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The Success of Democratic Capitalism in Europe

Terry Hung

November 30, 2006 

The main objective in applying social policy on top of capitalism by most European nations is to maintain social stability. The excessive uneven distribution of wealth - the few possess most of the wealth - is the primary cause of war and the downfall of a society.

After two savage World Wars, people in Europe witnessed first hand the cruelty of war and unconsciously/consciously determined to avoid war with all means. One of the main goal of social policy is to reduce the poverty and thus reduce the likelihood of civil unrest, revolution, and ultimately, war. This is why Europeans have been supportive of their governments' social policies so far.

Though many people view taking money from the rich "immoral," in reality there is no greater sin than war. If social construct can keep most people from falling into poverty, and thus greatly reduce the chance of human slaughter through war or revolution, then it can not be "immoral."

Granted, there are many causes of war. But many wars are waged by the poor fighting for greater share of resources and wealth. The next World War is most likely to be waged by an underdeveloped nation who possessed nuclear power.

Many economists believe that the Europe can not sustain its social policy. I certainly hope not. Europe is one of the best societies in human history. Not only does it maintain a more balanced environment for its people, but also achieved great scientific success in physics (CERN), airplane (Air Bus), train (Super Train), etc. Who says capitalism is the only way to inspire creativity?

There are many similarities between U.S. and ancient Rome. U.S. consumes eighty percent of the World's savings. Using a large portion of the resources of the world, U.S. has yet to face the problem of poverty like most of the world. And as a result of the known effect of capitalism, smaller portion of the U.S. is getting greater share of the wealth every day. Sooner or later the world will take their share of the wealth back and the rich will take most of the rest. By the way, at the end of the Rome civilization, ninety percent of its citizens were under poverty line. Can such civilization sustain itself?

It is possible that Europe will slowly forget about the pain of War and abandon their current socioeconomic policy. This will be a big mistake. I think adopting some adjustments is enough to cure temporary problems and maintain its original goal of social stability.

U.S. on the other hand, need to develop some kind of oversight on the social policy. Without being destroyed by war, it is unlikely that U.S. citizens will support similar social policy of Europe. But if U.S. has reached its peak and can no longer enjoy the disproportional share of the world's wealth, then there will be choices ahead. Either It can let the capitalism run its course until the fittest grab most of the wealth (and result in revolution or civil war), or it can bypass the inevitable and adopt democratic capitalism like Europe.



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