Europe attacking capitalism? Best joke of the year!

This week I read an article in the Newsweek from Stefan Theil, "The No-Growth Fantasy : Europe's attack on capitalism".

The thesis of the whole article is that because of some circumstances (worst economic crisis in 60 years, apocalyptic warnings of climate change and erosion of West's predominance) you get some "radical new ideas" - though not so new - and being stamped by the author as no-growther's one. He then spend the rest of the article to demonstrate these ideas make no sense and are the wrong path to take ("no-growth fantasy") or that's even an "attack on capitalism".

Let's take a look at what he tries to show/demonstrate.

First, to clarify, it is not because ideas are not new they are wrong. Like I already wrote in another post, historically, most of radical new political ideas took a long time - sometimes even more than 100 years - to reach a mature state and be well accepted by the population. By default, people - whatever they be politics or journalists - don't accept easily radical new ideas because it changes their comfort zone.

The background of the article is a rough summary of 3 "new" ideas, Britain and French political ones and a German book. Without agreeing with them, I would at least recognize that some people think about valid and serious issues and if I had to negate the correctness of these solutions, I would well prepare my arguments.

He admits these issues raised are valid like growth financed by unsustainable bubbles, resource depletion (food, oil) - so easy and basic questions to solve, right? - and GDP as a valid measure of human progress. For which latter, he admits there are not much more economists thinking GDP is a valid measure of the progress but on the other hand it has obviously not reached all the layers of the society otherwise it would not be an issue raised today, correct? Well, OK. We only stick with 2 issues out of 3 'cause the French idea makes sense since even "economists are the first to admit that GDP is at best a proxy for prosperity, not an end in itself". Why having taking time to mention French then?

He starts however his argumentation with a somewhat poor relation between these new ideas and predictions made by people (Thomas Malthus or Club of Rome) about some issues which have not occurred within the timeframe they warned it could occur. I don't understand why using this as an argument to demonstrate that the new ideas would be wrong because some other predictions have not occurred. It makes almost no sense. Even less when you know that the issuess raised by these predictions are still hanging out above our heads today!

When he comes to potential solutions, he simply mentions two points :

1. these "no-growthers" would not take sufficiently into account technical evolution, environmental regulation, greater efficiency and behavioral change. What I would like to emphasize here is that if nobody is raising an issue, nothing will ever be done to try to change the situation. Plus, the issues we're talking about requires political regulations and time. These are not the kind of issues one can change alone, nor be solved from one day to another without any cooperation between nations. A good example is the Copenhagen conference for which results have been a global disappointment.
2. Genetic engineering has also been mentioned. Well, yes, genetic engineering could help humankind to feed itself. Though, 'til now Monsanto has not convinced me it helped humanity in any way. But one day it might and I do bet it will be because some governments will regulate the way they'll have to do their job.

IOW, some unfounded criticism but no proposal of concrete solution for bubbles or resource depletion. Well, ok, let's continue maybe there are some later.

Next paragraph is probably my favorite. I learned that French president Nicolas Sarkozy would lead a european marxist movement. Would you expose that idea to any european that he could think you're trying to launch a new kind of one man show comedy. No, Stefan, seriously! I hope you're joking when you're trying to bind Sarkozy and Marxism in the same sentence, don't you? Oh but wait a minute, why do we speak about French again? Don't we have let them out of the game since they were right about the GDP? Oh nooo, Stefan is a man of suspense and surprise. Indeed, French people would be indoctrinated by a schoolbook because containing the sentence "economic growth imposes a hectic form of life that produces overwork, stress, nervous depression, cardiovascular disease, and cancer". Do you know how many students have read this schoolbook? It should be near from zero. Reading this kind of argumentation from someone writing articles in Newsweek is so disappointing. I really think it's at the same level of what has been related by Fox News about "indoctrination" of some children at school because they were "singing praises of President Obama".

He also raised an interesting affirmation which could be formulated like : "Do you really think this now famous sentence in French schoolbook about economic growth would not sound crazy to these 2.6 billion people living with less than US$2 per day?' Well, I'm living in Brazil for 3 years now and I have worked in some its slums, I know by experience, that people there are much closer to Marxist ideas than capitalist ones because they're living in a country with one of the highest GDP in the world though they're not seeing any practical improvements for them. Plus, helping one each other is something natural in their situations and nowadays, helping one each other is something closer to communism, right? :) Brazil is unfortunately a country where wealth redistribution is not working well. iow, capitalism promises are not working the way theory told us. To continue at the same level, I know people from Eastern European countries who would like to get back to communism era because their situations were better back then. Does that mean these people are right? Not sure. What I'm sure about is that it's not much more valid argument than the one from Stefan telling that because 2.6 billion of poor people might think economic growth might be positive for them that by induction the idea of capitalism can then not be improved. It's a lot of unfounded "might" to try to convince us that one idea could not be improved.

Whether the Britain or French government or the German book are right about the solutions they would put in place, I don't know. What I'm sure about is that they would not try to put in place a "no-growth" solution. If you're seriously believing it, you're completely missing the point. These 2 states because of some bad situations, created by faulty capitalist institutions and because economic development is limited, are trying to find out mechanisms to improve our system by defining some regulations - within capitalist framework - in order to reach a growth with sustainability and stability in mind! Selling us France and Britain are attacking capitalism?! Com'on Stefan! Who is foolish enough to buy that idea?!  


I've not read Benjamin Friedman's book, "Moral Consequences of Economic Growth" and I don't know if it's because the article's author oversimplifies his ideas but it does not take me 1 minute to know that economic growth is not equal to unlimited resources nor of intolerance and populism disappearance. Take a look at what happens in the USA right now with the health coverage system reform. Do you think that some of the well-educated Republicans are acting like if they were tolerant and not populist? Let me laugh (or in fact cry) once again. I would like to be in a world where people are tolerant and not populist, it seems we currently are not and it is independent from having growth or not.

BTW, while we're speaking about USA. I would not be surprised the author thinks USA is a good example of how capitalism should be driven. At least, "Europe Philosophy of Failure" let me guess it. The question is then : "Would I be proud to sell the benefits of economic growth of a country which has the highest rate of poor people of all developed country?". I won't even speak about health coverage system, I might be stamped of communist! I don't think it is really something faulty for others countries to have 1) their specificities because world is about diversity and 2) trying to avoid to make the same mistake others could make. Does that mean these countries are perfect? Of course not, nobody is and everybody should constantly learn from mistakes. Some should learn about humility.

Conclusion : not a clue of a solution about unsustainable bubbles, not even about rate of resource depletion, poor argumentation, generalization or statements coming from nowhere. Everything to make a "good" article. I do prefer and by large reading some articles with well built argumentation from Le Monde Diplomatique (also Stefan preference, right?) than that kind of article which just tries to demonstrate something so badly and without exposing decent arguments. Stefan, tell me if you need some contacts to program your next one man show. I would be your first fan!