Errant European

In today’s Washington Post, business columnist Steven Pearlstein, writing from Lisbon, sees a “Third Way” emerging in the Transatlantic approach to the world’s economic crisis. The “Third Way” used to be a favourite of Graham Greene characters in books like “The Quiet American,” usually naive idealists trying to find a Cold War middle ground between Soviet communism and American capitalism. They usually wound up dead.

But Pearlstein uses the term to describe that mix of market capitalism and the social safety net that is the norm in Europe, and – under the new U.S. administration of President Obama – is catching on across the pond. Another American journalist, Russell Shorto writing from Amsterdam (“Going Dutch,” IHT), describes in telling detail what a difference the safety net can mean in everyday life.

To Europeans used to essentially free (and certainly universal) health care, subsidised higher education, and omnipresent public transport, Pearlstein and Shorto are saying nothing new. But the more American readers are educated about what “civilised capitalism” can mean, the better the chances for convergence among the world’s leading free-market democracies, the European Union and the United States.

The stars are aligning: in Europe, French center-right President Nicolas Sarkozy calls for a centralised banking regulator; in the U.S., President Barack Obama, coming from left of center, draws the ire of hedge fund managers who resent being branded “speculators.”

The timing is interesting, coming in a week where there are hints of “the worst is over,” or visions of light at the end of the economic tunnel. Anyone who wants to just close the book on reform, or who never wants to hear the words “never again,” perhaps feels threatened by the Obama/Sarkozy approach.

The Third Way of a reformed capitalism, less “economic man” and more “earth mother,” is what this near-Depression can offer. Otherwise, it will just be pain but no gain.

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