Europe’s Philosophy of Failure
By: Stefan Theil
Foreign Policy | Thursday, January 17, 2008
In France and Germany, students are being forced to
undergo a dangerous indoctrination. Taught that economic principles
such as capitalism, free markets, and entrepreneurship are savage,
unhealthy, and immoral, these children are raised on a diet of
prejudice and bias. Rooting it out may determine whether Europe’s economies prosper or continue to be left behind.
BOB DAHM FOR FP
What a country teaches its young people reflects its bedrock national
beliefs. Schools hand down a society’s historical narrative to the next
generation. There has been a great deal of debate over the ways in
which this historical ideology is passed on—over Japanese textbooks
that downplay the Nanjing Massacre, Palestinian textbooks that feature
maps without Israel, and new Russian guidelines that require teachers
to portray Stalinism more favorably. Yet there has been almost no
analysis of how countries teach economics, even though the subject is
equally crucial in shaping the collective identity that drives foreign
and domestic policies.
Just as schools teach a historical narrative, they also pass on
“truths” about capitalism, the welfare state, and other economic
principles that a society considers self-evident. In both France and
Germany, for instance, schools have helped ingrain a serious aversion
to capitalism. In one 2005 poll, just 36 percent of French citizens
said they supported the free-enterprise system, the only one of 22
countries polled that showed minority support for this cornerstone of
global commerce. In Germany, meanwhile, support for socialist ideals is
running at all-time highs—47 percent in 2007 versus 36 percent in 1991.
It’s tempting to dismiss these attitudes as being little more than
punch lines to cocktail party jokes. But their impact is sadly and
seriously self-destructive. In Germany, unemployment is finally falling
after years at Depression-era levels, thanks in no small part to
welfare reforms that in 2005 pressured Germans on the public dole to
take up jobs. Yet there is near consensus among Germans that, despite
this happy outcome, tinkering with the welfare state went far beyond
what is permissible. Chancellor Angela Merkel, once heralded as
Germany’s own Margaret Thatcher, has all but abandoned her plans to
continue free-market reforms. She has instead imposed a new “rich
people tax,” has tightened labor-market rules, and has promised renewed
efforts to “regulate” globalization. Meanwhile, two in three Germans
say they support at least some of the voodoo-economic,
roll-back-the-reforms platform of a noisy new antiglobalization
political party called Die Linke (The Left), founded by former East
German communists and Western left-wing populists.
Many of these popular attitudes can be traced to state-mandated
curricula in schools. It is there that economic lessons are taught that
diverge substantially from the market-based principles on which the
Western model is based. The phenomenon may hardly be unique to Europe,
but in few places is it more obvious than in France and Germany. A
biased view of economics feeds into many of the world’s most vexing
problems, from the growth of populism to the global rise of
anti-American, anti-capitalist attitudes.
economics à la carte
BOB DAHM FOR FP
“Economic growth imposes a hectic form of life, producing overwork,
stress, nervous depression, cardiovascular disease and, according to
some, even the development of cancer,” asserts the three-volume Histoire du XXe siècle,
a set of texts memorized by countless French high school students as
they prepare for entrance exams to Sciences Po and other prestigious
French universities. The past 20 years have “doubled wealth, doubled
unemployment, poverty, and exclusion, whose ill effects constitute the
background for a profound social malaise,” the text continues. Because
the 21st century begins with “an awareness of the limits to growth and
the risks posed to humanity [by economic growth],” any future
prosperity “depends on the regulation of capitalism on a planetary
scale.” Capitalism itself is described at various points in the text as
“brutal,” “savage,” “neoliberal,” and “American.” This agitprop was
published in 2005, not in 1972.
When French students are not getting this kind of wildly biased
commentary on the destruction wreaked by capitalism, they are learning
that economic progress is also the root cause of social ills. For
example, a one-year high school course on the inner workings of an
economy developed by the French Education Ministry called Sciences Economiques et Sociales,
spends two thirds of its time discussing the sociopolitical fallout of
economic activity. Chapter and section headings include “Social
Cleavages and Inequality,” “Social Mobilization and Conflict,” “Poverty
and Exclusion,” and “Globalization and Regulation.” The ministry
mandates that students learn “worldwide regulation as a response” to
globalization. Only one third of the course is about companies and
markets, and even those bits include extensive sections on unions,
government economic policy, the limits of markets, and the dangers of
growth. The overall message is that economic activity has countless
undesirable effects from which citizens must be protected.
