By Erik Sass
TES Editor
Paris in spring 2019 is a study in contrasts, juxtaposing fabulous cultural treasures with damaged storefronts and heavy police presence, testimony to the populist eruption that has rocked France in recent months. The contrasts were no less vivid – and the social ferment just as evident – during the panel discussions organized and hosted on March 26, 2019 by the Free Market Road Show, a sort of libertarian traveling circus crisscrossing Europe, and its local partners, IFRE-ALEPS and Students for Liberty.
On one hand there was real optimism on display, in keeping with host and moderator Kerry Halferty Hardy’s opening question to young Europeans in the audience: “How do we make a continent that is a leader in innovation, not just in products but in governance and other aspects of politics?” Similarly James Sproule, until recently the chief economist at Britain’s Legatum think tank, reminded the audience of the economic and technological progress of the last hundred years and predicted even greater advances to come. But like others, Sproule conceded that the vision of long-term progress is tempered by the obvious uncertainties and anxieties of the present day, including the twin threats of statism and populism.
Even here panelists were mostly upbeat. While criticizing the European Union’s push for uniformity, Pierre Garello, a professor of economics at the University of Marseilles, pointed out that Europe’s diversity has long been a source of innovation: “The beauty of Europe was that it was never totally unified,” because the absence of a single unitary power for most of the continent’s history has fostered competition between countries and regions in the areas of governance and economic policy, each trying its own approach but also copying the successes of others. Garello urged a return to this dynamic, polycentric Europe, instead of a continued centralization of regulatory power in Brussels: “We have to revive that principle of subsidiarity if we want innovation.”
Similarly John Chisholm, an American venture capitalist, was hopeful and forward thinking with his proposal to create Special Economic Zones (SEZs) in Europe, similar to Shenzhen and others which helped transform China and have since spread across the globe. Chisholm recommended that policymakers “start by placing them in the most economically depressed areas of France,” predicting that entrepreneurs and investors would transform these areas into growth centers and “make visible how much better life can be with less regulation” to skeptics in the rest of the country. The U.S. investor also struck on the theme of decentralization, arguing the need to “keep top-down EU regulation as lightweight as possible,” and urged France to cut its relatively low ranking on the World Bank’s ease of doing business index by half within five years.
Anders Ydstedt, a serial entrepreneur from Sweden, also urged decentralization and competition between regions, especially in the critical areas of taxation and regulation. Contrary to recent moves in Brussels towards aligning tax regimes, Ydsted argued, “Taxes should be decided at the national level because then we can have institutional competition… Move a few hundred kilometers to get a better business climate? That’s a fantastic idea.”
The tempered optimism was shared by Chloé Fabre, president of the Ile-de-France chapter of the Union of European Federalists, whose call for federalism was broadly consonant with the other panelists’ calls for decentralization and free markets. Moreover, Fabre argued that true federalism would provide an effective workaround for globally-oriented policies in the face of rising nationalism and protectionism: here she noted the strides made by local governments – including townships, states and provinces – in forging cross-border alliances with each other and setting their own agendas, distinct from (and often contrary to) national governments. California’s path environmental issues including climate change is one prominent example of the power of independent local policymaking.
These essentially upbeat messages contrasted with a more serious view from Christopher Lingle, a professor of economics, author and pundit, who argued that the current wave of populism and nationalism around the world, including President Trump and Brexit, is a reaction to the decay of democratic institutions, questioning whether we face another “Weimar moment.” Over time, Lingle noted, the elected elites of democratic countries have become functionally isolated from their constituents, pursuing increasingly self-interested agendas. Meanwhile the purview of the democratic system – originally created to protect basic rights and provide security – has shifted from fostering liberty to economic redistribution, in a political game that encourages politicians to redirect resources to their own factions.
The resulting tensions and internal contradictions of these trends have produced a crisis of democracy, with legacy institutions threatened by atavistic populist movements. Flipping Woodrow Wilson’s famous call to “make the world safe for democracy,” Lingle believes that now “we have to make democracy safe for the world” – or risk the disastrous descent into populist nationalism which destroyed the Weimar Republic. To do that, simply having a written national constitution isn’t enough, Lingle urged the audience: the ideals which underpin the constitution must be actively inscribed in the “hearts and minds” of all voters.
While other panelists took issue with some parts of Lingle’s critique of contemporary democracy, there seemed to be a basic acknowledgement that Europe, and much of the rest of the world, are indeed in the grips of a social, economic, and political crisis. Whether the cautious optimism of the first panelists can be reconciled with dire views of democracy’s decline, however, remains to be seen.
