QUIET PLEASE, WE'RE DYING:

Europeans have opted for the quiet life - but they are in for a big shock: The EU will remain politically impotent - my greater concern is that it will lose the economic game too (Hamish McRae, 19 February 2003, Independent)

The argument that [it] s right to prefer a quiet and comfortable life has been well made by Adair Turner, the former director general of the CBI, in a lecture at the LSE earlier this month. His argument is that if you allow for shorter hours worked, European productivity is not much below that of the US. GDP per head in the EU is lower, but that is largely because we choose to take more leisure. And our take-home pay is further reduced relative to the US because we pay for more of our services through the tax system rather than paying for them directly. (The UK, as usual, is somewhere in between the continental and the US models.)

"Europe" argues Adair Turner, "is making social choices which are rational and natural for human beings in mature, already rich, and peaceful societies." His main doubt is whether the world can be peaceful enough to sustain these choices - he hopes and believes it can be, but he acknowledges that this is debatable. His is a powerful argument which cuts to the very core of the clash between Europe and America, at the moment over the Middle East. But the division is not just about what should be done about Iraq. It is about what sort of society we want to live in.

Many of us would find it pretty tough to have to work in the US. Having only two weeks holiday a year would not go down too well. It would not be much fun to have to worry about the adequacy of one's medical insurance. And while it might be harder to find a job in much of continental Europe than in the States, at least when people lose their jobs in Europe (and for that matter the UK) there is usually a better cushion to tide them over than there would be in most US states.

But is the European model sustainable? Adair Turner has two caveats. One follows from Europe's ageing society: the implications for pensions and so on, the other is that point about global power.

It seems to me that the power game is already lost. It is very hard to see any set of circumstances where Europe collectively will be able to exert much military or even political power in the world over the next generation. In another quarter century, when the US population is expected to pass the EU one, the imbalance of power will become even wider. For the time being, the larger European nations can individually have some modest influence - Tony Blair really does have more influence over the US than most Britons would give him credit for - but the EU as a body is and will remain impotent. If we have not yet learnt that harsh lesson we soon will.

My greater concern is that Europe will lose the economic game too - its model is simply not sustainable. There are two broad reasons for believing that. One is the ageing point made by Adair Turner; the other, the implications of labour mobility - particularly of the highly-skilled - for high-tax, high-benefit societies.

The implications of ageing on the European social welfare model, where the current generation of working people pay the benefits of the current generation of retirees, have been so widely recognised that there is a danger of "pension fatigue" overtaking electorates. The core problem is that welfare systems that were developed at a time when there were more than four workers for every pensioner cannot function when there are fewer than two. (In the case of Spain and Italy, there will actually be fewer workers than pensioners when the present 20-somethings retire.)

But that is a known problem. Europe has not done much about it, but at least people are aware of the problem. Europe is much less aware of the problem created by the increased mobility of the highly-skilled - and the increased demand for such skills.

Setting aside the fact that productivity is an hourly measure, not one of how much a worker produces per calendar year, this piece also seems to lose track of the choosing "quiet" argument that it raises. Quiet, or what we here would call "security", is one of the two great human values that we've long argued drives all of human history. From socialism to atheism to pragmatism to theocracy and on, all are philosophies of governance that seek to minimize conflict and instill a sense of security in the populace. Freedom tends to be rather more tumultuous and to entail greater risks. The problem for Europe is that "quiet", or security, leads to a moribund society, which it's not all clear can ever produce sustained economic growth, whilst freedom and tumult, at least in the American model, lead to creativity and mobility. It appears that what Mr. Turner refers to as "rational choices" may in fact be suicidal, though a pleasant enough way to go. This is why it is so urgent that we break Britain away from the EU and save it from this fate. Posted by Orrin Judd at March 30, 2003 12:02 PM