Thank you for this paper. It is by far the most intelligent and realistic description of what welt wrong with the European projection. I hope tour thought will disseminate. In fact it should go viral given how to the point it is. Thanks again. I have subscribed ans I'll keep reading you.
Thank you for your clear thinking and persuasive writing!
Just two small thoughts that popped up in my head:
1. I think an "unstable litigation-driven trading environment of inter-State regulatory diversity" very much describes how my American friends see their own economic area. And if the US is also a regulatory mess, to stay competitive vis-à-vis the US should depend on something else entirely, no?
2. I'm normally interested in the competitiveness of companies or industries, not whole economic areas, but I do think considering particular industries may provide a litmus test of sorts, ie., would your suggestions fix European tech and the car industry? These are under pressure largely from Silicon Valley's network dominance and Chinese subsidies, respectively, and I do fear that any solution that doesn't solve their problems may end up not solving many others either.. (yes the sector lacks creative destruction but there ARE barbarians at the gates too!)
I was actually somewhat worried about what the proposals were going to be, reading the first section of the article. European liberals often run into the mistake of saying "If only we were like America.... " when criticizing European regulation/bureaucracy.
This is a fundamental mistake in my view. European regulation does have many problems but I don't think we will get very far in fixing those problems if we try to sell the idea that we would be better off just by being as laissez faire as Americans are.
Much of European pride is built precisely around the idea that over on this side of the Atlantic companies and individuals must respect each other more. That there is a greater awareness and care for social and environmental issues and that in many times that is because our governments (which ever level it is) take a more active approach.
The problem though is when we are so deeply convinced that we must do something about a certain issue that we do not consider whether something can actually be done without significant sacrifices. The vagueness of certain directives/regulations strike me as a reflection of this political signaling urge.
But as liberals we should be able to fight this vagueness stemming from the urge to regulate, while still allowing space to recognize that simple, straightforward legislation is very much needed in many places and actually increase market dynamics, competition and thus prosperity.
I was very much relieved when I read though the proposals, they seem incredibly sensible, although hope that they would ever pass through the Council in the next decade is incredibly slim.
A question the Special Courts proposal left me with however, is whether these courts, through the precedents they would set, would in effect replace the Commission's role as the garantor of the single market. I would see this as a huge plus as I don't see how the Commission could ever be an effective political actor that is in many ways dependent on the Council for so many things and yet must also somehow be able to feel free to sue the members of the Council for their violations of the Single Market.
I was actually somewhat worried about what the proposals were going to be, reading the first section of the article. European liberals often run into the mistake of saying "If only we were like America.... " when criticizing European regulation/bureaucracy.
This is a fundamental mistake in my view. European regulation does have many problems but I don't think we will get very far in fixing those problems if we try to sell the idea that we would be better off just by being as laissez faire as Americans are.
Much of European pride is built precisely around the idea that over on this side of the Atlantic companies and individuals must respect each other more. That there is a greater awareness and care for social and environmental issues and that in many times that is because our governments (which ever level it is) take a more active approach.
The problem though is when we are so deeply convinced that we must do something about a certain issue that we do not consider whether something can actually be done without significant sacrifices. The vagueness of certain directives/regulations strike me as a reflection of this political signaling urge.
But as liberals we should be able to fight this vagueness stemming from the urge to regulate, while still allowing space to recognize that simple, straightforward legislation is very much needed in many places and actually increase market dynamics, competition and thus prosperity.
I was very much relieved when I read though the proposals, they seem incredibly sensible, although hope that they would ever pass through the Council in the next decade is incredibly slim.
A question the Special Courts proposal left me with however, is whether these courts, through the precedents they would set, would in effect replace the Commission's role as the garantor of the single market. I would see this as a huge plus as I don't see how the Commission could ever be an effective political actor that is in many ways dependent on the Council for so many things and yet must also somehow be able to feel free to sue the members of the Council for their violations of the Single Market.
Excellent article, glad to read it! What do you make of the take that Europe lacks competitiveness because of onerous labor regulations? Previously that's what I believed was the EU's biggest problem. It most clearly applies to tech and to startups: startups thrive on role flexibility and long hours; and also hiring someone who ends up not being that productive is very expensive. My best idea for this is to advocate for at-will employment for employees receiving equity and more than a certain salary.
As a recent economics graduate, I’m very glad to read this. You’ve captured the concerns of many to create a roadmap for Europe. Excellent work that many more people should see — especially those who aren’t yet aware of these important issues.
