Europe Can’t Get Out of Its Own Way by Andrew McAfee at Foreign Affairs

The problem is not that the EU and its national governments are not doing enough to spur competitiveness. It is that they are doing too much to impede it. Through the slow accretion of layers of labor and tax policy, red tape, and technology regulation, they have erected barriers to the creation of the kind of large, vibrant startup ecosystem currently thriving in the United States. This ecosystem has been the cradle of many major innovative high-tech companies, as well as those sparking innovation and growth in other sectors. If the EU does not create the conditions for such companies to develop, then the bloc’s decline may become irreversible.

The “slow accretion of layers” bit reminded me of demosclerosis and Mancur Olson’s theory of interest group rent-seeking leading to the decline of nations. So, I wondered who were the groups in favor of the EU AI Act, which the article discusses as a new millstone around Europe’s neck. Who lobbied for it and what are they protecting. Well, it seems that the only groups who were enthusiastically for the law were the European institutions themselves–the Commission, the Parliament, and Brussels-based nonprofits. Incumbent industry, and not just the tech sector, sought to soften the thing. At a certain scale I guess it’s possible the rent-seekers are the bureaucrats themselves. It makes sense that when there’s a deficit of democracy, as in the EU, the stationary bandit can forget how its bread is buttered.