Europe Vs. The Merciless Mings

By Rod Dreher • January 2, 2013, 6:59 AM

Matt Ridley warns that even as economic conditions improve around the world, Europe faces serious prospects of decline. Excerpt:

Even so, relative decline can be painful. Spanish people are richer and live longer than when their silver-sated conquistador ancestors strutted the European stage, but I am sure it does not feel like it to an unemployed youth in Bilbao. Whatever happens, we Europeans will probably have to get used to watching Asians book the best restaurants and launch the biggest aircraft carriers in the years ahead.

Absolute decline is far more scary. If Europe cannot rediscover how to grow its economy, then it will have to default on its vast debts, either directly or by inflation. Either way savers will be poorer, tax receipts will be lower and spending on schools and hospitals and roads will be lower: genuine austerity.

As the MP Douglas Carswell reminds us in his book The End of Politics, here in Britain we have public and private debts that are five times our annual economic output; we are spending £46 out of every £100 we earn to buy government – a product that, unlike most, delivers less output for more cost each year. As the Ming empire found out, the more government you buy, the less economic activity you get. A Fujian travelling salesman in 1400 was enmeshed in such a tangled bureaucracy that he could neither travel nor sell without bribes and permits, and he had to submit a monthly inventory of his stocks to the emperor.

Sound familiar? Every small businessman I talk to these days has a horror story to tell about the delays and costs that have been visited upon him by planners, inspectors, officials and consultees. Using the excuse of “cuts”, the bureaucracy is taking even longer to make decisions than five years ago. In the time it has taken Britain’s Government to decide whether to allow a fifth exploratory shale gas well to be drilled in Lancashire, and from the same standing start, the same investors have drilled 72 producing wells in Argentina. That the country of Watt and Stephenson should look a potential cheap-energy gift horse in the mouth in this way is staggering to this jaded optimist.

UPDATE: Some of you are having trouble linking directly to the Ridley piece. Try going to the main page of Ridley’s blog, and going from there to the “Global outlook rosy; Europe’s outlook grim” post.

Posted in Decline and Fall, Economics, UK/Europe. Tagged decline, economy, Europe, Matt Ridley, Mings.

13 Responses to Europe Vs. The Merciless Mings

FN says:

January 2, 2013 at 8:02 am

People should be more careful generalizing about “Europe”. Red tape and government intervention are a problem just as elsewhere, but they are not the reason for the crisis in the UK, Spain or Ireland. They were more important factors in Greece, Italy and France (in descending order). Germany and the nortern countries have been doing fine, despite hardly being less regulated and the government claiming a large share of GNP.

I certainly believe any small-business owner in the EU has a horror story to tell, just as anywhere else (India!!! The US!!! China!!!…), just as any big-business owner, for that matter. I know a couple, too. Our grandchildren will know some, I have no doubt.

BTW, that 46 GBP out of 100 that the government takes in the UK include the cost of free healthcare for everyone, as far as I am aware. Add the cost of (private) health insurance to the public expenditure quota in the US and you get a similar percentage.
JJM says:

January 2, 2013 at 8:24 am

Commenters in Britain are a poor barometer for conditions in “Europe.” Just pointing that out. I also doubt that this guy would trade places with a rural Argentinian just to make a point about bureaucracy.
David says:

January 2, 2013 at 8:35 am

Interesting excerpt, but the link doesn’t seem to work. I’d really like to read the article itself.
Bryan says:

January 2, 2013 at 9:20 am

The Ming Empire also was one of the very first on earth to impose a widespread fiat currency system. Coincidence? I think not.
stillaninterestedobserver says:

January 2, 2013 at 10:01 am

I dunno, Rod — given the metric of “drill baby drill!” of the last paragraph, it seems very non-crunchy-con. (That said, though I know I’ve read various comments on living with the environment over the years from you, I don’t recall any particular point re: big oil versus other energy sources? If there’s an extended reflection or argument you wrote or otherwise favor it’d be intriguing to read and consider.)
Bruce Ross says:

January 2, 2013 at 11:01 am

“That the country of Watt and Stephenson should look a potential cheap-energy gift horse in the mouth in this way is staggering to this jaded optimist.”

