Longtime adjunct Prof. Scott Benjamin reports below on the visit of former U.S. Commerce Department official Steve Arlinghaus to PS 104: World Governments, Cultures, and Economies. Thanks much for sharing this visit with us!
Steve Arlinghaus On The European Union
By Scott Benjamin
Former U.S. Commerce Department official Steve Arlinghaus said “today It is hard to imagine how awful things were in Europe in 1945, ’46 and ’47” after that part of the world had been devastated from the fighting during World War II.
“Europe had been bombed for four years,” he said during a talk to a section of PS 104: World Governments, Economies and Cultures at Western Connecticut State University in Danbury on Feb. 28, 2011.
“There were m any displaced persons,” Mr. Alringhaus added. “They also had two of the worst winters in their history right after World War II.”
“Europe now has a standard of living that is similar to that in the United States,” Mr. Arlinghaus said regarding the reconstruction that ensued in the years following the end of World War II.
He said part of that is due to the lack of conflict between some of the powers in Europe.
Mr. Arlinghaus said the years of 1870, 1914 and 1939 are important in understanding how the European Union (E.U.) became established.
He said on those respective dates, Germany and France began fighting in the Franco-Prussian War, World War I and World War II.
“The initial creation of the E.U. was to stop another war between France and Germany,” said Mr. Arlinghaus, who worked for the Commerce Department in France and Belgium for many years and now teaches Economics part-time at Eastern Connecticut State University in Willimantic.
“The great powers are no longer fighting,” he said. “It started what has been the longest period of peace in European history.”
Mr. Arlinghaus said what started as two countries seeking an agreement in trade and other areas has now grown to a group of 27 nations, 12 of which have joined within the last seven years.
He said what was known as the European Common Market in the 1950s and 1960s has become a larger unified market that includes both small and large countries, some of which were formerly part of the Communist bloc that had been controlled for years by the former Soviet Union.
Mr. Arlinghaus said that Croatia is now negotiating to enter the E.U. and that Serbia, Albania and Bosnia will probably join at some point.
In explaining some of the provisions in the E.U., he said, for example, a citizen in France can now get work in England without having to submit working papers.
Mr. Arlinghaus said the laws for the European Union come from the European Commission, which also enforces compliance of those laws.
He said that over time there was a movement to create a common currency, and in 1999 11 of the 15 countries that were in the European Union at that point agreed to use the Euro. He said that currently 16 of the 27 members are using the Euro, which is now valued above the American dollar.
Mr. Arlinghaus said the adoption of the Euro has made it easier for tourists who can use the same currency as they travel from one European country to another.
However, he said it also has created problems for countries, such as Greece, who no longer have their own currency and can’t “inflate their way” out of a recession.
Mr. Arlinghaus said that if a country creates an inflationary spiral it usually can pay down at least some of its debt as wages go higher and many of the residents pay higher taxes.
He said at times that has happened in the United States, indicating that a surge in wages allowed his brother-in-law to pay off his mortgage ahead of schedule.
Mr. Arlinghaus said the development of the European Union and the less-encompassing North American Free Trade Agreement (NAFTA) between Canada, the United States and Mexico are examples of multi-country pacts that enhance the economies of the members.
He said that, for example, Texas billionaire Ross Perot complained during his independent run for president in 1992 that NAFTA was going to create a large sucking sound in which America would lose jobs.
Mr. Arlinghaus said that didn’t happen, noting that the United States went through the longest economic expansion in its 235-year history in the late 1990s during the years immediately after NAFTA took effect.
“If anything, Mexico had to change more than the United States did,” he said. “The American market already was open to Mexico and NAFTA made Mexico’s market was much more open to the United States.”
On another topic, Mr. Arlinghaus, said that, generally speaking, Europeans are more likely than Americans to choose leisure over work.
He said that is largely due to the tax rates, which become more prohibitive on higher wage earners. He said that as a result of that there is less incentive to work additional hours or seek some of the higher-wage jobs.
Mr. Arlinghaus said that as a result of that there often is less of a spirit of enterprise in the European countries than in the United States.
He said that when the Commerce Department sent him to California during the early 1990s, when the United States was in a recession, he found, for example, that some of the people who had lost their jobs in the aerospace industry had immediately started t heir own consulting businesses.