The beginning of the pig in Europe

The contours of what may be the near future of Europe are slowly being drawn.

Oliver Thansan
Oliver Thansan
15 March 2023 Wednesday 17:50
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The beginning of the pig in Europe

The contours of what may be the near future of Europe are slowly being drawn. Although what we don't know weighs much more than what we can sense, some lines seem pretty solid.

The first is the perspective of demographic stagnation. What some predicted almost a century ago is happening: we Europeans have discovered that there are more rewarding, more interesting or more fun ways to spend our time than raising children, and there is some (perhaps misguided) consensus that the trend is irreversible

Forecasts indicate that, in the coming decades, the European population will decrease by around 50 million people, slightly more than the current population of Spain. Immigration is not expected to fully cover this deficit. The resulting ageing, if not offset by an increase in average productivity, will force an increasing share of GDP to be devoted to healthcare and pensions.

The second is imposed by climate change: we are already seeing that the energy transition will be much slower than the experts recommend. On the other hand, it will be much more expensive than anticipated, because the estimates of the aid that the poorest countries will require to carry out this transition have been rising to reach figures that used to be called astronomical (today they are called economic ): more than double the gross domestic product of Spain per year. The resources will have to come, to a large extent at least, from European pockets.

The third perspective is the increase in defense spending that Europe's "strategic autonomy" demands. An urgent need? Authorized voices repeat that yes. However, let's keep in mind that common sense warns us that general rearmament can increase the risk of a conflict, although I suspect that the official version will prevail, at least for now. More spending

With this scenario, don't you think, readers, that it is very likely that the European standard of living will decrease in the near future? Make no mistake: even if our GDP shows modest growth, this GDP will weigh more guns than butter and solar panels than social housing; part of our economy will not be available to satisfy other, more mundane needs, wants or whims. The European citizen will notice that the belt must be tightened. The richest people should notice this, because a more equitable distribution of income needs to be achieved.

The maxim that, when something is good, more is better, is known among economists as the "pig principle". According to this principle, tightening one's belt, having less of those good things, is a fact that reduces our well-being, a fact that one has the right to oppose.

But before going out into the streets with the yellow vest, let's remember that the principle has a very limited scope, since the economy deals only with material wealth, and our happiness is nourished by many other elements. "To think you need to eat", said the old adage. But we eat to think, not think to eat. After a certain point, more of a good thing is not better. Who hasn't had indigestion or suffered a hangover?

A little austerity and a little more fraternity towards the less favored will help us sort out whims, desires and needs. The pig principle has paid off, but it is time to abandon it. Every pig gets his Sant Martí.