Beating swords into welfare cheques

The trick in this line of work is not to be right too soon. A couple of years back, I wrote a bestselling hate crime. Don’t worry, I’m not in plug mode; indeed, I shall eschew even mentioning the book’s title. But its general thesis is that the jig is up for much if not most of the Western world. “Alarmist,” pronounced Maclean’s, reflecting the general consensus of polite society here and in Europe.

Polite society has spent the years since playing catch-up. So if you don’t want your fin du civilisation analysis from a frothing right-wing loon you can now get it from the house-trained chaps at the New York Times:

“Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism . . . ‘The Europe that protects’ is a slogan of the European Union.”

Protects from what? Right now, Europe mostly needs protection from itself, and its worst inclinations:

“With low growth, low birth rates and longer life expectancies, Europe can no longer afford its comfortable lifestyle.”

The Times hits all the Steynian themes, including the Continent as defence-welfare queen:
“Europeans have benefited from low military spending, protected by NATO and the American nuclear umbrella.”

Absolved from having to pay for their own defence, Continentals, like Canadians, beat their swords into welfare cheques, and erected vast cradle-to-grave social entitlements. Even under the U.S. security umbrella, they proved unsustainable. Why? Because Europeans stopped breeding. And, even with unprecedented levels of immigration, they’ve been unable to halt population decline. Again, that was mere Steynian alarmism a year or two back. Now it’s received wisdom. Here’s Time magazine:

“Germany is shrinking—fast. New figures released on May 17 show the birth rate in Europe’s biggest economy has plummeted to a historic low.”

That’s true. Time doesn’t really provide much in the way of historical perspective, but, for the purposes of comparison, in 1964 West Germany alone produced 1.35 million new babies; in 2009, a united Germany managed less than half that—651,000 births. In 1964, Germany was undergoing its postwar economic boom. In the mood for a reprise? On the depleted manpower of 2010, that ain’t gonna happen.

And these days, remember, Germany has to support a continent. It’s the economic powerhouse that’s supposed to be rescuing the euro and preventing the five soi-disant PIIGS (Portugal, Italy, Ireland, Greece, Spain) from having the Big Bad Wolf of reality blow their house of straw to smithereens. Dream on. “Germany’s working-age population is likely to decrease 30 per cent over the next few decades,” says Steffen Kröhnert of the Berlin Institute for Population Development. “Rural areas will see a massive population decline and some villages will simply disappear—Germany will become a weak economic power in the future.”

I disagree with Herr Kröhnert only to this extent: rural areas are already seeing a massive population decline, such that village sewer systems are having to be narrowed, at great expense, to cope with the reduced flow, and wolves are returning to the East German plain. You look at those old speeches of der Führer roaring on about Germany’s need for “lebensraum.” Few people have ever needed it less.

There is no precedent in human history for increased prosperity on declining human capital, even before you factor in the added costs of propping up a bunch of other nations facing even worse socio-economic arithmetic. Can mass immigration save you? No. You can never import enough people fast enough: according to Armin Laschet, “Integration Minister” of North Rhine-Westphalia, already 40 per cent of the children in the Fatherland’s cities are ethnically non-German, and thus the future of those cities will be non-German, too.

Could you ramp that number up to, oh, 70 per cent? Sure. But it still wouldn’t be sufficient to prop up an unsustainable economic model. Entire sovereign nations are now in the situation of a homeowner who’s fallen too far behind on the payments and has no prospect of catching up: you might as well just put the door keys in an envelope, leave ’em at the bank for the new owner, and move on.

This much is now agreed; it’s the conventional wisdom of our conventional media. What remains at issue is what to do about it. In the Time magazine story, advice on how to boost Germany’s collapsed fertility rate is all about more money for state-funded child-care facilities, etc. In other words, more government, more entitlements, more of what got Europe into its demographic death spiral in the first place.

In the U.S., meanwhile, Obama’s courtiers are beginning to muse about the introduction of an EU-style “VAT,” which the locals generally translate as a “national sales tax.” VAT stands for “value-added tax,” because you’re taxing the value that is added to a product in the course of its path to market. But I find myself ruminating on “value” in a more basic sense. Advanced social democracies don’t need a value-added tax; they need a value-added life. “The Europe that protects” may, indeed, protect you from the vicissitudes of fate but it also disconnects you from the primary impulses of life. “It drains too much of the life from life,” said Charles Murray last year. “And that statement applies as much to the lives of janitors—even more to the lives of janitors—as it does to the lives of CEOs.” Capitalists sometimes carelessly give the impression that theirs is a materialistic argument. But anti-capitalists do not want for material comforts—you go to the poorest part of town and you see plenty of cellphones and plasma TVs. And Eutopia is distinguished mainly by a lethargic hedonism: shorter working hours, longer vacations, earlier retirements, bigger benefits. What do they do with all that free time? Write operas? Paint pictures? Not so’s you’d notice. Life is a matter of passing the time—or, indeed, of holding the moment: “Linger awhile, how fair thou art,” in the words of Goethe’s Faust, which would make a fine epitaph for the European Union.

How fair thou hast been—but only for the moment, and the moment is passing. Europe’s economic crisis is a mere symptom of its existential crisis: what is life for? What gives it meaning? Post-Christian, post-national, post-modern Europe has no answer to that question, and so it has 30-year-old students and 50-year-old retirees, and wonders why the small band of workers in between them can’t make the math add up. It’s striking that both the chancellor, Angela Merkel, and the minister for families, Kristina Schroeder, who announced the latest grim statistics, are themselves childless women. Germany has one of the oldest ages of “family formation” in the developed world, and once you lose the habit, it’s hard to re-acquire it. I am all for seriously natalist tax regimes, not so much because they leave more money in people’s pockets but because they leave more responsibility in there. But that’s the bottom line—not introducing a new entitlement but instilling in people for whom life is a diversion a sense of purpose larger than themselves: what’s it all about, Alfie? Cradle-to-grave nanny-state “protection”? Government security does not in and of itself make for a satisfying, purposeful life: indeed, the University of Michigan and other studies suggest quite the opposite—that welfare makes one unhappier than a modest income honestly earned and used to provide for one’s family.

So it will take more than reoriented benefits to save Germany. In the Wall Street Journal, Christopher Wood bemoaned “the political backlash against free markets,” but, understandably, European countries won’t trust the market to self-correct because they’ve so jiggered it they no longer have a domestic market in any meaningful sense. If you’re a German bank, to whom do you lend money? You don’t have enough young people to grow your business, so you lend further and further afield, in markets you don’t fully comprehend, such as post-Soviet Eastern Europe or even the United States, a significant chunk of whose subprime mumbo-jumbo is held by Germany’s Landesbanken. By some estimates, German banks could have to write off a trillion bucks’ worth of toxic loans. The problem isn’t that Greece is the sick man of Europe, but that Germany is—and, when the economic engine of a continent no longer has enough folks to shovel the coal in, that puts a huge question mark over Ireland, Sweden, Slovenia and beyond.

This is the crisis of our times, and the first Western nation to figure out a way around it will have a huge advantage in the decades to come. When Barack Obama started redistributing American wealth, a lot of readers dusted off Mrs. Thatcher’s bon mot: “The trouble with socialism is that eventually you run out of other people’s money.” But European social democracy has taken it to the next level: they’ve run out of other people, period.