Europe's dark secret

Article published on Aug. 2, 2010
community published
Article published on Aug. 2, 2010
Source: Economist I believe the following article is quite interesting... They might not like to admit it, but Europeans don't mind a bit of capitalism WHEN history comes to write the tale of the euro-zone crisis, the chief villains, if Europe’s leaders have any say, will be not dissembling Greeks or dithering Germans, but the financial markets.
Traders subjected Greece to “psychological terror”, declared George Papandreou, its prime minister. They were “making money on the back of the unhappiness of the people”, lamented Michel Barnier, the European commissioner for the single market. The crisis was blamed on wolf-pack markets (Anders Borg, Sweden’s finance minister), cynical hedge funds, cocky credit-ratings agencies, neoconservative capitalism (José Luis Rodríguez Zapatero, Spain’s prime minister), a duplicitous Anglo-Saxon press (Mr Zapatero again), and other wicked forces still.

Not all Europeans demonise the market. Ex-communist Europe, which only recently threw off the command economy, is less hostile. So are the Germans, with their small-business Mittelstand and consensual labour relations. Elsewhere, though, market-aversion seems to go deeper than mere disapproval of extravagant stock options or bonuses (which is common to market-friendly Britain and America too). Fully 29% of Spaniards and Italians, and 43% of the French, told a global poll last October that free-market capitalism was “fatally flawed”. Only 13% of Americans shared that view.

Source: Economist

I believe the following article is quite interesting...

They might not like to admit it, but Europeans don't mind a bit of capitalism

WHEN history comes to write the tale of the euro-zone crisis, the chief villains, if Europe’s leaders have any say, will be not dissembling Greeks or dithering Germans, but the financial markets. Traders subjected Greece to “psychological terror”, declared George Papandreou, its prime minister. They were “making money on the back of the unhappiness of the people”, lamented Michel Barnier, the European commissioner for the single market. The crisis was blamed on wolf-pack markets (Anders Borg, Sweden’s finance minister), cynical hedge funds, cocky credit-ratings agencies, neoconservative capitalism (José Luis Rodríguez Zapatero, Spain’s prime minister), a duplicitous Anglo-Saxon press (Mr Zapatero again), and other wicked forces still.

Not all Europeans demonise the market. Ex-communist Europe, which only recently threw off the command economy, is less hostile. So are the Germans, with their small-business Mittelstand and consensual labour relations. Elsewhere, though, market-aversion seems to go deeper than mere disapproval of extravagant stock options or bonuses (which is common to market-friendly Britain and America too). Fully 29% of Spaniards and Italians, and 43% of the French, told a global poll last October that free-market capitalism was “fatally flawed”. Only 13% of Americans shared that view.

Nowhere is contempt for free enterprise, and its linked evils of wealth and profits, more intense than in France. Nicolas Sarkozy has declared laissez-faire capitalism “finished”. Almost alone in Europe, France imposes a yearly “fortune” tax on most biggish assets. In literature and philosophy, from Molière and Balzac to Sartre, the French have denounced the corrupting power of money, and ridiculed the grasping nouveau riche. Today’s bosses, always cigar-chomping, are subject to satire, scorn and even “boss-napping”. Communists, Trotskyites and the New Anti-Capitalist Party are treated not as curiosities, but serious talk-show guests.

Why is France such an outlier? It could be Catholic guilt, or lingering Marxism (economics textbooks teach pupils about the conflict between capital and labour). It may be the enduring romance of revolutionary rebellion, or the creed—or at least myth—of equality. Whatever its cause, suspicion of wealth is one reason that Mr Sarkozy is in trouble over his party’s links to France’s richest woman, Liliane Bettencourt, the L’Oréal heiress. The same reflex may even inhibit Dominique Strauss-Kahn, boss of the IMF and the Socialists’ most competent leader, from running for the presidency in 2012: he is damaged by his big pay packet and the link to Washington money. “Elsewhere, material success is readily admired…billionaires are applauded (and envied), bosses are acclaimed, self-made men celebrated,” writes Alain Duhamel, a French political commentator. “In France, not at all. Wealth embodies evil, money the devil.”

Perhaps, however, it is time to let the French, as well as other corners of market-averse Europe, in on a dark secret. The truth is that theirs is a capitalist society. For while Europe’s leaders rail against profits and wealth, its firms stride into new markets and rack up giant profits. Spain’s Inditex dresses men and women in Zara outfits in 76 countries. Belgium’s Anheuser-Busch InBev, which makes Budweiser, is the world’s leading brewer. France boasts more Fortune 500 companies than Germany. A French company, Sodexo, is chief caterer to the American marine corps.

Such firms strut unapologetically into China, India and Brazil, vaunting their “sales-driven, consumer-centric” mission to achieve “world-class efficiency”. And (whisper it) they also create the riches that the French, Belgians, Spanish, Greeks and others say they despise (but are happy to redistribute). Fitch, one of the global credit-ratings agencies denounced by Mr Sarkozy, may have its headquarters in New York, but, via a holding company called Fimalac, is actually French-owned.

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