Old Europe, New Europe and USA: comparative economic performance, inequality and the market-led models of development

The collapse of Communism in Europe and the recent enlargement of the European Union have significantly refashioned the world. As one of three developed economic blocs (Europe, North America and East Asia) Europe has increased in size and yet faces internal divisions between old and new Europe. While having shared interests, these blocs are also rivals, as is most strikingly reflected in the struggle for markets and over the expansion of imperial influence. At the same time globalization, economic transformation and integration have been profoundly shaped by Anglo-American/neo-liberal economic ideologies. The aim of this paper is to consider some of the implications of these developments for the new Europe extending from the Atlantic to Russia. Essentially it will deal with two issues. First, it will ask whether Europe has lost economic momentum relative to its trans-Atlantic rival, qualifying the earlier view that Rhine capitalism was superior to Anglo-American capitalism. Second, after considering the question of whether the European Union is a catch-up machine in a world in which inequalities are frequently widening, it will consider in some detail the territorial and social impacts of transition in Central and Eastern Europe (CEE) and the former Soviet Union (FSU). Throughout, attention will be paid to the impact of market-led models of development on growth and inequality, and the way in which a subjection of different parts of Europe to similar economic mechanisms, while in some senses making different parts of the continent more similar, also produces profoundly differentiated economic and social geographies.