In Defense–and Against–the Euro

by | Jan 6, 2000

The following letter was sent in reply to John Lewis’ article England, The Euro, and Socialist Europe. We present it followed by John Lewis’ reply. In Defense of the Euro: Mr. Lewis: Painting Germany as a socialist planned economy that is stagnating is inaccurate. Germany had quite a high growth rate last year, namely 2.7%. […]

The following letter was sent in reply to John Lewis’ article England, The Euro, and Socialist Europe. We present it followed by John Lewis’ reply.

In Defense of the Euro:

Mr. Lewis:

Painting Germany as a socialist planned economy that is stagnating is inaccurate. Germany had quite a high growth rate last year, namely 2.7%.

Free market activists should in fact, support the Euro. A global currency would be the ideal, because it allows people to do business anywhere on the earth that they please. Currencies, as you know, are tools of national governments to implement national policy–eliminating the world’s differing currencies would actually lend itself to a more free market.

The reason that London’s markets are ‘booming’ is Euro-skepticism, not because of stagnant markets on the Continent or oppressive taxes.

The taxes in Britain are only slightly more liberal than the taxes in most Continental nations. Europe, also, must not be lumped into one pot, so to speak. The southern nations have dramatically worse economies than the northern ones, and correspondingly less liberal tax policies. Spain, with approximately 20% unemployment, stands out here. The people who believe that the Euro will collapse, and, believe me, there are quite a few, are investing their money in overseas markets rather than domestic ones.

In my opinion, the German stock market, the DAX, has experienced a striking series of booms in the past months due to the recent export explosions caused by the low Euro. The Mark overvalued. Now, the Euro is somewhat equalizing that, and the German economy is doing better than it has in any year of the past two decades.

The taxation of overseas bank accounts, that you are decrying as ‘socialist’, is actually representative the efforts of the various European governments to establish a unified credit policy and eliminate tax havens.

The United States demands of its citizens that they pay interest tax on interest accrued in overseas banking accounts. After this fashion, the various European governments are also demanding that people pay interest taxes on accounts held in other European countries.

While I agree that interest income should not be taxed, the fact that it is in almost every country lends me to believe that you think that every country is socialist.

The countries that are not charging interest income, or doing so at strikingly lower rates, in this case most prominently Luxembourg, are doing so (or rather, not doing so) because by establishing themselves as a tax haven, they can more or less be a thorn in the side of the larger nations and drink the blood of their victims. The smaller nations subsist off this. Larger nations do not have that option. Surely, you can see the problem. The smaller nations must be forced into ‘honest’ employments, or all interest taxation across the board, in every country in the world, must be eliminated.

Germany is not a ‘People’s Republic’ by any means, and that, comparatively to the United States, has much more liberal laws on the rich, specifically a lower taxation on the highest income bracket than in the USA.As an item of interest, the lowest income bracket’s tax rate is lower in America than it is in Germany.

Sincerely,
Herr Elfers Germany

John Lewis replies from England to Herr Elfers:

The European states, led by Germany, want England to implement a 20% tax on savings deposited into the London bond markets. This is explicitly intended to close off alternatives for businesses wishing to find more freedom than they have where they are.

Now of course every country in the world has socialist policies of various kinds, including the United States. Tony Blair and Bill Clinton are certainly no lovers of freedom. What businesses and individuals look for is the most freedom they can find.

Lovers of freedom look at this situation and want the more slave-like countries to adopt freer policies. Socialists look at the same situation and want the freer countries to adopt more slave-like policies. That is what this issue dramatizes.

On Herr Elfers’ terms, a freer location is “drinking the blood” of the home country. In fact, it is the tax proposal that is blatant blood-sucking, as every honest man recognizes. This is why honest men are leaving.

A global centrally-managed currency would be a distinct disadvantage to everyone precisely because it is global. [There is no way to escape!] The socialists want such a global currency, so they can eliminate freer alternatives; they can then call it “a more free market.” No lover of freedom would desire such an omnipresent economic dictatorship, or call it “free.”

Different currencies have never been a deterrent to free trade; if they were, America never would have become a trade leader. Government coercion and extortion have been, and always will be, the only enemies of freedom. This is why millions fled to America, and America became that leader.

Lovers of freedom don’t care how many currencies there are, only that they are honest currencies. Socialists want one currency, as they want one world, so they can rule it. This is the meaning of “the efforts of the various European governments to establish a unified credit policy and eliminate tax havens.”

Herr Elfers’ claims that Euro-skepticism, and fear of collapse, are leading people out of Europe. I have more respect for people’s understanding. I think they understand the issues too well, and that is why they are fleeing. I think the British people in particular understand this issue, and that’s why they do not want to give up either political sovereignty or the pound. The socialists want to warp that understanding by eliminating the very sight of an alternative. Such alternatives Herr Elfers calls “thorns in the side” of other countries. In other words, the sight of freedom is a wound to the lovers of socialism.

Now here is a question to those who think that a “unified credit policy” and the elimination of “tax havens” in order to close off avenues of escape for honest businesses are good. The only reason the London bond markets are so enticing is because the taxes and regulations are lower. So why not lower European taxes and eliminate regulations? The answer to this is easy: it would mean giving up power, and that is one thing no socialist will ever willingly do.

And if things are so peachy in Europe, why the obsession with getting England to join the socialist party? The answer here is also a no-brainer: Britain is prosperous, and the socialists want to rob it.

John Lewis England

John David Lewis (website) is a Visiting Professor of Political Science, Duke University. He has been a Senior Research Scholar in History and Classics at the Social Philosophy and Policy Center, and an Anthem Fellow.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

Have a comment?

Post your response in our Capitalism Community on X.

Related articles

Are the Democrats betraying Israel?

Are the Democrats betraying Israel?

Both Biden and his predecessor, President Barack Obama, promised that they had Israel’s back, but it now appears that they are painting a target on its back at a time of its greatest vulnerability.

No spam. Unsubscribe anytime.

Pin It on Pinterest