Is it just possible that the country of Watt and Stephenson has learned a thing or two about the poisonous side effects of cheap energy in the past couple centuries, and thus approaches it with due caution?

If only we could exploit ourselves the way we exploit developing nations!
Tyro says:

January 2, 2013 at 11:18 am

If Europe cannot rediscover how to grow its economy, then it will have to default on its vast debts

He says this as though it would be some kind of disaster. That is the way of things: bond holders buy bonds. Sometimes, during a crisis, those bonds get wiped out because the borrowers default. In the end, everyone is better off because they start with a blank slate and begin again. 2008 was just the sort of crisis that defaults were designed for– the kind that weren’t priced into the risk models and couldn’t have been predicted. Spain, in particular, wasn’t even regarded as having a debt problem until the double whammy of the economic crisis followed by the governments austerity measures took effect.
EngineerScotty says:

January 2, 2013 at 1:48 pm

How can any post contain the words “Ming” and “Merciless”, and have no mention whatsoever about Flash Gordon?
Nick K. says:

January 2, 2013 at 1:57 pm

Economies matter, but it seems that any “absolute” decline that Europe faces will at least partly be a function of demographic decline. It’s hard to maintain a robust economy, a vibrant culture, and a stable polity when your population is simply not reproducing itself. This demographic decline is compounded by competition from non-European immigrant groups who are reproducing themselves. Anyway, I won’t blather on that, Pat Buchanan has handled masterfully already. Just seems that Mr. Ridley is missing a key point there.
David J. White says:

January 2, 2013 at 4:28 pm

How can any post contain the words “Ming” and “Merciless”, and have no mention whatsoever about Flash Gordon?

I thought that was Rod’s point in writing the headline he did.

I remember once seeing a photo of what was claimed to be the world’s largest collection of Ming vases. I wish I could find it. It consisted two huge vases with the image of Ming the Merciless on them.
cecelia says:

January 2, 2013 at 5:22 pm

the northern countries are not doing so well either – Germany, Netherlands and Luxembourg were warned recently that their bond ratings are about to go down. Netherlands has the highest rate of unemployment since the 50′s and the whole lot of them have negative growth. The US economy is growing faster than Germany’s – although I am sure our Congress will correct that soon!

Europe is a textbook example of the error of too much austerity and leaders who cannot admit they were wrong. It is also a distrubing situation in every way – but one of the things that gets me is how the eurocrats are using the situation as a means to further their agenda. Never let a crisis go to waste must be their motto. Having passed the rules for more fiscal integration in the euro land – political integration will not be far behind and it is hard to see what happens to democratic government in Europe then. Consider that the German finance minister has expressed dismay over the UK allowing its citizens to actually VOTE on wheither or not they stay with the EU project – imagine that – voting is now a cause for dismay.
k says:

January 2, 2013 at 6:27 pm

I find it a fascinating time of so much hope.
Charles_Atlanta says:

January 3, 2013 at 12:37 am

Honestly, is there any economy in the world that is doing really well right now?

My hunch is that every successful economy in the world other than the US was designed to be an export economy. The US was the import economy and the UK was there to finance it all. The US couldn’t continue to import without money being loaned/donated to us. So, money was dumped in via seeminly safe residential real estate investments.

But, that crashed. The world laughed at the US for a second and then realized they were more screwed than us because they needed us to buy their stuff. Our economy crashed and everyone rushed to buy dollars. What does that tell you?

It is my understanding that Spain and Italy didn’t have outsized deficits prior to the crisis. I’m not sure as to the specifics of why Italy crashed. But, Spain’s economy was heavily dependent on construction. When foreigners couldn’t afford to buy Spanish vacation homes, Spain was in trouble.

I frankly don’t think there is nearly as much of a lesson here as there might seem to be.

By the way, look at the fastest GDP growths rates for 2012. Based on that, Africa is where it is at (and I’m pretty sure that Africa is not where it is at). Or, think about Japan. It has stagnated for a decade and yet is still the world’s third largest economy. Catch-up growth skews growth figures.