June 28, 2016
By TK Chua
EU and the Lobster Theory
The EU is like a group of friends going to a restaurant. If they know the final bill is to be divided based on what they eat, they will probably order based on their actual need and their willingness and ability to pay. However, if they know the bill is to be split evenly regardless of what they eat, it is almost certain that all of them will probably order “lobsters”.–TK Chua
Maybe I belong to the old school, so I really can’t rationalise what the modern Western liberals are doing to their countries. First, they think there are unlimited free lunches. Second, they think there are simple solutions to complex problems. And third, they always prioritise instant gratification, never long term sustainability.
They formed the European Union (EU) and European Monetary Union (EMU is the adoption of the Euro as the national currency of participating members), thinking that they could leverage on economies of scale, access to bigger and freer markets, and facilitate efficiency and lower the cost of doing business. They think the sum is bigger than its individual parts.
But they have largely forgotten the loopholes, the free riders, the cheatings and the destabilisation that is associated with any union. I think this has been the problem with the EU, and if they are not careful, soon EMU too will give them a similar problem.
Obviously there are countries that consume more benefits than their fair share of costs to the EU. After a period of time, something must give, which I think is happening in the UK today.
For example, how could we have free movement of labour without looking at disruption to national cohesion and the way of life of the people? Immigration is always controlled and regulated, never unfettered and free. Malaysia is on the verge of having the same problem as the UK if we are not careful.
Similarly, free market access must always be based on quid pro quo, otherwise it is indulging in wishful thinking and expecting free lunches. Sooner than later, those lunches must be paid for.
Even for EMU, I think it will soon give way. They are essentially having a common monetary policy but with divergent fiscal, taxation, inflation and employment policies. My rudimentary knowledge in economics tells me that this is not going to work for long, before massive cheating and manipulation among member states take place. Is there any surprise why they have one debt crisis after another when the EMU was supposed to provide benefits and stability?
The EU is like a Lobster–Members should remain faithful for common interest and share the final bill. The UK wanted a free lunch.–Din Merican
The EU is like a group of friends going to a restaurant. If they know the final bill is to be divided based on what they eat, they will probably order based on their actual need and their willingness and ability to pay. However, if they know the bill is to be split evenly regardless of what they eat, it is almost certain that all of them will probably order “lobsters”.
I hope this illustrates the problem in the EU and EMU today – everyone is ordering lobster, even though some don’t like to eat it, some can’t afford it, and some think others are going to pay for it.
TK Chua is FMT reader.