Small is still beautiful in Europe

Yesterday, German Minister of Justice, Sabine Leutheusser-Schnarrenberger launched an attack on Google by expressing concerns about data protection issues. What makes this piece of news more worrying for me is that there seems to be a hidden agenda behind her concerns as she also said: “I am bothered by this kind of rushing forward, this megalomania, which is also apparent in the case of Google Book Search,” adding that Google is on its way to become “a monopoly, similar to Microsoft.”

If we add this to recent news about France’s ‘Google-averseness’, the question may rightly arise: are we to witness a renaissance of ‘big is bad’ in continental Europe? Schumacher’s work (Small is Beautiful: A study of Economics as if People Mattered) seems to have been rediscovered by contemporary European populism politics. However, before Germany and France decides that regulatory intervention into the free market is inevitable, thought should also be given to Pter Beckmann’s reaction to Schumacher’s work in 1978 (Economics as if Some People Mattered), which says:

The free market does not, of course, eradicate human greed, but it directs it into channels that the consumer the maximum benefit, for it is he who benefits from the competition of”profit-greedy” businessmen. The idea that the free market is highly popular among businessmen is one that is widespread, but not among sound economists. It was not very popular in 1776, when Adam Smith’s Wealth of Nations was pulished, and it has not become terribly popular with all of them since–which is not surprising, for the free market benefits the consumer but disciplines the businessman.

If the free market is so popular with business, what are all those business lobbies doing in Washington? The shipping lobby wants favors for U.S. ships; the airlines yell rape and robbery when deregulation from the governmental CAB cartel threatens; the farmers’ lobby clamors for more subsidies. Whatall these lobbies are after is not a freer market but a bigger nipple on the federal sow.

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