Inspiring Europe (?)

The St. Gallen Symposium in St. Gallen Switzerland brings together university students, global business leaders and scholars in an effort to limn Europe’s future. This year’s program was entitled “Inspiring Europe.” The title has intentional double entendre: Does Europe need inspiration or is Europe a source of inspiration?

Europe today is rich, somewhat complacent, peaceful and, considering its history, remarkably stable. In an historical sense, Europe is an uncontested success.

Yet the Europe that emerged from World War II as a bulwark against communism and as a model of economic recovery is now in a different stage of development.

European spokesmen at this conference readily admitted that the continental economy is lagging and the unfunded liability for prospective retirees is an enormous potential drag on the economy.

Moreover, affluence has bred complacency. It is widely believed that Europeans deserve six week vacations each year and retirement at 55. My suggestion that these conditions are not sustainable was greeted with derision.

There was much discussion about reinventing the continental economy. A spokesman for Bayer, for example, mentioned his belief in “a core business strategy,” but it was difficult to determine whether this was an idiosyncratic example or a systemic recommendation.

The Japanese president of E-Mobile introduced the constrants of reality by noting “99 percent of the electronic products in Switzerland were produced in China.” When asked if there is an alternative, he merely shrugged his shoulders.

Those who assumed the recent Japanese economic recovery has lessons for Europe were also disappointed. Japanese spokesmen noted that social security and employee benefits are not as generous as those in Europe and, as a consequence, do not serve as anti-competitive factors. Moreover, the Japanese put a greater stock in research and development and the resultant innovation than their European counterparts.

Perhaps the most serious oversight at the conference was a seeming unwillingness to consider the rise of radical Islam in European capitals and its chilling effect on economic competitiveness. When I made reference to the totalistic impulses of the jihadists and the rising secularism among Christians, my comment was greeted with blank stares. There appears to be a common belief that this cultural tension will sort itself out with Muslims ultimately integrating into European societies.

This “what me worry?” attitude is, to some degree, understandable. Looking over the horizon to a time when European prosperity cannot be taken for granted is difficult, if not impossible. Even the demographic nightmare of declining populations all over western Europe did not evoke alarm.

When a spokesman from the International Monetary Fund pointed out that Europeans work fewer hours per annum than North Americans and Asians, this was viewed as an indication of superior European work habits rather than uncompetitive productivity rates.

Considering relative satisfaction with the cradle to grave welfare arrangements and a belief in the natural order of social reconciliation, it is hard to understand what Europeans mean by reinvention. As I see it, European societies need inspiration, a catalyst for social reform. But, after all, they are democracies that depend for change on the will of their people.

Surely there are many Europeans who appreciate the anti-competitive impulse of lassitude. Yet they don’t know how to change. Tightly contested elections throughout the continent make it difficult to conceive of consensus for modification in the welfare system. The overhang of social expenditures makes it extremely hard for industries to reduce the price of products or for capital to be raised for innovation.

Is this scenario a dead-end? Is Europe necessarily on the road to marginality?

While the St. Gallen conference didn’t offer immediate answers, history does possess surprises. The resiliency Europe displayed after the war may reemerge. A generation of college educated students is eager to plot a new course for the future and European broadband developments indicate that there are some bright flourishes in a generally gray background.

What we know about Europe today is surely a guide to the next act in continental history, but it isn’t an inevitable guide. Realism dictates skepticism; hope suggests possibility. An inspired Europe needs some of both as a compass for the path ahead.

Herbert London is president of Hudson Institute and professor emeritus of New York University. He is the author of Decade of Denial (Lanham, Maryland: Lexington Books, 2001). London maintains a website, www.herblondon.org.