By Samuel Gregg
Monday, November 12, 2012
Following President Obama’s reelection last Tuesday, the
No. 1 question I’ve been asked by family, friends, colleagues, and even a few
philosophical sparring partners is whether America is now nothing more than
just another (albeit rather larger) Western European country slouching down the
road to economic turpitude while basking in a government-subsidized,
debt-fuelled twilight of faded glories.
My short answer to such queries is: “No — at least not
yet. And it is not too late to change course.” Let me explain.
Yes, the president’s reelection is reflective of enormous
and disturbing cultural and economic trends in America. Millions of Americans
do, for instance, seem committed to the expansion of government, either because
they have intellectually rejected the free-enterprise system or, to be frank,
because they personally benefit from interventionist arrangements. Why, for
example, bother going through the hard work of turning around a company (which
might involve telling unions that we’re not living in 1974 anymore) in order to
compete in the global market, when you can get piles of taxpayer money to
produce cars that no one apparently wants to buy? Incentives matter, including
the perverse ones.
Nor can we deny the clear parallels between particular
developments in America and Europe. Whether it is the welfare state’s growth
via Obamacare, the ongoing acceleration of public-sector debt, the demonizing
of the economically successful, our declining competitiveness vis-à-vis the
rest of the world, the spread of crony capitalism, the obsessive living for
me-myself-and-now, or our intellectually corrupt universities (which will
surely be the next financial bubble to explode, and good riddance) — all the
data suggest that, in important ways, we are on the path to becoming Europe.
That said, I’m not one of those who, in recent days, have
seemed inclined to indulge their inner curmudgeon, apparently convinced that
it’s more or less game-over for America and we’re doomed to Euro-serfdom. Why?
One reason is that, in some very important ways, America is still not Europe.
Here are a few of the more pertinent differences.
For one thing, we’re not involved in the grand political
experiment of the euro: the altar at which Europe’s political class is
apparently willing to sacrifice almost anything in the name of a
unified-from-the-top-down Eurotopia. Granted, we have our own problems with a
Federal Reserve that’s surely looking forward to a fourth round of quantitative
easing as its way of helping the administration avoid the macro and micro
reforms that are the only real way to restore American competitiveness —
reforms that will upset key administration constituencies (such as those living
in 1974).
Our little Fed difficulty, however, can — eventually — be
addressed by changing the people who make monetary policy. That’s small
potatoes compared with the prospect of a failed currency experiment that’s
haunting the EU right now, not to mention the sheer economic dysfunction that efforts
to preserve the euro are magnifying throughout Europe.
Second, the strength and persistence of private
entrepreneurship continues to substantially differentiate America’s economic
culture from that of Europe. America remains ahead — and, in some areas,
continues to pull ahead — of most of Europe when it comes to private
innovation. As noted in a World Bank report earlier this year, the elements
that fuel innovation, such as ease in obtaining patents and availability of
venture capital, continue (at least for now) to be far stronger in America than
in most of Europe.
The same report specified that it is young firms driving
innovative growth in America. Among America’s leading innovators in the
Industrial R&D Investment Scoreboard, more than half were created after
1975. They include firms such as eBay, Microsoft, Cisco, Amgen, Oracle, Google,
and of course Apple. By contrast, only one in five leading innovators in Europe
is young. In America, young firms make up an incredible 35 percent of total research
and development done by leading innovators. Their European counterparts account
for a mere 7 percent in the old continent. That’s great news for America and a
major headache for Europe over the long term.
Third, we need to remember that America’s been here
before. You need only read Amity Shlaes’s The Forgotten Man to know just how
far America was driven from its economic moorings by Franklin Roosevelt. Then
we had to endure the economic disaster of Lyndon Johnson’s Great Society. Yet
not even Roosevelt and Johnson could completely overturn the workings of the
American experiment in the economy. And twelve years after Johnson left office,
Ronald Reagan began his revolution.
At best, however, Reagan took America two or three steps
back from the six steps forward that had been made by the Progressive crowd
since the 1910s. Moreover, in some important respects, much of Reagan’s
economic legacy has been undone over the past 15 years. But perhaps America’s
greatest strength in resisting economic Europeanization is the fact that it
remains what John Courtney Murray called a “propositional nation.”
By this, Murray meant that America not only has the
capacity to renew itself by going back to its roots, which are formally
identified in its founding documents, but had also demonstrated a willingness
to do so. Few West European nations have shown a similar ability, not least
because of so many Europeans’ diffidence about the worth of their own heritage.
So while thinking about questions such as how to connect
Hispanics to the conservative cause without compromising the principles of that
cause is important, even more significant in the struggle to bring America’s
economy back from the brink of perpetual Eurostagnation is what some call “the
vision thing.” That means undertaking something that, with some notable
exceptions, many conservatives and free-marketers haven’t proved spectacularly
good at: grounding sound market arguments upon a moral-cultural vision of what
America is supposed to be.
Number-crunchers who think anything that can’t be
quantified doesn’t exist won’t be excited by this. Nor, I suspect, will those
conservatives disinclined to interest themselves in the messy details of supply
and demand. Nonetheless, building and articulating the vision thing must be
part of the way we persuade Americans who are tempted by the false promise of
little work, nanny states, and endless intervention that Europeanization is not
just economically and morally problematic — it’s also downright un-American.
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