Britain, the EU and Canada have instituted regimes of “thought police” where police departments randomly arrest those “guilty” of politically incorrect social media postings. They have also in recent years suffered economic growth rates far below their historic norms, which have produced a yawning gap between their living standards and those of the by no means economically dynamic United States (until this year, the probably robust growth figures for the 3rd quarter of which are being held back by the presumably anti-Trump BEA statistics agency). The two factors are closely connected; a system of thought police was economically ruinous behind the Iron Curtain and even in its current form is crippling growth today where it has appeared. I will explain how and why.

In the halcyon days of the 1990s, when Communism appeared to have been defeated and History was supposed to have Ended, the prevailing wisdom was that democracy was such a fabulous system of government that the U.S. only needed to get it adopted in any Third World country, no matter how apparently unpromising, and rapid growth would automatically follow as the country’s economy deepened its connection with the world and attracted foreign investment.

Thirty years of experience have shown us that this was over-optimistic, like most things people believed in the 1990s. In the wrong soil, and even in many countries previously thought immune to backsliding, a democratic electorate could make foolish choices, bringing in Marxists, extremist Greens or others who fought against good economic policy. Even more damaging, in countries where the electorate made no obvious mistakes, or where, as in the EU, the electorate lacked proper control, the bureaucratic state could pile Pelion on Ossa in idiotic regulations and foolish macroeconomic policies, making it impossible for the electorate to determine who was responsible for their thoroughly suboptimal outcomes. Britain since 1990 has been a prime example of the latter difficulty; the British electorate now seem to be opting for “None of the Above” in the form of Reform and, alas, the Greens – and who can blame them?

There are two aspects to the malaise in Europe caused by the increasing level of censorship. First, the electorate is not getting a full range of information. Even without formal censorship, the media environment is so hostile to capitalism and so wedded to sundry anti-capitalist nostrums that ordinary electorates are given a wholly biassed view of the world. In a market where ideas flow freely, they can correct these misapprehensions through social media, getting information through influencers who oppose the mainstream media mindset. In Europe’s climate of censorship, the alternative sources of information are cut off. This may be by state action against domestic individuals (over 10,000 people have been arrested in Britain this year for social media postings of which the authorities disapprove). Alternatively, the means of transmission may be prevented from operating in Europe by punitive fines such as the $140 million recently imposed on Elon Musk’s free-speech X.

The other damage from censorship, far more serious for Europe’s long-term economic success, is its chilling effect within the education system and elsewhere on the continent’s scientists and entrepreneurs. An EU bureaucracy that proclaims its objective to be “a regulatory superpower” is devastating to the innovation capability of all those within its realm. Not only do its regulations themselves stifle innovation, but the effect of all the society’s leading thinkers giving up on innovation and instead attempting to perpetuate the bureaucracy is truly chilling upon the finest minds, who by definition are original thinkers, whose original thoughts inevitably disturb the intellectually entrenched defenders of the status quo.

Europe resembles the Airstrip One of George Orwell’s Nineteen Eighty-Four, but with far more sophisticated technology that enables the central power structure to know more about what its citizens are doing and indeed thinking and punish them accordingly. Indeed, in time it may have very little to punish; 1984’s Winston Smith, employed in the Records Department of the Ministry of Truth, does not appear to have obtained a university degree (very few English people did in 1948, when Orwell wrote the book). Thus, having spent his entire adult life as a cog in the state’s wheel but without much direct indoctrination except on the TV screens which he ignores, Smith can eventually develop a rebellion against the system as well as a love affair with a girl who is similarly developing doubts about the regime. The scenes of torture and remorse at the end of the book and the Party’s ultimate victory of the human spirit may as yet be legally beyond the EU’s capabilities, but that’s certainly not for want of trying.

However, modern university education, extended as a matter of quasi compulsion to half the population and all those in the controlling sectors of society, gives the establishment far greater indoctrination capabilities than could be produced by Big Brother’s primitive television. (College debt also leaves the young graduates suitably economically subservient.) With university professors at the better colleges universal in their enthusiasm for what has become Party doctrine and their detestation of intellectual free-thinking, students are forced to conform to the accepted worldview whatever private beliefs they may have had on entering college.

After such a training, which extends even to the science departments, graduates may be incompetent as scientists (lacking as they do the basics of middle school mathematics, as the University of California, San Diego has discovered) but they will be admirably fitted for modern life. Some will become bureaucrats in the government or large companies, conforming to the accepted norms while engaging in a bitter struggle of internal power politics, some will become journalists, forwarding their careers by producing journalism entirely in conformance with accepted thought.

More important to innovation, some will become scientists, producing well-received peer-reviewed academic papers that confirm the accepted wisdom on such matters as climate change or the environment – because without conforming to such wisdom, the journals will ensure that the papers do not get published. The peer-review process is now hopelessly flawed, as evidenced by the peer-reviewed paper in “Nature” now wholly withdrawn that showed $38 trillion in annual damage from climate change by 2049, but had misplaced its decimals and included false data from Uzbekistan which completely distorted the analysis. If the reviewing peers are all believers in a particular scientific “religion” then they will be no more likely to catch errors in conforming papers than was the Spanish Inquisition, and they will place an immovable block against any “heresy” that represents scientific advance. Galileo would have been burned at the stake by today’s EU!

Such a society, “Regulatory superpower” or not is not economically competitive. Indeed, it is likely that European GDP per capita and therefore living standards have declined since 2007, except in the poorest countries like Romania and Bulgaria that are still being brought up towards the EU norm. The United States through its college system has placed similar obstacles in the way of economic health. We are used to thinking that “free” democratic societies such as the EU, Britain and the U.S. will inevitably outcompete the repressive Communist autocracy of China, but today the gaps between the West and China in terms of thought control and civil liberties are far less than they used to be.

China has speech codes and represses dissidents, yes, but scientific advances are far less hampered in China by the dead hand of Western universities and by the even more appalling economic cost of the “climate crisis” and its mitigation policies. While the West retires its nuclear power stations, takes at least a decade to build new ones, and engages in such follies as banning new North Sea exploration licenses for oil and gas, China is building both nuclear and fossil-fuel power stations at a rapid rate, essentially unhampered by the appalling regulatory jungle that infests the West. China will have power for Artificial Intelligence data centers as well as the rest of the economy, whereas Western countries are likely to face severe power shortages and draconian cost increases by 2027 or 2028. Moreover, China’s Artificial Intelligence models appear to be smaller than their supersized and overcapitalized Western equivalents, yet they are in some respects already superior, having caught up quickly with the West’s modest initial lead.

As for intellectual restrictions, I am currently reading the science fiction worldwide bestseller by Cixin Liu “The Three-Body Problem” and I am struck by the autonomy and intellectual influence of the average capable Chinese scientist, free as they are from arbitrary scientific “religions” such as climate change.

Politically, we must pray that China does not take over the world economy; intellectually, it may very well deserve to. Only by fighting hard against the disgraceful restrictions on free speech and imposed intellectual orthodoxies of the West can we hope to take advantage of free capitalism’s gloriously superior capabilities.

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)