Poor, Deluded Europeans

Posted January 3, 2008

Categories: Articles, Europe

Stefan Theil thinks that his fellow Europeans are brainwashed. He’s done a trans-Atlantic study of textbooks and discovered that schools teach little French and Germans all the wrong things about economics.

“Free markets offer chaos while government regulation brings order,” Theil describes the messages transmitted to European students in “Europe’s Philosophy of Failure” in the latest issue of Foreign Policy. “Globalization is destructive, if not catastrophic. Business is a zero-sum game, the source of a litany of modern social problems.”

Funny, I thought that many capitalist cheerleaders agree that the market engages in “creative destruction.” And wouldn’t Donald Trump be hip to the notion that business is a zero-sum game? There’s not a lot of win-win on The Apprentice.

Anyway, I can just see former secretary of defense Donald Rumsfeld whispering in Theil’s ear while he was doing his research. “Let’s dig up some dirt on Old Europe,” Rummy says. “Show how crazy they all are. High unemployment. Stagnant economies. Socialist inclinations. No backbone. All starts with Marxist teachers. Messes up the kids.”

So Theil did a little digging and found that, surprise, the economics textbooks in France and Germany more or less mirror their national economies by emphasizing the state more than the entrepreneur. Quel horreur!

Absent from the article, however, are some inconvenient facts. Europe just happens to be kicking our economic butt these days. Check out the exchange rate with the euro. With the dollar as soft as a marshmallow, European companies are leading the pack of foreigners, according to a fascinating piece in The New York Times, in gobbling up American businesses. Germany is #5 and France #11 on the list of top investors: where is that “philosophy of failure,” exactly? If anything it’s the other way around. The sub-prime crisis and a looming recession threaten to pull Europe down with us.

But wait, what did the Bush administration just propose? A stimulus package. It’s gotten so bad here in the States that even the hard right is relying on the state to pull us out of the mess. Alas, tax cuts are at the heart of the Bush plan. But the compromise plan that will be worked out in Congress in time for Tax Day will also likely include more traditional ways of priming the pump, including a boost to unemployment benefits or food stamps.

Wouldn’t it be nice if the U.S. government took a cue from the Europeans or even from our own history to come up with a more visionary stimulus package? Imagine redirecting government money into public works to repair our infrastructure, incentives for energy efficiency, job retraining, and so forth?

The problem is: our public officials are constrained by the economics information they picked up in school. It’s the economics textbooks, stupid! American kids are increasingly getting their economics education courtesy of such outfits as the Foundation for Teaching Economics, which sponsors workshops for teachers supported by right-wing benefactors like Coors. Corporations like Coca-Cola and McDonald’s produce videos on economics for use in the classroom. The National Council on Economic Education, which receives generous support from State Farm Insurance and International Paper, has taken the lead in developing nation-wide standards on economic education.

“I don’t care who writes a nation’s laws,” economist Paul Samuelson famously said, “if I can write its economics textbooks.” Samuelson popularized Keynesian economics for an entire generation of Americans and helped shape the Great Society programs of the 1960s. Unfortunately, a much more conservative group of economists are now writing U.S. textbooks and thus controlling the discourse. Maybe we should start importing European economics texts. If only the value of the euro dropped a bit and we could afford them….

The Elections

Republican John McCain is riding high on victories in New Hampshire and South Carolina and may well be heading for his party’s nomination. Under President McCain, the United States would at least change U.S. policy on torture. That policy is such an embarrassment that even our close allies, the Canadians, initially listed us as a country that potentially tortures prisoners–in a training manual for diplomats–only to retreat subsequently in the face of U.S. pressure.

Torture policy aside, a McCain presidency would be simply four more years of Bush foreign policy. As FPIF contributor Michael Shank explains in McCain’s Two Wars, the presidential contender is lockstep with the Bush administration on the top foreign policy issues of the day: the Iraq War and climate change. “In Iraq, McCain has diligently stood by President George W. Bush’s troop surge from the onset,” Shank writes. “In fact, had McCain been the American commander, troop numbers would have tripled in the 2003 invasion. Similarly, as if the $500 billion dollars spent on the Iraq war was somehow insufficient, McCain was long ago convinced that ‘we need to spend a lot more money.’”

