US vs. Europe vs. Third World Part V

High government regulation and involvement in the economy will have many destructive effects in the long run in both the US and the EU. R.W. Grant is correct when he asserts, “Much of business regulation, specially antitrust, today is based less on fundamental concepts of justice than on “murky” ever-shifting notions of “ideological law”: concerned less with real people who have suffered the actual harm, than with abstract notions of “fairness”, “integrity of the market place”, or “greed”, or “sleaze”, or whatever.” One famous example would be how US regulators approved the GE-Honeywell merger and European regulators stopped it. How Mr. Welch, CEO of GE at the time, was very angry about the amount of bureaucracy and special interests that where involved in the decision. From this, and many other rulings we can assert that antitrust regulation is heaver in the EU than in the US. Never the less, antitrust regulation is also very extensive in the US. To better understand regulation one has to find out what is the proper role og government. (This is very subjective and depends on who you ask) A good explanation is given by Ezra Taft Benson, “It is the single function of the government to secure the rights and freedoms of individual citizens”. But what are our rights? According to Frederic Bastiat, “Each has a natural right, from God, to defend his person, his liberty and his property. If every person has the right to defend, even by force, his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right, its reason for existing, its lawfulness, is based on individual rights.” With this powerful tool and guideline we can now correctly judge if government is playing a correct or incorrect role in the EU or US. Government in France owns a controlling interest in hundreds of companies and its spending represents half of the French economy. Is it the role of the Government to be actively engaging in the economy? NO. The French government has been engaging in embarrassing economic regulations like the introduction of the 35 hour workweek in 1999. Is it the role of government to dictate how long one should or should not work? NO. My point cannot be made any clearer than when French finance Minister Nicolas Sarkozy said, "It is not a right for the state to help industry. It is a duty." He must pay more attention to his fellow Frenchmen Frederic Bastiat and also remember Hitler’s duty to the Fatherland.

In Germany things are not any better. The government has an institution called the German Federal Labour Agency which job placing unemployed workers into employment. Grant M. Nulle best describes this government agency, “Another example of German corporatism, the agency allots equal shares on the federal and regional governing boards to labor, business and government personnel—this bureaucratic creature is inefficient at best. Last January its head was summarily sacked for his dodgy dealings with contractors and extravagant expenditures (especially office furnishings), which did not mesh well with the 6.5% of gross wages paid by both employer and employee and appropriations from general taxation that fund the agency’s $66bn budget.” Once again we can observe what happens when government interferes in the market place.

We have observed what happens when the principles of individualism, the institution of private property and the free markets are violated. We have also observed what is the proper role of government and its current roles in the EU and US. The EU is the birth of an important new empire in the likes of the US and the URSS. It will fill much of the economic and political vacuum of left in world after the collapse of the URSS. Unlike the US and URSS who where at complete opposite ends of the economical and political spectrum, the EU is very close to the left of the US most areas. Only a decade after the collapse of the Soviet Union the differences between these two very old allies (US and Western Europe) are they beginning to become more and more visible. In order to be more effective with its policy the EU needs to move more into a more supranational system like the US. The elongated time it takes to reach a decision has made the Union very inefficient in some instances. The opt-out option in policy dealing is always a weakness which in the long run when a difficult situation or crises arises will threaten the integrity of the Union. The policies decided in the next few years will likely determine the potential of this new empire. Europeans should wake up and get more involved in these decisions.