'Strategic autonomy is a dangerous idea' - An interview with historian Johan Norberg

Historian Johan Norberg wrote the book Peak Human about the rise - and fall - of seven great civilizations. Including the Netherlands of the Golden Age. What lessons can we learn from it? An interview.

Highlights:

• 'The Netherlands must not forget that its wealth and power have always depended on migration.'
• 'The idea of strategic autonomy is dangerous. Don't protect your basic industry. That would be a terrible mistake.'
• 'The good news is that I meet plenty of hungry European entrepreneurs. The bad news is that I meet them in America.'
• 'Wanting to protect what you have leads to the downfall of great civilizations.'
• 'If we stick to our ideals there is a great opportunity for Europe'

Sweden's Johan Norberg is not only a historian, he is also an unadulterated liberal. When he talks, however, he does not come across as dogmatic; rather, elusive. He doesn't really fit into boxes. He is not liberal in the VVD way, where skepticism about migration prevails. Nor in the D66 way, which is critical of business. He is affiliated with the American Libertarian Cato Institute, but is horrified by Donald Trump.

Norberg has previously written books with titles such as Progress, Open and The Capitalist Manifesto. This year he published Peak Human. What We Can Learn from the Rise and Fall of Golden Ages. In addition to the immense empires of the Romans and the Song in China, he also devotes a chapter to the tiny Netherlands of the Golden Age. Europe and the Netherlands are not now at the point where they can learn how to face a golden age, but perhaps how to avoid the fall thereafter.

So what exactly should and shouldn't you do? That's what Hollands Welvaren spoke to Norberg about via Teams. Norberg is sitting on the porch of a vacation home in Sweden, with sunny meadows and a forest edge in the background and an attention-seeking cat in the foreground that regularly runs through the picture.

'Wanting to protect what you have leads to the downfall of great civilizations'

The Netherlands is now one of the richest countries in the world, but Norberg likes to remind Dutch people that they used to have nothing. 'If you look at history, what made the Netherlands so unique? Why did they win their fight for independence from the Habsburgs? They had everything: tradition, history, wealth. The very fact that the Netherlands had nothing made them innovative. There was no orthodoxy at universities, no clinging to old business models. There was room for eccentric ideas. We need to recapture that spirit in Europe.'

But in Europe, the main fear now is that prosperity is at stake. Industry is disappearing because of competition from China, America is introducing import tariffs on European goods, and to the east, Russia is on the doorstep. 'Protect what we have? That's not how history works,' Norberg says. 'We forget that what prosperity we have depends on continuous innovation: on new inventions, new sources of income, new people. If you put on the brakes, that's the end of your civilization. That's the way it's always been in history.'

'We can rekindle capitalism in Europe'

There seems to be a kind of defeatism in the Netherlands and Europe. The economic dynamism that hangs in Silicon Valley, or in Chinese industry, is missing here. The world's most valuable companies are no longer European, nor are the new generation of tech champions. Is Europe a continent in decline? A continent that has all the freedom but does not use it to create new wealth?

'The good news is that I meet a lot of hungry young European entrepreneurs who want to build new companies,' Norberg says. 'The bad news is that I often encounter them in America, in California. That tells me the problem is not in human capital. We have a smart, well-educated population. The problem is that they don't have enough access to growth capital and to one big market. There is that in the United States.'

'So yes, Europe has problems, but that has more to do with the fact that we never checked off our old to-do list. We haven't created one capital market or one consumer market. That's all still fragmented. According to an International Monetary Fund report, those internal barriers to capital and services ín the EU are higher than the tariffs that Trump is now introducing on European goods. If we address that, we can rekindle the forces of capitalism.

'Migration has always been important for the Netherlands'

A better internal market is a distant prospect for many citizens. Not interesting, but not controversial either. Things are different with migration. According to Norberg, it is crucial to keep the economy fresh and fruity. 'The Netherlands must not forget that its power and prosperity have historically depended on migration. Almost all expertise and knowledge in the Golden Age came from migrants who came to the Netherlands because the Netherlands was much more open and free than many other places in Europe. And that created a revolution in industry, art and philosophy. That's deep in the Dutch identity, deeper than in many other countries.'

In the public discussion, there is a tendency to divide migration into two parts: highly skilled migrants who go to work for companies like ASML are welcome, but we take a harder line about migrant workers doing lower-paid work. But according to Norberg, that cut cannot be made. 'If you want an elite worker to specialize and be highly productive, then they should also be able to outsource things, like gardeners and nannies. One of the reasons America has such a productive economy is that the market for those kinds of services is so large.'

