Does Europe Face a Corporate Takeover?


European Union flags.
European flags in front of the Berlaymont building, headquarters of the European Commission — the executive of the European Union — in Brussels, Belgium. Creative Commons photo courtesy Flickr user TPCOM.

Paul Solman frequently answers questions from the NewsHour audience on business and economic news on his Making Sen$e page. Here is Wednesday’s query:

Name: Tom Vagedes

Question: Has the risk of corporatist capitalism replacing European democratic capitalism over the next 20 years risen as a result of the European Union’s collective financial indecisiveness in dealing with debt and growth crises?

Making Sense

Paul Solman: I don’t think the economic woes of the West, such as they are, have much to do with “indecision.” Ever-increasing prosperity is the style to which we have become accustomed throughout the Organization for Economic Cooperation and Development. As a marijuana importer named Harvey said to me in the ’70s, when I asked him why he persisted in such a risky business even after he’d made a million dollars, real money back then: “It’s a very hard fantasy to replace.” Harvey kept dealing. Eventually, he got caught. But he was never indecisive. Like him, Europe, and even we here in the U.S., are still fanning the fantasy. Who can blame us?

As to the rising risk of corporatist capitalism, I think it has little to do with the weaknesses of the welfare-state alternative. Corporatist/crony/state capitalism has a momentum all its own. Ask Adam Smith, who railed against it in his “Wealth of Nations.”

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions