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We are copying the Ming empire

I have an op-ed in the Times on how even a global
optimist can foresee absolute as well as relative decline for
Europe if it continues to emulate the Ming Empire:

A “rational optimist” like me thinks the world
will go on getting better for most people at a record rate, not
because I have a temperamental or ideological bent to good cheer
but because of the data. Poverty, hunger, population growth rates,
inequality, and mortality from violence, disease and weather – all
continue to plummet on a global scale.

But a global optimist can still be a regional pessimist. When
asked what I am pessimistic about, I usually reply: bureaucracy and
superstition. Using those two tools, we Europeans seem intent on
making our future as bad as we can. Like mandarins at the court of
the Ming emperors or viziers at the court of Abbasid caliphs, our
masters seem determined to turn relative into absolute decline. It
is entirely possible that ten years from now the world as a whole
will be 50 per cent richer, but Europeans will be 50 per cent

Not that the world economy is a zero-sum game. It is a good
thing if Africans and Latin Americans join Asians in getting richer
at breakneck pace, as many now seem to be doing, even if we don’t
join in: not only because want and misery are bad whoever they
happen to, but also because if others grow productive and inventive
they can supply us with valuable goods and services. Why should the
development of new antibiotics or thorium nuclear power remain a
burden exclusively on the shoulders of Western taxpayers?

Even so, relative decline can be painful. Spanish people are
richer and live longer than when their silver-sated conquistador
ancestors strutted the European stage, but I am sure it does not
feel like it to an unemployed youth in Bilbao. Whatever happens, we
Europeans will probably have to get used to watching Asians book
the best restaurants and launch the biggest aircraft carriers in
the years ahead.

Absolute decline is far more scary. If Europe cannot rediscover
how to grow its economy, then it will have to default on its vast
debts, either directly or by inflation. Either way savers will be
poorer, tax receipts will be lower and spending on schools and
hospitals and roads will be lower: genuine austerity.

As the MP Douglas Carswell reminds us in his book The
End of Politics
, here in Britain we have public and private
debts that are five times our annual economic output; we are
spending £46 out of every £100 we earn to buy government – a
product that, unlike most, delivers less output for more cost each
year. As the Ming empire found out, the more government you buy,
the less economic activity you get. A Fujian travelling salesman in
1400 was enmeshed in such a tangled bureaucracy that he could
neither travel nor sell without bribes and permits, and he had to
submit a monthly inventory of his stocks to the emperor.

Sound familiar? Every small businessman I talk to these days has
a horror story to tell about the delays and costs that have been
visited upon him by planners, inspectors, officials and consultees.
Using the excuse of “cuts”, the bureaucracy is taking even longer
to make decisions than five years ago. In the time it has taken
Britain’s Government to decide whether to allow a fifth exploratory
shale gas well to be drilled in Lancashire, and from the same
standing start, the same investors have drilled 72 producing wells
in Argentina. That the country of Watt and Stephenson should look a
potential cheap-energy gift horse in the mouth in this way is
staggering to this jaded optimist.

From ancient Egypt to modern North Korea, always and everywhere,
economic planning and control have caused stagnation; from ancient
Phoenicia to modern Vietnam, economic liberation has caused
prosperity. In the 1960s, Sir John Cowperthwaite, the financial
secretary of Hong Kong, refused all instruction from his
LSE-schooled masters in London to plan, regulate and manage the
economy of his poor and refugee-overwhelmed island. Set merchants
free to do what merchants can, was his philosophy. Today Hong Kong
has higher per capita income than Britain.

In July 1948 Ludwig Erhard, director of West Germany’s economic
council, abolished food rationing and ended all price controls on
his own initiative. General Lucius Clay, military governor of the
US zone, called him and said: “My advisers tell me what you have
done is a terrible mistake. What do you say to that?” Erhard
replied: “Herr General, pay no attention to them! My advisers tell
me the same thing.” The German economic miracle was born that day;
Britain kept rationing for six more years. Where are Europe’s
Cowperthwaites and Erhards today?

A growth-preventing bureaucracy is not the only thing
suppressing enterprise in Europe. Superstition is also playing a
part, as it has done in past episodes of economic decline. The
great flowering of Arab prosperity and culture under the Abbasids
was brought to an end with the burning of books, the shutting down
of inquiry and a mistrust of novelty.

Again there are echoes. Many of the ideas that led to the
genetic modification of plants – which has boosted yields, cut
insecticide use, saved fuel and soil, and helped the poorest
farmers – were pioneered in this country. Yet today there is almost
none of this work done in Britain and none of its boons are
permitted to farmers and their customers. The labs are ghostly
quiet. Why? Entirely because of neophobic superstition that has
animated reactionary elites into opposing change on the basis of
myths peddled by green mystics. (The biggest superstition of all is
surely the worship of the euro: the sacrifice of growth, youth and
truth at the altar of a mere currency.) By contrast, America, for
all its fiscal incontinence, is still friendly to enterprise and
open to novelty, as any time spent in Silicon Valley will prove. To
avoid the fate of Ming China Europe needs to rediscover economic

By Matt Ridley | Tagged:  rational-optimist  the-times