By Kevin
D. Williamson
Monday, April
17, 2023
My, but
2007 seems like a long time ago.
In 2007,
Jay-Z made a video for “American Gangster” in which he prominently displayed a
very large stack of banknotes—not the Benjamins that it used to be all about,
but euros. And why not? The euro was, back then, at an all-time high against
the U.S. dollar. Things went well for the eurozone for a while: In 2008, the
European Union’s economy was larger than that of the United States. But growth
changes everything, and the European Union has paid a high price for
eurosclerosis: By 2022, the U.S. economy was 25 percent larger than the
combined economies of the European Union and the United Kingdom, formerly the
EU’s second-largest national economy. The U.S. economy is about 50 percent
larger than the economy of the post-Brexit European Union. In 2008, a U.S.
dollar would get you only 0.63 euros; in September 2022, the dollar bought you
1.03 euros, though as of Friday the greenback was only at 0.92 euros—not a
record high, but almost half-again as much as it traded at in 2008. The United
States is today much wealthier than the European Union on a per capita basis,
with a gross domestic product per capita nearly 50 percent higher (on purchasing-power
parity basis) than in the European Union. The only EU countries with higher
per-capita GDPs than the United States are Ireland and Luxembourg, relatively
small countries where the data are distorted by corporate profit-shifting. (Two
European countries that are not EU members also have higher per-capita GDPs:
Norway and Switzerland.) So, sing another chorus of “All About the
Benjamins.”
But is
that actually good for the United States?
Not at
all, says the European Council on Foreign
Relations, a think
tank that provides invaluable resources for non-specialists looking to keep up
with European affairs. Just a few days before President Emmanuel Macron of
France warned about Europe becoming a
“vassal” of the United States, the ECFR issued a report with a cheeky title—“The Art of Vassalisation”—and a sobering subtitle: “How
Russia’s war on Ukraine has transformed transatlantic relations.” All that
growth has been good for the United States, as has the continued development of
U.S. military capabilities, even if many analysts argue that the United States
has fallen grievously behind in its defense investments. (Fred Kagan is one of
these; listen to his conversation with The Dispatch’s
Jonah Goldberg here.) The Europeans have spent years talking about
“strategic autonomy”—meaning the development of EU capabilities in such a way
as to give the European Union the ability to see to its interests without U.S.
support and, if necessary, in the face of U.S. opposition—but the European
Union has grown less powerful relative to the United States during all those
years of “strategic autonomy” talk rather than growing into more of an
equal.
It is a
very nice thing to grow more powerful relative to one’s enemies and rivals. Growing
more powerful relative to one’s allies is, in its way, a kind of burden. The
allied response to the Russian invasion of Ukraine has been, in effect,
Washington’s response: As ECFR reports, the United States has provided more aid
to Ukraine—military and humanitarian—than all of the EU countries combined.
The number of U.S. troops stationed in Europe increased by nearly 50 percent in
only a few months, and the Biden administration has rolled out plans for new
bases and installations in the places that most need support: the Baltics,
Romania, and Poland. This has gone along with a reversion to—even a deepening
of—Cold War habits, with the United States both providing the bulk of funds
and matériel and taking the lead strategically and
politically.
This isn’t
just about dollars and bullets. It is about political and intellectual
leadership, too. From the ECFR report:
American leadership is about more than just resources. The US has proven
necessary to organise and unify the Western response to the Russian invasion.
Within the EU, there had been enormous divisions on the question of Russia in
recent years. Countries such as Poland, Sweden, and the Baltic states deeply
distrust EU members such as France, Germany, and Italy on the issue.
[German Chancellor Olaf] Scholz and Macron believed until the very eve
of the invasion that a compromise with Russia was possible. They had tried to
put a new spin on the Normandy format to dissuade Russia from
invading Ukraine further. On 24 February 2022, Russia’s invasion ended these
efforts abruptly. In the eyes of most central and
eastern Europeans,
both the German and French policy approaches towards Russia were discredited.
