Europe's Problem--and OursWill the EU choose collectivism over...

Europe's Problem--and Ours

Will the EU choose collectivism over individualism? Will we?

BY PETE DU PONT
Monday, March 21, 2005 12:01 a.m.


Vaclav Klaus, president of the Czech Republic, was recently in Washington to meet with President Bush and release his new book, "On the Road to Democracy." When the Berlin Wall fell in 1989 and the Velvet Revolution came to Czechoslovakia, Mr. Klaus became finance minister in the new democracy. He became prime minister in 1992, and later president. His market principles replaced communism with freedom and choice; he liberated prices and foreign trade, deregulated markets and privatized state ownership of assets. Communism was dismantled and prosperity came to his country.

But now President Klaus sees an unsettling new challenge: the zeal of Old Europe--France, Germany, Brussels--to impose collective choices on New Europe--Poland, Denmark, the Czech Republic, Ireland. "Ten years ago," Mr. Klaus writes, "the dominant slogan was: 'deregulate, liberalize, privatize.' Now the slogan is different; 'regulate . . . get rid of your sovereignty and put it in the hands of international institutions and organizations.' "

"The current European unification process is not predominantly about opening up," he continues, "It is about introducing massive regulation and protection, about imposing uniform rules, laws, and policies." It is about a "rush into the European Union which is currently the most visible and the most powerful embodiment of ambition to create something else--supposedly better--than a free society."


The force that is creating these pressures is indeed the European Union. Its constitution must be ratified by all member states; four of the 25 nations have done so, and referendums will be held in France and the Netherlands this spring. If ratified, the EU will become the primary source of legal authority in Europe with "primacy over the law of member states." In other words, the 25 members of the European Union Council of Ministers--not the 750 members of the EU Parliament--will make the laws for 450 million people previously citizens of 25 independent countries.

So what is making President Klaus "more and more nervous" about the Czech people's future? His conviction that the authors and enforcers of the new EU Constitution believe:

o That "competition is not the most powerful mechanism for achieving freedom, democracy and efficiency, but rather an unfair and unproductive form of dumping."

o That "intrusive regulation, ruling and intervening from above are necessary because market failure is more dangerous than government failure."

o That "the premise that government is ultimately a benevolent force, obliged to guarantee equal outcomes by redistributing benefits and privileges between individuals and groups."

Could the Brussels bureaucracy, for example, constitutionally impose France's 35-hour work week on the other 24 nations in the European Union? Indeed it could, and with a vote of only 15 of the member states (if they represented 65% of the population of the EU). A state voting "no" would have the law imposed upon it.

It seems likely that the European Union intends to centralize decision making in Brussels, while President Klaus believes in "the inherent morality of markets, in the ethics of work and saving, in the crucial link between freedom and private property. It is not possible (or desirable) to legislate a better world from above or outside."


Come to think of it, hasn't this very same debate dominated public-policy decision making in America? Whether the government should have the power to make collective decisions for us or people have the power to make individual decisions for themselves?

It began in the Depression, when capitalism appeared to have failed and it seemed Franklin D. Roosevelt's collectivism would do better. That government-knows-best philosophy pretty much dominated the country--with some respite during World War II and the immediate postwar years--for half a century. In the 1960s and '70s government grew; regulation increased; crime rose while the prison population dropped; schools lowered their standards and limited testing; and the distribution of wealth became more important than its creation. As Lyndon Johnson said, we must accept "greater government activity in the affairs of the people." Richard Nixon's wage and price controls and higher taxes continued the trend.

Then came Ronald Reagan with the opposite view, and the 1980s and '90s saw an America in which liberty was believed more important than equality; expanding markets became more important than expanding government. Welfare was replaced with work, expanded police forces and mandatory sentencing drove crime rates down, education began a return to testing and standards, and the creation of greater individual and national wealth became our economic focus.

President Bush has continued the individualist perspective. With the exception of his steel tariffs catastrophe, he has worked to increase trade. He has reduced taxes to increase individual opportunity and grow the economy. He favors the ownership society--he hopes to expand the 52% of Americans who own stock and the 69% who own their own homes--and believes that Social Security retirement accounts should be owned by individuals too. The No Child Left Behind Act tried to bring higher standards to public education, but this is an area in which the United States still follows the Brussels model--public schools are run by the government, and families are not allowed to choose the best school for each of their children.

Establishment thinking, of course, predicts that individualism will be a catastrophe, but the opposite turns out to be true. Reagan's tax cuts were called--by Republican Howard Baker, no less--a "riverboat gamble," yet they launched a strong economic expansion. His missile defense system was ridiculed by Ted Kennedy as "star wars" and his challenges to the Soviet Union denounced as reckless and irresponsible, and yet they consigned communism to the dustbin of history. Sen. Pat Moynihan and Children's Defense Fund president Marian Wright Edelman both predicted that welfare reform would drive the poor deeper into poverty, but it cut the welfare caseload in half and allowed millions of people--mostly women--to go back to work and improve their lives and opportunities.


So as communism disappeared in Eastern Europe and Reagan's philosophy dominated American thinking, individualism has been on the rise. But a nation's belief in individualism is often overwhelmed by a warm and persuasive governmental benevolence that will in the end limit our opportunities. In Europe we see its growing power in Brussels; in America we see it in the current Social Security debate.

Establishment America favors collectivism--the collectivism of public education and our current Social Security, and higher taxes to limit individual choices and increase government choices. So President Klaus's thinking deserves some consideration, for if Brussels and Blue America prevail, our lives will be very different indeed.

Mr. du Pont, a former governor of Delaware, is chairman of the Dallas-based National Center for Policy Analysis. His column appears once a month.