American economy is commonly known to be in a bad condition. Most Americans are convinced that 4 years of the President Obama’s administration government have not managed to deal with the crisis. To my mind, Americans electing for the next 4 years a man who has no personal experience involving economy and whose administration – apart from all the other distortions – has led to a gigantic national debt (over 100% of GDP this year) significantly reduced the chances for the enterprising and innovative America to rise again.
In the late ‘70s economists used to name Europe’s (then Western Europe’s) problems a ‘eurosenility’. Economic growth getting slower and slower, higher inflation, unemployment, lower competitiveness – besides inflation it all sounds familiar to us. Nevertheless, it was very similar when it comes to the USA. Analysts have raised the alarm that America is losing its global economic leadership in favour of the ‘Japanese supercountry’. It also sounds so familiar (providing we change Japan to China!).
The victory of Ronald Reagan and his republicans in the election of 1980 became the source of positive change. Taxes were lowered, some areas of economy were deregulated, bureaucracy was curbed. The amount of pages in the American Journal of Laws, throughout the ‘80s being by 30 -40% lower than during the previous decade, became a good indicator of the ‘legislative diarrhoea’ being stopped. The USA, instead of growing far slower than Western Europe as it has taken place for over 30 years, began to grow much faster.
And Great Britain’s growth, where a similar ‘liberal counter- revolution’ was conducted by the Prime Minister Thatcher, has been the fastest from all four big European countries. Whereas earlier, after the war, it was growing more slowly than in France, Italy or Germany. Although it is not up to such an extent, also continental Europe has started deregulating its economy and in some cases taking the weight of the social country off.
There is no doubt that such a free-market impulse will not come from the Democrats who now more than ever are supporting etatism instead of free enterprise. President Obama’s infamous words, „you didn’t build that’ addressed to entrepreneurs, proved that Barack Obama, now elected for the second time, does not understand where the wealth comes from. For him, wealth is brought by the country that builds roads and bridges and as a result, people come, open a shop or a factory- that is how the economy works.
That flipped the issue upside down. The history of economy based on private property shows that it is exactly the opposite! It is people who decide to open their workshops, shops or anything else. Producing at their own risk, they do create wealth. Gathering together, they decide to create a self-government and pay it off form the collected taxes. If it was not for their initiative and hard work, there would be nothing to collect. This is what it looked like when the towns from Western Europe were reviving, working their way out of the Middle Ages.
Such initiatives cannot be replaced by the country tinkering, supporting ineffective industries or creating costly fiction of modernity, making use of endless subsidies (so called ‘green economy’). Every week five companies move out from the state being proud of the Silicon Valley because of the worst conditions when it comes to enterprise growth. Taking into consideration that the USA is so signficant for the global economy, and even more significant for the West, the lack of the American free-market leadership will influence not only the amount of problems of the USA itself, but also the lack of the proper enterprise and innovative impulses for the others who have taken advantage of that leaderhip since the ‘80s. The world will become poorer – literally and figuratively as well…
Translation: Aleksandra Wójcik