Europe is on the right track to becoming the largest re-agriculturialized region in the world. Whilst all other regions tend to use more and more resources on research and development (R&D), the European Union continues to subsidize wine production and agricultural export instead of making it profitable to invest in future wealth.
The OECD has recently publicized a report expressing concern about the investments made in the EU in the field of R&D. Likewise, the European Commission has also expressed concern that the EU region will not reach the goal of using 3 % of GDP on R&D in 2010. Both the US, China and Japan are currently investing more money in future development than the European countries, even though the EU countries make up the world’s largest economy.
The combined investments made in the EU region equals 1.8 % of total GDP, in comparison the expenses used on subsidizing wine and butter, adds up to 0.6 % of EU GDP. Right now every European Citizen is using about £90 a year to enable European farmers to sell goods in developing countries at prices that cannot be matched by local farmers, forcing them to rely on aid from European countries... The safe way of ensuring jobs for bureaucrats.
What could then be done to increase the wealth of EU citizens in the long as well as the short run? In the first place, the EU countries could choose to use the agriculture subsidies on corporate tax reliefs encouraging investments in R&D. This would leave the EU region using 2.4 % of total GDP on actual improvement. An increase like this would mean that the EU region would spend $298 billion on R&D compared to the US’s $344 billion. Secondly the EU could stop taxing agricultural import from developing countries, leaving these economies with a fair chance of self-propelled economic development as well as securing cheap agricultural goods to EU citizens. Last but not least we would save the costs of unnecessary bureaucracy, since we wouldn’t need to send nearly as much development aid to developing countries in view of the fact that they would be better off as a result of free markets.