A Stronger ‘Political Europe’ might save a Stumbling ‘Economic Europe’

11 Jun


 

            It was only a few years ago that Europe was being praised as the savior of world order, and heralded as the hope for the future of world order. Books with such titles as The European Superpower and Why Europe Will Run the 21st Century were widely read. They celebrated the realities of a European post-colonial recovery, even a new type of ascendancy, results that were welcomed by many who hoped for a more peaceful and equitable world. I shared much of this enthusiasm, believing that the European Union was a bold and generally progressive experiment in regionalism that was better suited to our era of intensifying globalization than a state-centric world of sovereign territorial communities habituated to the dynamics of warfare. This statist world order had been evolving through the centuries, but always with the premise that the sovereign state was not subject to external authorities and law if its fundamental security interests were at stake. The origins of this state system are conveniently associated with the Peace of Westphalia in 1648 that brought to an end the bloody Thirty Years War, a struggle between Catholics and Protestants to determine primacy within Christendom. 

 

            A world of regions provided a structural vision that seemed an attractive sequel to a world of sovereign states. It seemed more attainable than a quixotic leap in the direction of world government, which neither political nor business leaders took seriously. Populist forces were also suspicious of any advocacy of world government, generally fearing it was intended as or would turn out to be a scheme for Western dominance. From these perspectives the EU seemed to be the most interesting world order game in town!  It was an exciting experiment in world order that had grown through the years far beyond its early modest post-1945 beginnings as an instrument for limited economic cooperation on matters of coal and steel among a small number of European countries. By stages the EU had become the most impressive supranational presence in modern times, seemingly a far more significant alternative to state-centricism than the UN or even the international financial institutions (World Bank, IMF, WTO).

 

            European regionalism was mainly applauded in mainstream circles because of its achievements associated with economic integration that produced benefits in trade and investment, as well as overall economic growth. EU was not only a clever adjustment to European participation in a globalizing world economy that featured the expanding role of such major actors as the United States, Japan, and China, it also seemed to facilitate a positive European future . Perhaps, most notably, Europe had become a culture of peace, not a small accomplishment on a continent long ravaged by devastating wars, particularly in the 20th century. In a stimulating book, Where Have All the Soldiers Gone, its author James Sheehan informs us that “[t]he eclipse of the willingness and ability to use violence that was once so central to statehood has created a new kind of European state, firmly rooted in new forms of public and private identity.” (p. 221) Most especially, this new European outlook, while certainly not pacifist, was generally seemed disinclined to endorse global militarism.

 

            Such a shift in Europe was not without ambiguities. Europe’s habits of obedience to Washington acquired during the long Cold War often led European governments to give priority to their alliance relations with the United States rather than give expression to this altered political consciousness. Some skeptics suggested that Europe had not really adopted a culture of peace, but rather found it expedient to concentrate their collective energies on meeting the perceived threat posed by the Soviet Union. NATO waged war in 1999 to end the oppressive Serb occupation of Kosovo in a situation in which there did exist credible dangers of ethnic cleansing and the encouragement of an Albanian majority population that welcomed the intervention. Although European governments were split on backing the Iraq War in 2003, the public opinion in every European country was strongly opposed to the war. NATO had been a defensive regional alliance generated by concerns about Soviet expansionist ambitions and anchored in the military capabilities of the United States that seemed dedicated to the defense of Europe even if meant enduring the onslaught of a third world war.

 

            Above all, the EU evolution confirmed the view that intra-European relations were now insulated from war, that open borders did not pose security threats, and that a common European foreign policy was likely to be achieved in the near future. To some extent, the EU reinforced this positive image by taking the lead in efforts to shape a responsible global policy on climate change.

Their efforts were so successful that the United States at the 2009 Copenhagen UN Conference on Climate Change tried to build a new coalition of pro-growth economies with the intention of marginalizing the European insistence on cutting back drastically on greenhouse gas emissions.

