Why the US Grows While the EU Slows: Adam Smith’s Recipe
5th February 2025
First, we must remind ourselves that wealth does not happen automatically, bestowed from above as if it were manna from heaven. It has to be created through the conscious and deliberate efforts of workers, business leaders, and entrepreneurs. Notice one group of people missing from this list: policymakers. Despite their claims to the contrary, policymakers cannot create wealth. Indeed, they cannot do so. However, their role in wealth-creation cannot be understated, for they wield the simultaneous power to foster growth and to inhibit it.
Adam Smith gave us the blueprint for growth all the way back in 1776. He writes, “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things.”
Comparing the United States and the EU on these dimensions reveals differences.