🇪🇺 🇺🇸 🇨🇳 If China is rising and America stagnating, Europe is gambling with a steep, shocking decline into poverty and irrelevance. | Palladium Magazine

🔶️ Energy scarcity, aging workforces, and institutional paralysis don't combine to create social-democratic utopia but a closed, deindustrializing society:

🔶️ Europe has set itself up to lose the two most basic ingredients for industrial competitiveness and sustainability: cheap energy and cheap labor.

🔶️ You can maybe maintain an industrial society by offsetting one against the other, but to maintain one with neither is ludicrous.

🔶️ China has coal. America has fracking. But Europe's energy strategy is to install solar panels on the world's least sunny continent and build windmills that don't make sense anywhere in the world.

🔶️ This is almost explicitly the opposite of a strategy for cheap energy.

🔶️ European countries have banned fracking and failed to pursue oil and gas exploration opportunities, while the deal for cheap Russian gas has been exploded by war in Ukraine.

🔶️ Meanwhile, Germany shut down its nuclear plants and other countries are planning to follow.

🔶️ That some peripheral European economies like Finland, Poland, or Romania are pursuing new nuclear plants just underscores the problem of a future without nuclear in larger economies like Germany, Italy, and Spain.

🔶️ Except for Japan and South Korea, the world's oldest countries are all European. Nor are European fertility rates anything to brag about.

🔶️ There is no amount of immigration that can make up for such wide and deep aging of the workforce.

🔶️ Aging populations and social democratic entitlements might work with a growing economy, but without it, they just lead to a dysfunctional, extractive political economy where the old oppress the young.

🔶️ The resulting political gridlock and institutional paralysis is perhaps Europe's single biggest problem, because it makes solutions and reforms extremely hard to implement.

🔶️ Europe's energy crisis, for example, could be solved almost literally just with a few strokes of a pen.

🔶️ This looming European decline is not a cause for celebration in America or China. Europe is not a cautionary tale, but the canary in the coal mine for aging industrial societies that do not reform.

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