The horizon is not so far as we can see, but as far as we can imagine

The Decline Of the European Garden

A while back EU foreign-policy chief Josep Borrell said “Europe is a garden.” He was fairly widely attacked, but I agree. Some parts are much less of a garden, but Europe is a garden.

However, Europe’s status as a garden is based on factors which are no longer true:

1) Vast military superiority.

2) Vast productive superiority

3) Vast technological superiority at producing and fighting.

This needs some unpacking. Prosperity is just how much goods and services you have. If a society has relatively low inequality, and enough goods and services, almost everyone may share in the prosperity, if not only some part of the society may be prosperous, and those will obviously be the people who have the most power within the society, though that doesn’t mean the richest people are the most powerful—the powerful people may just be prosperous enough. Nancy Pelosi is worth about $120 million. You and I will never see such money, absent hyperinflation, but she isn’t Jeff Bezos rich. Still, she and almost all members of Congress are inside the charmed circle.

To be prosperous, then, you have to create rather a lot of goods and services. If you don’t bother with radical inequality, you may need less of certain kinds and more of other kinds: comparing the 60s to the 2010s is instructive. Not a lot of private jets or mega-yachts and rent and houses were cheap, but there were a lot less luxury condos.

Now roughly speaking, there are three inputs to producing goods and services: labor, capital (meant here as machines and buildings and so on) resources. Any economics 101 textbook will tell you so, and it’s one of the few things in an economics 101 textbook that isn’t wrong.

Europe’s not a large place compared to the rest of the world. For most of its history, certainly after the collapse of the Roman Empire (and really a couple centuries before) it was a primitive and very nasty backwater. But starting in the late 1400s or so the Europeans became very good at warfare and seafaring. Having spent a millenium fighting each like cocks in a pit, they had an advantage over pretty much everyone else (and where they didn’t yet, like China, they walked small.) Along with spreading disease to the New World, killing upwards of 90% of the population) they were able to grab a lot more resources than they had before.

Understand that at this point Europe does not have a productive advantage: China and even India are much more productive. Before the European invasion, India has more industry than England.

But they have a military advantage, multiplied by plague and are able to grab much of two additional contents, the Americas, and then get (thru coercion and commerce, African slaves were mostly sold by their compatriots) slaves and peasants made out of the Americas people to labor for them, while colonizing with Europeans at the same time.

Then, in the 19th century, when England was the first country to properly industrialize, they exploded, conquering or subjugating essentially everyone. Even places which weren’t formally conquered, like Thailand or much of China (the century of humiliation) knew their place.

The world’s resources belong to Europe. There was that upstart semi-European colony the US and the peripheral semi-European Russians, but basically Europe, Russia and the US controlled the majority of the world’s resources, even where they didn’t rule. The world sent them raw goods, they sent back manufactured goods and “provided” services like government.

Then the Europeans fought two internal wars, and were divided up by the corner powers: the USSR and America. And yes, that is what happened. European countries in the West and East were (and still are) satrapies. Nominally independent, but not really, and operations like Gladio, which ensured governments wound up in charge that were friendly to the US, or the Red Army crushing Eastern European independence movements make that clear.

The USSR collapse, the Eastern European countries mostly joined the EU, and the EU grew in power, but Europe still remained a satrapy, pointed almost entirely now towards America. From this point of view, the Ukraine war is nothing but a conflict over whether Ukraine will be a Russia or American satrapy, as its desperate desire to join NAT and the EU indicate.

Europe had a window, especially in the 2000s where it could have become truly independent, but it chose not to and during the Ukraine war it has so far, with some grumbles, subjugated itself further to America. No longer willing to buy energy from Russia it has become vastly dependent on the US. Problem is that that Americans charge Europeans four times as much as the Russians did for natural gas. As a consequences, a great deal of industry is planning to move out of Europe, because they aren’t viable. Much of it is going to America, helping America re-industrialize by sucking away industry from its satrapies.

Likewise, as Europe had not built a large army and was dependent on American military manufacturing or military tech and manufacturing licensed from the US, to support Ukraine it needed America assistance. (US whining aside, not having to maintain a large military is one of the primary advantages of being a satrapy, and smart overlords don’t really want their satrapies to be too strong militarily.)

Going back to prosperity, you are prosperous when you have more stuff. Europe’s problem is that it’s gone from controlling the majority of the world’s resources, to having a lot less resources than it needs. It imports more than half of its energy requirements, for example, and it doesn’t have the minerals and rare resources it needs. For a long time, because of a remaining technological need, it was still more productive than most of the rest of the World and that meant nations had to send it their resources and get them back in completed form, and as satrapies of the overlord, they still received preferential access thru the methods of coercion used by the American empire.

