Is Europe's Welfare System a Model for the 21st Century?

In the United States, the crisis exposed an unsustainable credit culture and undid a highly sophisticated financial system that accounted for 8 percent of GDP and now needs rebuilding from scratch. On paper, the euro zone may look worse. Parts of its financial system are reeling, too, and economic growth is expected to fall for much of 2009, while many economists expect the United States to resume growth in the second half of the year. Growth in China is only slowing, not going into reverse. But unlike the other two, Europe faces less fundamental questioning of its social contract. Higher benefits and broad-based consumption taxes serve as automatic stabilizers of the business cycle, restraining growth in good times but cushioning the downturns. Obama's advisers may be looking to Europe for inspiration and many Americans are clamoring for protections against the financial and economic storms. – International Herald Tribune

Dominant Social Theme: Today the EU, tomorrow the world.

Free-Market Analysis: What is it about the insatiably corrupt and buffoonish (though admittedly vastly planted) European Union that attracts so much popular adulation from mainstream apologists? We just don't get it. And we are not alone.

Here is just one description of the European Union from a speech given by Vladimir Konstantinovich Bukovsky. Bukovsky is a notable former Soviet political dissident, author and political activist. He was "one of the first to expose the use of psychiatric imprisonment against political prisoners in the Soviet Union. He spent a total of twelve years in Soviet prisons, labor camps and in psikhushkas, forced-treatment psychiatric hospitals used by the regime as special prisons. Bukovsky is still active and attempted to run for the Russian presidency in 2008." (Wikipedia) Here is a transcript of some of a speech that he gave in Brussels – as it appears at AugustReview.com ...

In 1992 I had unprecedented access to Politburo and Central Committee secret documents which have been classified, and still are even now, for 30 years. These documents show very clearly that the whole idea of turning the European common market into a federal state was agreed between the left-wing parties of Europe and Moscow as a joint project which [Soviet leader Mikhail] Gorbachev in 1988-89 called our "common European home."

The idea was very simple. It first came up in 1985-86, when the Italian Communists visited Gorbachev, followed by the German Social-Democrats. They all complained that the changes in the world, particularly after [British Prime Minister Margaret] Thatcher introduced privatisation and economic liberalisation, were threatening to wipe out the achievement (as they called it) of generations of Socialists and Social-Democrats – threatening to reverse it completely.

Therefore the only way to withstand this onslaught of wild capitalism (as they called it) was to try to introduce the same socialist goals in all countries at once. Prior to that, the left-wing parties and the Soviet Union had opposed European integration very much because they perceived it as a means to block their socialist goals. From 1985 onwards they completely changed their view. The Soviets came to a conclusion and to an agreement with the left-wing parties that if they worked together they could hijack the whole European project and turn it upside down. Instead of an open market they would turn it into a federal state.

According to the [secret Soviet] documents, 1985-86 is the turning point. I have published most of these documents. You might even find them on the internet. But the conversations they had are really eye opening. For the first time you understand that there is a conspiracy – quite understandable for them, as they were trying to save their political hides. In the East the Soviets needed a change of relations with Europe because they were entering a protracted and very deep structural crisis; in the West the left-wing parties were afraid of being wiped out and losing their influence and prestige. So it was a conspiracy, quite openly made by them, agreed upon, and worked out.

In January of 1989, for example, a delegation of the Trilateral Commission came to see Gorbachev. It included [former Japanese Prime Minister Yasuhiro] Nakasone, [former French President Valéry] Giscard d'Estaing, [American banker David] Rockefeller and [former US Secretary of State Henry] Kissinger. They had a very nice conversation where they tried to explain to Gorbachev that Soviet Russia had to integrate into the financial institutions of the world, such as GATT, the IMF and the World Bank.

In the middle of it Giscard d'Estaing suddenly takes the floor and says: "Mr. President, I cannot tell you exactly when it will happen – probably within 15 years – but Europe is going to be a federal state and you have to prepare yourself for that. You have to work out with us, and the European leaders, how you would react to that, how would you allow the other Eastern European countries to interact with it or how to become a part of it, you have to be prepared."

