A fascinating viewpoint, David!
Surely the Euro was created BY statists -- you're saying that --
long-term -- the Euro will be a part of (an instrumental part of) the
downfall of the statists.
Is that correct?
So for example, we all love what has been happening in Eireland, and
your point is that the EURO indeed HELPS Eireland
{A world-wide currency would help them more -- hey, e-gold! :) }
What are your thoughts on Europe, with it's various parts but one
currency, vs. the US with it's various parts but one currency?
Surely you are looking a long way ahead, David? At the moment in
Europe (save Eireland) there is nothing but capital "S" Statism. I
know of no "early signs" at all in Europe (again, other than
wonderful Eireland) of the beginning of the end of Statism there.
>The Euro will be instrumental in the death of European welfare states
>and the re-emergence of civil society. A common currency encourages
>governments to remove impediments to price flexability, so that the
>price level can adjust downwards with smaller output losses. It is also
>encourages governments to open their labour markets to each other. The
>reality of the free movement of labour will generate tax competition on
>labour, and the de-socialisation of skill acquisition (education). Skill
>premiums on labour will increase dramatically. The tax/transfer system
>will be increasingly unable to reduce inequality, because skilled labour
>can migrate to avoid tax recovery of tertiary education subsidies and
>taxation for redistribution. After tax/transfer inequality within
>countries will grow rapidly, while the inequality of all individuals
>within the free migration area falls. Europe will evolve into the the
>most free market area in the world, ad globalisation proceeds apace and
>the welfare state withers. Already Ireland has reduced its government
>expenditure from 50% GDP to about 27% GDP this year and its public debt
>from over 100% GDP to less than 40% GDP (not to mention its company tax
>rate of 20%, heading towards 12.5% by 2003 for all companies). Labour
>taxation, while high, is falling. Ireland is now the world's third
>freest economy after Hong Kong and Singapore. Although political changes
>in Europe will be slow, the forces are there towards significant tax
>reductions and restraint of government expenditure. There is a lot of
>room for top income tax rates to be slashed and labour markets
>liberalised, and the forces for these will prove great under free
>migration and intensifying financial and capital market globalisation.
>
>David Hillary
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