Luis Garicano is one of the sharpest minds in Europe, but once again he falls short of clearly understanding the solutions to the malaise, mainly because of his pro-EU bias (just look at his profile picture).
Since around 1995 (when integration really started), the economies have basically stalled. The single currency is in full force, and yet the proposed solution is always to apply more of the same recipe?
I think Europe’s goal should be to go back to something like the European Coal and Steel Community model, instead of pushing for even more integration.
Germany has benefited from a devalued currency, while the peripheral countries (like Italy) have used the Bundesbank’s backing to avoid reform and enjoy lower rates — basically free-riding. The whole project just feels messy.
Isn’t it paradoxical that, to be truly pro-Europe, you almost have to push for anti-EU ideas?
Can we call this a “small-c” conservative view on what EU should do? Do a few things, but do those well, and do them mostly for the sake of economic growth and prosperity.
I find that the European Court (CJEU) has taken an approach in a few key rulings that effectuate the often very broad and general EU regulations that adds to the mess and uncertainty, like in their rulings on CRISPR and their willingness to universalize Max Schrems’ extreme privacy concerns. I would be interested in their jurisprudence and if the change should include CJEU.
And also, when will the ultimate account of GDPR coming into being be written? Are we waiting for Franz Kafka to return? I followed that debate over the years and what logic or fallacies made that regulation such a celebrated piece when passed baffled me, since its harms were predicted.
I hope this becomes widely read and appreciated. However, I am very pessimistic about the chances of the EU reforming itself from within. Neither Brexit nor the failing economy nor Ukraine was digested in a way which gives me hope (maybe Ukraine ... but the lessons are absorbed so slowly).
I think all your suggestions sound good and if they were implement might give the EU a fighting chance to get on the right track. But many clocks are ticking and the EU is slow.
Thank you for this paper. It is by far the most intelligent and realistic description of what welt wrong with the European projection. I hope tour thought will disseminate. In fact it should go viral given how to the point it is. Thanks again. I have subscribed ans I'll keep reading you.
Thank you for your clear thinking and persuasive writing!
Just two small thoughts that popped up in my head:
1. I think an "unstable litigation-driven trading environment of inter-State regulatory diversity" very much describes how my American friends see their own economic area. And if the US is also a regulatory mess, to stay competitive vis-à-vis the US should depend on something else entirely, no?
2. I'm normally interested in the competitiveness of companies or industries, not whole economic areas, but I do think considering particular industries may provide a litmus test of sorts, ie., would your suggestions fix European tech and the car industry? These are under pressure largely from Silicon Valley's network dominance and Chinese subsidies, respectively, and I do fear that any solution that doesn't solve their problems may end up not solving many others either.. (yes the sector lacks creative destruction but there ARE barbarians at the gates too!)
How do we solve for recruitment in the EU?
What enabled this takeover and refocus away from its original intent?
And how can it be fixed and prevented?
Europe is super responsive to interest groups.
Its budget is dedicated to defending jobs in zombie companies.
Its regulation handicaps innovation.
I was actually somewhat worried about what the proposals were going to be, reading the first section of the article. European liberals often run into the mistake of saying "If only we were like America.... " when criticizing European regulation/bureaucracy.
This is a fundamental mistake in my view. European regulation does have many problems but I don't think we will get very far in fixing those problems if we try to sell the idea that we would be better off just by being as laissez faire as Americans are.
Much of European pride is built precisely around the idea that over on this side of the Atlantic companies and individuals must respect each other more. That there is a greater awareness and care for social and environmental issues and that in many times that is because our governments (which ever level it is) take a more active approach.
The problem though is when we are so deeply convinced that we must do something about a certain issue that we do not consider whether something can actually be done without significant sacrifices. The vagueness of certain directives/regulations strike me as a reflection of this political signaling urge.
But as liberals we should be able to fight this vagueness stemming from the urge to regulate, while still allowing space to recognize that simple, straightforward legislation is very much needed in many places and actually increase market dynamics, competition and thus prosperity.
I was very much relieved when I read though the proposals, they seem incredibly sensible, although hope that they would ever pass through the Council in the next decade is incredibly slim.
A question the Special Courts proposal left me with however, is whether these courts, through the precedents they would set, would in effect replace the Commission's role as the garantor of the single market. I would see this as a huge plus as I don't see how the Commission could ever be an effective political actor that is in many ways dependent on the Council for so many things and yet must also somehow be able to feel free to sue the members of the Council for their violations of the Single Market.
I was actually somewhat worried about what the proposals were going to be, reading the first section of the article. European liberals often run into the mistake of saying "If only we were like America.... " when criticizing European regulation/bureaucracy.
This is a fundamental mistake in my view. European regulation does have many problems but I don't think we will get very far in fixing those problems if we try to sell the idea that we would be better off just by being as laissez faire as Americans are.
Much of European pride is built precisely around the idea that over on this side of the Atlantic companies and individuals must respect each other more. That there is a greater awareness and care for social and environmental issues and that in many times that is because our governments (which ever level it is) take a more active approach.
The problem though is when we are so deeply convinced that we must do something about a certain issue that we do not consider whether something can actually be done without significant sacrifices. The vagueness of certain directives/regulations strike me as a reflection of this political signaling urge.
But as liberals we should be able to fight this vagueness stemming from the urge to regulate, while still allowing space to recognize that simple, straightforward legislation is very much needed in many places and actually increase market dynamics, competition and thus prosperity.
I was very much relieved when I read though the proposals, they seem incredibly sensible, although hope that they would ever pass through the Council in the next decade is incredibly slim.
A question the Special Courts proposal left me with however, is whether these courts, through the precedents they would set, would in effect replace the Commission's role as the garantor of the single market. I would see this as a huge plus as I don't see how the Commission could ever be an effective political actor that is in many ways dependent on the Council for so many things and yet must also somehow be able to feel free to sue the members of the Council for their violations of the Single Market.
Amazing article. Congratulations for such a deep work. Impressive to say the least!
Thoughtful post. I'll be chewing on this for a few days! You may enjoy my essay on a related topic - https://kaustavmitra.substack.com/p/the-cargo-cult-of-innovation
Excellent article, glad to read it! What do you make of the take that Europe lacks competitiveness because of onerous labor regulations? Previously that's what I believed was the EU's biggest problem. It most clearly applies to tech and to startups: startups thrive on role flexibility and long hours; and also hiring someone who ends up not being that productive is very expensive. My best idea for this is to advocate for at-will employment for employees receiving equity and more than a certain salary.
As a recent economics graduate, I’m very glad to read this. You’ve captured the concerns of many to create a roadmap for Europe. Excellent work that many more people should see — especially those who aren’t yet aware of these important issues.
Gracias Pedro! And good luck!
Luis Garicano is one of the sharpest minds in Europe, but once again he falls short of clearly understanding the solutions to the malaise, mainly because of his pro-EU bias (just look at his profile picture).
Since around 1995 (when integration really started), the economies have basically stalled. The single currency is in full force, and yet the proposed solution is always to apply more of the same recipe?
I think Europe’s goal should be to go back to something like the European Coal and Steel Community model, instead of pushing for even more integration.
Germany has benefited from a devalued currency, while the peripheral countries (like Italy) have used the Bundesbank’s backing to avoid reform and enjoy lower rates — basically free-riding. The whole project just feels messy.
Isn’t it paradoxical that, to be truly pro-Europe, you almost have to push for anti-EU ideas?
I am an American raised in France. I love that continent as much as this one.
Can we call this a “small-c” conservative view on what EU should do? Do a few things, but do those well, and do them mostly for the sake of economic growth and prosperity.
I find that the European Court (CJEU) has taken an approach in a few key rulings that effectuate the often very broad and general EU regulations that adds to the mess and uncertainty, like in their rulings on CRISPR and their willingness to universalize Max Schrems’ extreme privacy concerns. I would be interested in their jurisprudence and if the change should include CJEU.
And also, when will the ultimate account of GDPR coming into being be written? Are we waiting for Franz Kafka to return? I followed that debate over the years and what logic or fallacies made that regulation such a celebrated piece when passed baffled me, since its harms were predicted.
I hope this becomes widely read and appreciated. However, I am very pessimistic about the chances of the EU reforming itself from within. Neither Brexit nor the failing economy nor Ukraine was digested in a way which gives me hope (maybe Ukraine ... but the lessons are absorbed so slowly).
I think all your suggestions sound good and if they were implement might give the EU a fighting chance to get on the right track. But many clocks are ticking and the EU is slow.
Do you want to get this translated into different languages? I could do my native Slovak.
That would be great, yes please Martin!
Here you go. The translation is licensed under CC0 license, a.k.a. feel free to do whatever you want with it.
https://docs.google.com/document/d/16aqxnjEnYeL9y7QF-oL86-5YnTGZDVgbdwb1X18-G50/edit?tab=t.0