At the close of a recent radio broadcast I asked the Italo-American
economist Alberto Alesina how “Old Europe” could defend
itself from the attack of new unscrupulous Asian capitalism, which
is invading the world with far more economic products than ours,
putting both our industry and our social model in a difficult
position. His answer was scathingly frank: “Nowhere is it
written that this Europe should maintain the privileged position
it has held so far even in the future”. In other words Alesina
believes that we are about to undergo an epoch-making change with
a historically unprecedented global redistribution of power and
riches: the process will clearly not take place immediately, rather
it will unfold over a period of many decades, as occurred with
the Roman empire or with Charles V’s empire on which the
sun never seemed to set. Besides it will not come about through
military events, but only through economic and demographic ones.
But this “Decline of the West” a century after Oswald
Spengler’s famous book could be equally painful to our sons
and nephews.
We must start with a premise to better understand the impending
threat: during the sixty year
period, which has elapsed from the close of World War 2, populations
in industrialized nations (also numbering the Japanese, who were
not rashly classified as “honorary whites” in South
Africa ruled by apartheid) have enjoyed a privileged situation,
which has enabled them to gain unprecedented wealth that is not
restricted anymore to the high classes as in the past, but is
widespread at almost all levels, thus deeply altering our social
framework.
This sort of status-based income depended on a series of factors:
1) Europe had always been the cradle of civilization and the father
of all civilizations and together with the United States of America,
which, from a cultural perspective, was still only its brilliant
appendix in the middle of 1900, it enjoyed unquestioned and unrivalled
supremacy in all fields: politics, science, industry, literature
and art. It was the only source of inspiration, the light everyone
was almost naturally forced to look up to. Some preferred Adam
Smith and others Marx, some Tocqueville and others Hitler, but
none could escape the often even negative appeal of European thought,
not even nations, which boasted ancient civilizations like China,
India and Japan. Latin America, which was also created from one
of Europe’s ribs, always considered it almost natural to
look towards the “mother”. But even new Asian and
African countries, which had risen from the ruins of colonialism,
ended up by first adopting democracies built on the European model,
only to adapt them to their customs and requirements through the
years or even to reject them to the advantage of dictatorships.
Though global hegemony was really disputed between the USA and
the USSR, the world remained Eurocentric from many other perspectives.
2) Once conflicts between nations had been left behind –
these had torn Europe apart for many centuries with relatively
brief respite - and especially in the early 20th century Europe
was free to finally concentrate all its energies on economic development,
drawing from the immense potential, which it received in this
field from its entrepreneurs, engineers, scientists and artisans
(or at least those who had not migrated to the United States under
the thrust of events). With the same spirit it started building
a united Europe by starting from the very economic front where
it was easier to overcome old divisions and rivalries. War-related
destruction was thus followed by the German miracle and Italian
miracle, followed in stages
by the British miracle (which coincides with Ms. Thatcher’s
reforms) and the Spanish one (which closely followed the end of
Franco’s dictatorship). Long after 1945 the continent’s
entire western region was moved by an exceptional inclination
towards rebirth and by an extraordinary dynamic force, which,
under the United States’ military umbrella, encouraged quick
and balanced development.
3) The establishment of communism in extensive areas of the world
due to Soviet occupation of Eastern Europe and Mao’s victory
in China on Ciang Kaischek’s nationalist troops in practice
removed one and a half billion people from global competition.
Pandit Nehru’s autarchic socialism produced a similar effect
on India, the other Asian giant, which had an ancient civilization
behind it. This “plaster cast” lasted throughout the
entire period, which Europe required to become what it is, in
other words till the introduction of Deng Xiao Ping’s “four
modernizations” in Asia and the fall of the Berlin wall
in Europe. But its consequences can still be felt as witnessed
by East Germany’s inability to come up to western standards,
despite the injection of hundreds of billions of euros or the
huge delay with which Manchuria, once the Chinese state industry’s
cradle and window, follows the fast growth of coastal regions.
I am convinced that if Western European people’s per capita
income is three to five times higher than income in Eastern Europe
today or if the Japanese are still far richer than the Chinese,
it is not because they are more intelligent or more hard-working,
but because they have been able to operate from the very start
in a system, which encourages the creation of wealth more than
all others. In other words every hour of work performed by us
yielded both to the individual and to his country more than what
the same hour could yield under inefficient and suffocating communist
systems. Strengthened by this intrinsic superiority, we have been
able to gift ourselves, through the decades, shorter working hours,
longer holidays, more generous pensions, richer social shock absorbers,
better public health and more besides, without however compromising
our ability to compete in international markets. Our products’
superior quality and our better organization have enabled us to
remain at the top despite increasing production costs, lesser
working hours and a gradually less forceful propulsive thrust,
also due to a drop in the birth rate, which one would have found
hard to even imagine fifty years ago.
