What are the reasons for Europe's lag behind the US in some high-technology industries, and what can it be done to correct it?

In this paper, I will try to assess the reasons for Europe's lag behind the US in hightechnology industries, and what can it be done – whether anything – to correct it. The first part of the essay analyses the recent development of the economy and its shift towards high technologies.
Then it describes the foundations that according to me lead to the exceptional
high-technology development in the US and the European lag in the high-tech. I define shortterm, medium-term, and long-term factors of the US dominance in high-tech industries. Then I am going to describe some empirical data about the US and European economies.
Finally I am going to assess the policies that could correct this lag. The conclusion is that it is not necessary to replicate the US socio-economic system. Rather, Europe should finish liberalisation in products, services, and labour markets to achieve higher competitiveness in general.
MN_425_2008 I -v19[1]

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The Pigou club

Let's present a think-tank that has similar views on the tax system as I do. There are lots of negative externalities in the world. There are also two options:
1) leave it as it is
2) do something with it

OK. I prefer 2), even though it is a soft support as the government can become very big when trying to correct all negatove externalities.

The Pigou club tries to deal with it this way (Manifesto by its founder Gregory N.Mankiw):

Raise the Gas Tax
By N. Gregory Mankiw
With the midterm election around the corner, here's a wacky idea you won't often hear from our elected leaders: We should raise the tax on gasoline. Not quickly, but substantially. I would like to see Congress increase the gas tax by $1 per gallon, phased in gradually by 10 cents per year over the next decade. Campaign consultants aren't fond of this kind of proposal, but policy wonks keep
The environment. The burning of gasoline emits several pollutants. These include carbon dioxide, a cause of global warming. Higher gasoline taxes, perhaps as part of a broader carbon tax, would be the most direct and least invasive policy to address environmental concerns.

Road congestion. Every time I am stuck in traffic, I wish my fellow motorists would drive less, perhaps by living closer to where they work or by taking public transport. A higher gas tax would give all of us the incentive to do just that, reducing congestion on streets and highways.

Regulatory relief. Congress has tried to reduce energy dependence with corporate average fuel economy standards. These CAFE rules are heavy-handed government regulations replete with unintended consequences: They are partly responsible for the growth of SUVs, because light trucks have laxer standards than cars. In addition, by making the car fleet more fuel-efficient, the regulations encourage people to drive more, offsetting some of the conservation benefits and exacerbating road congestion. A higher gas tax would accomplish everything CAFE standards do, but without the adverse side effects.

The budget. Everyone who has studied the numbers knows that the federal budget is on an unsustainable path. When baby-boomers retire and become eligible for Social Security and Medicare, either benefits for the elderly will have to be cut or taxes raised. The most likely political compromise will include some of each. A $1 per gallon hike in gas tax would bring in $100 billion a year in government revenue and make a dent in the looming fiscal gap.

Tax incidence. A basic principle of tax analysis -- taught in most freshman economics courses -- is that the burden of a tax is shared by consumer and producer. In this case, as a higher gas tax discouraged oil consumption, the price of oil would fall in world markets. As a result, the price of gas to consumers would rise by less than the increase in the tax. Some of the tax would in effect be paid by Saudi Arabia and Venezuela.

Economic growth. Public finance experts have long preached that consumption taxes are better than income taxes for long-run economic growth, because income taxes discourage saving and investment. Gas is a component of consumption. An increased reliance on gas taxes over income taxes would make the tax code more favorable to growth. It would also encourage firms to devote more R&D spending to the search for gasoline substitutes.

National security. Alan Greenspan called for higher gas taxes recently. "It's a national security issue," he said. It is hard to judge how much high oil consumption drives U.S. involvement in Middle Eastern politics. But Mr. Greenspan may well be right that the gas tax is an economic policy with positive spillovers to foreign affairs.

Is it conceivable that the policy wonks will ever win the battle with the campaign consultants? I think it is. Even after a $1 hike, the U.S. gas tax would still be less than half the level in, say, Great Britain, which last I checked is still a democracy. But don't expect those vying for office to come around until the American people recognize that while higher gas taxes are unattractive, the alternatives are even worse.

Valtr Komarek osmasedmdesatilety

ale porad mu to mysli. Rozhovor v lidovkach:
Snad to nejpodstatnejsi:

* Za dva roky vám bude osmdesát. Přinesl vám váš dlouhý věk nějaké důležité poznání?

