Europe in decline?

Europeans have long believed that soft power is their best instrument to promote their values and their security. But their strong sense of moral superiority is questionable. The rise of the ultra-right and the treatment of the migrants have created a gulf between Europe's self-perception and external perception

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The Nobel Prize winning Columbia University economist Edward Phelps maintains that innovation is the key to economic growth, prosperity and human happiness. He has argued that China has "out-innovated" the West. What may shock many is his view that the West has ceased to be a land of innovation.

Europe's political, economic, military and technological power may have diminished, its soft power remains formidable. However, it is also true that the old continent has been largely basking in reflected glory by transferring technology from the US.

The Economist magazine goes a step further arguing that "the values that made the West great have been sold on to the rest of the world."

From the early 19th century to the early decades of the 20th century, the Western world benefited from discoveries of scientists and navigators.

The decline in the pace of innovation, Phelps maintains, "threatens prosperity" in the West. He attributes the main cause of the decline to "corporatism" and the tendency of businesses "to band together what they have."

The Columbia economist says that France lost almost all its innovation by 1980, Italy by 1990, Germany by the 1970s and the UK by the 1980s and 1990s. Lithuanian-born economist Zvi Griliches of Harvard University explains how Europe escapes the costs of its indigenous innovation.

They "let the Americans take the risks of innovation, then they copy each year the new products that were successful."

This is not to say, the US is not without problems. Wealth inequality is widening by the day. Many experts contend that the 2020s mark the Second Gilded Age.

Like the first Gilded Age, the second Gilded Age has similar features: more prosperity and growth but also the rise of corrupt and greedy industrialists, bankers and politicians.