Today, at the start of the third millennium, part of this status-based
income has disappeared or is at least being depleted. Cultural
supremacy, which we have wanted to mention in its most extensive
sense, is not our exclusive quality anymore, because its barycentre
has gradually
shifted towards America, which has lost its former symbiosis with
us. Clear evidence of this withdrawal is the distribution of Nobel
Prizes for medicine, chemistry, physics, economics and so on,
which increasingly privileges not only the Americans, but also
Japanese, Israelis and even Indians to the disadvantage of Europeans.
Not only Italy, whose record of achievements is particularly negative,
but the entire continent has lost ground in the vital sectors
of research and innovation, and it is – with a few exceptions
like little Finland – little competitive concerning new
technologies.
At the same time the propulsive thrust, which characterized the
second half of the past century, has considerably weakened. Our
people are aging - with no exceptions - both spiritually and considering
registry office data. People seem satisfied after many achievements
and much progress and if due to circumstances described below,
they feel that wealth and safety are not those typical of the
golden years anymore, they will not roll up their sleeves as the
post-war generation did but rather claim state interventions,
retreat behind defence lines to defend privileges gained and refuse
all aspects of globalization, which in some way go against their
interests. From Cape North to Cape Passero they now refuse the
most humble and worst paid jobs, which make resorting to the immigrant
population unavoidable, but then they rebel against the negative
consequences, which unfailingly appear in schools, social services
and public order. They pretend to accept opinions stated by the
most enlightened politicians concerning the need for painful structural
reforms, but when someone really tries to introduce these, they
oppose a ‘rubber wall’ or even rebel as soon as they
feel the pressure. They preach solidarity towards the weakest,
but when the French government attempted to abolish the long Pentecost
weekend to create a social fund for the elderly, more than half
the right and left wing citizens turned against the it. Our mouths
are filled with words about the need to help the poorest areas
of the world to improve their conditions of life, but then we
close the doors to their agricultural products and invoke protectionist
measures no sooner their industries become too competitive and
threaten work places in our most developed sectors. Many throw
themselves into hypocritical crusades against the lack in emerging
countries, which are now becoming rivals too, of trade union rights,
adequate salaries and environment protection measures, forgetting
that we too faced these problems during our initial and intermediate
industrialization phases and that we would never have reached
current development standards if we had attempted to solve them
from the very beginning. When certain associations protest against
resorting to the work of minors and invite us to boycott the products
of multinationals, which resort to it, they forget that children’s
economic contribution is often essential to the survival of families
in the third world and they authorize us to suspect that rather
than the rights of the weak, they are subtly defending western
workers from a sort of unfair competition. China, Russia,
East Europe and other countries’ departure from communism
has seriously worsened problems in countries, which till recent
years held a sort of efficiency-based monopoly. The most outstanding
case of released energies is China, which is giving us so many
headaches these very days. We have long known that the Chinese
people’s DNA could make them great protagonists of global
economy and skilled interpreters of modern capitalism, because
the inhabitants of Taiwan and Singapore, who are free from communist
oppression, have extensively proved it. Despite being only a few
million (respectively 22 million and 3.5 million) they have defined
a relevant niche in international trade since the ‘70s.
When Deng also brought one billion 250 million inhabitants from
the People’s Republic into the scene, he set the premises
for a challenge, which we could win in the medium term only if
we can accept its premises, at least partly. Right now we can
try to curb it with antidumping measures and by resorting to safeguarding
clauses as the United States and Europe are already doing by hanging
on to certain WTO regulations, but “fundamentals”
are today to the advantage of the Chinese, the Vietnamese, the
Indians and many more besides who, having freed themselves from
the Marxist heritage, have learnt modern production methods, need
not test their strength with the costs of European social models
and especially have the will to work and develop, which we have
lost. The debate on how to face this new situation is open, though
at times we get the impression that
events are moving faster than us. The politically correct answer
is that our industries can be saved by improving products with
a quality leap focused on style and technology, with a sort of
escape, which is not directed forwards but upwards, outside the
reach of new industrial powers’ competition. But it is “wishful
thinking” at least partly both because most international
and European demand does not focus on high quality products and
because our competitors are making considerable progress in this
sector too. Others say that, in practice, the danger is only transitory
because the day will come when third world industries too will
have to face the high costs and increasing demands of workers,
which factors concern our industries today. Hence the re-establishment
of a sort of natural balance. The theory has a logical foundation,
but it considers neither the fact that this case will take place
outside our control, nor the long periods it will require, nor
the enormous reserves of cheap manpower, which the third world,
which is now moving to the forefront, does not lack.
