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John Lonergan's avatar

Economic Realities vs. Cultural Nostalgia: A Rebuttal to Békés on Europe's Decline

Márton Békés's essay presents Europe's challenges through a lens of cultural homogenization and lost identity. However, this cultural diagnosis misidentifies the disease. Europe's genuine crisis is economic and institutional, rooted in concrete policy failures rather than abstract threats to civilizational spirit.

The Real Crisis: Four Economic Failures

While Békés acknowledges that Europe has become "economically uncompetitive, technologically outdated, demographically declining, culturally stagnant, and procedurally slow, cumbersome, and paralyzed," he misdiagnoses the causes. The evidence points to four primary factors.

1. Unsustainable Welfare Spending

Public social expenditure in EU countries averages approximately 27% of GDP, compared to roughly 19% in the United States. France's public spending exceeds 57% of GDP. These resources are diverted from private capital formation, entrepreneurship, and innovation.

The consequences are measurable: between 2000 and 2020, real disposable income per capita grew by approximately 60% in the United States compared to roughly 30% in the Eurozone. Békés acknowledges Europe is "economically uncompetitive," yet attributes this to cultural homogenization rather than the structural reality that high tax burdens and generous transfer payments reduce incentives for work, entrepreneurship, and risk-taking.

2. Demographic Collapse

Total fertility rates across the EU average approximately 1.5 children per woman, well below the replacement rate of 2.1. Italy and Spain have fallen to 1.2. By 2050, the EU's working-age population will decline by tens of millions while the number of retirees explodes.

This creates impossible fiscal arithmetic: fewer workers must support more retirees through already-strained pension systems. In Italy, there will be nearly one pensioner for every worker by mid-century. Crucially, this fertility decline predates recent cultural trends and reflects economic incentives: delayed family formation due to extended education, high opportunity costs of childrearing, expensive urban housing, and welfare policies that reduce the economic necessity of children while making family formation economically burdensome through high taxes.

3. Political Ossification

European political systems have systematically excluded parties offering fundamental economic reform through "cordon sanitaire" arrangements. In Germany, established parties refuse to work with the AfD. In France, left and right unite to block the Rassemblement National. The result is political sclerosis—centrist parties share similar economic philosophies preserving the welfare state and resisting structural reform.

This consensus prevents policy innovation. By excluding parties voicing popular economic concerns, the system reinforces precisely the technocratic, unresponsive governance that Békés criticizes—but the solution is greater democratic responsiveness to economic reform demands, not retreat into cultural nationalism.

4. Guild Economies and Regulatory Capture

Europe has failed to produce a single technology company of global significance in thirty years. No European Google, Amazon, or Apple. No European company ranks among the world's top 20 by market capitalization. The reason is regulatory barriers protecting incumbents from disruption:

Uber and ride-sharing: Multiple cities banned or severely restricted Uber to protect taxi monopolies, resulting in less convenient transportation and higher costs.

Financial innovation: High compliance costs prevent fintech startups from competing with incumbent banks, who deliver inferior service at higher cost.

Artificial Intelligence: The EU's AI Act prioritizes precaution over innovation, disadvantaging European firms relative to American and Chinese competitors. European AI investment lags far behind.

Labor markets: Strict employment protection makes hiring risky and firing difficult. Youth unemployment in southern Europe regularly exceeds 30%—millions of young Europeans denied opportunity because regulations favor incumbent workers.

The cumulative effect is an economy optimized for stability and incumbent protection rather than growth and innovation. Risk-taking is penalized, capital flows to rent-seeking, and stagnation results.

The Widening Gap

GDP per capita in the United States is approximately 40% higher than in the EU. The gap is widening—in 1990, Western European and American living standards were comparable. Today, the typical American household enjoys a standard of living considered upper-middle class in much of Europe. Projections suggest this divergence will accelerate as Europe's demographic crisis intensifies and its technological lag grows.

What Békés Gets Wrong

Békés's essay contains an internal contradiction. He correctly identifies Europe's concrete failures but explains them through cultural homogenization—a diagnosis that cannot account for these failures. How does Americanization cause regulatory capture by taxi monopolies? How does immigration policy relate to the EU's failure to produce competitive technology firms? Békés provides no causal mechanism.

His vision of a "Europe of peoples, nations, landscapes, and regions" offers romantic nostalgia but no actionable solutions. Would national sovereignty reform pension systems? Would ethno-pluralism make labor markets flexible? Would regional identity reduce occupational licensing barriers? The connection is tenuous at best.

The Path Forward

If Europe wishes to reverse its decline, it must address concrete policy failures:

Welfare reform: Shift pensions from pay-as-you-go to funded models. Raise retirement ages. Make benefits sustainable. Target transfers to those genuinely unable to work.

Pro-natalist policy: Reduce tax burdens on working-age adults. Make housing affordable through supply-side reforms. Provide genuine family support rather than rhetoric.

Political responsiveness: Stop excluding parties voicing popular frustration. If voters want policy experimentation, democratic systems should accommodate rather than maintaining centrist cartels.

Embrace creative destruction: Dismantle regulatory barriers protecting incumbents. Allow new businesses to challenge old. Enable technologies to disrupt established industries. Limit professional licensing to genuine safety concerns. Make labor markets more flexible.

Conclusion

Europe's crisis is not that it has become too homogeneous or too American. It is that Europe has become too rigid, too regulated, too burdened by unsustainable commitments, and too resistant to the creative destruction that generates prosperity.

The prescription is not ethno-nationalism or continental grandiosity. It is boring, concrete reform: fiscal consolidation, regulatory liberalization, demographic policy, and political opening to reformist forces. These measures will not restore some imagined civilizational essence. But they might restore rising living standards, economic opportunity, and a future in which young Europeans need not emigrate to find prosperity.

Europe's real choice is not between homogeneity and diversity, or between Americanization and authentic identity. It is between reform and decline. The longer Europe delays confronting its genuine problems with genuine solutions, the wider the gap with more dynamic economies will grow—and the bleaker the future for ordinary Europeans.

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AJC's avatar

Excuse me, but this article seems increadibly vague in regards of what sort of tangible co-operation there should be between European nations.

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