Smart racing cyclists who run out of breath keep the pace by slipping quietly behind faster riders. Carried by this wake, it is easy to feel comfortable, even lazy. Why make the effort to move forward if you can let yourself be carried away by having the good life? Sometimes followers have to appease the tired (and increasingly irritated) lead runner by vaguely promising to “do their part of the job.” It seems like a small price to pay. It is only much later, perhaps ensconced in the comfort of a peloton, that one realizes that staying too long behind means blindly following someone else down a road that the we have not necessarily chosen.
Europe is the continent of profiteers. For decades its defense has been backed by America, leaving it to come to its aid even when war breaks out on its own borders. On the economic level, it relied on innovations from elsewhere to follow its rivals, without moving forward.
“For decades, his defense has been supported by America. Economically, Europe has relied on innovations from elsewhere to keep up with its rivals”
Even the reassuring environmental ambitions crafted in Brussels are made possible in part by importing products once made in carbon-emitting factories that Europe has long since shut down. How clever that sounds to some! All that saved money and outsourced effort makes it possible to lead a good life working 35 hours a week and retiring in the prime of life.
It is in the field of defense that criticism of Europe has been the strongest and is currently being felt the most. The combined military expenditure of the 34 European countries that are part of NATO or the EU is less than half that of America, despite greater economic output and a population almost twice as large. The European members of NATO spend only 1.7% of their GDP on their armed forces, which is well below the 2% target set by NATO and the 3.5% spent by the America. Large countries such as Germany (1.5%), Italy (1.4%) and Spain (only 1%) slip away when the subject is broached. And this, despite the wave of new military spending that followed America’s announcement of its pivot to Asia a decade ago, not to mention the terrifying prospect of seeing Donald Trump as the guarantor of all that is important.
“The combined military spending of the 34 European countries that are part of NATO or the EU is less than half that of America, despite greater economic output and a population almost twice as large”
Worse, if you consider an army’s ability to do anything beyond its borders, much of Europe’s spending is wasted on dozens of redundant national programs. Too much money is spent on military pensions rather than state-of-the-art equipment. The preparation for the war in Ukraine demonstrated these shortcomings. It was America, overwhelmingly, that undertook basic military tasks such as surveillance flights. Europe must have complained of not having sufficient access to information which it contributed little to produce.
Catch-up growth
All the money that is not spent on armaments allows you to do something else. Europe could have invested the savings made in pioneering innovations. But there too, she preferred to lag behind the others. EU countries spend a third less on research and development than America or Japan, as a percentage of GDP, and are even overtaken by China today.
“EU countries spend a third less on research and development than America or Japan, as a percentage of GDP”
According to economic theory, poor countries converge on rich countries as they learn to imitate their methods. Part of the world continues to challenge the possibilities of this “catch-up” growth: Western Europeans were a quarter poorer than Americans in 1990, and still are today. They work less and enjoy the wake of those who work harder.
Care Bear Capitalism and Failing Innovation
So what ? Europeans might wonder. Many of them scoff at the American capitalist model, let alone the Chinese model. But economists, including Daron Acemoglu, point out that these win-win systems create the conditions for innovation that Europe then adopts cheaply. And indeed, the “Care Bear” form of capitalism adopted by Europe has failed to create world-class companies.
“Pharmaceutical innovations are funded by the high prices paid by American patients, European public healthcare systems then buy the same drugs in bulk for much less”
The big tech companies are all American or, increasingly, Asian. Pharmaceutical innovations are funded by the high prices paid by American patients (and backed by abundant venture capital); European public healthcare systems then buy the same drugs in bulk for much less. Europe has had some successes – German companies were among the pioneers of messenger RNA vaccines – but most of the cutting-edge science and technology research is done at universities and companies elsewhere.
Offshore carbon emissions
Even the EU’s efforts to reduce its carbon footprint depend on the work done by others. The commitment made by the European Union to achieve “zero carbon” by 2050 is a fine ambition. But some of the progress already made is an illusion. In Denmark, for example, emissions per capita have roughly halved since 2000. But the pollution it imports — goods that were once made domestically, but are now being made offshore in China and elsewhere — has jumped. during the same period. Taking into account the additional carbon that its imports have generated in other countries, Danish emissions have fallen by only a third, according to data from the Global Carbon Project. A system has been mooted to tax the carbon emissions embedded in products imported into the European Union, but it has not yet been adopted.
Ukrainian crisis, a blessing in disguise?
It is the immobility in defense that currently attracts the most attention. The evacuation debacle in Afghanistan in August was a reminder of Europe’s inability to do much without America. But the outbreak of war in Ukraine brings us back to reality, literally. It was America that took the initiative to sound the alarm, not the EU. It was also the United States that deployed troops to the continent in a futile attempt to deter Russia. Emmanuel Macron made a provocative allusion to NATO’s impending “brain death” in 2019 to urge Europeans to take charge of their own defence. The French president should be grateful that the alliance seems to have come back to life. Despite all its desires for “strategic autonomy” – the idea that Europe should be able to chart its own course in the world – America is firmly in the lead, and Europeans are united in following it.
“It’s the standstill in defense that’s getting the most attention right now. The outbreak of war in Ukraine brings us back to reality, literally. It was America that took the initiative to sound the alarm, not the EU”
Europe is aware that being part of the peloton has its limits. But being a leader requires resources and purpose. Mr Putin’s decision to go to war has created a sense of unity among a set of rival governments that more often bicker in a flawed union. Being a follower might not seem so bad after all.
The Economist
© 2022 The Economist Newspaper Limited. All rights reserved. Source The Economist, translation The new Economist, published under license. The article in the original version: www.economist.com.
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