Year XXVIII, 1986, Number 1, Page 43
THE METAMORPHOSES OF EUROPE
Is the sleep which overcame Europe in the early seventies a sign of a thousand years of abdication heralding a world from which Europe will be absent? Or is it merely a fit of drowsiness just long enough to give Europe the strength she needs to resume an active role in the greatest awakening of mankind since the neolithic revolution?
M. Richonnier’s Les métamorphoses de l’Europe gives a haunting and dizzying vision of Europe’s life and death, familiar to the readers of The Federalist. Both approaches, his and ours, may be combined to take stock of the situation facing Europe. No less than six historical periods, he claims, have come to an end during the thirty glorious postwar years (actually twenty-eight) lived in the comfort of ignorance:
— the end of the Stone Age’s death throes. Thanks to genetic engineering, climate and weather will no longer affect agriculture, and natural reproduction will no longer restrict cattle breeding. This revolution, which began in 1973, when Herbert Boyer of Berkeley and Stanley Cohen of Stanford first succeeded in their attempts at genetic recombination, means that man can now increase cells’ production capability and even obtain substances that cells do not naturally produce by modifying their natural genetic programmes.
— The end of the European era: the collapse of the European (national and colonial) system of States which ended Europe’s monopoly on modernity for good. Europe’s geopolitical decline began just after the Second World War with the advent of a bipolar world dominated by the USA and the USSR and ended psychologically and symbolically with the end of the Vietnam war. The bipolar system contained the seeds of a multipolar system as is demonstrated by the EEC’s and Japan’s rise as economic powers and France’s and China’s membership of the nuclear club. Europeans experienced the end of the Vietnam war, the last major sequel of colonialism by proxy, and shifted their guilty conscience as former colonizers onto the USA. Without any qualms, Europeans accepted the price to be paid by the Vietnamese people by American defeat: a future of oppression. With their colonial past exorcized through Vietnam, Europe was now in a position to rehabilitate the notion of power, so vital to any universal ambition in a world of States.
— The end of the absolute reign of capital: the data processing revolution lasted from 1951 with the first commercial computer to 1971 with the first microprocessor. It heralded an era in which goods will be replaced by information as the object of trade; “monetics” will cause money to disappear; capital, at first restricted by the Unions and other labour organisations and subsequently divided by mixed appropriation, will tend to decline as a production force and will be replaced by the science of elementary particles and living cells. Hence knowledge will increasingly replace private or public ownership as the power behind decisions in production units. While the generalisation of Fordism tended to turn the salary into a political fact, and while the adverse effects of the concentration of capital came close to causing ecological catastrophe with the destruction of the natural environment and sociological catastrophe with urban overcrowding, the first signs of a redistribution of production activities that would free society of the problem of siting of factories now began to appear.
— The end of the “mechanical principle” and its replacement with the “automatic principle”: while the machine multiplied man’s manual powers, automation is destined to increase his intellectual powers. Artificial intelligence is within our grasp and soon man will be freed from toil and will be able to pursue leisure and creative activities to the full.
— The end of the Second Industrial Revolution: the sharp increase in the price of oil in 1973 precipitated the use of alternative energy sources, the most promising of which, controlled nuclear fusion with its potential for free energy, passed from basic to applied research during the 30 glorious years. This oil shock signalled the steady abandonment of oil technology. At the same time the explosion of biotechnologies indicated there will be a boom in biomass chemicals.
— The end of a Kondratiev cycle. The Russian economist ended his famous study in 1920, the very year when a new period of declining prices began (the great 20th Century deflation). It ended with the Second World War and was followed in 1946 by a new long-term phase of rising prices which lasted until the end of the Vietnam war (1973). Despite hard-to-control inflation generated by the oil shocks, the current crisis ought to be seen as a trough in a long Kondratiev-type movement. But various new trends have arisen in the midst of this crisis which may well trigger off a new phase of growth that will reach its “cruising speed” around 1995.
The seasons now coming to a close lasted respectively ten millenia, six centuries, three centuries, two centuries, one century and half a century. Europe is not surprisingly dazed by this traumatic conjunction of historical turning points and by an unprecedented leap into the unknown. Surprisingly, Richonnier, a contemporary historian, treats these six metamorphoses very unequally: a chapter for the Kondratiev periods, a big paragraph and two or three points on electricity and chemicals, three or four points on automation and nothing or next to nothing on the social changes that all this brings, hardly more than a few passing references to dates related to the world balance of power (but a full paragraph on European wars) and two allusions to the neolithic era. In fact Les métamorphoses de l’Europe is less a book on “when” and “what” and more a book on “where” and “ who”. The protagonists are not production methods or state systems but the prevailing or rising industrial powers. The reader gains in concrete information what he loses in theoretical formulation. Richonnier is mainly concerned with the decisive twists and turns of history on the march, the rhythms of innovation, the progress and setbacks of the various ‘warring’ competitors rather than with establishing socio-historical laws.
Richonnier argues that sleeping Europe will have to answer the following questions: How is technological progress achieved? Why does one country rather than another become the seat of industrial revolution? What assets are needed to close the gap and overtake the leader?
To answer the question “Why England?”, Richonnier borrows Arnold Toynbee’s explanation of the English mystery and at the same time throws light on the Japanese mystery: “The first industrial revolution was the answer England found to the challenge of a shortage of firewood”. Japan’s case recalls that of England: “as a response to a challenge which was its energy dependence, Japan frantically launched itself into the technologies of information and living matter which will be the spearheads of the Third Industrial Revolution”.
England’s success may also be explained by Britain’s unity, achieved before French (1791) and German (1833) unity: “the innovations which shook the textile industry, multiplying the spinning productivity a thousandfold between 1764 and 1779, required large markets capable of absorbing such rises in output”. Besides, this market was protected not only against Indian calicoes but also against the textile industry of continental Europe.
Why Germany and the United States? A unified market capable of absorbing new manufactured goods was essential if Britain’s leadership was to be challenged. Here Richonnier fails to point out the technological explanation for the average size of nations produced by processes of ‘national unification’ or, alternatively, fragmentation of Empires by “balkanization”: this average size corresponded precisely to the size of the British Isles, where the First Industrial Revolution occurred. But Richonnier does, on the other hand, point out that a market of this size was not in itself enough and goes on to explain what he calls the “industrial Trafalgar” of France and hence the difference between France and Germany. German industrialization would have failed without the success of Friedrich List’s theories on customs unions and “educational” duties, which were only justified when protecting a country’s “infant industries”. This idea was taken up by Alexander Hamilton and allowed American industry to express its full potential. But German industrialization was mainly stimulated by a dynamic birth-rate and an exemplary educational system: “in 1850 for every thousand inhabitants, the number of sixty-years olds was a hundred in France, as compared with seventy-five in Germany and England”. Primary education became compulsory in England in 1880 and in France in 1882 (Jules Ferry’s law) — a century after Prussia.
If the First Industrial Revolution was an English response to shortage of firewood, the Second Industrial Revolution in the United States was a response to an equally exceptional challenge: “In those days American enterprises were faced with a shortage of qualified manpower at a time of sturdy economic growth”. Economic growth was of course linked to the home market’s growing territorial and demographic proportions. The problem was that most of the 15 million immigrants who went to the US between 1880 and 1915 were unskilled and had never even worked in a factory. Hence Taylor’s stroke of genius: streamlining work organisation so as to reduce the qualifications needed for jobs to be performed.
Protecting infant industries is also a feature of the Third Industrial Revolution: the development of microelectronics was fostered by the great US military and space programmes and Japan’s heavy socio-cultural protection. Once again the revolution occurred in unified markets with over a 100 million consumers, a necessary but not in itself sufficient condition for the revolution to take place.
Richonnier quite rightly mentions the other factors: in Japan, the forced march that led to the automation of the production system and the high level of education of the population; in the USA flexible working hours and the dynamic financing system.
Europe fell asleep because she was sleepy. This is often as far as many diagnoses go. Of course, on the strength of his well documented and rigorous analysis of successful past and present therapies, Richonnier is able to indicate by a process of contrast and analogy what treatment is needed to wake Europe up.
First he stresses the fact that European results are not uniformly bad. Well-known exceptions that confirm the existence of a technology gap include Europe’s successful nuclear industry, Airbus, which (sometimes) successfully competes with Boeing, and the Ariane rocket, which has beaten the American shuttle as a commercial satellite launcher. But claiming, for example, that Western Europe’s share of the world pharmaceutical market is 30% or that its share of the telecommunications market was 27% in 1982, i.e. significantly higher than Europe’s share of the world’s gross product, is misleading. Europe, claims Richonnier, is a sick man unaware of his real condition.
Despite these exceptions, Europe’s real and deep disease can no longer be hidden. Europe suffers from under-information and will drop out of the “hit-parade” of innovation. Jacques Delors, the President of the Commission often asks his listeners «Is Europe running short of ideas?”.
The answer is, of course, that Europe is suffering not from any lack of ideas but rather from an identity crisis. Europe has always been the champion of the free circulation of capital and ideas, respect for others and the rejection of prejudices. The nation state, which stands for closure, exclusion, injustice and idolatry, has attacked “this magical square” and destroyed Europe. The nation state harbours the concentration camp and mass extermination just as the wind brings the storm.
Last year, Europe celebrated the fortieth anniversary of the end to an aberration which divided men into superior and inferior beings, a victory from which Europe as a political project was born. But until Europe is re-established as a cosmopolitan Union, both this victory and the political project for Europe will remain incomplete. They will be incomplete until a European Union replaces the excess of injustice Europe is guilty of with an excess of justice consisting of the following: recognizing others as one’s brother; guaranteeing rights and freedoms and promoting the legislative framework on which they are based; working towards equal rights thus reconciling the differences between men while recognizing and respecting these differences; becoming aware of the brotherhood which reunites free men with equal rights.
This victory will not be complete until, by means of the Union, Europe does not oppose to the excess of idolatry of nations for themselves, both the excess of resistance to collective oppression by removing the idols which subdue mankind, thus liberating the person and giving men equal status as brothers in a community of rights, and the excess of humility in politics and organization of life in society.
One word will sum up these two sides of the square: democracy. When Europe shows its true, human face, there is no room for a master-race or master-party.
No other project can justify the will to unite Europe: a point which must be stressed — even though circumstances sometimes provide good reasons for starting with the other two sides of the square, for example, passing bouts of competition or the self-preservation instinct, where Europe is construed as a safety belt and where the idea of European security is forgotten. We should not lose sight of the fact that the loosening of the constraints shackling innovation in Europe, which Richonnier only touches on so as not to drift off of his subject, is in itself a return to Europe’s past, a rediscovery of Europe’s identity. Like any project, Europe’s union is primarily a matter of memory. Europe will be justice, humility, open-mindedness and tolerance or she will be nothing.
No wonder Richonnier, a keen European, puts forward two major requirements:
— “creating a vast common market” which means, and this has too often been forgotten, free circulation of capital, a great European financial market which can “defend itself”, which means, and Richonnier is too discreet on this essential point, a single common currency and an autonomous federal bank in charge of the internal and external stability of this currency. The ECU’s advocates are right to push hard in this direction: by taking advantage of this “metamorphosis”, Europe can break down the conservatism in the way she finances innovation;
— freeing the circulation of ideas, information and culture inside Europe is just as important as removing the obstacles to the circulation of goods and capital. Before the end of the century, all Europeans will be able to receive the same TV programmes in the language of their choice directly by TV satellites. Provided cable is used to serve direct TV rather than being a new tool for chauvinistic narrow-mindedness. A European audio-visual space will be a powerful factor in the promotion of a European identity and solidarity, provided Europe creates its own programme industry right away.
Despite these few reservations, Richonnier has included the vital requirements in his inventory of existential stakes that Europe needs, namely identity and safety.
Europe has begun to appreciate its weaknesses and primarily the weakness arising from its division and has now realized that nations’ withdrawal into themselves would be as fatal to Europe as it was to the Mings and the Ottomans.
At the very moment when Europe was initiating what we call Modern Times, China was shrinking into itself: just when China’s navy managed to link Sumatra to the coasts of Africa non-stop, China retreated into itself and erected the Great Wall. The isolation of the intelligentsia has harmful effects on intellectual life. The Ottoman Empire, after possessing the best artillery in Europe, failed to modernize and adapt to keep pace with the West’s advances and eventually many years later, in the 18th Century, had to call in Baron de Tott, a French engineer, to reorganize things. Already at the end of the 16th and especially the 17th Century, the current of trade turned into mere exploitation of the Empire’s resources and the Empire itself became a simple outlet for European manufactured goods, a consequence of the industrial progress of Western Nations and Easterners failure, for various reasons, to adapt to the “metamorphoses” of Europe, the most amusing of which Richonnier has drawn from Jean-Paul Roux’s L’Histoire des Turcs. “Modernizing their fleet, improving their ships which were hardly sea-worthy was a possible response to this European challenge. But to do so the Turks would have had to lower the decks of their ships, and this could not be done because they would have had to reduce the height of their turbans…”.
Will the Europeans be able in good time to lower the height of their “turbans” of under-information, under-investment, under-education and over-regulation? Only if they learn about the weaknesses of their competitors.
Richonnier reminds us that the Japanese model is weak on the social side and the American model is vulnerable on the growth side. The smoothness of the Japanese system is bound to be disturbed in coming years. The emancipation of Japanese woman, with its corollary — equal wages for equal work — should become a reality before the end of the century. In 2020, Japan will be the oldest country, the number of people over sixty will reach 22%. Expenditure on social security will therefore rise faster than in Europe. The competitiveness of Japanese firms will decline.
The strong growth recorded in the USA in 1984 could not last, if we take the record balance of payments deficit into account. “The US will not be in a position to play their currency trump with impunity much longer… Sooner or later the US will have to fund their public deficit… by inflation or an increase in taxes. In both cases their growth will be jeopardized in spite of their regalian monetary power or they will run the risk of triggering world… economic disaster”.
Nothing then is lost, but two remarks are in order:
— Europe will not be penalized by solidarity if she can combine it with mobility. The European social security system will remain the most progressive and fairest as Chancellor Willy Brandt rightly wished, if the mobility risk is provided for, in the same way that the risks of old age, accident and illness are provided for.
— By developing the ECU, Europe can free itself from the dollar and place itself in a good position to take over from the US in steering growth: by so doing, Europe will ensure (and reassure) the world against the dollar risk. Michel Albert has emphasised a possible recovery. Under the leadership of Fernand Herman, the European Parliament has listed the actions which are within the grasp of national and community powers. The ball is now in the government’s camp.
When giving a lightning sketch of Europe’s handicaps in technological competition with the US and Japan, it is not very surprising to find the inner market high on the list. Whether it is a matter of promoting European identity or trying to make up lost ground, free circulation is the problem. It is the priority.
The European inner Market: restraints on intra-EEC trade add 20% to the costs of goods and services, thus hindering new enterprises more than in other countries. A fledgeling business can try its wings in the US and Japan where the home market is big enough for it to reach medium size before selling abroad. This is not possible in Europe. As time goes by, the effects of a fragmented European market grow worse: development costs rise, products’ life spans decrease and investment becomes increasingly difficult to amortize, on the domestic market alone. The Commission’s 1992 deadline, however prudent, is welcome.
The Europe of Public Spending: Public markets are enormous amounting to 17% of the EEC’s GDP. The member states are not using their purchasing power properly. Discrimination in favour of domestic manufacturers occurs with practically all high technology products. Further discrimination favours the big groups. Conventional European wisdom has it that each country would be in a better position to face American competition by supporting a national champion. The policy now followed in ESPRIT (European Strategic Program of Research and Information Technology), RACE (Research on Advanced Communications in Europe), BEST (Bio-technological European Systems Team) and now, on a larger scale, EUREKA is a decisive change.
The Europe of Venture Capital: Europeans have been wrong in relying on State subsidies to finance their young innovative enterprises instead of using venture capital. Besides, sums invested by the market are barely 10% or 20% of American investment. It takes 18 months to finance a young firm’s projects in Europe as against 3 months in the USA. A European capital market with no restrictions or restraints is badly needed.
The Europe of Human Resources: The German precedent or the Japanese model should enlighten us. As we have seen in the historical part of his work, Richonnier examines the role played by the close co-operation between the budding German chemical industry and the Universities at the end of the 19th Century. Today European academics are civil servants who very often work in archaic conditions and who consider businessmen either as philistines or as class enemies. The climate has been improving recently and scientific “parks” are the best example of this. But Japan and the US still have more scientists and engineers per worker in industry. Europe’s problem is made all the more difficult by the increasing brain drain, which has proved particularly harmful for young industries — indeed the position for European biotechnology is alarming. Richonnier is thus absolutely right in proclaiming the need to reshape European education systems: the European school of the 21st Century has yet to be invented.
The Europe of Law: Legislation inhibits innovation in Europe in three fields. Firstly, income tax. This is far too heavy and ought to be replaced by a tax on spending, as suggested by the British Social Democratic Party in a recent green paper. The term “tax on spending” is, however, ambiguous since it is not a tax on consumption like VAT. All the money a person saves would be free of tax while the net amount that he does not save would be taxed. Secondly, as already mentioned, there is the problem of financing young innovative firms: professional privileges, outdated legislation and company laws are obstacles in most European countries to instant financing, inventiveness of the financial market and risk-taking by investors. Finally, professional mobility: Western European legislation endorses mobility as a basic requirement for companies rationalizing their production but as a rupture for workers who lose their job security. Future European legislation must recognize work mobility as a permanent social structure encouraging the development of workers’ skills. This revolution is called flexitime.
Bad legislation, we should always remember, will cause the loss of valuable time, creating obstacles to international competition. Richonnier reminds us of the severe restrictions placed on steam coaches in England by the Locomotive Act which decreed that any engine-driven vehicle should be preceded by a man on foot carrying a red flag. The Locomotive Act remained in force until 1896 and severely crippled the British car industry for a long time.
He who says law says law-maker, and the transition is easy from these handicaps of a divided Europe to Richonnier’s political conclusion which resolutely puts him in the European Union party.
So much for the criticism. This critic finished his reading reinforced in three of his convictions:
— the first is federalist: the recovery and rebirth of Europe is first of all a political issue in the full sense of the word. Only thorough reform of official Europe can give “the ever closer union” of Europeans the capacity to take the wholesome action dear to Richonnier. For Europeans the preparation for the 21st century begins with the European Union based on the European Parliament’s Draft Treaty. Europe’s citizens now expect this sign from Europe’s political community;
— the second is practical: “today’s technologies will be out-of-date by the year 2000”. We should not waste our time catching others up. We should jump ahead of the Americans and the Japanese and fight the battles of the future. If this philosophy inspires the EUREKA project and other subsidiary projects, then the game is not won in advance but Europe still has every possibility of winning. Europe’s chances are not only its trump cards’ like the formidable resources locked away in its unfinished construction, but also the weaknesses of its competitors, whose failures and successes will be as many lessons for Europe;
— the third is cultural: free circulation is a right. To come and go as one pleases is a revolutionary freedom. All Europeans must have equal rights in this respect. This review has begun a debate regarding language. The Adonnino Committee has insisted on bilingualism from the nursery school. Perfectly bilingual Europeans could learn two additional modern languages without too much difficulty in the course of their secondary studies. I believe there are two vital points to be made: English should be one of the four; the first or second cycle of university-level studies should take place in a country other than the country of birth. These reforms are of the utmost urgency. “If they fail to transcend the narrow framework of the nation state (Europeans) will not be able to avoid the decline which is ready to engulf them”.
We agree wholeheartedly with Michel Albert, another docteur ès Europe, when he recently wrote that Richonnier “should be put on the curriculum”.
Thinking of California, where Richonnier, like so many other people, was able to measure the distance between Europe and success, I feel the need to supplement his lesson by giving my fellow Europeans this following terse motto: MOVE.