can Europe’s present woes be explained in mono-causal terms. Like America, property-bubbles and over-leveraged financial industries played a role in some countries’ meltdowns. But not every European nation presently enduring economic hardship experienced banking crises on the scale experienced by Ireland and Britain.

It will be decades before economists and pletely diagnose what’s happened to Europe’s economies since 2008. Many, however, will likely conclude that many European countries’ economic culture helped them lurch into seemingly unending crisis.

“Culture” is one of those heavily over-used words. But in sociological and historical terms, “culture” is a way of describing, among other things, the approach to life, the values emphasized, attitudes toward work, the understanding of law, and ultimately the view of science, the arts and religion prevailing in a given society. Over time, these form a type of inheritance that can remain relatively stable in particular historical settings over several generations.

Again, we shouldn’t over-generalize. But we can speak of a West European-style economic culture that differs (at least for the moment) from what might be called “Anglo-American” ways.

Few, for example, would question that the dominant value presently informing Western Europe’s economic cultures is security. Poll after poll illustrates that if West Europeans are asked to choose between more security or more liberty, they overwhelmingly opt for security. That’s understandable, given 20th-century Europe’s history of political and economic instability.

Unfortunately the policies directed toward preventing reoccurrences of 1930s-like mass unemployment and the economic turmoil that fed the extremes of left and right have contributed to notoriously rigid labor markets throughout Europe, not to mention fiscally unsustainable welfare states. These have in turn helped facilitate many European nations’ high unemployment levels, and created deep anxiety among those unable to find full-time work.

Another defining feature of a society’s economic culture is its dominant mode of economic advancement. Broadly speaking, this occurs in two ways in modern economies. The first is through free enterprise petition within a stable framework of laws, customs, and morality. The second is through closeness to government power.

Much of Europe has opted for the second approach. This manifests itself in what might be called hard or soft corruption. “Hard” corruption can be found, for example, in contemporary Greece — a country where it’s very difficult to get anything done without payoffs to one or more of Greece’s army of civil servants.

In a way, however, “soft” corruption is more insidious, because it avoids the overt unseemliness of accepting bribes. Soft corruption essentially involves cozy relationships between European interest-groups — such as businesses unwilling pete, or public-sector unions intent on securing permanent employment for their members — and political parties from across the ideological spectrum. The interest-groups provide the cash and votes that help elect politicians. The politicians reciprocate by legislating to protect their supporters.

The fatal flaw of this arrangement is that neither hard nor soft corruption creates wealth. Instead, they shift the incentives away from creating wealth through entrepreneurship petition. More and more people are thus drawn into playing a dysfunctional game in which the objective is to manipulate state power in order to redistribute wealth towards oneself.

Sooner or later, those genuinely interested in creating wealth in such cultures either give up or simply migrate to more entrepreneurial-friendly settings. Those left playing the redistribution game subsequently find themselves fighting over less and less. Sooner or later, something has to give. Greece has reached that point. Much of Europe is struggling to avoid following it into the abyss.

The irony is that the barriers to change in Europe are not economic. They’re political. And most European politicians understand this all too well. As Luxembourg’s prime minister, Jean-Claude Juncker said in 2007: “We all know what to do, but we don’t know how to get reelected once we have done it.”

Fortunately, no one is a prisoner of their culture, economic or otherwise. European governments could make substantial progress if they chose to pany austerity measures with pro-growth, pro-entrepreneurship, and anti-crony capitalist policies.

Yes, the price for some might well be electoral defeat. But so be it. If the whole point of politics is to promote mon good rather than one’s self-advancement, then any European political leader with any integrity shouldn’t hesitate to think — and do — the unthinkable.

