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The EU is investing a lot of funds into equalizing the standards of living across the Union. This works both directly through direct investments and indirectly through allowing Western European companies to relocate their business to Eastern territories. The final goal is to have the same salary and the same quality of living all across the EU.

However it seems to me that there is an implicit assumption that this equalization will happen exclusively as the result of poorer members getting richer, rather than having both that and richer countries getting poorer in the process. The EU is always boasting about how they're helping out the poor guys, but never admits any harm to the rich guys, as though it doesn't exist in the first place.

What is the reason behind this? Is it because the economic theory is sound and no harm is being done to the richer members? Or is it simply much harder to admit a negative effect exists?

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    Propaganda only works if you can swallow it. – easymoden00b Jun 29 '17 at 17:02
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    Richer "members" as in countries or citizens? Also, can you explain (speculate) why you think it would harm the rich? – Jorn Vernee Jun 29 '17 at 17:56
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    The EU does not invest funds in "equalizing”, it invests funds in fostering growth (that's even the name of one of its directorate-general) and helping poorer countries converge to richer standard of living. So whatever you think of it all, that's not an implicit assumption or an afterthought, it's the goal of these policies while "equalizing" is a side effect. It also seems like pretty standard economic and trade theory, what would be the mechanism that hurts richer countries as a whole? – Relaxed Jun 29 '17 at 18:48
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    @JonathanReez No, the idea is that it makes the whole European economy more efficient and standard trade theory suggests welfare increases on average. Historically, many countries really did catch up that way. In reality, there is more to it and I personally don't think it's a painless process but it's not a zero sum game. That and not "equalizing" is what the EU approach to enlargement has always been. – Relaxed Jun 29 '17 at 19:03
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    @SalvadorDali the top 0.1% will do fine regardless. It's the 99% that should be worried. – JonathanReez Jul 1 '17 at 8:14
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Is it because the economic theory is sound and no harm is being done to the richer members? Or is it simply much harder to admit a negative effect exists?

We don't know. There haven't been so many examples of poorer and richer countries merging. That said, there are any number of examples of poor countries that became rich countries with development:

  • The area now known as the United States was poor by modern standards in 1492. It's not considered to be like that now.

  • Japan was a poor country after World War II, if not before. By 1990, it had a similar standard of living to western countries like the United States.

  • China is much richer now than it used to be.

  • East Germany merged with West Germany and the resulting country's prosperity remains comparable to that of West Germany prior to the merger.

The East German example is especially on point here, as it is an actual example in Europe of a rich western country merging with a poorer eastern country. And in the longer term, it seems to have raised the poorer country up to the level of the richer country. Of course, in the shorter term, there were various challenges in the richer country.

You identify this as so successful that now they get their poor, low wage workers from the former Czechoslovakia. And we're what, a generation and a half from the merger? Austria was a poor country thirty years ago. Now it's where poor countries send their excess workers. In thirty years, will we be saying the same thing about Slovakia getting workers from Hungary or somewhere like that?

There is a class of economic theory that says that there is a limited amount of resources and that the only way to get better results is through concentration (or by spreading the concentration out). However, there is another class of economic theory that says that knowledge is the critical resource and that having more skilled workers makes everyone better off.

Economically, France and the United Kingdom have been rich countries for a long time. They still are today. Other countries have caught up with them but have not greatly exceeded them. By historical standards people in either are fabulously rich. The working class enjoys amounts of food, quality of healthcare, and access to entertainment that would have dazzled the kings of the middle ages.

A side issue is that it may not matter. Under either theory, the poor world can develop without Western Europe. Eastern Europe could become richer by taking export sales away from Germany and France. Or could buy up all the natural resources that Western Europe gets from Africa and the Middle East. Eastern Europe might get richer regardless of what Western Europe does. Under the current system, the West gets the advantage of cheap labor.

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    Just to be clear: Japan was a fairly wealthy country before WW2, an emerging industrial power. It had a substantial navy, with six aircraft carriers. – tj1000 Jul 2 '17 at 1:47

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