This was January 1989, at a time when the [1992] Maastricht treaty had not even been drafted. How the hell did Giscard d'Estaing know what was going to happen in 15 years time? And surprise, surprise, how did he become the author of the European constitution [in 2002-03]? A very good question. It does smell of conspiracy, doesn't it?

Luckily for us the Soviet part of this conspiracy collapsed earlier and it did not reach the point where Moscow could influence the course of events. But the original idea was to have what they called a convergency, whereby the Soviet Union would mellow somewhat and become more social-democratic, while Western Europe would become social-democratic and socialist. Then there will be convergency. The structures have to fit each other. This is why the structures of the European Union were initially built with the purpose of fitting into the Soviet structure. This is why they are so similar in functioning and in structure.

It is no accident that the European Parliament, for example, reminds me of the Supreme Soviet. It looks like the Supreme Soviet because it was designed like it. Similarly, when you look at the European Commission it looks like the Politburo. I mean it does so exactly, except for the fact that the Commission now has 25 members and the Politburo usually had 13 or 15 members. Apart from that they are exactly the same, unaccountable to anyone, not directly elected by anyone at all. When you look into all this bizarre activity of the European Union with its 80,000 pages of regulations it looks like Gosplan. We used to have an organization which was planning everything in the economy, to the last nut and bolt, five years in advance. Exactly the same thing is happening in the EU. When you look at the type of EU corruption, it is exactly the Soviet type of corruption, going from top to bottom rather than going from bottom to top.

If you go through all the structures and features of this emerging European monster you will notice that it more and more resembles the Soviet Union. Of course, it is a milder version of the Soviet Union. Please, do not misunderstand me. I am not saying that it has a Gulag. It has no KGB – not yet – but I am very carefully watching such structures as Europol for example. That really worries me a lot because this organization will probably have powers bigger than those of the KGB. They will have diplomatic immunity. Can you imagine a KGB with diplomatic immunity?

So you see – others are disenchanted with the EU as well! Of course, we cannot vouch for Bukovsky's recollections, above, and have not verified them. But generally we believe him to be an honorable and courageous man – and what he describes is in line, generally, with our suspicions.

And what are these suspicions of ours? We would maintain with some confidence that the EU is not democratic in the fundamental sense, that its leaders have intentions that they are not enunciating and that, in fact, the EU was built as a common currency region when in fact the plan was to create a European super state.

Now some obviously believe a European super state is needed for some reason. But whether it is or not, facts remain "stubborn things." The EU's leaders quite obviously have in mind something other than what they said they did. That's no small thing. When leaders mislead, one is obliged to wonder about the future. What exactly will the misleading lead to? Even if the system is OK now, where exactly will it end up?

We would submit that the EU is nothing like a gently evolving democratic state. This is a group that is trying to recreate the empire of Charlemagne for goodness' sake! Further, it may seem like the world's grandest welfare state right now, but give it a decade. There is no social compact that we can see: only an endless whittling down of human rights and the engorgement of authoritarianism.

Conclusion: We've run other articles maintaining that the EU is on its way down, maybe all the way to bankruptcy, according to the UK Telegraph. One thing we are certain of: the vision of the EU's leaders is not of a mixed economy, at least not in the way that the article excerpted above implies. The vision of the leaders of the EU seems to be one of a socialist corp-oratocracy in which largeness – both in the public and private sector – will triumph. Ultimately a blurring of lines may make it difficult to tell the difference between the two sectors. Call the system mercantilism. Investigate the Dark Ages to find out just how well it has worked out.

The American system, built on free-markets, private enterprise, sound money and limited government is radically dissimilar from the vision of EU's leaders. The culture is different as well. The idea that the two cultures are equivalent, that convergence is somehow inevitable or that the EU's model is static and not evolving toward something much grimmer are suppositions we believe to be naïve.

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