Importing optimism

Another reason to bring in migrants, according to Norberg, is because in many cases they bring new experiences and optimism to an aging continent. "Many young Europeans grew up with the credit crunch and the euro crisis. That has given them a crunch, Norberg says. 'When you bring in people with different experiences, you get new energy. You see that when you go to India or Vietnam. When three generations sit around the dinner table there, the first generation has been a farmer, the second generation has done simple factory work, and the third generation goes into high-tech industry, or the service sector. When you grow up like that, it's hard not to be optimistic. In our part of the world, it's harder, because progress is slower.

Yet that feeling is also still present in parts of Europe, Norberg says. 'In the Baltic states and Poland, I also see that sense of adventure, entrepreneurship and innovation. They have seen how quickly their societies have changed after the fall of Communism. And how their lives improved by taking great risks.'

Of course, Norberg says, it is important that migrants subscribe to the open and free society. 'But one of the problems with how we look at migration now is that we do see it when one terrorist commits an attack. But we don't see all those migrants who help in the aftermath of such an attack: the migrant police officer, the nurse. Somehow we don't see those people standing.

'Don't look to the government all the time'

In addition to skepticism about migration, Norberg is also concerned about the size of the welfare state. High, partly unfunded, government spending is "incredibly dangerous," he says. 'Many great civilizations have gone down because they want to live on too big a foot.'

According to Norberg, the idea of the welfare state has spiraled out of control. 'It was meant to protect people who found themselves in a vulnerable position through no fault of their own, but has increasingly degenerated into a system where everyone lives off everyone else, expecting ever higher levels of welfare.' The bill for that is being passed on to future generations by running up government debts, Norberg says.

Where have the strict accountants gone?

An influential group of officials is advising a coming administration to cut 7 billion euros to keep public finances healthy. In doing so, they are deliberately shifting part of the problem of aging to the future. Is that wise?

Hollands WelvarenJoris Heijn

'You have to look carefully at the incentives you build into the welfare state,' Norberg says. 'Get people to work and keep working, especially as we get older and also stay healthy longer. You do that by not giving people a guaranteed pension [like the AOW in the Netherlands, JH], but making the benefit dependent on the deposit. Then you also can't pass on debt to future generations and we don't have to keep looking to the government either.'

'Strategic autonomy is very dangerous'

Not only citizens, but also companies increasingly look to the government. It must help with rising energy bills, prevent factories in Rotterdam from collapsing and protect them from unfair competition from China. The underlying argument is often: strategic autonomy. If basic industry disappears, we become more dependent on the increasingly unsophisticated foreign countries for basic things.

Norberg is vehement about it. 'I think it's a terrible mistake to protect your basic industry. The idea of strategic autonomy is dangerous.' It is an illusion that the Netherlands and Europe can produce everything themselves. 'Especially when it becomes war, you need open and diverse supply chains. You shouldn't put all your eggs in one European basket.'

'It is much more important that the Netherlands continues to develop very complex chip machines. If others depend on you for those kinds of machines, they have an interest in keeping trade open with you. That's a better strategy than continuing with things you're pretty bad at.'

These are the largest chip companies in the Netherlands

The Netherlands has the most important chip industry in Europe, but its exact size is unknown. Hollands Welvaren therefore listed the main players. ASML is by far the largest, but it relies heavily on the much smaller players in the Netherlands.

Hollands WelvarenJoris Heijn

'This is a great opportunity for Europe'

You would think that for a liberal at heart like Norberg it would be a bleak time. America, the land of freedom, is taking an increasingly authoritarian turn under Trump. Europe buckled under Trump's curbs on free trade, and also fails to push Putin back on Ukraine.

Yet Norberg thinks this need not be an era of the law of the jungle, be it America, China, or Russia. 'We are living on a much more dangerous world than before. That's why we need to think about a Plan B. The big difference from the protectionism of the 1930s is that no one seems to want to follow America this time. There is still interest in globalization.Can mid-sized players like Europe, Canada, Australia and East Asian democracies like Japan and South Korea start carrying free trade and start a new kind of world trade organization? Maybe America will get FOMO, fear of missing out, after all.'

'This could be a great opportunity for Europe, to serve as an anchor for that new order. With new free trade agreements with the South American Mercosur countries, India and the Middle East. But then we have to stick to our ideals.'