Myslím, že jo. Například to, že se pachtíme za málo smysluplnými věcmi. Mluvím o sobě. V Prognostickém ústavu nebo předtím ve Státní plánovací komisi jsem byl až chorobně pracovitý. Dělal jsem denně dvanáct čtrnáct hodin, porada střídala poradu, těšilo mě, když jsem se blýsknul, třeba i tou svou pamětí. Měl jsem úspěch a byl jsem suverén. A reálný efekt té práce? Já byl třeba u projekce desítek závodů, to byly stovky porad a jednání – a ty závody jsou dnes v ruinách. Život by se neměl takhle hloupě promrhávat. Je škoda každého dne. A když je člověku tolik jako mně, je krásné dýchat, projít se v přírodě, v tomhle věku už to není samozřejmé. Těch dobrých věcí je tolik a některých se tvrdě držím – jednou týdně například chodím do divadla. Pořád hodně čtu. A v mém věku se pochopitelně zabývám i myšlenkou: Kéž by se mi podařilo šťastně zemřít.

Czechs may give EU a bumpy ride

BBC on the Czech EU Presidency:

The Czech Republic takes over the EU's rotating six-month presidency on 1 January, but politics is less than sweet in the land that produced the sugar cube, the BBC's Rob Cameron reports from Prague.
One of the delights of living here is gradually discovering the many things that began life in the Czech Republic.
There's the soft contact lens (Otto Wichterle, 1961), the sugar cube (Jacob Christoph Rad, 1841), the dollar (Count von Schlick, 1518... it's a long story) and the European Union (King George of Podebrady, 1462).
The European Union?
Well, sort of.
In the mid-15th Century, George (Jiri in Czech) of Podebrady, Hussite leader and King of Bohemia, dreamed up the idea of a confederation of all Europe's Christian powers, with France in the driving seat. Sounds familiar?
The member states would settle their differences by exclusively peaceful means - no more wars and conquest. There would be a common parliament, common institutions and even a common insignia (though no mention of yellow stars on a blue background).
George's idea - aimed at neutralising Rome and uniting Christendom against "the abominable Turk" - didn't get very far. It was dismissed by Pope Pius II and died, along with King George, in 1471.

President Klaus is a prominent critic of the EU's Lisbon Treaty
Now, more than five centuries after his death, George's vision has become reality.
"Frankly I would be quite glad if the EU eventually evolved into one supranational state," says Jan Kvasnicka, a 20-year-old economics student from Charles University in Prague.
"It is the best guarantee of stability in terms of peace. Also it could put through some of its agenda on the international level more effectively," he goes on.
"Though I don't think the French and Germans were inspired by Jiri of Podebrady when they came up with the idea of European integration after World War II."
Czech learning curve
If few outside the Czech Republic have heard of King Jiri, few outside Charles University seem to care about the Czech EU presidency.
"But look forward to what?" is the reply from the girl behind the counter at a cafe on the Old Town Square, when I try to ask about her country's presidency of the European Union.
She seems genuinely not to have a clue what I am talking about. She calls over a colleague, who is better informed, but also pessimistic.

President Klaus refuses to fly the EU flag above Prague Castle
"It's going to be a little bit embarrassing I think," she says.
Why? I ask.
"Have you seen our president lately? Have you heard anything he said lately? He's not exactly the shining example of diplomacy."
Vaclav Klaus, the conservative Czech president, has strong views on virtually everything - climate change (not man-made), NGOs (more dangerous than communism) and the EU (all right as a free trade bloc, but that's about it).
The "Eurosceptic" President Klaus (he prefers "Eurorealist") has been campaigning against the EU's Lisbon Treaty, which the fragile centre-right government is attempting to ratify. The Czech Republic, alone among the 27 member states, has yet to even vote on it.
In November, Mr Klaus had dinner in Dublin with the controversial anti-Lisbon campaigner Declan Ganley, causing a minor diplomatic incident.
Mr Klaus later had a shouting match with a visiting European Parliament delegation, and has steadfastly refused to fly the EU flag over Prague Castle. And all this before the presidency even begins.
'Teenager driving EU bus'
The combination of Eurosceptic (though largely ceremonial) president, fragile government and divided parliament has reportedly caused some nervousness in Brussels, as France hands over the reins.



Profile: Czech Republic
"I think the EU unfortunately has the right to be worried a bit about the Czech presidency," says Jiri Pehe, who was a political adviser to Mr Klaus's predecessor Vaclav Havel.
"This 19-year-old teenager is now taking over a bus with 26 other people on board," he explains.
"It's the second teenager, after Slovenia, but this one is rather unruly and problematic.
"Maybe the rest of the European Union would be OK if this particular teenager was driving the bus on an empty road with no intersections ahead, but I think we are facing very difficult traffic, with several complicated intersections."
Others think such concerns are unfounded and unhelpful.
"I don't think that those assessments are justified," says Roman Joch, director of a conservative think-tank, the Civic Institute.
"The Czech agenda is modest. It's about internal liberalisation in the EU and about the common energy and security policy towards Russia. So I cannot see any option for failure, because the presidency is more of an administrative function than an executive one."
Who knows what old King George would have thought of the modern-day European Union. Disappointed, perhaps, that it was founded by the Treaty of Rome, rather than the Treaty of Prague. Appalled, probably, that Turkey was even being considered for membership. But proud, certainly, that the Czechs are in charge. If only for six months.