Wall Street Journal
July 10, 2012
The Entitlement State—and Zombies
How to become a country, or a continent, of democratic serfs.
When is an economic crisis more than just an economic crisis? When is it also a political crisis? And when is it something else altogether: social, demographic, institutional, moral, intellectual—in short, civilizational?
The euro zone’s troubles shouldn’t be difficult to understand: Pair overspending governments with over-regulated economies and sooner or later the Continent was bound to lose the confidence of the markets.
Normally, such a crisis could be resolved by slashing corporate and marginal tax rates and red tape in order to encourage investment, enterprise and risk-taking. Instead, European policy makers have pursued every conceivable fix, from serial bailouts to a banking union, in order to circumvent having to address the core problems. As a result, the crisis continues to worsen: In Spain, for instance, bank-deposit flight has only gathered pace since last month’s $125 billion bank bailout.
So Europe’s predicament is more than just economic. What about the politics? Why can’t Europe’s leaders just tackle the problems the way Margaret Thatcher did in the 1980s, under the clarifying banner, “There is no alternative”?
It’s not as if voters are giving politicians a pass, having thrown out incumbents from Athens to Dublin. Nor is it that the “wrong” parties are in power: The French just installed a Socialist in the Élysée, but Spain and Greece have elected conservatives and Italy’s prime minister is a nonpartisan technocrat.
Yet François Hollande, Mariano Rajoy, Antonis Samaras and Mario Monti are guaranteed failures, just like the men they replaced. This partly reflects the men themselves.
But it mainly reflects the ideological assumptions they share, the pan-European institutions in which they operate and the electorates they represent—that is, the totality of contemporary European civilization. European leaders will not cure what ails their economies because the people who voted them into office are addicted to what ails those economies.
In other words, they are addicted to entitlements. These aren’t only the entitlements as most Americans understand them, from Social Security to food stamps and corporate welfare. It’s also “free” medical care, “free” university education, 35-hour work weeks, guaranteed vacations, de facto job tenure. Try to modify any of this, as various European leaders have discovered in recent years, and you’ll have mass demonstrations, crippling strikes and old-fashioned rioting.
With the exception of Mrs. Thatcher during the coal miners’ strike of 1984-85, no modern European leader has been able to stand up to the pressure. That’s a testament to the Iron Lady’s political guts, and to the gutlessness of would-be reformers like Jacques Chirac and Silvio Berlusconi.
Mainly, however, it’s a testament to the zombifying power of entitlements. It’s sometimes said that modern Europeans aren’t willing to fight for anything anymore. But that’s not true: Every time an entitlement is even slightly at risk—whether it’s raising the retirement age to 62 from 60 in France or tinkering with the legal architecture that guarantees jobs for life in Italy—Europeans go right to the barricades.
That’s not just because they are defending a financial benefit. They are also defending a way of being and a state of mind: a conviction that it’s up to somebody else to provide for their well-being; a terror of what might happen should that somebody else fail to provide.
So the typical European looks to government to afford his living, and the typical European government looks to the EU, or the IMF, or the ECB, or Berlin to afford theirs. Even now, as the accumulation of national bankruptcies threatens collective bankruptcy, the entire focus of European policy making rests on how to pool diminished resources in a fiscal union rather than attempt to restore economic vigor. It’s like the film “I Am Legend,” only this time the hordes of the undead speak a Romance language, and the Will Smith character is played by Angela Merkel.
Observing this situation, Americans might suppose that we are still a long way from Europe. But consider this: As of the first quarter of 2010, 48.5% of Americans lived in a household that received some form of government assistance. That’s up from 44.4% when the financial crisis began in 2008, and up from around 30% just 30 years ago. In the meantime, 49.5% of Americans paid no federal income tax as of 2009, up from 34.1% when George W.Bush took office.
Once ObamaCare kicks in, the percentage of takers will move north of 50% (if it hasn’t already), and we will become a nation of modern zombies—or, if you prefer, democratic serfs. Don’t console yourself with the hope that things can be turned around with a different president, or once the failures of the entitlement state become manifest. Incentives matter, but not as much as habits do. And a habit of dependency, as any addict knows, will sooner drive a man to degradation than to reform.