No wonder, then, that the French default attitude is to be suspicious
of market forces and private entrepreneurship, not to mention any
policies that would strengthen them. Start-ups, Histoire du XXe siècle
tells its students, are “audacious enterprises” with “ill-defined
prospects.” Then it links entrepreneurs with the tech bubble, the
Nasdaq crash, and mass layoffs across the economy. (Think “creative
destruction” without the “creative.”) In one widely used text, a
section on technology and innovation does not mention a single
entrepreneur or company. Instead, students read a lengthy treatise on
whether technological progress destroys jobs. In another textbook,
students actually meet a French entrepreneur who invented a new tool to
open oysters. But the quirky anecdote is followed by a long-winded
debate over the degree to which the modern workplace is organized along
the lines imagined by Frederick Taylor, the father of modern scientific
management theory. And just in case they missed it in history class,
students are reminded that “cultural globalization” leads to violence
and armed resistance, ultimately necessitating a new system of global
governance.
This is a world apart from what American high school students learn. In
the United States, where fewer than half of high school students take
an economics course, most classes are based on straightforward,
classical economics. In Texas, the state-prescribed curriculum requires
that the positive contribution of entrepreneurs to the local economy be
taught. The state of New York, meanwhile, has coordinated its
curriculum with entrepreneurship-promoting youth groups such as Junior
Achievement, as well as with economists at the Federal Reserve. Do
American schools encourage students to follow in the footsteps of Bill
Gates or become ardent fans of globalization? Not really. But they
certainly aren’t filling students with negative preconceptions and
suspicions about businesses and the people who run them. Nor do they
obsess about the negative side effects and dangers of economic activity
the way French textbooks do.
French students, on the other hand, do not learn economics so much as a very specific, highly biased discourse about
economics. When they graduate, they may not know much about supply and
demand, or about the workings of a corporation. Instead, they will
likely know inside-out the evils of “la McDonaldisation du monde”
and the benefits of a “Tobin tax” on the movement of global capital.
This kind of anticapitalist, antiglobalization discourse isn’t just the
product of a few aging 1968ers writing for Le Monde Diplomatique; it is required learning in today’s French schools.
learning to love the dole
BOB DAHM FOR FP
Germans teach their young people a similar economic narrative, with a
slightly different emphasis. The focus is on instilling the corporatist
and collectivist traditions of the German system. Although each of
Germany’s 16 states sets its own education requirements, nearly all
teach through the lens of workplace conflict between employer and
employee, the central battle being over wages and work rules. If
there’s one unifying characteristic of German textbooks, it’s the
tremendous emphasis on group interests, the traditional
social-democratic division of the universe into capital and labor,
employer and employee, boss and worker. Textbooks teach the minutiae of
employer-employee relations, workplace conflict, collective bargaining,
unions, strikes, and worker protection. Even a cursory look at the
country’s textbooks shows that many are written from the perspective of
a future employee with a union contract. Bosses and company owners show
up in caricatures and illustrations as idle, cigar-smoking plutocrats,
sometimes linked to child labor, Internet fraud, cell-phone addiction,
alcoholism, and, of course, undeserved layoffs. The successful, modern
entrepreneur is virtually nowhere to be found.
German students will be well-versed in many subjects upon graduation;
one topic they will know particularly well is their rights as welfare
recipients. One 10th-grade social studies text titled FAKT
has a chapter on “What to do against unemployment.” Instead of
describing how companies might create jobs, the section explains how
those without jobs can organize into self-help groups and join weekly
anti-reform protests “in the tradition of the East German Monday
demonstrations” (which in 1989 helped topple the communist
dictatorship). The not-so-subtle subtext? Jobs are a right to be
demanded from the government. The same chapter also details various
welfare programs, explains how employers use the threat of layoffs as a
tactic to cut pay, and concludes with a long excerpt from the platform
of the German Union Federation, including the 30-hour work week,
retirement at age 60, and redistribution of the work pie by splitting
full-time into part-time jobs. No market alternative is taught. When
fakt presents the reasons for unemployment, it blames computers and
robots. In fact, this is a recurring theme in German textbooks—the
Internet will turn workers into “anonymous code” and kill off
interpersonal communication.
Equally popular in Germany today are student workbooks on
globalization. One such workbook includes sections headed “The Revival
of Manchester Capitalism,” “The Brazilianization of Europe,” and “The
Return of the Dark Ages.” India and China are successful, the book
explains, because they have large, state-owned sectors and practice
protectionism, while the societies with the freest markets lie in
impoverished sub-Saharan Africa. Like many French and German books,
this text suggests students learn more by contacting the
antiglobalization group Attac, best known for organizing messy protests
at the annual G-8 summits.
