Saturday, December 22, 2012

Depardieu is creating a stronger Europe

Gerard Depardieu, one of our most famous and successful actors, has moved to Belgium to avoid sky-high taxes that were recently announced by the new socialist government of Francois Hollande. Depardieu was criticised from all sites as not patriotic and only interested in money.

I believe Depardieu is a high profile example of a trend that will strengthen the European Union. Free movement of people in the EU allows people to avoid too high taxes, go to where jobs are, get together with like-minded people, to start a business and to do whatever they want to do. We see this with Polish plummers in Belgium, Dutch bankers in London, French engineers in Eindhoven, English pensioners in Spain. And French millionairs in Belgium.

In the Middle Ages, the fractionated landscape and political situation in Europe made it impossible for the ruling aristocracy (the "rent seeking elite" as Fukuyama calls them) to suppress their serfs too strongly. If the serfs were dissatisfied they could leave and seek another lord for protection. Or they could go to one of the growing cities and be free. Tilly described this eloquently in 1990.
This lack of oppression, this impossibility to dominate the people in absolute terms is what allowed freedom, democracy and prosperity to develop in Europe, for the first time in history. The free movement has been interrupted for maybe two centuries (the great period of the nation states about which Theirry Baudet is so enthusiastic, but which I would call mainly bloody) and is now coming back.

The free movement of people in the European Union will force the governments of cities and states to compete for the preference of the 500+ million people that have a choice to go and live where they want. These governments will have to provide good living conditions, education, culture, logistics, security, employment, and all the other things people want. If they don't, or if they raise the taxes to a much higher level than other states, people will vote with their feet.

This is a competitive situation that the USA does not have: conditions between cities or states are much more equal there. And Asia is different because they do not have the free movement, the level playing field, rule of law and all the other things Europe has. This internal competition for talent will give a whole new dynamism to Europe.

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