Germany was therefore initially unable to take the leading role in formulating
the European response to the war in Ukraine in the way it had after the
annexation of Crimea in 2014. Eastern EU member states this time did not
perceive Berlin as an ‘honest broker.’ They had also not forgotten Macron’s
2019 effort, taken without consulting them, to suggest negotiating with Russia
over a new European security order.
Overall, easterners believe that the leadership of these countries have
either been corrupted by cheap Russian gas and
lucrative payouts or are hopelessly naive about the nature of the
Russian regime. “President Macron,” taunted Polish prime minister Mateusz Morawiecki
in April 2022, “how many times have you negotiated with Putin? What have you
achieved? Would you negotiate with Hitler, with Stalin, with Pol Pot?”
The most powerful countries in the EU could not lead because they did
not have the trust of key actors. Meanwhile, the most consistently anti-Russian
countries could not lead because, in turn, they did not have the confidence of
France and Germany. They are also small or relatively poor and thus lack the
resources. Poland is a vocally active, but its government’s undermining of the
rule of law make it divisive within the bloc. In this sense, no autonomous
European policy was possible because, without the US, Europeans probably would
not have agreed on anything at all. America was really the only choice. As
Estonian prime minister Kaja Kallas tweeted in February 2023, “US leadership has been
key in rallying unprecedented support for Ukraine.” Indeed, it is difficult to
find a policymaker or expert on either side of the Atlantic that
believes that there was any other way to organise a unified and forceful
response to Russia’s invasion.
U.S.
interests are distinct from EU interests, but they are to a
very great extent aligned with them. Because our interests
are distinct, there is some advantage in the United States being
able to dominate France or Germany, or the whole of the European Union, when it
comes to particular economic and military projects. But because our interests
are aligned, the ability to dominate Europe is of much less
practical value than would be a Europe that has the ability to carry a greater
share of the geopolitical burden even if that “strategic autonomy” obliged
Washington to consult and negotiate more earnestly with Brussels rather than
simply handing down accomplished irreversibilities for pro forma diplomatic
consummation. Whatever miserable noises Macron may make, our European allies
are as pliant as we need them to be—what we need is for them to be more
powerful.
The
remainder of the 21st century is likely to be defined by the
ongoing contest between the liberal-democratic world—led by the United States,
the English-speaking countries, and the European Union—and the China-led
revolutionists who wish to overturn the global order and establish a new and
radically different one that Beijing feels will be better fitted to China’s
interests, China’s dignity, and China’s proper place in the world. (The
leadership of the Chinese Communist Party is cruel and vicious, but there is
more to the divergent philosophies of the liberal-democratic West and China; I
very highly recommend reading Tingyang Zhao, particularly his elegant and
fascinating Redefining a Philosophy for World
Governance, if you want something beyond the
white-hats/black-hats level of analysis.) A European Union that is as
rich and as powerful as the United States is an absolutely irreplaceable
necessity when it comes to ensuring that the outcome of that contest is the one
the United States desires.
Of
course there would be costs: A richer and more powerful Europe would compete
economically with the United States more intensely than it does, including in
sensitive sectors such as agriculture and manufacturing; likewise, a European
Union that had the ability to act independently would be likely to act
independently, including in ways that conflict with some genuine U.S.
interests. But it would be foolish to abandon our major, central, and
genuinely national interests in the service of relatively
minor and parochial interests.
What to
do?
There is
the political and intellectual work. The European Union believes that the
United States is turning away from transatlantic relationships in pursuit of
Pacific concerns, namely the challenge of China. That is not entirely wrong, of
course, but both Washington and Brussels need to understand—and act on the
understanding—that the U.S. response to the Chinese challenge must incorporate
a broader and deeper cooperative relationship with the European Union to have
its best chance of success. One of the perverse tasks before us is going to
involve Washington bullying the European Union into building up the capacity to
resist Washington’s bullying—which will redound to the advantage of Washington
as much as that of Brussels, if not more. The United States and certain major
European powers—especially Germany—are going to have to get over their
superstitions regarding nuclear proliferation and build an EU-wide nuclear
deterrent separate from NATO and independent from the direct control of French
political authorities. (Nuclear weapons should probably be part of Japan’s
future, too.) The eurozone rate of economic growth is going to need to catch up
to that of the United States, something that is going to be difficult to do if
the European Union insists on kneecapping itself with utopian “Green New Deal”
programs. (This isn’t to say that the European Union should not pursue an
active climate policy; what it should forgo is a stupid active
climate policy.) And because our European allies like nothing better than a
good committee meeting, there are going to need to be new formal channels
through which the energies of this richer alliance may flow. Here the ECFR
authors propose a kind of non-military NATO, something that looks and acts a
lot like NATO but that is directed at geopolitical development rather than
mutual defense per se:
Recent debates over 5G and green technology subsidies show that the
struggle with China will penetrate deeply into the Western domestic sphere and
will securitise questions that heretofore have been purely economic. Indeed, in
the century of competition between … China and the West, the geo-economic realm
will likely become the central front. The US and Europeans therefore need a
forum in which they consider the geo-strategic implications of economic issues
such as industrial policy. A ‘geo-economic NATO’ would allow the transatlantic
partners to think strategically about geo-economic issues and decide jointly on
foreign economic policy, rather than Europeans just accepting US decisions. The
intent of such a forum would be to create a joint US-European strategic
economic policy on China that would be both more effective and reduce
vassalisation.
Our
friends in Brussels have never lacked self-importance. They have recently
started to rediscover self-respect. The next step is self-interest, and
European self-interest coincides with American self-interest to a greater
extent than is perhaps genuinely appreciated in Washington or in European
capitals. The United States does not need European vassals—we need European
allies, we need them rich, we need them ruthless, and we need them ready for
the fight that is coming.
Economics
for English Majors
I
mention above that U.S. GDP per capita—annual economic output divided by
population—is almost 50 percent higher than EU GDP per capita on
PPP—“purchasing power parity”—basis. On a “nominal” basis—a straight-up
dollars-to-dollars comparison—U.S. GDP per capita is almost 90 percent higher
than in the European Union.
What is
up with that PPP vs. nominal business?
First, a
little prologue. The United States does not seem radically richer than the
European Union to the average American visitor to Europe. It seems unbelievable
that in dollars-to-dollars terms, U.S. economic output per capita is almost
twice what it is in the European Union. I suspect that much of this is the
effect of tourism: Americans visiting Europe tend to visit the richest parts of
the richest countries, unless they have family in a Czech farming village or a
Bulgarian factory town. The parts of Amsterdam you can walk to from the big
train station? Very nice. Try taking a commuter train out to the exurbs and see
what it looks like: It isn’t desperately poor, but it isn’t Dam Square, either.
I think of the parts of Europe where I have spent the most time—Montreux,
Verbier, Zurich, Madrid, the wine country of Portugal, Amsterdam, Nice,
Rome—and that is fantasyland. It would be like visiting the United States and
seeing nothing except Beverly Hills, Tribeca, Malibu, and a few sundry
highlights (nothing of Philadelphia except Rittenhouse Square, nothing of
Dallas except Highland Park, nothing of Detroit except the airport) and
thinking you had been from sea to shining sea and that you know what’s what
across the fruited plain. I am more sympathetic to the European modes of
government and life than are many American conservatives—and much more
sympathetic to the European Union—but the broader American tendency to believe
that the best of Europe is all there is to Europe should be resisted.
It was
not very long ago—the 1990s—that an exemplar of the high quality of
Scandinavian life such as Sweden was terribly poor compared to the United
States. As Johan Norberg once pointed out:
If Sweden left the EU and joined the U.S. we would be the poorest state
of America. Using fixed prices and purchasing power parity adjusted data, the
median household income in Sweden in the late 1990s was the equivalent of
$26,800 compared with a median of $39,400 for U.S. households—before taxes. And
then we should remember that Sweden has the world´s highest taxes.
Sweden
is a much more capitalistic country than it was a few decades ago—and a much,
much richer one. Well done, Sweden.
And
there’s that PPP again.
If you
want to compare the GDP of Sweden with that of the United States, you have a
problem: In Sweden, they use the krona (like the United Kingdom had once done,
Sweden joined the European Union but kept its currency) while in the United
States, we use the dollar. If you want to compare the economic output of Sweden
to that of the United States, you either have to convert Swedish GDP into
dollars or U.S. GDP into krona. (And we all know which one you’re actually going
to do!) Doing so is how you get that nominal comparison: Swedish GDP in dollars
vs. U.S. GDP in dollars.
The
problem with that is that this doesn’t necessarily give you an accurate idea
about the standard of living, especially when you are talking about GDP per
capita, i.e., how much economic output there is per person, something that
matters a great deal when you are talking about quality of life. And that is
where PPP comes in. PPP is an attempt to adjust figures such as GDP/capita for
local cost of living. In 2021, the average household income in the Czech
Republic was just above $10,000 a year in nominal terms, less than half of the
U.S. poverty threshold for a family of three. But Czechs are not all in
desperate poverty, because the cost of living is quite low in comparison with
the United States. Even in Prague, the most expensive part of the Czech
Republic (some Czechs want us to call the Czech Republic “Czechia”—opinions?),
a typical apartment is something like $800 a month—a good deal less than in,
say, Amarillo, Texas, and a heck of a lot less than in Paris or Zurich, where
you might expect to pay four or five times as much for a similar apartment.
Many other things are less expensive, too. (Which is great news for the kind of
American visitor who wants bottle service in a Prague nightclub.) So, PPP
tries, in an inexact way, to reflect that.
There’s
some interesting complications there: Yes, Prague is a lot less expensive than
Zurich, so people with less money don’t feel as poor there; but one of the
reasons Prague is less expensive than Zurich is the fact that people have, on
average, less money, so there is simply less demand for things that are very
expensive, which keeps overall prices down. But statistics tell us only so
much, because they capture only so much: If you look at Luxembourg, Dubai, or
Silicon Valley, you will notice an unusually large difference between median
incomes and average incomes, because a few dozen billionaires can really push
up the average while having relatively little effect on a typical
household.
In other
economic news …
I will
write about this at some point, but for now, you might profit from this Goodman
Institute report on unfunded liabilities, which would be a very good E4EM
subject.
Words
About Words
The
headline I suggested for this piece uses the word vassalization. The
ECFR report speaks of vassalisation.
We
use z frequently where our British and Anglophone European
friends would use an s. (And we say zee, not zed.)
Americans organize, Englishmen organise; Americans
rarely apologize, Canadians apologise all the time.
As our
rustic friends don’t actually habitually say, “Why come?”
The
divergence in orthography proceeds from the fact that there was, until
recently, relatively little standardization (standardisation?) in English. Many
of those American z-spellings were used at one point in British
English as well, though some of them seem to be directed at trying to capture
specifically American pronunciations. Etymology also plays a role, and has as
far back as Middle English and Old French: Words adopted directly from Greek
tended to get the ize treatment, whereas words with a French
or otherwise non-Greek basis (advertise, surprise) As our
friends over at the Online Etymology Dictionary report: “In Britain, despite
the opposition to it (at least formerly) of OED, Encyclopaedia Britannica,
the Times of London, and Fowler, –ise remains
dominant. Fowler thinks this is to avoid the difficulty of remembering the
short list of common words not from Greek which must be spelled with
an -s-.”
One
theory has it that the British insistence on s rather
than z is a reaction to American efforts to make the z compulsory
and standard. As one famous account has it, a British writer commented: “The
primary rule is that all words of the type authorize/authorise, civilize/civilise,
legalize/legalise may legitimately be spelt with either –ize or
–ise throughout the English-speaking world except in America, where
–ize is compulsory. … Speaking purely personally, I think that
anything that is compulsory in America should be avoided.”
Snoots!
(Points
for spelt, though.)
The
difference is found in about 200 English words.
No comments:
Post a Comment