FOR IT TO BE CONSEQUENTIAL WOULDN'T EUROPE HAVE TO BE A PLACE OF CONSEQUENCE?:

The Decline and Fall of Europe: Talk to top-level scientists and educators about the future of scientific research and they will rarely even mention Europe (Fareed Zakaria, 2/20/06, Newsweek)

Cartoons and riots made the headlines in Europe last week, but a far less fiery event, the publication of an academic study, might shed greater light on the future of the Continent. The Organization for Economic Co-operation and Development, headquartered in Paris, released a report, Going for Growth, that details economic prospects in the industrial world. It is 160 pages long and written in bland, cautious, scholarly prose. But the conclusion is clear—Europe is in deep trouble. These days we all talk about the rise of Asia and the challenge to America, but it might well turn out that the most consequential trend of the next decade will be the economic decline of Europe.

It's often noted that the European Union has a combined gross domestic product that is approximately the same as that of the United States. But the EU has 170 million more people. Its per capita GDP is 25 percent lower than that of the U.S. and, most important, that gap has been widening for 15 years. If present trends continue, the chief economist at the OECD argues, in 20 years the average U.S. citizen will be twice as rich as the average Frenchman or German. (Britain is an exception on most of these measures, lying somewhere between Continental Europe and the U.S.)

The Fake Science Threat (Sebastian Mallaby, February 6, 2006, Washington Post)

Science and math advocates have been harrumphing about national competitiveness for at least a quarter-century. In the early 1980s the National Science Foundation predicted "looming shortfalls" of scientists and engineers, and the National Commission on Excellence in Education declared, "If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war." But the American economy went from strength to strength over the next decades, while supposedly more technical countries such as Japan and Germany foundered.

This hasn't stopped the science lobby from making the same arguments again. According to the recent report from the National Academies that inspired the administration's new competitiveness initiative, "the scientific and technical building blocks of our economic leadership are eroding at a time when many other nations are gathering strength." Further, the link between technological decline and economic decline is certain, since "85% of measured growth in US income per capita is due to technological change."

This is embarrassingly flimsy. When economists say that technological change drives living standards, they don't mean that scientific ingenuity achieves this by itself. What matters is the way science is diffused through an economy: the availability of venture capital, the flexibility of workers, the quality of corporate leadership, the competence of government policy, the reliability of public infrastructure -- all help to determine how science is absorbed. The United States scores well in nearly all these areas, which is why it's defied alarmist predictions for a quarter of a century and will continue to do so.

The science lobby should also stop pretending that countries compete the same way companies do. Firms such as Toyota and Ford really do go head-to-head against each other; if Toyota has superior technology, it will steal Ford's customers -- and Ford may even disappear. But if China produces Nobel-quality science, it won't put the United States out of business; rather, Chinese discoveries will help American scientists discover more, too. Equally, Toyota doesn't sell cars to Ford workers, so there's no benefit to Ford's people if Toyota's quality advances. But China does sell to Americans, so whatever makes it more productive has some upside for the United States as well.

In short, the "China threat" argument ignores the ways that competition between countries, unlike companies, is a positive-sum game. Moreover, to the extent that Chinese institutions -- firms or university laboratories -- compete against American ones, the alarmists underestimate U.S. strengths.

In the race to turn scientific ideas into businesses, the United States is hard to beat. There's no dividing wall between academic labs and commerce, and scientists surf from one world to the other on waves of money and cultural approval. Harvard's Richard Freeman, an economist who has studied the market for scientific talent, recounts a conversation with a physicist who'd collaborated with foreigners. "Ah, so you are helping them to catch up with us," Freeman commented. "No, they are helping us keep ahead of them," came back the answer: Because of the superior U.S. business environment, the research was being turned into a company in the United States.

It's the American version of Zeno's Paradox: Russia/Germany/Japan/China/fill-in-the-blank runs twice as fast as we do but we finish twice as far ahead as we started....

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Reply to Dalrymple (Anne Applebaum, February 12th, 2006, Cato Unbound)

I long—I really do long—to contradict Dr. Dalyrymple. I write here as an American who lived in Europe for most of my adult life. I have a European husband, a European house. I have children with European passports. I too have a European passport, in addition to my American one. I speak three European languages besides English, have friends in several European capitals, and am moving back to Europe next year.

Yet on reading the “Is Old Europe Doomed” essay, I was reminded of a recent conversation with a friend, another American Europhile, now resident in East Asia. Sadly, we agreed that the Europeans who bash “wild” Anglo-Saxon capitalism, who believe America is an unregulated jungle, and who feel smug and safe within their secure welfare states are deeply, deeply deluded. They haven’t yet realized that the economic and social challenge presented by the successful societies of Asia is hundreds of times more dangerous to their way of life than the caricature they’ve created of the challenge presented by the United States, a country which is nearly as over-regulated as their own. If the rise of China continues apace, I’m afraid Dr. Dalyrymple’s final phrase—that Europe is “sleep-walking to further relative decline—might even be too mild. At some point, it’s also possible that Europe’s decline, for all the reasons he listed, might even cease to be relative.

Posted by Orrin Judd at February 13, 2006 1:10 PM