 

            Europe veered in a wrong direction after the 9/11 attacks when it allowed NATO to express solidarity with the United States decision to respond by way of launching a global war on terror that persists. This implicated Europe in the dubious approach by the neoconservatives in Washington to pursue a worldwide grand strategy aimed at global domination. It completely transformed NATO into an instrument of post-colonial Western interventionary diplomacy, having nothing to do with the defense of Europe, and engaged in warfare in such non-European battlefields as Afghanistan and Libya. The claims to achieve a culture of peace were deeply compromised by this participation in these non-defensive wars, and as a result the idea of an emergent progressive European alternative to state-centricism has almost vanished from the imaginary of a preferred future for humanity.

 

            But more than peace, Europe also showcased the realities of a humane form of capitalism in which the mass of society could enjoy a secure and satisfying life, a welfare state in which high quality education and health care was provided, human rights upheld and implemented by a regional judicial process that had the mandate to override national policy, and an economic space that combined robust growth with the free flow of capital, goods, and labor. This 21st century social contract between the state and its citizenry that emerged in Europe seemed to provide a model for others to follow, or at least to be challenged by. Other nearby countries seemed eager to join the EU to benefit economically and politically from such an association of states in which the whole seemed definitely to exceed the value of the parts, and extremist politics of either left or right seemed precluded.

 

            Disappointment with developments pertaining to Europe can be expressed schematically. The preoccupation with economic Europe produced an accommodation with populist insistence on a decent life to produce advances in ‘social Europe’ and this produced a climate of opinion that allowed the radical step of monetary integration. This process proceeded but without corresponding political integration needed to establish a strong European identity. Political Europe, while enjoying some governmental presence in the form of the European Court of Justice, European Court of Human Rights, and the European Parliament, never generated a sense of Europeanness that extended beyond market ambitions, and perhaps the aggrandizing moves that prompted the enlargement of the EU to encompass the countries formerly part of the Soviet Bloc. As the great French Europeanist, Jacques Delors, well understood, without congruence between economic and political integration, the onset of a crisis affecting money and markets will revive fierce nationalist sentiments and accompanying blame games. Instead of a bold experiment in regional identity politics, we seem faced once again with Europe as a collection of separate sovereignties.

 

            All is not yet lost, but there is a message beyond that of the obsessive bailout/default dialogue. It is that Europe to ensure its future must renovate its political architecture. This means overcoming the peculiar capitalist brand of economic materialism that seems perversely convinced that if money and banks are the problem, then money and banks must be the solution. No, the solution a political, ethical, and psychological leap of faith that a European sense of community is necessary to save the EU and the constraints of obsolete nationalism, and therefore it is possible.   

 

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7 Responses to “A Stronger ‘Political Europe’ might save a Stumbling ‘Economic Europe’”

  1. Jeremy R. Hammond June 11, 2012 at 10:03 pm #

    I respectfully and strongly disagree that rejecting state sovereignty in favor of even more centralized government power can be any part of the solution. The problem with the euro is not that this economic centralization was not accompanied with political centralization. The problem with the euro is the centralization of power itself and loss of political and economic sovereignty. I find it hard to reconcile a belief in democratic principles such as the right to self-determination and state sovereignty with an argument that we need to move closer toward global government, with centralized political power in Europe paving the way. We’ve seen this error in our own country, where the chains the Constitution bound around the federal government and protections of states rights and individual Liberty have been cast off by abusive centralized power, an abusive government that commits crimes around the world. Even more government and more centralization of power isn’t the answer to the abuses of government we witness daily.

    One of the most egregious abuses of which I speak is the government-legislated private monopoly over the supply of money and credit, in the U.S., the Federal Reserve, and in Europe, the ECB, both of which operate according to the same Ponzi scheme, creating so-called “money” out of nothing and charging interest for its use, which requires even more money printing, since the interest due also needs to be created out of nothing. This is why the Fed sets a target rate of inflation, why the dollar has lost 98% of its purchasing power since 1913, and why we are bombarded with propaganda that “deflation” is the practically the work of the devil himself. In this system, “money”=”debt”, and more and more buyers of U.S. debt are required each year to keep the largest Ponzi scheme ever perpetrated against mankind going. This system is unsustainable. We are seeing this all around us today.

