The Economist September 22nd issue has summarized the difference between the two economic philosophies that make such a difference in the quality of life in their Brussels Rules OK article where they say that Brussels is becoming the world regulatory capital replacing America.
"The America model turns on cost-benefit analysis, with regulators weighing the effects of new rules on jobs and growth, as well as testing the significance of any risks. Companies enjoy a presumption of innocence for their products: should this prove mistaken, punishment is provided by the market (and a barrage of lawsuites). The Euopean model rests more on the 'precautionary principle', which underpins most environmental and health directives. This calls for pre-emptive action if scientists spot a credible hazard, even before the level of risk can be measured. Such a principle sparks many transatlantic disputes: over genetically modified organisms or climate change, for example.
"In Europe corporate innocence is not assumed."
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