"By pursuing his own interest [every individual] frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." ~ Adam Smith
What Are They Teaching Them?
Column by Cristian Gherasim.
Exclusive to STR
In France and Germany, students are forced into a dangerous indoctrination. Taught that economic principles such as capitalism, free markets, and entrepreneurship are savage, immoral and unhealthy, these children are raised on prejudice and bias. As they prepare for admission to some of the best European universities, they study from textbooks filled with a Pravda-like philosophy (Pravda was a leading newspaper of the Soviet Union). It’s not that hard to notice how the public school system has turned into a genuine propaganda machine, set on spreading a doctrine of dissent and aversion against capitalist values. No wonder why Europeans are so in love with state-provided social benefits. They became strong believers in a rational economic order, in a sort of concentrated form of economic knowledge that solves collectively the problem of allocating resources. This is the idea behind every welfare state: the mistaken conception of the proper scientific procedure universally applicable, by the state, in every economic situation.
Still, this is not something peculiar to France and Germany alone. But these two countries are among those that benefited most from a liberal-run economy and a market-based system. Now, they seem to have turned a blind eye to what really made them what they are today: leading industrialized countries, ranking as the fourth and fifth largest economies in the world. Their incredible economic growth after the Second World War kick-started only because they benefited from free trade, unhampered financial investments, free movement of capital and innovations. And now these free market principles are perceived as being close to national threats. It seems that classical liberalism went to sleep in these countries. With the State reasserting its monopoly over private enterprises, Europe will continue to lag the US and other emerging regions in productivity. It’s probably a foreseeable outcome for an economic union, led by France and Germany, that prides itself with unconditional state benefits, a heavily subsidized agricultural policy and a vast array of import tariffs. No wonder it came to be known as Fortress Europe.
Getting to the study books I was telling you about in the beginning, I would like to draw on a sample of German and French political and economic writings. The thing that strikes you when reading such texts is the emphasis placed on explaining why capitalism is bad, with little attention to economic theory or what might be viewed as positive consequences of economic competition. Such an example can be found in the revered three-volume Historie du XXe siècle, a set of texts memorized by countless French high school students as they prepare for entrance exams to Science Po and other prestigious French universities. Capitalism itself is described at various points in the text as brutal, savage, and American. It continues by giving a baffling explanation of what economic growth does to the human body: Economic growth imposes a hectic form of life, producing overwork, stress, nervous depression, cardiovascular disease and, according to some, even the development of cancer. It also makes references to trade unions, government economic policies, market regulations. By and large, the message is that economic activity implies a great deal of risks and complications and the state needs to fend off its citizens from such perils. It’s safe to say that, in order to keep on with their art de vivre, Europeans are compliant with the will of the government in limiting the liberty sphere. Individualism and free enterprise are left aside. In fact, there’s a guilt-inducing method by which any increase in private well-being can be attacked as ‘unconscionable greed,’ ‘materialism’ or ‘excessive affluence.’ Profit-making can be attacked as ‘exploitation’ and ‘usury,’ always leading to the conclusion that more resources should be siphoned from the private to the ‘public sector.’
On the other side of the ocean, Americans understands that a free society is ‘a state of affairs in which everybody serves his fellow citizens and is served by them in return.’ But that can only happen if individual property exists. There’s no single society that can survive without private property rights. That’s what keeps a society running: the perpetual exchange of goods and services between owners/consumers. They are the real bosses of this economic system. No state regulations and no economic calculus can replace each individual’s plans for his daily needs. The free man is the best man for this job. And there’re no free men without self-ownership.
The American school system strongly emphasizes the role of entrepreneurs on local economies. Moreover, to encourage maximum uptake and relevance, courses on entrepreneurship for secondary school pupils are adapted to those of programs like Junior Achievement. Poles apart, the French students learn nothing but a highly ideological speech that goes against globalization and free enterprise. They don’t know too much about supply and demand, but they sure can ramble for hours about the McDonaldization of the world and how the capitalists are plotting to take over the entire planet. They are quite happy in keeping their property rights to a minimum in exchange for state-sponsored perks. In fact, they strongly believe that the state should be above all others in regulating and standardizing economic activity.
The Germans are no strangers to this kind of reasoning, either. Their course books offer a vivid description, by illustration and cartoons, of how employers tyrannize their workers. This surreal environment leaves no room for the successful businessman. Even so-called right wing weekly magazines like Der Speigel trumpet the imminent demise of capitalism, blaming Wall Street and unregulated markets for present day economic woes, without saying a word about the real causes: deficit spending, protectionism, central banks’ faulty interventions, and massive bailouts.
German tenth graders are offered insight on how to make the most of social benefits and given advice on pressuring the government whenever they require better paying jobs. Arguing that work is not a collective right, that looking for a job has to happen in a free market is gibberish to them. There’s nothing besides collective bargaining, trade unions and strikes. There’s no encouraging the individual to develop skills that are actually in demand and offer a boost to overall productivity. Again--productivity--a blasphemous notion, bearer of unemployment and capitalist greed that has to be stifled at every cost, say German textbooks. They are taught to despise free trade and hail protectionism. Capital flow is unthinkable without the Tobin tax and the labor market a total chaos without state intervention.
This bias way of giving information has a far reaching impact. There are two aspects to this problem: First, it stifles and muzzles free expression; second, it shapes young minds into thinking that the free market is dangerous left unregulated and that the state can and will cater to everyone’s needs. French and German students are all but convinced that starting their own business can’t be beneficial. They are most keen in finding safer, better paying jobs in the public sector, a paralyzed way of thinking that holds its grip on the whole system. Changing the European welfare system will prove a hard nut to crack. In 2005 in Germany, when politicians tried to reform the social system, citizens voted for leftist and extreme right populist parties that promised higher social spending and less economic risk, opting out from any kind of free-market orientated policies. Under these circumstances, change is highly unlikely as the very men able to turn things around--the decision makers--have their hands tight by an anti-capitalist and anti-globalization collective grudge. If countries like France and Germany hope to place their nations on a different economic path, they should start by paying more attention to what their children learn in school. But they shouldn’t stop there. They should continue by slashing social expenditures together with encouraging entrepreneurship, innovation and private sector development.
 Friedrich Hayek, The use of Knowledge in Society, American Economic Review, XXXV, No4, pp.519-30, Sep.1945
 Friedrich Hayek, The pretence of knowledge, Lecture to the memory of Alfred Nobel, December 11, 1974
 James M Buchanan, Saving the Soul of Classical Liberalism, The Wall Street Journal http://www.independent.org/newsroom/article.asp?id=370
 Murry Rothbard, Anatomy of the State, (Auburn: Ludwig von Mises Institute, 2009), 27
 Ludwig von Mises, Economic Policy. Thoughts for Today and Tomorrow, (Auburn: Ludwig von Mises Institute, 2006), 33
 John Locke, Two treaties of government , (Cambridge: Cambridge University Press, 1988), 244