Obama and the Europeanization of American Capitalism

Needless to say, Europeans are giddy over the shift in U.S. competition policy. Kroes said Varney's words give her hope that the EU's information exchanges with the Obama administration "could go in a very positive way" in the future. "The more competition authorities are joining us in our philosophy, the better it is for it is a global world," she said. Her phraseology, however, is actually European bureaucratic jargon that means Europe is determined to impose its statist economic model upon the rest of the world, and it expects the United States to fall into line.

Indeed, Europe increasingly is usurping America's role as a source of global standards, and many analysts say that Brussels is becoming the world's regulatory capital. At the same time, European antitrust policy is moving in an increasingly anti-American direction. In fact, Europe's regulatory zeal is an essential component of its strategy to rebalance global power in such a way that places Europe at the top of the international pecking order.

The main obstacle to European superpower ambitions is, of course, the United States, in whose likeness the present global system is made. As a result, Europeans are targeting the primary sources of American power. On the military front, Europeans recognize the impossibility of achieving hard power parity with America, so they are working to change the rules of the international game to make soft power the only acceptable superpower standard. Toward this end, Europeans are ensconcing a system of international law based around the United Nations, which they hope will constrain the exercise of American military power. For Europeans, multilateralism is about neutering American hard power. It is, as the cliché goes, all about Lilliputians tying down Gulliver.

On the economic front, Europeans say it's time to usher in a new global economic order, one that would replace the current system that is dominated by the United States with a new model far more to Europe's liking. For example, German Finance Minister Peer Steinbrueck believes the "Anglo-Saxon" capitalist system has run its course and that "the United States will lose its status as the superpower of the global financial system." French President Nicolas Sarkozy says "Self-regulation to solve all problems, it's finished. Laissez-faire, it's finished. The all-powerful market that is always right, it's finished. ... It is necessary then for the state to intervene."

All the more perplexing then, that during his recent trip to Europe, Obama gave in to European demands for global financial regulations that Sarkozy said turned the page on the Anglo-Saxon model of free markets.

European bureaucrats, who have created the world's most highly regulated Leviathan, are now portraying themselves as global defenders of competition law, even though their excessively interventionist policies are strangling entrepreneurial innovation and destroying economic growth. The big question for Americans is why Obama would want to cede more global enforcement authority to the Europeans. And why would he want to punish U.S. multinational companies with billions of dollars in fines when his political future depends upon a speedy economic recovery that is led by a revival in business profits and hiring. Does he want to lead American down the path towards a new era of global socialism?