And so, because for so long Europe had access to most of the world’s resources at preferential rates (directly, or in the American era because they were the favoured satrapies) and had among the highest tech and thus were highly productive, they were able to create their “garden.” And an amazing and beautiful garden it was, and to some extent remains.

But, now that they are just satrapies, without colonial empires and with limited ability coerce other nations if the US doesn’t help them (France, really, is the only one to still maintain a decent unilateral ability to kick around a few minor African nations), their access to resources is based on the strength and generosity of their satrap.

This worked pretty well for a long time, but then there was the rise of China. China became the world’s foremost manufacturing power, caught up in almost all technologies (chips and aviation are being fought over so fiercely because they are almost the last bastions where China has not caught up), and nations had options: they didn’t have to sell thier raw resources to the US, Europe and to countries hosting outsourced and offshored Western industry. They could go to China. And China offered and offers cheaper loans, cheaper good and builds ports, railroads, hospital, power generators and even entire cities and does it for far less than the West.

The American empire has involved a lot of military coercion, but the primary coercion was economic. Up until the nineties it was usually of the “you can only get it from us” variety, and since the 90s it has been “we’ll lock you out if you don’t cooperate”, but all of it was based on “you have no choice. Only we can really make the things you need, plus you can’t defend yourself against us, and we have so much money we can buy a faction of your elite to coup your government if you don’t cooperate.”

Europe rode piggyback on that, and after some lessons after WWII understood that if they didn’t want to be couped, they would make sure their governments were acceptable the US. Only France ever dared significantly buck the system and even they eventually came back into the fold, albeit muttering curses under their breath.

Now, let’s talk about Europe and Russia. Russia was providing energy cheaper than Europe can get it anywhere else. A lot of it, and had Nord Stream 2 come on line, they would have been able to double it, which would have made Europe’s energy bill even cheaper and most importantly, Germany’s, since Germany is the productive and industrial powerhouse of Europe.

This is why German politicians especially, before the war, resisted US efforts to shut down Nord Stream 1 and 2 and its why the pipelines were sabotaged (probably by the US, though the formal investigations will never say that.)

Even if Europe wanted to remain an American satrapy, and all indications are that current EU elites do want to, they wanted to reduce the cost of important resources and assure access to them because Russia, again, was willing to sell them for a lot less than anyone else and way less than the US was.

This made industry viable. It is no longer a world where people have to buy from the US/Europe/Japan/Taiwan/hangers on because they (we) are the only game in town. They can buy from China, and China is cheaper. To compete, Europe had to keep its costs in control and in some areas offer better quality or some of the few goods that China can’t create (often to China, as it happens.)

Without trade, Europe, which no longer has coercive ability, cannot get what it needs. The Euro is not the dollar. People take it because they expect they can do business with the EU at some point. It’s relatively liquid, but it is only secondarily backed up by the US military.

The European garden was based on having access to more resources and to being more productive than all or most of the rest of the world with those resources. This was based on having a tech and military lead, allowing for coercion. After WWII it was based on “we are the favored satraps of the US empire and still have a tech and productive lead so we have access to the resources.”

Bu that is going away. The tech lead is almost gone. The productive lead is gone in most industries and the access to resources is declining, because China can now make better offers in most cases. Now add in refusing to buy cheap Russian energy and minerals and replacing them with more expensive substitutes, when substitutes can be found at all, and consider the European future.

Europe doesn’t have enough resources, and doesn’t have a productive or technological advantage significant enough to maintain its “garden” in the face of the rise of China. The trade alliance between Europe/Germany and Russia was an attempt to keep European industry viable by keeping costs down.

At this point, Europe is in a race where they must either be cheaper (by being more productive) or have an absolute advantage (you can’t get this from anyone else, or at least not from China), in order to maintain their industrial base. Without cheap Russian energy and minerals, this is going to be a lot harder.

So then, you may ask, what about moving to renewables.

Well, they will work to some extent but they still require resources, just not as much fuel. Europe recently sanctioned imports from Xinjiang in China for human rights reasons. Turns out most of the silica required for solar panels comes from there. Then, of course, there is the refusal to use nuclear power, which is required to make renewables work by providing baseline power. In the middle of a crisis where German industry is fleeing to the US because of high energy prices, Germany will not turn back on its nuclear reactors for even a few years to transition over.

But bottom line, even with renewables, resources are still needed as inputs for industry in order to produce goods and if you don’t have a lot of military or economic coercive power (like the US had and still  has, though it is declining precipitously) that means  you wind up losing your prosperity and becoming like all those countries in African, Asia and Latin America who can never seen to get to developed status.

You “un-develop.” My money is on Britain (soon England) to be the world’s first undeveloped nations.