One might expect Europeans to view the world through a slightly
left-of-center, social-democratic lens. The surprise is the intensity
and depth of the anti-market bias being taught in Europe’s schools.
Students learn that private companies destroy jobs while government
policy creates them. Employers exploit while the state protects. Free
markets offer chaos while government regulation brings order.
Globalization is destructive, if not catastrophic. Business is a
zero-sum game, the source of a litany of modern social problems. Some
enterprising teachers and parents may try to teach an alternative view,
and some books are less ideological than others. But given the biases
inherent in the curricula, this background is unavoidable. It is the
context within which most students develop intellectually. And it’s a
belief system that must eventually appear to be the truth.
can old europe do new tricks?
This bias has tremendous implications that reach far beyond the
domestic political debate in these two countries. These beliefs inform
students’ choices in life. Taught that the free market is a dangerous
wilderness, twice as many Germans as Americans tell pollsters that you
should not start a business if you think it might fail. According to
the European Union’s internal polling, just two in five Germans and
French would like to be their own boss, compared to three in five
Americans. Whereas 8 percent of Americans say they are currently
involved in starting a business, that’s true of only 2 percent of
Germans and 1 percent of the French. Another 28 percent of Americans
are considering starting a business, compared to just 11 percent of the
French and 18 percent of Germans. The loss to Europe’s two largest
economies in terms of jobs, innovation, and economic dynamism is
severe.
Attitudes and mind-sets, it is increasingly being shown, are closely
related to a country’s economic performance. Edmund Phelps, a Columbia
University economist and Nobel laureate, contends that attitudes toward
markets, work, and risk-taking are significantly more powerful in
explaining the variation in countries’ actual economic performance than
the traditional factors upon which economists focus, including social
spending, tax rates, and labor-market regulation. The connection
between capitalism and culture, once famously described by Max Weber,
also helps explain continental Europe’s poor record in entrepreneurship
and innovation. A study by the Massachusetts-based Monitor Group, the
Entrepreneurship Benchmarking Index, looks at nine countries and finds
a powerful correlation between attitudes about economics and actual
corporate performance. The researchers find that attitudes explain 40
percent of the variation in start-up and company growth rates—by far
the strongest correlation of any of the 31 indicators they tested. If
countries such as France and Germany hope to boost entrepreneurship,
innovation, and economic dynamism—as their leaders claim they do—the
most effective way to make that happen may be to use education to boost
the cultural legitimacy of going into business.
The deep anti-market bias that French and Germans continue to teach
challenges the conventional wisdom that it’s just a matter of time,
thanks to the pressures of globalization, before much of the world
agrees upon a supposedly “Western” model of free-market capitalism.
Politicians in democracies cannot long fight the preferences of the
majority of their constituents. So this bias will likely continue to
circumscribe both European elections and policy outcomes. A likely
alternative scenario may be that the changes wrought by globalization
will awaken deeply held resentment against capitalism and, in many
countries from Europe to Latin America, provide a fertile ground for
populists and demagogues, a trend that is already manifesting itself in
the sudden rise of many leftist movements today.
Minimal reforms to the welfare state cost former German Chancellor
Gerhard Schröder his job in 2005. They have also paralyzed modern
German politics. Former communists and disaffected Social Democrats,
together with left-wing Greens, have flocked to Germany’s new leftist
party, whose politics is a distasteful mix of anticapitalist
demagoguery and right-wing xenophobia. Its platform, polls show, is
finding support even among mainstream Germans. A left-leaning majority,
within both the parliament and the public at large, makes the world’s
third-largest economy vulnerable to destructive policies driven by
anticapitalist resentment and fear of globalization. Similar situations
are easily conceivable elsewhere and have already helped bring
populists to power in Latin America. Then there is France, where
President Nicolas Sarkozy promised to “rupture” with the failed
economic policies of the past. He has taken on the country’s public
servants and their famously lavish benefits, but many of his policies
appear to be driven by what he calls “economic patriotism,” which
smacks of old-fashioned industrial protectionism. That’s exactly what
French schoolchildren have long learned is the way the world should
work.
Both the French and German cases show the limits of trying to run
against the grain of deeply held economic ideology. Yet, training the
next generation of citizens to be prejudiced against being enterprising
and productive is equally foolhardy. Fortunately, such widespread
attitudes and the political outcomes they foster aren’t only determined
by tradition and history. They are, to a great extent, the product of
education. If countries like France and Germany hope to get their
nations on a new economic track, they might start paying more attention
to what their kids are learning in the classroom.
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