15 July, 2016

Economic self-regulation is always better than supranational regulation - even when it is less pro-market

The following is my comment to a blog posting on European Students for Liberty website titled The Myth of EU-induced Regulation, written by Daniil Gorbatenko.  The author claimed that the fact that most EU member countries set their economic regulations higher than what the EU mandates at minimum is the solid indicator that EU economic interventionism is minimal.  The author perhaps also intended it as a soft argument for why libertarians should prefer for EU countries to stay in the EU rather than leave, because as members they are more pro-free market than they would otherwise be.

In my comment, I pointed out that freedom of a country to make its own economic decisions is more important than being mandated to follow certain rules set by the supranational entity, even if the super-state happens to command more economic freedom at a given point in time than what its members would want.  See below:

You obviously don't get it, do you?  It is not about what country sets what regulations within the EU rules, but it is the fact that that they should be able to set regulations themselves independently of the EU that matters.  With EU giving itself the power to set any standards, no matter how minuscule as compared to those of individual countries, such regulatory creeping in with minimal footprint sets a precedent that it does gain the power to set regulations and fiddle with numbers. And later on, like all benevolent governments, it surely will tweak those numbers that will cause people to start to 'Feel the Bern' in their pockets.

Remember the US Federal Reserve upon its establishment?  Not a big deal in 1913, right!  And now?  Too late, my friend!  Pay your taxes or put hour hands behind your back and rot in prison like a criminal.  For wanting to keep the fruits of your own labor for yourself!

What if some EU country all of a sudden decided that VAT at 20% is detrimental to its economy and even cutting it down to the EU mandated minimum of 15% is not low enough for them and wants lower it down to 5% or even eliminate it altogether?  Got freedom?

The EU should not be entitled to setting any of the rules mentioned in the article, just like with the minimum wage.  But just wait a couple of years and see if things remain that way.  Let's see, it will be introduced at super low 2 EUR an hour.  Not a biggie, right?  And what will a member country that 10 years down the road, with EU minimum wage rate of 5 EUR an hour, all of a sudden realizes that minimum wage law hurts most exactly those whom it intends to help, and now wants to get rid of the minimum wage altogether?  Sorry, can't do!

Freedom of a nation to determine its own laws and compete in the market is better, even if chooses to be more anti-free market than the EU itself, because it has freedom to make changes, for better or worse.

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