In Old Europe The Real Problem Is Fear

THIS WEEK EVERYONE is tut-tutting about the French and the Italians. Again. The privileged youth of France refused to take a baby step away from their current guarantee of lifetime employment towards the cruel world of employment-at-will. So the government of Prime Minister and poet Dominique de Villepin did the poetical thing. It caved.

Meanwhile the Italians voted to return to pure welfare state policies. The center-left coalition of Romano Prodi promises to gut parts of the “Biagi” law that allowed an explosion in temporary and part-time work.

The French disease and the Italian disease issue from the same disease vector. The governments of both nations gave the voters economic privileges that could not be sustained. You cannot offer people lifetime employment unless you allow employees to allocate the risk of their employment onto other people. It is relatively easy for governments to do this with government employees. They pay the government employees out of taxes and if the employees actually catch a criminal or educate a child, well, that is a windfall. It’s all perfectly harmless until the disease breaks out of government and infects the entire working population.

Of course the European disease is not confined to Europe. New York and New Jersey are doing their best to emulate the politics and economic sclerosis of Old Europe. In Prince of the City Fred Siegel shows just how selfish and mean-spirited a politics the iron triangle of government workers, liberal interest groups, and machine politicians has created for New York City. Now New Jersey, once a middle-class refuge from New York big government, is going the same way according to Steven Malanga in City Journal.

How is it possible for such a corrupted politics to continue, unreformed and unashamed? Charles Murray offers a clue in Losing Ground. In the mid 1960s the political elite rushed to meet to the challenge of Michael Harrington’s The Other America, and solve the problem of 50 million forgotten Americans with a vast War on Poverty. Yet by the end of the 1960s program evaluations were demonstrating that the war wasn’t working. People in government, in Washington DC, saw the numbers and they knew it had all been a waste.

Yet half a century later these failed programs are still broadly in place. How could this be?

The missing link, of course, is power. Liberals leaped to implement the Great Society programs because the programs would give them power and jobs. And the programs would create client groups dependent upon them. Why would they volunteer to dismantle their power and turn away their squawking dependents? Of course their ears are deaf to reform. Of course they scream “they are coming for the children.”

We will never reform the political elite. But what about the dependents?

Canadian philosopher Mark Steyn has identified the problem. “A government big enough to give you everything you want, once you get used to that, it can’t persuade you to give back anything in return.”

In that notable sociological tome The Millionaire Next Door Thomas J. Stanley and William D. Danko explain why. They call it Economic Outpatient Care (EOC). They are referring to a syndrome among adult children of wealthy parents. EOC recipients tend to work less and consume more than people who live without parental subsidy. They are dependent on their parents, and—here is the key—they have more fears and worries than the confident people who live independent of parental EOC.

It all sounds just like the situation in Old Europe. Although the students of France and the electorate of Italy and Germany may seem truculent, demanding their rights on the streets of their ancient cities, in reality they are faking it. Underneath all the bravado they are afraid. They are afraid that when the “economic outpatient care” of the welfare state is removed, they may not be able to make it on their own.

There is no mystery about how to cure France and Italy and Germany, or even New York and New Jersey. Anyone with half a brain knows what to do. As the Economist (sub reqd) reminds us, in 1979 Britain suffered from the British Disease, yet Thatcherite reforms ushered in two decades of growth. In 1980 the United States suffered from economic malaise; now its cowboy economy is the envy of the world. In 1982 the Netherlands suffered from the Dutch Disease. In 1987 Ireland was collapsing into economic crisis. In 1990 it was Finland. In all these cases pro-market reforms transformed basket cases into economic powerhouses.

The question is: how do we get the patients of Old Europe to take their medicine—to face their fears and overcome them?

Perhaps we should teach them about Manliness, Harvey Mansfield’s virtue of developing “confidence in the face of risks.”

Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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