Saturday, 15 January 2011

Pointless regulation like that of herbal remedies is accelerating western decline

Stifling EU regulation recalls the decline of the great eastern empires
Five hundred years ago, the Chinese and Muslim empires were the richest, most powerful and technologically advanced civilisations on the planet. By comparison, Europe was only beginning to wake from a prolonged period of violence, religious fundamentalism and economic stagnation.

Anybody wishing to know how the tables came to be so spectacularly turned over the proceeding centuries could do worse than read the first chapter of Paul Kennedy's The Rise & Fall of the Great Powers.

The European David was able to so completely outpace Asia's Goliath, Kennedy says, because those great empires had allowed themselves to become ossified and inward-looking through a vast system of bureaucracy, corruption and state monopoly which served to choke not only economic entrepreneurialism but the whole spirit of individualism and adventure.

While Europeans were discovering new continents to colonise and devising ever more advanced methods of blowing each other up, for example, the Ming Emperor banned oceanic exploration and monopolised the production of cannon. In essence, while European civilisation began to sprint, the east went to great pains to stand still.

Bizarrely, Kennedy's conclusion in 1987 was that, in order to continue to compete and hold their own in the world economy, the countries of what was then the European Economic Community (EEC) should press ahead with a policy of 'ever closer union' in both economic and political terms.

Nearly quarter of a century on I can't say whether this is still his view but it seems to me that, in following Kennedy's suggestion, the EU is in the process of accomplishing the very thing he said caused the old eastern empires to crumble.

Like Ottoman Turkey and Ming China, power on the continent is being progressively concentrated in the hands of a vast and entirely unaccountable Brussels bureaucracy. An economy that once fed on the competition between states is being steadily centralised through a web of legislative red tape and more and more un-debated, non-mandated 'imperial edicts' are coming from the Commission.

The most recent of these to come into effect (it was decided in 2004) is the directive on herbal remedies. As Daniel Hannan very succinctly puts it, there is no rational reason for banning and regulating such harmless products except to benefit 'big pharma' at the expense of small businesses, which are the driving force of any healthy economy.

And as the BBC reports, many herbalists will simply go out of business as popular products disappear from the shelves either through banned outright or because producers cannot afford the thousands of pounds needed for licensing.

As Mr Hannan says, such a pointless and irrational piece of legislation would never have gone through the national legislatures of Europe. But, like the mandarins of the Great Ming, eurocrats are able to pursue their destructive fetish for regulation precisely because they are insulated from public opinion. But with the eurozone in meltdown, it is precisely the type of enterprises the Commission is putting out of business that are needed to lead a recovery.

EU Commissioners likely assume, as many do, that because western civilisation has been politically and economically dominant for as long as anyone on the planet can remember, it will continue to be so. Indeed, the truly astounding hubris of neoconservatives seems to have played a central role in accelerating US decline through what Kennedy called 'military overstretch.' The ideologically-motivated Iraq débâcle turned a Clinton surplus into a Bush deficit; the economic crisis plunged the knife in and Obama's bizarrely-timed addition of $200bn to the healthcare budget may well spell the last rites of US economy.

As the centre of gravity once again shifts eastwards, it's worthwhile keeping in mind that the Islamic Golden Age - a period when Muslim nations led the world in the arts, economics, industry, law, literature, navigation, philosophy, science and technology - lasted approximately six centuries. And after 500 years, it may well be that western civilisation is leaving its own golden age.

It will not have been immediately obvious to the great scholars and lawmakers of thirteenth century Baghdad that the city, then a leading hub of learning and commerce, would one day become the most dangerous place on earth at the centre of a perennially unstable backwater.

Similarly, it will not be immediately obvious to the legislators and bureaucrats in Washington and Brussels that they are busily accelerating western decline. But at a time when China is buying up European debt and the FT is talking seriously of a US default, people making their voices heard on fiscal discipline and light government - Tea Party politics, if you will - are needed more than ever.

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