10 Membranes

Europe is the new USSR

At one stage the USSR was making huge gains on the USA: it’s industrial production was rising fast, with living standards being hauled behind it; it’s military capacity was vast and growing; it’s scienctists and engineers were world leaders, ahead of the US in the Space Race; Communism was on the march around the world, from Cuba to China. But then it became a car crash in slow motion, for thirty years stuttering to what was, in hindsight, an inevitable collapse. 

Interestingly Europe of the present day shares some key features with the USSR of the 1980s. 

- An impenetrable and self serving bureaucracy. The EU is not as opaque as UK popular folklore would make out, but it is inherently technocratic (what a chilling, evocative and brilliant word), and obtuse. Coupled with the “closed door” nature of the key meetings in the Council of Europe it is not exactly engaging. Likewise European countries like France, Italy and yes, the UK, have large, professional, vested and powerful bureaucracies that as much as the politicians control the countries. We in Europe like to think we are beacons of democracy, but functionally Europe is not so far from China, where a nominally enlightened bureaucratic class governs immovably from on high (as China and to some extent Europe prove, this isn’t a priori a bad form of governance). 

- Widening inequalities. There are two axes of inequality within Europe - inter state and intra state. A common theme on this blog has been that of the 1 and the 99%, as we now call it. While such a trend is most pronounced in the most neoliberal countries of Europe, namely Britain, it is a global trend and applies across Europe. Yet we now have the prospect of several two speed Europes, politically, but also economically where the so called periphery will continually get poorer for the foreseeable future. The USSR had a major faultline of inequality between the party elite and the rest, which destroyed the credibility of the regime and sapped morale across the country, building up a good deal of instability in the process. 

- Declining Industry. Take Germany out of the picture and Europe’s industrial base isn’t a pretty picture. The UK and Italy both used to be industrial giants, with strong, innovative companies and track records of global success, before each in its own way, was hit with a bombshell - bad productivity and Thatcher in the former, China in the latter. A small hardcore of great manufacturers remains, but it is clear that countries like South Korea and increasingly China will dominate industrial production in the coming years, and will only continue the slow shrinking of European industry as a global player. 

- Declining Research. Scientific research never stopped in the USSR, but it lost its dynamism as edge. It did not have the manpower and more crucially the resources and system to compete. On all measures we are seeing the same now happen in Europe. We produce far less scientists than Asia, and spend far less as a proportion of GDP, especially the UK which contributes a woeful level of GDP to R&D (although still has a respectable impact from that research). What started as a strength in the USSR - the controlled concentration of resources in selected key areas- eventually became a weakness as the open ended, organic US model proved to be more powerful. Now in China we are seeing, as with economics, the fusing of the two, leading China to position itself as the global leader in areas like space technology and synthetic biology. 

- Malaise. One of the most curious and in my view the most important aspects of the end of the USSR was that everyone knew it was coming. Party cadres and trammelled upon workers alike both had the sense that the system was bust, it’s days numbered, its legitimacy gone, a malaise that stemmed from years of unreversed decline. This seems to be echoed in the populations of Southern Europe - they know their countries have been living beyond their means, they know it will be bad, but they also refuse to accept it. This double think is manifested in the way Greeks know they must pay taxes, yet still continue not to do so. People across Europe have a sense of the bankruptcy of finance capitalism, the European social model, Western supremacy and the rest; we in the UK have enjoyed 60 years of diminishment and no one sees any prospect of it ending soon. 

None of the above are like for like comparisons, or that the situation is any way directly analogous, but certain parallels seem interesting to me. You might dismiss it and say, well Europe is alright, it is still, just, growing, it still has great companies and scientists and so on. You would be right. However this was also the case for the Soviet Union - it wasn’t that it went backward, it’s that its major competitors went forward much, much quicker while it stagnated during the Brezhnev years. Europe is experiencing such a stagnation, economically, scientifically, industrially, with the same inflexible, broken sense of politics and engagement from the population, even as our competitors in the Asia-Pacific region race mightily ahead. 

Many in the UK have shown undisguised smugness at the fate of the Eurozone, ironic, seeing as many of the above traits are more than usually pronounced there (here). 

If I had to sum up the situation I would describe it as the following: economic imbalances and stagnation + popularly discredited politics + loss of overall competitiveness = the Soviet Union circa 1980/Western Europe 2011.