July 03, 2003

Socialism's Farewell Note

Marian L. Tupy says the new EU "Constitution" may well be the "last gasp of European socialism":

Drawing on the intellectual legacy of the proponents of the Scottish Enlightenment, the Austrian economist Friedrich Hayek showed that it was not possible to centrally plan complex social systems because the planners in charge did not have sufficient information. Soviet central planning, for instance, was unsustainable because it could not rely on the price system to point out the real needs of the economy. The best social systems develop through a process of trial and error called "evolution."

Such evolution, however, is exactly what the European Constitution undermines. With the exception of direct taxes and foreign policy, virtually all of the social and economic policies of the EU states will be "harmonized" at the pan-European level. Whatever Schumpeterian "creative destruction" of the competitive process remains among the European states, will be eroded through recourse to the concepts of disloyalty and competitive distortion-those Trojan Horses cleverly included in the Constitutional draft.