Commentary

Global Greed Screed

The European Commission and the OECD (Organization for Economic Cooperation and Development based in Paris) are reprimanding and threatening several political and economic entities with blacklisting or other sanctions because of their economic policies. You are probably thinking they are going after Fidel Castro of Cuba, Hugo Chavez of Venezuela, or the rulers of several African countries — all of whom have managed to greatly reduce the standard of living and liberties of their people while increasing misery and poverty.

No way. Instead, these European political leaders and bureaucrats have declared war on the political leaders and statesmen who brought their people record prosperity and economic opportunity, and upheld the rule of law and liberty.

According to new data just released by the World Bank, the six economies that have the highest per capita income (on a purchasing power parity basis) are: Luxembourg, Liechtenstein, the United States, Bermuda, Switzerland, and the Cayman Islands. These six entities are all free-market democracies. They are all characterized by providing a high degree of economic freedom and personal liberty for their people. They all provide strong protections for private property and have low levels of corruption, honest and independent judicial systems, relatively small black markets, and very low levels of poverty.

In a rational world, you would expect other countries to applaud and try to emulate the success of the “top six.” Unfortunately, we live in a world of envy, corruption, and intellectual dishonesty. As a result, the “top six” are all under attack for engaging in the newly invented and oxymoronic “sin” of “unfair tax competition.” Their crime, in the eyes of the international bureaucratic class, is that even though they have provided great prosperity and opportunity for their citizens, they have done so without the excessive taxation of the French and some of the other “old European” nations.

As most people would expect, many of the citizens of “old Europe” have been moving their savings out of their home countries and investing in the “top six,” where investments are better protected and taxed less rapaciously. Citizens of France and other countries of “old Europe” are merely acting rationally to protect their property from tax confiscation.

This has caused the European political establishment to engage in an irrational and destructive jealous rage by demanding that the “top six” raise their tax rates, share taxpayer information with corrupt governments, and stop providing safe harbor to their runaway tax slaves.

If the “top six” acquiesce to these demands, they will lower the standard of living of their own citizens. Of course, the European bureaucrats understand this very well. Their attitude is if we cannot be as rich as the “top six,” then let’s drag them down to our level or below.

Even when members of “old Europe” try to move in the right direction by reducing their tax rates, they are quickly attacked by their own economic statists.

For example, on June 24, German Chancellor Gerhard Schroeder received a rebuke from the European Commission over his plan to bring forward tax cuts. The fact that Germany is in recession and its tax rates are far above the growth and revenue maximizing rates appeared to be of no importance to the high tax-loving European Commission. Several years ago, the EU censured high-growth Ireland for having “too low tax rates.”

Belgium, a member of the “old Europe” club, has proclaimed its unilateral right to try any person who has allegedly committed war crimes anywhere in the world. As a result, the Belgian courts have pursued suits against former President George H. W. Bush, Secretary of State Colin Powell, Vice President Dick Cheney, and Gen. Tommy Franks.

Since gross economic mismanagement also results in excess deaths (higher infant mortality, shortened life expectancy, etc. — the positive relationship between level of income and personal well being has been extensively documented), I suggest that economic mismanagement be added to the list of war crimes. Fidel Castro should be indicted under both the old and new definitions. Hugo Chavez would also be a likely candidate.

Those politicians who lead their countries to years of below world average growth rates, such as the leaders of Japan, France and Germany, should be put on the warning list, along with the faceless bureaucrats at some of the multinational organizations like the OECD who peddle economic nonsense like “harmful tax competition” (representatives of the U.S. Treasury Department who consort with such organizations ought not to be excluded).

Several years ago, New Zealand had a law that if the members of their central bank did not keep inflation under a proscribed level, they would lose their jobs. Using the Belgium criteria that anyone can be a war criminal, why not criminalize the behavior of central bankers whose policies result in sustained inflation or deflation (after all, didn’t we have a “war” on inflation a couple of decades ago)?

The easiest way to improve global economic policy making might be to define a “war criminal” as any government official from any country who demands that another country, with higher per capita income, increase its taxes or regulations. I suggest the politicians in the “top six” consider passing a law defining an “economic war criminal” and then make a Belgian-like claim of “universal jurisdiction.” I have already started preparing my list of suitable indictees.

Richard W. Rahn is an adjunct scholar of the Cato Institute.