Lessons from the European Legislative Elections

To many Americans, Europe is a sideshow. The EU may be the third-largest market for US exports (after Canada and Mexico, and before China) and the second market for US imports (after China, and before Mexico and Canada). But China and Mexico feature much more prominently in the news. Americans (rightly!) like to roll their eyes at profligate Europeans, who spend lavishly on welfare states and subsidies to national champion firms, but live cheaply under a US military umbrella.

Europe and the US share cultural ties and the Enlightenment legacy of democracy, human rights, free markets, and constitutionally constrained government (if imperfectly… and this holds on both sides of the North Atlantic). Despite a fondness for social democracy, about two thirds of European countries are in the top quartile of economic freedom, with the other third in the second quartile. None are in the third or fourth quartile (this assumes a broad definition of Europe as spanning Eastward to Russia's border, with the perhaps controversial claim that Ukraine is not fully European, and the far more obvious claim that Belarus is a Russian vassal state).

Beyond economic and political affinity, Europe can serve as a canary in the American coalmine. The American administrative state, for example, was originally imported from Germany in the early 20^th century, by a professor of political science, who later became the 28^th president of the United States (Woodrow Wilson). Likewise,"wokeism" is a popularization of postmodern ideas that started in France in the mid-20^th century, before emigrating to US departments of English and Philosophy, then saturating academia. The rise of national conservatism in the US - an eager use of the state's administrative power to advance conservative goals - has parallels, if not necessarily roots, in similar European movements.

Two weeks ago, citizens throughout the European Union voted in legislative elections for the European Parliament. Within Europe, the European Parliament is itself a sideshow. It does have the power to approve laws, and a majority of Members of European Parliament (MEPs) must approve the choice of European President. But the Parliament is a self-described "co-legislator" and the real action happens at the level of the bureaucratic machinery (the EU Commission in Brussels). Still, it is worth looking at the election results.

Two stories from The Economist are telling; in the June 15 issue, the newspaper worried in its weekly summary that the elections "saw the hard right making the most gains overall," even if it tempered its assessment a few pages later: "EU elections deliver more of the same." Last March, I wrote in this column that polls predicted three trends for the June elections: 1) Green parties would lose seats, as voters engaged in "Greenlash" against expensive environmental regulations; 2) the center-right European People's Party (EPP) would pick up votes from Greenlash voters; and 3) far-right candidates would make gains, as part of overall voter worries.

These predictions were spot on, but the expected roar was not quite as dramatic. The Greens indeed fell from 10.1 percent of seats to 7.4 percent (the Parliament overall increased from 705 to 720 seats since the last election). The EPP representation grew from 25 percent to 26.3 percent. And the far right grew from 7 percent to 8.1 percent. The far left and moderate left also saw small losses. The good news is that the new majority is largely centrist and not radical. The bad news is that the new majority is largely centrist and not radical: indeed, even under the center-right leadership of the EPP, the EU's role has continued to grow. Over the 40 years from the Treaty of Rome (1957) to the Treaty of Maastricht (1992), and again under the EPP majority since 1999, the EU has transformed itself from a logical and desirable customs union to a regulatory factory in Brussels, spewing forth negative externalities and barriers to business. So we should not expect any major reform to the EU anytime soon.

The main bit of good news is that Europe was not taken over by an extremist wave of discontent, from the left or the right. There was neither a tidal wave of socialism nor a tidal wave of nationalist populism. Democracy and free markets are safe for now (to the extent that markets have really been safe in Europe for the past 90 years… but this is not a harbinger of communism or nationalist autarky).

Some more interesting results emerged at the national level. In Germany, the far-right Alternative for Germany (AfD) beat the chancellor's Social Democrats by two percentage points (15.9 percent to 13.9 percent), further weakening the ruling coalition. In France, the far-right garnered 37 percent of seats, a whopping plurality of votes (the next two parties came in at 13 percent). This could be alarming - but it could also be classic, unremarkable national electoral politics.

Indeed, Public Choice theory draws distinctions among the different motivations voters face. The first is altruism versus self-interest: are voters motivated by their perceived self-interest, or by their perception of what is good for the country? Keep in mind that voters are often mistaken, so what matters is their perception. The second distinction is between instrumental and expressive voting. Do voters think their ballot will affect the outcome, or are they merely expressing their frustrations? We often see voters support extremists in primaries (US-style) or first rounds (European-style) - then come to the center and their senses in the general election or second round. In economic terms, the benefit of expressing oneself freely comes at a low cost in the first round; as the cost of expressive satisfaction increases in the second round, voters move away from extremes. The same may apply in the recent European elections. European voters believe that the European Parliament is politically secondary, so they can express extremist frustrations at low cost. We should thus not take the results of the recent elections as a strong predictor of national elections (this seems to be the gamble behind French President Emmanuel Macron's decision to weaken the far right by calling a snap national parliamentary election; the far right is likely to lose momentum as the country rallies against it in an election that actually matters).

The prospects for market liberalization in the EU aren't good. We can expect more business as usual, if with some important marginal cuts (notably on the EU's aggressive and expensive environmental agenda). But the recent election doesn't represent a tidal wave of extremes.

It may seem more discouraging for friends of liberty to be working against a milquetoast-but-relentless centrist apparatus of regulation, than against the more spectacular and exciting extremes of left and right. But, as friends of liberty think about electoral politics in the EU and the US, they would do well to remember Lord Acton's warning:

At all times sincere friends of freedom have been rare, and its triumphs have been due to minorities, that have prevailed by associating themselves with auxiliaries whose objects often differed from their own; and this association, which is always dangerous, has been sometimes disastrous, by giving to opponents just grounds of opposition, and by kindling dispute over the spoils in the hour of success.