But the smart money is that over the next few decades, that will be true of much of the EU. Perhaps a few countries in Europe will manage to hang on, but not most.

Happens to everyone eventually. All eras come to an end. The job of modern EU politicians was to keep it going and to make it possible for the next generation to keep it going.

Looks to me like they’re failing.



Week-end Wrap – Political Economy – December 4, 2022


Podcast Interview On US Politics and the Midterms


  1. Willy

    I just saw an old show about late-stage Roman Empire capitalism. While the eastern half was employing many to build imposing walls at its capitol, the west was employing influencers to blame everything on the barbarians. I presume the latter is a standard diversionary excuse for human elites after most of the citizenry has become poor. “Yes, we suck. Yes, we’re too callously spoiled to care (or even be good at much of anything anymore). But look ever there! Barbarians!”

    Western emperor Honorius bought into the anti-barbarian sentiments of the time and assumed that the rightfully pissed off Goth army was so inferior that they’d just magically go away. They of course didn’t, and the rest is history.

    I’m not saying that building walls or employing undocumented Goths as cheap labor might save modern Europe. What I’m saying is: Here we go again. Wealth disparity happens, republics turn into empires, elites blame scapegoats, and a now-inept PTB ignores all the warning signs encouraging collapse.

  2. Purple Library Guy

    I generally agree with this piece when it comes to Europe in particular, and the historical context.

    But in general, I have a disagreement on what is required for a place to be prosperous. You don’t actually have to be “the best” at this and that. You just have to be “good enough” and not have too much free trade. Productivity in general has grown a lot over the years. An average economy that isn’t being kicked in the ‘nads by the IMF et al. would now be productive enough that if it doesn’t happen to be handing huge amounts of its money to the wealthiest, the average output of its citizens is enough that most people would be able to do pretty decently.

  3. Michaelmas

    Ian: “Now roughly speaking, there are four inputs to producing goods and services: labor, capital (meant here as machines and buildings and so on) resources.”

    That’s the first sentence, fifth graf, and I’m guessing you mean the four inputs as ‘labor, capital (as in machines and buildings), land, and natural resources.’ The way it reads now, though, it could be labor and capital resources (as in machines and buildings), which is two inputs; or else labor and capital (as in machines and buildings) and (natural) resources, which is three.

    Ian: “… in the 19th century, when England was the first country to properly industrialize, they exploded, conquering or subjugating essentially everyone.”

    When they industrialize slaughter the mid-19th century via the machine gun is when it really gets going. Around 1850, vast portions of Africa’s interior are still unmapped by the European powers; by 1900, everywhere in Africa is a European colony except Ethiopia and, as Hillaire-Belloc wrote, it’s because:

    Whatever happens, we have got the Maxim gun,
    And they have not.

    A worthwhile short book (if you haven’t read it is THE SOCIAL HISTORY OF THE MACHINE GUN by John Ellis

    Ian: “You “un-develop.” My money is on Britain (soon England) to be the world’s first undeveloped nations.”

    I just moved to Notting Hill in London, and it doesn’t look that way while you’re walking around in it. Of course, it wouldn’t, you may say. Of course, too, it’s London. We will see.

  4. someofparts

    Well, as far as I can tell, this undeveloping country I am living in is the global epicenter of fascism and predatory colonialism. These systems need to be defeated decisively, once and for all, and the world will be better off once that happens. It is nothing to look forward to for those of us who will suffer the consequences of our own demise. But I would also have to note that at this point, after decades of watching everything/everybody I ever cared about get ground down by the greedy, myopic PTB, I have lost the power to care about, to have hope for, this country. Maybe it is just part of the process that as a country digs its own grave, the citizens of the place stop being able to care about their own country anymore, because everything they once loved about it has already been destroyed.

  5. VietnamVet

    USA and Canada are about to be “un-developed” too if they keep following in their UK mentor’s footsteps.

    Tar sands and fracked shale oil made North America the #1 petroleum producer. But when the actual costs of production kick in and scarcity hits like it just did to Europe (without cheap Russian natural gas), inflation will skyrocket into Zimbabwe and Weimar Republic levels where wheelbarrows of cash will be needed to buy food without electricity to run the checkouts.

    The current western exploitation regime is simply incapable of sharing or rationing. Actually, Russia and USA are similar outsider empires both totally corrupted by their oligarchs. This probably explains the animosity between them besides the West needing Russia’s cheap energy to keep what is left of their industry running.

    Secretary of State Tony Blinken has hinted that Russia can keep Crimea. Perhaps, someone whispered to him that the Turks, French, English, Germans, and Ukrainians were in possession of Crimea but Russia keeps regaining control. If human beings could learn to share and build strong borders, an Armistice like Korea could be signed and the land conquered east of the Dnieper River since February 24th demilitarized.

