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Continent Adrift
July/August 2013


Has something gone wrong with us Europeans? We fancy ourselves as the bastion of parliamentary democracy, the champions of liberty, equality and fraternity, the home of the industrial revolution, the continent to which, above all, Fukuyama's "end of history" is meant to apply . . . And yet, economically, we seem to be going nowhere. In the six years from 2007 the gross domestic product of the European Union has not increased at all. 

Perhaps we are wrong to equate GDP growth with "progress". One of the sobering lessons of the 20th century was that industrial expansion does not guarantee moral or cultural progress. All the same, most people would regard material progress — more output, crudely — as a crucial dimension of any larger notion of progress. In modern Europe it has now been absent for more than five years. Unless something changes soon, the ten years to 2017 could be the first peacetime decade since the 17th century to see no economic growth in the continent usually seen as the core of Western civilisation. 

The counter-argument might be that the six years to 2013 constitute "the Great Recession", a blot on the historical record comparable to, although mercifully rather milder than, "the Great Depression" of the early 1930s. It might be claimed that Europe's performance has symptomised wider trends in the world economy, so that there is nothing much to worry about. Indeed, many Europeans may interpret the apparent stagnation of their continent's economy as an inevitable and desirable adjustment to a planet beset by intensifying resource scarcity and environmental deterioration.

Europe boomed in the first 30 years from 1945; its growth slowed to a more moderate and sensible rate in the next 30 years; and now the halt to that growth confirms that life is about more than economics. So what? Living standards cannot rise indefinitely. In the much quoted title of the 1972 Club of Rome report, we do indeed confront Limits to Growth.  

But does the world as a whole share this interpretation of the end of economic dynamism? Are all nations being held back by the same forces as Europe, and seeing little or no increase in their GDP? As on other occasions in this column, I will appeal to the International Monetary Fund's superb database to answer these questions. The result may cause a little consternation among the peoples and governments of Europe.

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