A Misunderstanding

This time by Europe’s nations. The annual China-EU CEO and Former Senior Officials Dialogue is a secretive congregation of 40 chief executives, top officials, and academics from Europe and the People’s Republic of China, and it was quietly canceled last month. Europe’s organizers rejected the PRC’s attempts to ban from attending anyone who dared criticize the PRC.

So far, so good.

The misunderstanding is this:

…difficult balance Europe is trying to strike between safeguarding business interests and upholding democratic values….

Those aren’t opposing interests that must be “balanced”—traded off one against the other—in order to achieve some sort of supposed optimum. They are synergistic interests, each of which potentiates the other.

But they’re far more than that, too. Each is a Critical Item for the other; if either doesn’t exist, the other cannot exist.

Democratic values provide the necessary economic framework for enhancing business interests. It is those democratic values that are at the core of liberty, in this context particularly of private property rights. John Adams recognized private property ownership as necessary for individual safety, security, and happiness. Adam Smith wrote roughly contemporaneously of the necessary role private property holds in achieving national prosperity. Hernando De Soto wrote of the criticality of private property rights to individual liberty and to the prosperity of the nations in which free peoples reside. Absent these values, the only interests that get enhanced are those of a few oligarchs and those populating the government reigning over that economy.

Business interests from within that economic framework feed back into those democratic values by increasing the economic prosperity not only of business owners, but of business’ employees and of the nations’ consumers (keep in mind, too, that employees are themselves consumers). It’s a direct feedback loop: all parties to a voluntary exchange—a business interest as carried out within that democratic framework—are made better off than they were before the exchange since each gains something of value to him that he did not have before. This applies for business-business exchanges, business-employee exchanges, business-consumer exchanges.

The feedback loop is an extended one, also. As businesses produces what consumers want, more gets consumed, which produces funds for more production, more hiring, more innovation, more of what consumers want—and greater prosperity for all participants however indirectly they participate. And, as Adams recognized, that greater prosperity enhances individual freedoms.

Europe’s prosperity—and its freedom in the face of aggressively acquisitive nations like the PRC and Russia—depends on those nations clarifying their misunderstanding.

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