Whether practiced in the former Soviet Union, Cuba, North Korea, or the European Union, statism does not work.
Failed EU Economic System
At the end of the day, the much-maligned ''invisible hand'' of the market exacts its toll and cannot be defied without excessive costs. Just look at the collapsing euro house of cards.
Spain is learning a difficult lesson by the ''invisible hand'' as the bond market moves mercilessly against the Iberian giant spurring a huge leap in its risk premium this week, the highest since the euro's debut.
Effete socialist President Zapatero in Madrid, with declining popular support, still strenuously resists talk of a bailout, but so did Ireland at first.
The European social welfare experiment is nearing its end - in disaster.
The iron hand of dirigisme marked by parsimonious economic growth, unfunded promises by elite politicians to provide cradle-to-grave livelihood, entrenched unions, and above all - the disincentive for entrepreneurship and economic freedom to excel beyond one's social station at birth - mires an ageing, energy-strapped, and near defenseless (save Nato) EU adrift in a sea of pain. High tide is now upon the euro-zone.
The EU crisis is social, economic, and political. There is no president of the EU to bring discipline to decision making. Too much shared history, atavism, and a gulf between the ''rich core'' and ''poor periphery'' cannot be reconciled. Divisions are also geographic: east-west and north-south. A divided house will not stand.
Finally, bureaucrats and politicians are not smarter than the business class in economic production, job creation, and bolstering economic freedom. The lack of economic freedom smothers the euro zone.
Wither the EU?
The European Union began without the consent of the people yet now the hoi polloi (taxpayers) are being asked to save the elite dream began with the Treaty of Rome in March 1957.
Greece. Ireland. Probably Portugal. Maybe Spain. Then Italy. Like dominoes, the periphery EU countries are collapsing and pressuring the core (Germany and France) to stop the economic hemorrhaging.
Ironically, Ireland reluctantly joined the EU scheme. The United Kingdom smartly kept the pound sterling.
Ironically, Ireland reluctantly joined the EU scheme. The United Kingdom smartly kept the pound sterling.
GSM looked into its crystal ball in December 2009 and asked in its Six Strategic Questions for 2010: What is next for the European Union?
As far back as May, the respected business journal Bloomberg raised the prospect of a disintegrating EU.
Six months later, the EU is unraveling daily. Slovakia exempted itself from any aid in the Irish bailout. So much for the ''one for all and all for one'' happy EU.
Germany, the EU's ATM, now sees its own credit-worthiness stressed.
Germany, the EU's ATM, now sees its own credit-worthiness stressed.
Fundamental Failure
While the current crisis focuses on sovereign debt and bank lending, the fundamental failure is the attempt to fight market forces with excessive taxes, generous social welfare policies, and the ''omnipotent State'' growing into a Leviathan in every citizen's life.
Frankly, the mature EU economies are not producing what the world wants to buy. Where is the EU's Apple or Toshiba?
Moreover, the economies cannot grow or compete in the global economy with the impediments of overregulation and nanny-state interference from the national capitals and the colder blanket from Brussels' bureaucrats.
While the EU continues to voluntarily kill its economies, its global competitors move forward.
Moreover, the economies cannot grow or compete in the global economy with the impediments of overregulation and nanny-state interference from the national capitals and the colder blanket from Brussels' bureaucrats.
While the EU continues to voluntarily kill its economies, its global competitors move forward.
The market wins at the end of the day as demonstrated by world history, a lesson unfolding before the world today.
The faux European Union is dissolving along with its faux currency.
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