    Peace and Prosperity go together.

  6. Trinity

    “I have a disagreement on what is required for a place to be prosperous.”

    I disagree in general terms about “prosperity” itself (“successful only in material terms”). It defines the world yet again in strictly economic terms (only money = happiness! aka Buy, baby, buy!) when there is plenty of evidence that we are actually much happier with less “stuff”. I can’t cite the research, but the old saw goes: the more you own, the more your things own you. And truly the rich seem miserable, which I would definitely assume anyway because they are also addicts. There is not much chance of baseline happiness when under the thrall of an addiction.

    Also want to add that it is Europe that diverged from the rest of the world in terms of its ongoing brutal insanity and extremely poor treatment of both their own poor and non-whites. Also in its deliberate choices that caused many, many catastrophes, wars, calamities, etc., all in the name of greed. Yes, other skin colors can and do exhibit brutal treatment of civilians, but not at the same scale, in both space and time. That this insanity gene (or whatever it is) was exported to all their colonies is also a given. And here we are.

    I cannot gather even a smidgeon of sympathy for Europe’s leaders. Or US leaders, for that matter.

  7. Paul

    Hi Ian,

    Great summary.

    Only thing that baffles me is your view that the UK will be the first to go down. Have you not seen the Sunak/Biden deal on US LNG.

    UK also has offshore wind in the North Sea, historically good relations with the gas and oil rich Gulf States and the capacity, just, to impose its will on ex-colonies in Africa that are resource rich.

    Zeihan is spot on in this regard. The only countries in Europe that will thrive in the future are France, Poland and the UK. The rest are buggered.

  8. GrimJim

    The entire wealth of the UK is in International Finance (rent and other loot from productive countries) in The City. When the world breaks into two or three factions, The City will no longer be needed, will wither and die, and whither goes The City goes England. Because at that point there won’t be a UK left, it will be England and the Channel Isles and maybe Cornwall…

  9. Astrid

    The European garden was/is watered with the blood of hundreds of millions, including plenty of poor white peasants. The current European leadership was repeatedly offered the chance to peacefully maintain their garden on affordable terms by joining the rest of Eurasia as partners. They refused and now they will shrivel and die.

    America doesn’t even have a garden. Just strip malls and tract housing. There’s plenty of beauty left in the unoccupied parts, but the manmade stuff is remarkably ugly and impractical. Would anyone else mourn its passing?

  10. Ian Welsh

    Precisely GrimJim. And leaving the EU also damaged the City, badly.

    If you were going to leave the EU, it would have to be so that you could do proper industrial policy again, but there was no way the Conservatives would do that.

  11. Paul

    Not correct. City doing fine, just look at the numbers. Jobs in the City of London are quite stable since Brexit.

    I work in financial services and the UK has simply diversified out of the EU.

    As for Scotland we won’t allow it to go independent. Northern Ireland doesn’t matter if it joined the republic (its a loss earner for the taxpayer) and there is no serious Welsh independence movement.

    UK has its challenges for sure but you got this one wrong Ian.

  12. Ché Pasa

    Wither and die, wither and die, wither and die… we see these terms repeated over and over almost like mantras to describe the future of the present world order, the Europe to come, the UK’s bleak fortunes, the US in decline, etc.

    And there’s an element of truth in it. Parts of the US have long since withered and died, and revival is hard, nigh impossible in most of those dead zones. Sure enough, Britain has gone through much the same since before Brexit and continuing. Europe, of course, is realigning on the basis of whatever the Brussels bureaucrats think will transpire within the next few months or decades.

    “The Garden” is being replowed, parts replanted, parts left fallow for now, maybe for always. If whispered reports are true, then much of Ukraine’s population is being redistributed throughout Europe, as balance, perhaps, to the millions of Middle Eastern refugees brought in over the last few decades. Ukraine is essentially being depopulated, and possibly won’t be repopulated any time soon, if ever.

    Those who used to live there will wind up somewhere else, and in time they won’t care.

    Parts of The Garden will be dug up, but not all of it. The European/UK/US prosperity will continue in fewer and fewer hands. The Global Realignment will impoverish parts of the formerly dominant colonial powers but not all of them. Enrichment of some of the global south and much of the East will accelerate.

    Bad? Different. Most of it will take place slowly enough that many will adapt well enough.
    Many won’t though. We’ve already seen how easy it is to cull millions with nary a backward glance, nary a memory of their existence. So it will continue.

    Is there something we can do? On the material plane, probably not. Grin and bear it. And change our outlook from the inside out. Thankfully, many of the young have already done so. Us old farts, though, may have a difficult time noticing.

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