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Europe’s Zero-Sum Poison

BRUSSELS – Whenever a society regards its problems solely through the prism of distributional disputes, its chances of solving them diminish greatly, because the “us versus them” mentality distorts analysis and blocks solutions that would unambiguously improve the overall situation. Every policy choice is perceived as a zero-sum game, whereby a gain for one group is necessarily a loss for another group. The very notions of trust and progress vanish.

We have seen in the past the extent to which such conflicts – between rich and poor, landlords and industrialists, or capital and labor – can hamper development. We are seeing today in the United States how entrenched antagonisms result in a stalemate on tax and budgetary matters. And there are many examples of failed economic reforms that fundamentally boil down to the same zero-sum logic.

But that logic is nowhere as salient today as it is in Europe. Since the euro crisis began, almost three years ago, there has been a continuous struggle between two readings of it.

The first interpretation emphasizes the eurozone’s policymaking shortcomings and the reforms needed to remedy them. The second highlights individual eurozone countries’ failings and the costs that they impose on their neighbors. Until now, a rough balance between these two interpretations has prevailed. But the second is increasingly gaining the upper hand.