The problem briefly presented by Alesina is hence the following:
how can we maintain our current standard of life, our current
social welfare system, our extremely regulated current working
method, which results from fifty years of social conquests during
which, due to the already mentioned reasons, the rules of the
game were more to our advantage than the ones currently enforced?
Is it better to accept a few renunciations and some extra sacrifices
today in an attempt at defending ourselves from the attack to
maintain current supremacies or is it better to resign ourselves
to the fact that international wealth must be more equally distributed
tomorrow and that it is hence fatal to give a part of it to emerging
populations - the Chinese are merely their vanguard?
We cannot apply Manzoni’s “The hard sentence is left
to posterity” to this context. On the one hand we need a
clear long-sighted vision, which should be shared at a European
level, of what can and cannot be done, while on the other hand
we need public opinion’s immediate awareness of the dilemma
– this awareness is virtually nonexistent today, and a reaction,
which, if we can encourage it, beyond all customs duty, can make
us competitors once more.
year
period, which has elapsed from the close of World War 2, populations
in industrialized nations (also numbering the Japanese, who were
not rashly classified as “honorary whites” in South
Africa ruled by apartheid) have enjoyed a privileged situation,
which has enabled them to gain unprecedented wealth that is not
restricted anymore to the high classes as in the past, but is
widespread at almost all levels, thus deeply altering our social
framework.
by the British miracle (which coincides with Ms. Thatcher’s
reforms) and the Spanish one (which closely followed the end of
Franco’s dictatorship). Long after 1945 the continent’s
entire western region was moved by an exceptional inclination
towards rebirth and by an extraordinary dynamic force, which,
under the United States’ military umbrella, encouraged quick
and balanced development.
gradually
shifted towards America, which has lost its former symbiosis with
us. Clear evidence of this withdrawal is the distribution of Nobel
Prizes for medicine, chemistry, physics, economics and so on,
which increasingly privileges not only the Americans, but also
Japanese, Israelis and even Indians to the disadvantage of Europeans.
Not only Italy, whose record of achievements is particularly negative,
but the entire continent has lost ground in the vital sectors
of research and innovation, and it is – with a few exceptions
like little Finland – little competitive concerning new
technologies. 
China, Russia,
East Europe and other countries’ departure from communism
has seriously worsened problems in countries, which till recent
years held a sort of efficiency-based monopoly. The most outstanding
case of released energies is China, which is giving us so many
headaches these very days. We have long known that the Chinese
people’s DNA could make them great protagonists of global
economy and skilled interpreters of modern capitalism, because
the inhabitants of Taiwan and Singapore, who are free from communist
oppression, have extensively proved it. Despite being only a few
million (respectively 22 million and 3.5 million) they have defined
a relevant niche in international trade since the ‘70s.
When Deng also brought one billion 250 million inhabitants from
the People’s Republic into the scene, he set the premises
for a challenge, which we could win in the medium term only if
we can accept its premises, at least partly. Right now we can
try to curb it with antidumping measures and by resorting to safeguarding
clauses as the United States and Europe are already doing by hanging
on to certain WTO regulations, but “fundamentals”
are today to the advantage of the Chinese, the Vietnamese, the
Indians and many more besides who, having freed themselves from
the Marxist heritage, have learnt modern production methods, need
not test their strength with the costs of European social models
and especially have the will to work and develop, which we have
lost. The debate on how to face this new situation is open, though
at times we get the impression 
that
events are moving faster than us. The politically correct answer
is that our industries can be saved by improving products with
a quality leap focused on style and technology, with a sort of
escape, which is not directed forwards but upwards, outside the
reach of new industrial powers’ competition. But it is “wishful
thinking” at least partly both because most international
and European demand does not focus on high quality products and
because our competitors are making considerable progress in this
sector too. Others say that, in practice, the danger is only transitory
because the day will come when third world industries too will
have to face the high costs and increasing demands of workers,
which factors concern our industries today. Hence the re-establishment
of a sort of natural balance. The theory has a logical foundation,
but it considers neither the fact that this case will take place
outside our control, nor the long periods it will require, nor
the enormous reserves of cheap manpower, which the third world,
which is now moving to the forefront, does not lack.