Federal Triangle: Hard Power, Soft Power
Four months ago we looked at unreasoned but prevalent European, negative views of the "American condition," popularized by politicians and the media. Why this divisive and arrogant view of U.S. success exists and its impacts on America deserves revisiting. Indeed, the U.S. public and policy makers have been extraordinarily complacent by not understanding the rise of a European Union or the United States of Europe, as Winston Churchill phrased it first in a speech in Zurich on 19 September 1946. He recommended creation of a "sovereign remedy" to ravages of war that plagued the Continent for most of the 20th century and model it on "the great Republic across the Atlantic Ocean." This vision, the remarkable achievements of the Marshall Plan after WWII to resurrect past enemies, and a genuine desire by a war-weary Europe to banish the Age of Empire, assured that no new souls would join the millions beneath the sod of Flanders Field. Europeans saw the benefits to cooperation among themselves and in structuring an economic revolution.
So it evolved that an appreciative European citizenry created a "common market" in 1957, beginning with six nations, which evolved into the European Union with today's twenty five members and more awaiting entry. The EU began with solid admiration of American virtues; youth, vigor, creativity and acceptance of new ideas, good universities open to all, and "class-less-ness," a concept still not strong in practice but recognized as essential to a vibrant society. Member nations relinquished sovereignty to a transcontinental government that is truly becoming legally, commercially and culturally borderless. The EU grew, so that by the turn of the millennia, Eurocrats managing this collage began to perceive themselves as an economic superpower capable of challenging America. And it developed that this same EU no longer sees America as the continental protector but as a threat. Facts are that America IS their protector and IS the European defense establishment, it is in addition the world's unpaid fire department and rescue squad. It has evolved that EU citizens, heavily taxed (16% to 25% VAT on everything), pay about a fourth of what Americans pay for "the common defense" and instead divert defense money to what we call "welfare," but they do not yet understand and their young have not yet learned facts and consequences. Europeans in a few short years have now come to distrust America, which has protected them and, instead of aligning with the U.S. against common threats, have chosen to become an economic superpower in their own right without benefit of defense structures. What we see here is conflict between the U.S., both a hard power (militarily) and soft power (economically), and the EU as an emerging soft power. A major question for America is how to respond-to let Europe revert to its roots and risk its destruction or to retain our defense forces in spite of their foolishness because, it is not to U.S. advantage to have a trading partner and erstwhile friend, as the French say, "hoist on their own petard." The EU is rapidly and aggressively consolidating asymmetric soft power to contest America.
EU members and candidates must accept a jillion conditions including some good ones, such as having a popularly elected government, civil liberties, visa-free entry across member borders, and free market economy, plus some dubious ones like acceptance of 80,000 pages of EU laws for the welfare state and environment protection as interpreted, often without recourse, by EU Eurocrats in Brussels. A major accomplishment was the creation of the Euro and its seamless introduction as the currency for 470 million people living in EU states. My view is that establishment of the Euro as common currency was the single most important unifying factor because it brought stability to exchange rates (not without variable performance and fluctuation against the dollar since inception 1 January 2002) and "price convergence" and "transparency" between nation states. Think of it this way: a Big Mac costs pretty much the same everywhere, but not exactly, and you don't need a passport to walk through the golden arches.
What is important to readers of this journal is the obvious intent and practical ability of the Eurocrats to impose business regulations that become the world standard. The EU has learned that market size carries clout. We see many venues where this has recently occurred: Airbus taking majority market share from Boeing in passenger jet aircraft; dominance in manufacturing of cellular telephone by Nokia, Seimens and Ericsson; the U.S. Department of Defense losing the argument with European Space Agency on who will control navigational accuracy via GPS; Microsoft acquiescing to EU mandates that protocols be changed to sell software into EU markets; or the World Trade Organization decision in cases brought by the EU that U.S. authorized off-shore sales organizations are unacceptable in "subsidized free trade." In many cases the EU is correct but in many analyses, Eurocrats are on the road to a socialism that is reminiscent of Nazism. The message is industry, soft power players, pay attention. IH