    How did we get into the current financial crisis to begin with? The primary culprit is the Federal Reserve itself, which created the housing bubble with its inflationary monetary policy that kept interest rates artificially low. Government policy of encouraging homeownership contributed to the bubble, and one symptom of it was that Wall Street had a feeding frenzy with it, which the Fed also encouraged, such as by refusing to regulate derivatives or credit default swaps (a case of the fox guarding the henhouse) and itself monetizing mortgage-backed securities of the government-sponsored enterprises (i.e., Freddie Mac and Fannie Mae), which also sent the message to the rest of the world that these securities were as good as US Treasury securities.

    How about the ratings agencies? Where were they? They are a government-enforced oligopoly who profit by giving ratings to the same institutions issuing these debt instruments, which ratings imply compliance with SEC regulations. In a free market, this might not necessarily suggest a conflict of interest, since an agency would still depend on providing accurate and credible ratings in order to edge out its competition. But when government steps in and eliminates the competition and establishes these agencies as an oligopoly, that market discipline is also removed, leaving this situation where the agencies were giving junk deriatives “AAA” ratings.

    “Capitalism” is inevitably blamed for this crisis, but the truth is it never could have occurred if we actually had a free market system, which we do not. Under a free market system, the market would determine interest rates, not some government bureaucrats on the Fed’s board of governors. It is a fallacy to blame the free market for our situation for the simple reason that a free market does not exist under this four decades-old global experiment with fiat currencies.

    More government cannot possibly be the solution to a government-created financial crisis.

    • Richard Falk June 12, 2012 at 10:27 am #

      Thanks, Jeremy, for this illuminating response. Your sophisticated analysis of the economic crisis is very persuasive to me in most respects.

      My post clearly partly conveyed a wrong impression. I was not praising the EU because it moved closer to world government. I have long been a critic of world government, but also a critic of state-centric world order (my views are set forth in an essay entitled “Anarchism without Anarchism” published a year or so ago in the journal MILLENNIUM put out by LSE.

      I believe that the regionalization associated with the EU could produce a net reduction in governmentality, especially if the commitment to subsidiarity is genuinely implemented. Also, with a weaker state structure self-determination becomes more available for minorities entrapped in states, e.g. the Catelans or Basque peoples in Spain. I see the EU as a political engine promoting political decentralization.

      Your comment made me realize that I did not express my views very clearly this time, although I am aware that some disagreements between us would remain.

      Best wishes,

      Richard

      • Jeremy R. Hammond June 12, 2012 at 6:43 pm #

        Thanks for the clarifying remarks. I will check out the essay you mention.

  2. monalisa June 12, 2012 at 2:16 am #

    Dear Richard,
    at first I would like to say that I still admire you very much for your steadyfastness in supporting the Palestinian Plight.

    Concerning the European Union:
    Europe isn’t a free continent. The US armies are still very much prevalent and in another word, occupy Europe (this word is neither liked bei European politicans, because its shows its weakness, nor bei USA because they want to hold “high” their “pure good interests”) – and this more than 65 years after WWII.
    And especially after the fall of the former USSR and the Berlin Wall.

    So Russia constituted never an enemy to European states except when it came to the WW. In fact, throughout history it was welcomed and even collaborated on the sides of some European countries against another European countries. This is a typical European mindset of states: if a state was becoming to big other states would not like it. However, nowadays this has changed. What has not changed is the alien feeling of the peoples to the other European states: this comes because there are so many languages in Europe. For example to go to France it is much better and a tourist is more welcomed when speaking even only a frew words French. Same goes to the other countries. Who is speaking Polish? Who is speaking Hungarian ?

    So creating the EU would be fine, however it was lacking right at the beginning the most important outset: being free of foreign military forces.

    Then some politicans got the idea of creating an EURO as a monetary unit for EU member states if they wanted to join this monetary union.

    The whole thing is wrong in my opinion: it is as someone is putting the cart before the horse.

    Inbetween the EURO was strong and the USA was going to be nervous because of their debts and thereby in danger of loosing the monopol of the US Dollar as worldwide
    monetary transaction basis for materials against the Euro: i.e. gold, cupper, silver, wheat, cotton and so forth.

