Following President Obama’s reelection last Tuesday, the No. 1 question I’ve been asked by family, friends, colleagues, and even a few philosophical sparring partners is whether America is now nothing more than just another (albeit rather larger) Western European country slouching down the road to economic turpitude while basking in a government-subsidized, debt-fuelled twilight of faded glories.
My short answer to such queries is: “No — at least not yet. And it is not too late to change course.” Let me explain.
That said, I’m not one of those who, in recent days, have seemed inclined to indulge their inner curmudgeon, apparently convinced that it’s more or less game-over for America and we’re doomed to Euro-serfdom. Why? One reason is that, in some very important ways, America is still not Europe. Here are a few of the more pertinent differences.
For one thing, we’re not involved in the grand political experiment of the euro: the altar at which Europe’s political class is apparently willing to sacrifice almost anything in the name of a unified-from-the-top-down Eurotopia. Granted, we have our own problems with a Federal Reserve that’s surely looking forward to a fourth round of quantitative easing as its way of helping the administration avoid the macro and micro reforms that are the only real way to restore American competitiveness — reforms that will upset key administration constituencies (such as those living in 1974).
Our little Fed difficulty, however, can — eventually — be addressed by changing the people who make monetary policy. That’s small potatoes compared with the prospect of a failed currency experiment that’s haunting the EU right now, not to mention the sheer economic dysfunction that efforts to preserve the euro are magnifying throughout Europe.
Second, the strength and persistence of private entrepreneurship continues to substantially differentiate America’s economic culture from that of Europe. America remains ahead — and, in some areas, continues to pull ahead — of most of Europe when it comes to private innovation. As noted in a World Bank report earlier this year, the elements that fuel innovation, such as ease in obtaining patents and availability of venture capital, continue (at least for now) to be far stronger in America than in most of Europe.
The same report specified that it is young firms driving innovative growth in America. Among America’s leading innovators in the Industrial R&D Investment Scoreboard, more than half were created after 1975. They include firms such as eBay, Microsoft, Cisco, Amgen, Oracle, Google, and of course Apple. By contrast, only one in five leading innovators in Europe is young. In America, young firms make up an incredible 35 percent of total research and development done by leading innovators. Their European counterparts account for a mere 7 percent in the old continent. That’s great news for America and a major headache for Europe over the long term.
Third, we need to remember that America’s been here before. You need only read Amity Shlaes’s The Forgotten Man to know just how far America was driven from its economic moorings by Franklin Roosevelt. Then we had to endure the economic disaster of Lyndon Johnson’s Great Society. Yet not even Roosevelt and Johnson could completely overturn the workings of the American experiment in the economy. And twelve years after Johnson left office, Ronald Reagan began his revolution.
At best, however, Reagan took America two or three steps back from the six steps forward that had been made by the Progressive crowd since the 1910s. Moreover, in some important respects, much of Reagan’s economic legacy has been undone over the past 15 years. But perhaps America’s greatest strength in resisting economic Europeanization is the fact that it remains what John Courtney Murray called a “propositional nation.”
By this, Murray meant that America not only has the capacity to renew itself by going back to its roots, which are formally identified in its founding documents, but had also demonstrated a willingness to do so. Few West European nations have shown a similar ability, not least because of so many Europeans’ diffidence about the worth of their own heritage.
So while thinking about questions such as how to connect Hispanics to the conservative cause without compromising the principles of that cause is important, even more significant in the struggle to bring America’s economy back from the brink of perpetual Eurostagnation is what some call “the vision thing.” That means undertaking something that, with some notable exceptions, many conservatives and free-marketers haven’t proved spectacularly good at: grounding sound market arguments upon a moral-cultural vision of what America is supposed to be.
Number-crunchers who think anything that can’t be quantified doesn’t exist won’t be excited by this. Nor, I suspect, will those conservatives disinclined to interest themselves in the messy details of supply and demand. Nonetheless, building and articulating the vision thing must be part of the way we persuade Americans who are tempted by the false promise of little work, nanny states, and endless intervention that Europeanization is not just economically and morally problematic — it’s also downright un-American.
— Samuel Gregg is research director at the Acton Institute and author of the soon-to-be released Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future.