'Destructive Creation - Shumpeter-Style Reasonings on Some Trends and Lisbon Process in Europe ('Разрушительное Созидание?' - Рассуждения В Духе Шумпетера О Некоторых Трендах И Лиссабонском Процессе В Европе)

Mirovaia Ekonomika i Mezhdunarodnye Otnosheniia RU(0131-2227), Vol. 10, pp. 34-41, 2008

8 Pages Posted: 30 Apr 2009

See all articles by Arno Tausch

Arno Tausch

University of the Free State, Department of Political Studies and Governance; University of Innsbruck - Department of Political Science

Date Written: April 26, 2009

Abstract

Starting from Professor Kornai’s assertion about the necessity to focus on the long-term perspectives of the transformation process, we analyze in this paper the Lisbon performance of the countries of the European Union from such a long-term, structural perspective. First, we present the 14 Eurostat “structural indicators” and their measurement deficits as well as a debate about the performance of the countries of the EU in geographical terms. We then analyze this Lisbon indicator performance by factor analytical means. Traditional methods of simply adding together the ranks of the different countries along the 14 structural indicators are insufficient, whereas modern multivariate methods like factor analysis are much more appropriate to arrive at conclusions about “combined” performances. We eliminate one of the 14 Lisbon structural indicators - regional dispersion of unemployment rates - from the further debate, because that indicator does not produce ANY data throughout the entire observation period for nine of the 27 EU member countries. We then observe the contradictions between some of the remaining 13 indicators, chosen by the member governments and the European Commission, to measure the Lisbon progress. We conclude that only a Schumpeterian vision of capitalism as a process of “creative destruction” - or rather - “destructive creation” can explain these contradictions, which we empirically reveal in this analysis, and which beset the “Lisbon process” from the very beginning. European decision makers often seem to be unaware about these underlying contradictions, and our paper hopes to clarify the processes involved. Our factor analysis and our correlation analysis, on which the mathematical construction of factors is based, tells us that “Lisbon” goes hand in hand with:

• high comparative price levels 2005 • high freight transport, 2004 • high greenhouse gas emissions, 2003 • low business investment rates 2004 • low youth educational attainment levels (20-24)

Contradiction number 2: confronted with contradiction 1, we concluded that in reality we are faced with four underlying and contradictory processes of the Lisbon reality;

1. a Lisbon productivity factor 2. the avoidance or existence of a high eco-social exclusion 3. the employment performance 4. the neo-liberal European model, which is not clearly and positively linked to the other factors

We then proceeded to analyze with multiple regression techniques the recent European Commission data on regional growth in Europe. Patterns of discrimination against the young and the elderly on the labor market are incompatible with long-run economic growth.

Contradiction number 3: the following four factors explain ¾ of regional economic growth in Europe Our empirical, cross-national analysis, based on UNDP data, is also confirmed by our micro-analysis of University performance on a global scale.

Keywords: Index Numbers and Aggregation, Cross-Sectional Models; Spatial Models, Economic Integration, Regional Economic Activity, Growth Development and Changes, International Factor Movements and International Business, International Relations and International Political Economy

JEL Classification: C43, C21, F15, R11, F2, F5

Suggested Citation

Tausch, Arno, 'Destructive Creation - Shumpeter-Style Reasonings on Some Trends and Lisbon Process in Europe ('Разрушительное Созидание?' - Рассуждения В Духе Шумпетера О Некоторых Трендах И Лиссабонском Процессе В Европе) (April 26, 2009). Mirovaia Ekonomika i Mezhdunarodnye Otnosheniia RU(0131-2227), Vol. 10, pp. 34-41, 2008, Available at SSRN: https://ssrn.com/abstract=1395322

Arno Tausch (Contact Author)

University of the Free State, Department of Political Studies and Governance ( email )

205 Nelson Mandela Drive
Park West
Bloemfontein, Free State 9300
South Africa

University of Innsbruck - Department of Political Science ( email )

Universitätsstrasse 15
Innsbruck, Tirol 6020
Austria

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