Europe’s Problems Have Lessons for US

Meltzer 3

Dr. Allan H. Meltzer is an American Economist and the Allan H. Meltzer professor of Political Economy at Carnegie Mellon University’s Tepper School of Business. He is the author of a large number of academic papers and books on monetary policy and the Federal Resrve Bank. Dr. Meltzer’s two volume books, “A History of the Federal Reserve”, are considered the most comprehensive history of the central bank.   He is considered one of the world’s foremost experts on the development and application of monetary policy. Currently he is also President of the Mont Pelerin Society. Dr. Meltzer originated the aphorism “Capitalism without failure is like religion without sin. It doesn’t work.”


Europe has been the model for how a democratic capitalist country   becomes a welfare state. After a surge of market driven growth after World War II, each election from the 1960s on brought new programs of income redistribution and regulations intended to protect workers and consumers and to achieve an undefined “fairness”. Instead, high tax rates and heavy regulation slowed economic growth. And many welfare state programs became road blocs to economic progress by resisting reforms and prolonging the current European recession.

This essay neglects the immigration problem that complicates many of the issues, but does not change the need for real economic adjustment. I leave immigration to Europe for another day.

Current economic problems and prospects differ substantially within the group. At one extreme is Greece where promises for pensions and other benefits have made the cost of producing uncompetitive.(An index rates Greek’ competitive position at 3.8 on a scale of 10.) Greek workers can retire on full pension after working 37 years, so a worker who starts at 18 can retire with full pension at 55. Most other European countries use 65 as the age for retirement with full pension.

Recently the Greek Parliament finally agreed to reduce pension costs as part of its preparation for the next round of negotiations. Greece has a long experience with agreeing to adjustments that it is unable to achieve in practice.

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Strategic management and Organization Theory: A Merging of Disciplines

Dr. John Psarouthakis, Executive Editor,
The Business Thinker and co-author of Dynamic Management of  Growth Firms, University of Michigan Press.

Apart from experience in the field of entrepreneurship, here we straddle two disciplines: strategic management and organization theory. Until the late 1980s, the fields of strategic management and organization theory appeared quite distinct. Though both are interdisciplinary outgrowths of other disciplines, strategic management was more heavily influenced by the fields of marketing and finance, whereas organization theory was an outgrowth of social psychology and sociology. But it is logical and inevitable that researchers from each field would begin to pay attention to one another while searching for common truths. Both attempt to predict a common set of dependent variables—organizational success and effectiveness.

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Avoiding a War in Space

Omar-LamraniBy Omar Lamrani, Senior Military Analyst, Stratfor
Omar Lamrani focuses on air power, naval strategy, technology, logistics and military doctrine for a number of regions, including the Middle East and Asia. He has lived and worked in Europe, the United States and Thailand.

Space is becoming more congested, contested and competitive. Since the Soviet Union put the first satellite, Sputnik I, into space in 1957, no nation has deliberately destroyed another’s satellite in orbit. But there is a growing possibility that battles may soon be waged in space.

Although the militarization of space started long ago, a number of technological developments and tests over the past decade show that the race toward its weaponization is accelerating. Driven by Washington’s dominance of and strategic dependence on space, U.S. rivals are working to develop and deploy anti-satellite weapons (widely known as ASATs). The technology, which began to be developed during the Cold War, has become an area of intense competition for the world’s most capable militaries over the past decade. 

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