On the Democratic side, Hillary Clinton received a big push from New Hampshire. But Barack Obama is still going strong. Does Obama represent a significant foreign policy alternative? FPIF’s Middle East editor Stephen Zunes cautions readers not to be naïve or cynical. “Obama has harshly criticized the Bush administration’s unilateralism and militarism and promises to be far more cautious regarding sending Americans off to war,” Zunes writes in Barack Obama on Diplomacy. “Yet he leaves loopholes big enough to drive a tank through. Rather than categorically declaring he would use military force only as a last resort, he insists that ‘no president should ever hesitate to use force–unilaterally if necessary,’ not only ‘to protect ourselves . . . when we are attacked,’ but also to protect what he refers to as ‘our vital interests’ when the president believes they are ‘imminently threatened.’”

The Perils of Pakistan

Pakistan is a case in point. As FPIF contributor Saira Yamin points out in Looking Presidential on Pakistan, the Democratic candidates are all eager to demonstrate that they can be tough when necessary. “At the New Hampshire debate on January 5, Senators Obama and Clinton, and former Senator John Edwards were all unanimous in their eagerness to launch unilateral strikes on Pakistan if they knew the location of Osama bin Laden,” Yamin writes. “Given the reliance on the kind of intelligence that President George Bush launched the Iraq War, Democratic candidates might like to think twice. The presidential candidates should also be reminded that Pakistan is a sovereign nation and unilateral strikes on Pakistan would be in violation of international law. Such a move by the United States would not bode well for its already deteriorated image as a responsible world leader.”

FPIF’s military affairs analyst Dan Smith is still asking questions about the assassination of Benazir Bhutto. He thinks that the Musharraf government doth protest too much.

“Spokespersons for the Musharraf government, thrown on the defensive by accusations that government-provided security for Bhutto not only was lax but totally non-existent, gave conflicting accounts of the cause of death,” Smith writes in Bhutto’s Assassination Seems Too Familiar. “Then they were entirely discredited by video footage of the attack obtained from a number of private citizens who had come to see and hear the former prime minister. Moreover, in a CBS ’60 Minutes’ interview aired January 6, Musharraf blamed Bhutto for ignoring threats to her life and taking unnecessary and provocative risks.”

Rising Waters

Whenever pundits mention the Global South and global warming in the same sentence, it’s usually to complain about all the carbon that the Chinese and Indians are emitting in their attempts to catch up to the industrialized world. The message: they’re part of the problem.

FPIF columnist Walden Bello turns this equation upside down: the people of the Global South are part of the solution. In Elites vs. Greens in the Global South, Bello discusses the surging environmental movements, particularly in China and India, that are challenging both the elites in their country and the elites in the Global North.

“People in the South are open to an alternative to a model of growth that has failed both the environment and society,” Bello writes. “For instance, in Thailand, a country devastated by the Asian financial crisis and wracked by environmental problems, globalization and export-oriented growth are now bad words. To the consternation of the pro-market Economist, Thais are more and more receptive to the idea of a ‘sufficiency economy’ promoted by King Bhumibol, which is an inward-looking strategy that stresses self-reliance at the grassroots and the creation of stronger ties among domestic economic networks, along with ‘moderately working with nature.’”

Further to the East, the islands of the Pacific are also dealing with the very real effects of global warming. The rising waters threaten many of these small island nations, like Kiribati and Vanuatu. Yet, these countries are spending billions of dollars on new conference centers and government buildings–courtesy of China and Taiwan.

“China and Taiwan,” explains FPIF contributor Andre Vltchek in Wooing the Islands, “have been jockeying for position in the region with their willingness to work with any government in the region, no matter how corrupt or undemocratic, and to shower such friends with aid and grandiose gifts. China is, for instance, closely cooperating with the military government in Fiji. Government officials in the Pacific are being pampered and their incomes are boosted by countless lucrative trips to Taipei and Beijing, helping to support what is often described as a ‘per-diem mentality.’”

Finally, President Bush is recently back from his trip to the Middle East. As Stephen Zunes writes in Still No Peace, the trip did not move the Israeli-Palestinian peace process forward. “The United States still rejects the application of international law in settling the conflict, opting instead to use as its starting point the status quo based on Israel’s 40-year occupation,” he argues. “This underscores the longstanding and inherent contradiction between the United States simultaneously playing the role of chief mediator in the conflict and being the chief military, financial, and diplomatic supporter of the more powerful of the two parties. As a result, Israel, the occupying power, has little incentive to compromise, and the relatively powerless Palestinians under occupation have little leverage to advance their struggle for an independent viable state.”

FPIF, January 22, 2008

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