The Iron Curtain Fell And Socialism Spread To Western Europe

History Is Full Of Irony

No pun intended here! J But it is actually quite remarkable that for some reason the words irony and history almost sound the same in the English language.

Since we know so little about history thanks to government run public education all over the developed world and beyond, we are likely condemned to repeat history, what an irony.

European Socialist Union

It has been my observation for quite some time that since the demise of the former Soviet Union and the fall of the Iron Curtain, the European Union is indeed becoming more and more the successor of real Socialism with respect to e.g. expansion of government central planning and price controls.

As long as Socialist countries and empires still existed on the border of Western Europe it was mandatory to the political elite in Europe to distinguish themselves from them. Not anymore!

Here are my previous blog posts regarding this subject: here, here, here, here, here, here, here, here, here, here, here, here

Just One Recent Example Here

Just (9/14/2013) came across this blog post by top European think tank Bruegel titled “Borderless electricity: completing the internal energy market” by Georg Zachmann (a research fellow) published on 9/5/2013. From the author’s bio we read “Prior to that he worked at the German Ministry of Finance and the German Institute for Economic Research in Berlin.” How sweet is that!

Bruegel Think Tank

I have come across articles reporting that the European Union finances think tanks etc. to promote their agenda. Under About we read on the website of the Bruegel Institute that “Established in 2005, Bruegel is independent and non-doctrinal. Our mission is to improve the quality of economic policy with open and fact-based research, analysis and debate. We are committed to impartiality, openness and excellence. Bruegel’s membership includes EU Member State governments, international corporations and institutions.” (Emphasis added). A nice contradiction!

This think tank is ranked 2^nd on the “Top 100 Think Tanks – Worldwide (Non-US)” of 2012 published by the University of Pennsylvania. Bruegel prides itself or shall we say boasts with this ranking on their website. However, when you just briefly glance at this ranking you may wonder why is Amnesty International listed there as well, ranked 4^th. Another irony, the “Chinese Academy of Social Sciences (CASS) (China)” located in Beijing is ranked 5^th. I did not investigate how the University of Pennsylvania produced this ranking (Subject for another blog).

Borderless Electricity In Europe

Is this a program similar, but less extreme to the Chinese “Great Leap Forward”?

Back to the above mentioned blog by the former German government employee. How is Europe to achieve such an integrated electricity market?

Here is a salient excerpt from this blog (emphasis added):

“Market integration requires political intervention for four reasons:

•First, electricity networks are a natural monopoly that requires public intervention to produce socially desirable results.

•Second, the actions of individual market participants have significant externalities that affect all other participants. Because those externalities cannot be dealt with (internalised) by vertical integration, public intervention is necessary to achieve socially desirable sector structures.

•Third, in EU member states very different market arrangements have emerged. Those arrangements are a priori largely incompatible across borders and trading thus requires interfaces, which are highly complex because of the need to make different energy products seamlessly tradable between more than 30 incompatible markets. The solution to this – harmonised rules – has significant redistributive effects for market participants. Public intervention is required to strike stable arrangements.

•Fourth, energy is a strongly politicised product in all countries. Consequently, self-organisation of cross-border markets is politically constrained.”

Mr. Zachmann has a PhD in economics. His language is that of a central planner par excellence (preeminent). His first two reasons are uncritically regurgitated, perhaps even misapplied false dogmas of economics. The third and fourth reason could have been written by Lenin or Stalin.

For brevity sake, I will not go into a detailed discussion here why his first two premises are wrong. Suffice it to say that human created electrical networks are by far not anywhere close to natural monopolies especially not in the 21^st century. If they are natural monopolies then they were foremost created by government fiat like typical utility companies. More free market competition is the answer not government intervention.