Monday, November 7, 2011

Europe Induces 'Sloth, Indolence'

Jin Liqun, chairman of China's $400 billion sovereign wealth fund considers Europe to be a bad investment at the moment.  This is worrisome as European leaders are counting on China to bail the Continent out of its debt crisis.

Liqun believes that the problems are caused by Europe's labor laws and welfare system, which distort incentives and deform character.  They induce people to become lazy and dependent.

Until this is fixed, he doesn't see the point of risking his country's capital there.  Lazy, dependent people with an expectation of entitlement and a penchant for violent protest are a poor credit risk.  As always, reality rears its ugly head.

While everyone favors humane living conditions, not everyone believes that they can be decreed by the wave of a magic wand.  Reasonable people know that increased living standards are brought about by increases in productive capacity and productivity, capital and risk-taking.

Unfortunately for Europeans, and Statists the world over, the skeptics are the ones with the money.

China is less easy to demonize than the United States.  Its wealth is very new, and is acquired by suppressing its own domestic consumption, and large segments of its population.

Neither can anyone accuse it of exploiting unjust international structures that perpetually favor strong nations.  They have too recently joined the club of world powers.  In fact, the ascent of the BRIC countries demonstrate that capitalism makes such structural arrangements difficult to maintain.

Moreover, China and its mixed political economy do not provoke the same visceral reaction among Continentals that America and its founding in Anglo-Saxon, classical liberal ideals and principles always has.

Liqun is not presently swayed by Europe's high-sounding social ideals, which stress all the things that people are due from government, and none of the things that are needed to sustainably pay for them.

Europe is driving itself to dependence and bankruptcy through incomplete reasoning and debilitated character, which makes it a bad credit risk.
"If you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of the worn out welfare society. I think the labour laws are outdated. The labour laws induce sloth, indolence, rather than hardworking. The incentive system, is totally out of whack. 
"Why should, for instance, within [the] eurozone some member's people have to work to 65, even longer, whereas in some other countries they are happily retiring at 55, languishing on the beach? This is unfair. The welfare system is good for any society to reduce the gap, to help those who happen to have disadvantages, to enjoy a good life, but a welfare society should not induce people not to work hard."

These inconvenient truths underscore that in today's world of reckless borrowing to support living arrangements predicated on wishful thinking rather than careful planning and execution, capital--the resource needed to actualize those dreams--operates according to laws of reality, to what actually is, not to laws governing the way we wish things to be.

Among the few moral resources remaining in today's dissipated yet self-congratulatory occident, capital is one.  There is no morality divorced from reality.

No comments:

Post a Comment