Google Alerts    is a service to which I have subscribed. I asked to be alerted to web postings that speak to monetary reform.   This one, from Scotland, is part of the NO_ Campaign in the UK. The campaign opposes various losses of UK sovereignty that the EU Constitution and its union of euro   users require. The campaign appears to favor Bush-like doctrines --- but monetary reform? I'm not sure.

I want to share Dominic Cummings with you.

It may be that I will part company with him if he does not support the ultimate goals of freedom from want and fear and FDR's Second Bill of Rights.   

Although he appears to have too much trust in Hayekian markets he is equally in favor of national self-government.

I, of course, want free markets to be rudely subordinate to public priorities**, especially the four freedoms, liberty and national and multi-national defense against a return to red or black fascism or retreat to tribal and fundamentalist wars that predate the European enlightenment and American revolution.

The leadership that emerges from open competitive scholarship, enterprise and politics, is vital to nations and treaty organizations.   But that leadership must be aware of noblesse oblige.   Without that awareness our mission to end poverty and suffering is quickly submerged in a sea of vanity, narcissism, arrogance, anger and war.

Scotland on Sunday
Sun 27 Feb 2005
'European dream' fantasy ---
Stuff of which nightmares are made

By   DOMINIC CUMMINGS

IN 1989 Francis Fukuyama announced "The End of History" and the triumph of Anglo-American liberal democracy.

This vision was based on a "democratic syllogism": economic success requires capitalist markets; capitalist markets produce liberal democracy; liberal democracies do not fight each other.

The political and bureaucratic Establishment that has so consistently mis-analysed the process of European integration has a related vision. It believes that Great Britain has no credible alternative to the European Union (EU), based on the assumption that the European project, blessed by historical inevitability, will produce economic growth and cement political tranquillity.

Both arguments assume that liberal institutions in the West are so successfully entrenched they are resistant to internal collapse or the sort of systemic crisis unleashed by the 1929 stock market crashes, which largely swept civilised government off the European map.

It is an overly optimistic view of the world. There are, after all, some obvious candidates for the role of "catalyst of systemic crisis" - for example, a terrorist bio-warfare attack, or a Sino-American nuclear confrontation, with Taiwan playing the role of Belgium in 1914.

More fundamentally, the increase in our understanding of cognitive science and evolutionary biology - combined with a merging of the computing revolution with genetic research, nanotechnology and robotics - is altering philosophical discussion of the most fundamental questions of human ‘nature’ and existence. Their applications will have unknowable, but surely profound, political effects - potential developments that have been largely ignored by British and European political elites (though not by their equivalents in America).

Instead, we conduct an embarrassing ‘debate’ about how much more power we should give the tottering bureaucratic Leviathan of the EU via the proposed constitution.

There is another candidate, however, for the role of "crisis trigger" which has particular implications for Britain’s decision on the constitution: the historically unprecedented collapse of European birth rates, the ageing of Europe’s population and the immense financial consequences to follow. This ought to become a major element of the ‘no’ campaign’s crucial attempt to portray the EU as "old-fashioned and failing".

Fertility rates in Germany, France, and Italy are far below replacement levels, while life expectancy grows. Germany’s population will shrink by around 11 million by 2050 and its working-age population by over 10%. Overall, the EU-24’s population will decline by about 35 to 40 million; the rest will age rapidly, putting a huge strain on collectivist welfare systems and pay-as-you-go pensions.

By 2050, the unfunded pension commitments of Britain (as a percentage of GDP) are expected to be merely 5%; the equivalent figures are 70% for Italy, 105% for France, and 110% for Germany.

The economic consequences of these pension obligations are enormous: an 8% fall in real wages by 2030, a 13% fall by 2050; a rise in total taxes on wages from about 40% now to about 50% by 2030, and 70% by 2050.

By the middle of this century, barring the privatisation of pensions, there will be a relative fall in living standards for Europeans of about 40%.

These figures are based on conservative assumptions; recent reforms in Europe, and even the doubling of immigration rates, will not make much difference. Further consequences will be higher interest rates and even slower growth, which will exacerbate the vicious feedback loop and drive the young out of the system or out of the Continent.

Europe is already stagnant. The advanced technology gap between America and Europe is large and growing. The Brussels Commission recently warned that 75% of EU students in America will not return. The single market brought increased regulation, not liberalisation; there is little chance of this dynamic changing. European politics suffers a growing crisis of legitimacy and EU institutions are widely perceived as incompetent and corrupt.

Historically, multinational monetary unions have broken up because of varying fiscal burdens and policies, usually created by war. The scale of the demographic-welfare burden, and its very uneven effect on the monetary union, will call into question European willingness to suffer lower living standards and/or make vast transfer payments to other nations. The EU elite is likely, as before, to seize on this "beneficial crisis" to drive further integration. Eventually, this combination of problems is likely to produce economic and political crisis and perhaps destroy monetary union.

It makes no sense for Britain to give further powers to such an institutional matrix, which promises decline rather than adaptation to a rapidly changing and unknowable future environment.

Instead, we should remove the EU’s regulatory power over us; negotiate a new trade deal; embark on educational reform, democratic renaissance and technological innovation; and abandon the disastrous Foreign Office assumption that we have no alternative but to attempt to "influence" the project from the inside - a conceit which suits diplomats but is irrelevant to the rest of us. Our best chance of "influence" is by example, not by stumbling along, ever-whining, behind a doomed Franco-German agenda.

Fukuyama’s optimism may prove justified by America but is likely to be disappointed by a Continent whose dominant cultural elites have always rejected the Anglo-American, Lockean vision. Remember, Fukuyama’s last chapter contains Nietzsche’s predictions for the future Western intelligentsia and their role in the collapse of liberal democracy.

The psychology of those now preaching "the European dream" and "the European century" --- their preference for supranational bureaucracy over Hayekian markets and national self-government --- will combine with remorseless demographic decline to prove their latest fantasy predictions as false as those of 1999 about the euro’s success and Europe becoming "the most dynamic economy in the world".

For Britain, in many ways now more Continental than Lockean, even victory in the referendum will prove no more than a tactical victory if the ‘sensible right’ fails to produce an alternative vision to "ever closer union" and does not embark on a deliberate long-term campaign to alter the moral assumptions of the intelligentsia.

Dominic Cummings is Director of The New Frontiers Foundation in London

This articlemay be found at
http://news.scotsman.com/opinion.cfm?id=219362005

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** Blogs in this series take the current need for wartime monetary financing for granted. This authorizes government checks to be honored in advance of bond sales in the open market. The bonds issued (but not sold) are owned by the Treasury and held by the central bank as tokens of government's intention to avoid ruinous inflation. This authority also allows lower taxes than in the past---as debt-free money finances urgent priorities and private capital savings and investment to serve the public interest. Such savings---in inflation protected Individual Estate Accounts (IEA's)---are a fairer instrument than war savings bonds: they will protect ordinary savers from any penalty of holding bonds until payment is due.