Socialism slows progress – by Michael Czinkota

My annual assessment of the intellectual and economic proximity between both the United States and Europe indicates ongoing disenchantment and a growing psychic distance from each other. Conditions have changed not all for the better, perhaps because of the thriving growth of socialist thinking. The public preference given to the group over the individual is dangerous to the quality of life in both regions.


England used to stand out for the views and perspectives by its educated experts on money and markets. Now they don’t know and don’t care. New announcements and shifts are just shrugged off or, worse yet, ignored. Refusing to think or getting involved is the equivalent of Sokrates’ poisoned hemlock cup – because conditions will not improve by themselves.


British institutions which label themselves as European need to re-think their position as to its meaning in times of Brexit.  Prime Minister Johnson may not defuse conflicts and polarization. How to help ship captains make a choice between the drowning migrants and personal jail time for their rescue? Are we all in the same boat? Even in theatre performances the audience and troupe performances have lost their traditional bite. 


Germany has a whole set of growing problems. I am not referring to the physical tremors of Chancellor Merkel. When standing is a problem she can sit. In the U.S., President Roosevelt served the country despite difficult illnesses, for more than three terms.

But I am concerned about the diminution of German ability to rely on its traditional strengths. When German intellectuals talk about U.S. policies there is very little well-formed reasoning, or even desire for input and learning. Rather, flash judgements and condemnations are made, remindful of the checking of boxes.

When the official airplanes of both the chancellor and the president repeatedly either can’t fly or must return to land right after takeoff, then the motto of “advancement through technology “does not fare very well. Misleading public information on air contamination by car diesel engines is a shameful event.  Failed technology to measure societal impact of government action is wasteful and inefficient. Expropriation of rental property owners will do little to increase the housing stock.


Increasingly, a sense of proportion and morality is missing. Take the case of Gustl Mollath who, was wrongfully placed in a psychiatric ward for more than seven years after complaining about banking irregularities.  Now,  government offers him a paltry compensation of less than $ 200,000. At the same time, the Deutsche Bank, provides publicly more than $ 10 million for ineffective managers to depart, and we don’t yet know about any additional hidden support. 


The Nordic countries have lots of goods available but few of them are thrilling. The food offered, for example, was surely healthy, but not appetizing. Drinks were hard to get, even at events where conviviality was the objective, not a byproduct. Big praise to the person who found and handed in my disappeared wallet. Thank you, Gary, from the West Coast!

European country governments regulate many things, issues and interactions, a form of localized socialism I suppose. But it means fewer and quite expensive taxis, no Ubers, little adjustment to changing conditions. New government thinking stresses more taxes. France, for example, tries to impose a new 3% tax on large digital companies.

Italy still has very good wines and beautiful bridges from Roman days, but roads are decaying, and modern bridges are crumbling. Speed and parsimony cannot be the only criterion for quality public projects. Modes of transport appear to be routinely under strike during times of heavy use. Austrian government leaders are caught on tape offering the wholesale transfer of government contracts.

People seem content but not driven or forward oriented. Many tasks are either left unfulfilled or waiting for foreign hands, which the both the public and the private sector appear to encourage.

Overarching governing by the European Union seems to be often haphazard, contradicting the desires of the citizens affected. Leadership selection often brings on candidates which govern in spite, not because of themselves. Will the new team of Ursula von der Leyen make its mark with a reduction of regulation? All in all, it’s great to be exposed to history, and remember the British Pound as world currency, Greek and Roma palazzo’s, Marie Antoinette’s cakes, and the Viking battles.. But for now, innovation, change and a forward-looking perspective give good future odds to America.

Prof. Czinkota (czinkotm@georgetown.edu) teaches International Business at Georgetown University and the University of Kent. His latest book is ‘In Search For The Soul Of International Business’, 2019, New York, Business Expert Press

Global Update: Retail Sales on the Rise in the EU

Consumer spending may be on the rise in the Euro-zone as indicated by the increase in retail sales this year, and more specifically this August. Sales rose by 0.7% from July but were still 0.3% lower than last year. It is evident that the financial crisis is still luring but these figures indicate a sign of slow but steady recovery.

Consumer spending had been declining since mid-2011. The July and August 2013 figures suggest further recovery in the future. However, retail sales are still below the rates seen before the 2008 financial crisis hit.

Without a doubt Germany has had the fastest growth with Italy notably accounting for its fastest growth in two years. On the other hand, Spain’s economy contracted.

What does the contracting of Spain’s economy signify? Post your comments below!

Source: WSJ

Answer to International Business Jeopardy Question from 7/28

One of the smallest nations in the world is also the oldest country in Europe, and the oldest Republic in the world. Most of its citizens earn their living making and selling postage stamps. Name it.

San Marino, on the slopes of the Apennines entirely within Italy, has been an independent Republic since 1631. It covers 24 square miles.