    Having explained the beforementioned as a point of view from the middle of Europe I would say:
    The EU is going the way of a very much reglementary body.
    However, lacking to put fences for banks and those huge companies whom are dominating and even “eating” those smaller companies. Also those huge companies are always bribing and who knows whom they bribe: starting from politicans to the mainstream media.
    A free market doesn’t exist, as those big companies are dominating.
    Also as long as the EU supports some areas in farming products for example, Africa will never be able to get stronger (also not to forget other foreign interests there, USA is instigating turmoils and supporting very much with waponry and China is buying land and so forth !!).

    The EZB has mostly implemented the same rules as in other countries like USA.
    However, there is a big difference: it isn’t independent and private as in USA. It has a certain freedom, but has to obey some rules and is states-owned.
    In my opinion not enough rules.

    The fault in the EU is: tax payers are far too much reglemented. Big companies and private banks not. This creates an inequality, loopsided, which will not work out for a longer time.

    Having explained the beforementioned:
    I think it is clear that the EU will not have a positive bigger influence on world politics as long as it is in the NATO compound, which is under the command of the USA.
    Also not to forget, as long as some European countries aren’t giving up their still prevalent “colonial aspirings” (so almost dead, and under US NATO command never able to be realized again), as long the political “stand” of the EU is practically more ruled by USA.

    In short: EU is still in some ways the puppet of USA.
    (We are overflooded by US movies, series etc., which are doing their job: i.e. the subtle influence in shaping some sort of opinions.)

    For me, seeing all these created wars, lies etc. I cannot say that I am happy with this status of the EU.

    monalisa

    • Richard Falk June 12, 2012 at 10:13 am #

      Dear Monalisa:

      As always I benefit from your comments, learn from them. You are of course right to mention the foreign occupation of Europe and the degree of persisting subservience to the U.S. in relation to its continuing pursuit of what I have called ‘the global domination project.’

      Perhaps, I have valued the EU experiment too much from the perspective of overcoming the limitations of a state-centric world order in an increasingly globalized setting, and the seeming turn away from intra-regional rivalries in the process of economic and political integration.

      In any event, you make me keep thinking, and I promise to be more careful in the future if I dare to touch on the future of Europe.

      warm greetings,

      Richard

      • Terrell E. Arnold, Senior US Foreign Service Officer Retired June 12, 2012 at 7:00 pm #

        Richard: I think you have outlined the problem that currently besets Europe and is beginning to interfere with the tranquility of practically every nation state: Our global management of the common spaces is demanding greater, clearer, more widely agreed upon rules and habits. This does not, per se, demand creation of a some Federal World Government that I and my counterparts debated as early as the late 1940s. However, the situation is demonstrating that we do need systematic management of the common spaces and that, of course, includes common services.

        Recognition of those needs led to the creation of the United States system. In that system we have fifty states, virtually each of them larger than some present members of the United Nations. We arrived at that unique rule that only powers not specifically allotted to the states could be exercised by the Federal system. That meant basically that the Fed inherited the task of managing the common spaces, services and interests which no individual state could do without interfering with other states. Some like conception appears to me increasingly necessary for the global system, and the needs and problems are growing larger every day. Europe was actually addressing those needs on the economic and social levels while more or less assiduously evading them at the political level. And such exceptionalists as the Brits felt/still feel that avoiding anything like a political boundary crossover cannot be.

        Our US system has learned piecemeal that the boundaries between state and federal are not easily managed as merely political issues. The practical levels/needs of traffic–at all the levels we engage–are simply too numerous, too complex, and too interactive to permit of happy, politically comfortable distinctions.

        There is much more to come. As our numbers increase and our resource needs become potentially more conflictual, we do not face the traditional run or fight sets of choices that have been available from time immemorial. In the crowded future we anticipate, if we run we will find there is virtually no place to go; if we fight we will probably win some battles, but we will discover that the coming war for survival on our increasingly crowded will actually allow no winners except cooperation or extinction.

        I greatly admire your work and read it in the many places I find it.

        Thank you.

        Terry Arnold

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