Samuel Greggis Research Director at the Acton Institute. He has authored several books including On Ordered Liberty, his prize-winning The Commercial Society, and Wilhelm Röpke’s Political Economy.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
The archbishop of Canterbury eyes a ‘broken’ economy
Defending the free market and advocating for ever-greater access to capital is of paramount importance during uneven economic patches. That is how Christians should ments from Justin Welby, the archbishop of Canterbury, who recently said that the economy is “broken.” The archbishop cited familiar economic data of unequal economic growth, youth hopelessness, and questions about wage stagnation. Many of these are part of a ing report from the IPPR’s Commission on Economic Justice, of which he is a member. But...
A holistic view of Christian vocation
In a society where personal identity is conveyed by one’s job title, it is of little wonder that the nation’s youth are so anxious about career choice. But what if your identity is found in Christ? What if living vocationally has nothing to do with finding the “perfect” career? ...
Erasing the cross: Public vs. private sector
The European discount grocery chain Lidl stirred controversy by removing the cross from its products’ labels, so as not to give offense. Eagle-eyed consumers noticed that Eirdanous, its Greek food line, featured a picture of a blue-domed Greek Orthodox Church by the sea – but unlike every other such church, its cupola was not topped by a cross. pany Photoshopped the symbol of Christ’s victory over death and Hell off of the Anastasi(in Greek, literally, “resurrection”) Church inSantorini. Perhaps to...
Explainer: What you should know about single-payer healthcare
Today, Vermont Senator Bernie Sanders is unveiling his legislation for a single-payer healthcare system. Here is what you should know about single-payer systems and Sanders’s proposal: What is single-payer healthcare? In a single-payer healthcare system, the government pays for all medically necessary service for of all citizens, regardless of e or ability to pay. Does the U.S. have a single-payer system? In the U.S. most citizens over the age of 65 and people under 65 who have specific disabilities qualify...
5 Facts about the 9/11 aftermath
Today marks the 16th anniversary of the worst terrorist attack ever on American soil. Here are five facts you should know about what happened in the aftermath of the events on September 11, 2001: 1. It took 99 days—until December 19, 2001—for thefires at Ground Zeroto be extinguished.Cleanup at Ground Zero wasn’t pleted until May 30, 2002. It took 3.1 million hours of labor to clean up 1.8 million tons of debris at a total cost of cleanup of $750...
Missiles, threats and sanctions: How should the United States respond to North Korea?
The North Korean people are not the same as the North Korean regime. Photo: “Pyongyang, North Korea” by (stephan) (CC BY-SA 2.0) Today the United Nations Security Council will meet and vote on a resolution to impose new restrictions on North Korea. This resolution is a direct response to recent North Korean missile activity and threats from Kim Jong Un. On July 4, North Korea tested an intercontinental ballistic missile and claimed it could hit any nation on Earth and...
Upstream: A Conversation on Artist Renee Radell
On the Upstream segment of this week’s Radio Free Acton podcast, I discuss the visual art of Renee Radell with Gregory Wolfe. Radell’s work is the subject of Renee Radell: Web of Circumstance (Predmore Press, 2016, 220 pages, $80), a book presenting a career overview of her artistic efforts. In his review of Web of Circumstance for The University Bookman, Wolfe – founder and editor of Image magazine – determines the panying text by Eleanor Heartney superficial in contrast to...
The monopoly markup
Note: This is post #48 in a weekly video series on basic microeconomics. Ever wonder why pharmaceuticals are so expensive? In this video by Marginal Revolution University, Alex Tabarrok shows how low elasticity of demand results in monopoly markups. This is especially the case with goods that involve the “you can’t take it with you” effect (for example, people with serious medical conditions are relatively insensitive to the price of life-saving drugs) and the “other people’s money” effect (if third...
7 Figures: Income and poverty in the U.S.
The U.S. Census Bureau released its latest report on e and poverty in the United States today. Here are seven figures from the report you should know about: 1. Real median household e increased 3.2 percent between 2015 and 2016—from $ 57,230 to $59,039. (This figure surpasses the previous high reached in 1999.) 2. Real median es in 2016 for family households ($75,062) and nonfamily households ($35,761) increased 2.7 percent and 4.5 percent, respectively, from their 2015 medians. (This is...
The consuming self as tyrant
“Consumerism is, quite precisely, the consuming of life by the things consumed. It is living in a manner that is measured by having rather than being.” -Richard John Neuhaus In a free economy, we each serve distinct roles as both producers and consumers. As producers, we create and serve, leveraging the work of our hands to meet the needs of our neighbors. As consumers, however, we look to ourselves and our own needs. Consumption is good and necessary thing, but...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved