I wrote just yesterday about Europe lagging behind the United States, and that’s in addition to many similar columns over the past year.
But let’s not forget that Europe is also the cradle of classical liberalism, and that the continent became rich because of market-oriented policies.
As I often say when giving speeches in developing nations, it is a good idea to copy Europe’s rich nations. But I then include a very important caveat. Copy the policies that those counties had when they became rich.
Back in the 1800s, that meant very small government, very low taxes, and very low levels of red tape (i.e., the types of policies that helped trigger the industrial revolution).
Heck, the fiscal burden of government in Western Europe was relatively modest as recently as 1960.
It wasn’t until the mid-1960s that the welfare state exploded in size (aided and abetted by the imposition of value-added taxes).
Now taxes drain huge amounts of money from people’s pockets and government budgets now divert immense amounts of money from the economy’s productive sector.
P.S. The news isn’t all bad. As fiscal burdens increased in Europe. some other policies moved in the right direction.
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Image credit: Sébastien Bertrand | CC BY 2.0.
