The European Union was always a somewhat anti-free-market association, one reason why the then more liberal United Kingdom should not have joined it. In recent years, however, it has gone beyond the mild social democracy baked into its constitutional arrangements, and has become more authoritarian, more oriented towards central planning through its regulations, and recently in its nullification of the Romanian election outright anti-democratic. In Europe, the age of neo-Communism is upon us; non-European countries and companies would do well to give the region a wide berth.
Begin with some definitions. As often emphasized by the Left while Communism was in power, the full Marxian system of Communism, with factories owned by the workers, was never really tried. Even in Yugoslavia, where worker ownership was nominally in place, factories were in practice controlled by their management, who were almost all chosen to be good Party members. In the Soviet Union and its satellites, the economy was controlled by a central planning bureau GOSPLAN, which set prices and output targets. Thus, the main practical features of Soviet Communism were one-party rule, central planning of the economy and lack of free speech, with dissidents imprisoned in one Gulag or another. Aleksandr Solzhenitsyn (1918-2008) while no free-marketer and disgusted by American materialism, expounded the central life-destroying propensity of the Soviet system.
When the Soviet Union broke apart in 1991, there was much facile rejoicing in the West about the fall of Communism, with Francis Fukuyama describing it as “the end of history.” I was never entirely convinced. Marxism in its unworkable form had a strong grip among university academics, for whom theoretical leftist beauty always outweighed practical advantages to ordinary people, and who were always strongly inclined to force the rest of us, allegedly of inferior academic attainments, to conform to their unpleasant views.
In fully free societies, the proclivities of academics are never entirely able to run wild; the voting populace is capable of seeing “la trahison des clercs” for what it is and boot it out of power whenever they get the chance. However, the European Union, which now rules continental Europe, is not a free society. The corrective mechanism of free elections, by which the populace overrules foolish “woke” academic opinion is neutered by the electoral system of the EU Parliament and the unelected constitutional superstructure that accompanies it. Political parties do not campaign internationally, but only within their own countries, and coalitions are then formed after the election, while leaders are appointed largely without parliamentary input.
This allows the parties of leftist continuity to marginalize reformist forces, whether of the left or right, that more properly represent public opinion. Elections are held only between center-left coalitions and “center-right” coalitions, the latter being the kind of “conservative” parties that refuse to work with radical groups. In such an undemocratic system, the bureaucracy, composed almost entirely of leftists trained by the university system, with free-marketers and eccentrics weeded out at an early stage, has total effective control.
The infinite power of left-bureaucrats in Brussels is now spreading to individual EU countries. Most damaging, the Romanian election was cancelled by a left-appointed court after the EU-disfavored candidate Călin Georgescu won the first round and seemed likely to win the second. The story of “Russian influence” is lying tosh convincing only to those Americans and others incapable of finding Romania on a map; there was no evidence whatever of anything like the concerted effort needed to subvert an election in a sophisticated country of 19 million people.
The Romanians have been subjected to innumerable terrible governments since 1991, most of them “social democrats” who represented the remnant of the old Communist party of Nicolae Ceauşescu. This election represented a revolt against the “social democrats” who were beaten into third place in the first round, a fitting if inadequate punishment for their record of corruption and economic failure. The EU bureaucracy, possibly allied with the Biden State Department (which has a track record of this kind of thing in Eastern Europe) then decided to nullify the election, thereby transforming Romania into a neo-Communist state, without free elections, free speech or free markets.
The refusal of the “blob” to include populist parties in government spreads well beyond Romania. Its hatred of the long-established and highly capable rightist government of Viktor Orban in Hungary is well-known and disgraceful. In Austria, the Freedom Party, a long-established impeccably democratic party with an excellent if modest record in government, was shut out of power after winning the recent election by a coalition of Christian Democrats and Social Democrats, who formed precisely the kind of government Austrians had just voted against. In Germany, an election is to be held on February 23 and the Financial Times (admittedly not an impartial source) suggested that, given the current opinion polls, with the CDU-CSU first and the rightist AfD second, the most natural government would be a CDU-SPD coalition, possibly including the Greens, even though a Social Democrat-Green coalition had just wrecked the economy for four years.
This refusal to allow the electorate to get its way is inextricably undemocratic and produces the worst sort of government – inept, blocking out new ideas and generally highly corrupt. It is also, in the long run, very dangerous. The precedent is the last years of the Weimar Republic, where after the 1930 election, in which the Nazis got 107 of 577 seats becoming the second largest party, Heinrich Brüning (1885-1970) of the Centre Party with only 68 seats formed a government specifically to freeze out the Nazis. (Weimar was full of such expedients; when the great Konrad Adenauer, also of the Center Party and Mayor of Cologne, was offered the Chancellorship in 1926, he turned it down as he “did not want a temporary job.”) When Brüning’s government ran into difficulties through the Great Depression, the Nazis won close to a majority at the next election in 1932 and took power thereafter – which they presumably would not have done if they had been associated with the Brüning government’s battle against economic hardship.
In today’s Germany and Austria, a coalition of the two rightmost parties would work well; the nationalists would provide a highly necessary backbone of principle to the left-sliding and feeble Christian Democrats, in Germany wrecked by their association with the former Komsomol leader Angela Merkel. Only the authoritarian left that controls the EU bureaucracy is preventing such a potentially fruitful coalition from emerging.
It is in economic areas that the neo-Communist tendency is most apparent. (In social areas, the pro-trans contingent in government engages in antics that would have made Josef Stalin order them to the Gulag and be praised by Leon Trotsky for doing so.) Germany is the prime example; led by Merkel’s keen focus on free markets it simultaneously poured hundreds of billions into “green energy” boondoggles that grind to a halt on “dunkelflaute” calm days in winter, then closed down its nuclear power stations in a panic about a minor earthquake-caused accident in Japan. This laser-like focus on politically correct rubbish over the needs of the German economy is typical of totalitarians, although Stalin at least focused the Soviet Union on steel and electric power, two genuine needs of modernity.
A government that ignores price signals and manages the economy based on ideological purity cannot be called a free government. Given the German governmental preference for importing millions of unwanted immigrants and forbidding its domestic citizens from complaining about it, such a government can best be described as neo-Communist. It cannot be removed, it operates without any regard to what the market would prescribe, and objecting to it results in imprisonment. That is not social democrat, it is Communist in the Stalinist or Maoist sense, with only the trivial detail that property is still technically private (but subject to infinitely onerous state regulations).
From Greece and Rome through the Industrial Revolution, Europe was the cradle of our modern civilization. Today, it is leading the way into darkness, poverty and barbarism.
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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)