Decline of Europe

Fareed Zakaria’s “The Decline And Fall Of Europe” supports my previous article about the future of European economics. Europe is quickly falling behind in the global marketplace. It’s aging population and lack of work incentives will force Europe into decline if current trends hold. Growth occurs through innovation and Zakaria points out that science, education, and innovation are fleeing Europe. Coupled with the heavy socialized programs Europe is in a serious crunch. At its current rate those relying on government aid in retirement will outnumber those in the work force within 25 years. Despite this, many in Europe are pushing for shorter work weeks and better benefits. Europe is transforming into a time bomb.

Only growth has a chance to curb the decline in population and the underachieving growth rates. Growth will require an infusion of labor most likely from immigrants. In Europe however, great racism an biased exists against immigrants for ethnic and religious reasons. In term immigrants will eventually have to gain the rights of citizens if they are being taxed to take care of the native citizens. Only time will tell but Europe is in big trouble. Protectionism and Socialism are currently leading Europe into decline.

Schism or Continuation? A Look a the EU and its Impact on Globalization

NAFTA. EU. OPEC.

These names probably mean plenty to anyone who pays attention to international politics. Today’s world is not only connected through the information superhighway and various technologies but politically and economically. Examine the idea of partnerships and alliances. Detrimental or beneficial that’s an individual decision, but no matter the consequence they exist. While the possibility of a Worldwide Nation or State is quite improbably the basis of this is that the world will eventually become much closer. While I personally don’t think it will ever reach this extreme I would like to discuss in detail the European Union.

The EU love it or hate it is an interesting occurrence politically but I will boldly make the case that it is globalization. Perhaps Macroglobalization? While culturally and economically the people of the EU are very different, a relatively stable and cooperative union has created an interesting variable in the globalization process. Today predominant European currency exists. While it could be argued that all hard capital, in particular the dollar, was already global currency, it shows the changes that globalization has created in the past 20 years. While tariffs and trade agreements have been around for along time they are at their peak right now. While each state still controls its internal affairs the European community now wields powerful influence especially over other states in the union. While much of the world has created a dynamic flow of goods and as capitalism prevails the EU seems to actually be reverting or confirming the nations of Europe in a their various socialist agendas.

I think that capitalism is an important component of globalization. It is not only the inter-connectivity but the idea and desire of what others have that drives us. While that may sound like greed it’s not. America does not have the pyramids or castles, so tourism is simply a desire to experience culture. The capitalistic drive is fading in Europe…

Although I would argue that the EU is a product of Globalism I would also look at it as an extreme step or perhaps a step backwards away from Globaization. Has Globalization come full circle? I argued that globalism originated from colonial powers and empires and their desires of wealth, expansion, and the hopes of being culturally influential. In 200 years the colonies have moved on and the empires have broken. Perhaps the EU is the next at European cultural and economic domination. While they will never become supreme with nations such as China the US and Japan driving the global economy, they have a chance of greatly affecting the next century of globalization and economic evolution.

Today the EU and protectionist policies keep products and manufacturing at home. While this often provides jobs it comes at the price of inflated value. This coupled with high wages demanded by the European due to the dramatic rise of social spending. Since the governments take care of their citizens the opportunity costs of working is often outweighed by welfare benefits. With the costs of goods soaring the only way to even sell goods is to monopolize the market with high priced European goods. This is done not just through tariffs and duties but not just between say the US and France. Instead of “closing the market” the EU has actually opened instead a market but a limited market place. While I don’t have the economics background to truly analyze this greatly I am concerned. Protecting companies with large amounts of government subsidy is detrimental to the world market at the price of a chance for European gain or at least in hopes of not slipping in status. For example only two major companies produce large fleets of passenger airliners. Boeing and the Airbus company. The economic playing field is completely distorted. With the backings of perhaps some of the worlds top economies (Germany, France, UK) any time the Airbus corporation is in trouble they can count on staying afloat. While this can be true in America as well (i.e. airlines stay afloat through bankruptcy) it will never happen at European levels.

The airline industry is at a critical period in its history. With high fuel prices but a steadily increasing demand someone will have to build airplanes. Competition is what leads to quality products. Competition is under attack from the EU. While it may take decades to play out Eu policies may very well become a gold standard in other developed regions but this is again unlikely…

I would be curious for your feed back about the pros/cons of groups and agreements that our affecting the global market…

Check out future posts in “continenalism” the official EU discussion
To Be Continued…