Thursday, July 14, 2016

Some insights into the crisis of the European Union as revealed by Brexit

Traveling briefly in Croatia and Montenegro last year led me to think more than I had formerly about "Europe." The former country is part of the European Union; the latter is not and eagerly wanted into the club. And now the English want out while the Scots are horrified. A mess indeed.

Following promptings from friends, I've been trying to educate myself.

Tony Judt, a British historian who taught at NYU, first dragged an awareness of central and eastern Europe into my consciousness; like many in the U.S. who came up during the Iron Curtain era, that Europe was a blank in my mind. Then I read his epic Postwar: A History of Europe since 1945 and felt as if I'd had blinders removed.

In 1996 Judt focused his sharp gaze on the European Union, offering A Grand Illusion?: An Essay on Europe. He very much wanted to see this venture succeed:

I am enthusiastically European; no informed person could seriously wish to return to the embattled, mutually antagonistic circle of suspicious and introverted nations that was the European continent in the quite recent past. Whatever moves us away from that Europe is good, and the further the better. But it is one thing to think an outcome desirable, quite another to suppose it possible.

He worried about the "losers" -- people and regions who would be hurt by unmediated application of free markets' "creative destruction" to old economic modes, by what would feel like a tsunami of cultural changes and unfamiliar people, by seeing some of their local democratic autonomy subsumed into the larger whole. Had he lived until 2016, he would have foreseen Brexit and the xenophobia it has unleashed:

... however desirable in principle, an ever-closer bonding of the nations of Europe is impossible in practice, and it is therefore perhaps imprudent to promise it. In arguing for a more modest assessment of Europrospects, and for a continuing recognition of the proper place of the traditional state, I don’t wish to suggest that there is something inherently superior about national institutions over others. But we should recognize the reality of nations and states, and note the risk that, when neglected, they become an electoral resource of virulent nationalists. It may also be true that the old-fashioned nation-state is a better form in which to secure collective loyalties, protect the disadvantaged, enforce a fairer distribution of resources, and compensate for disruptive transnational economic patterns.

He worried in 1996 that

... we shall discover that it has become little more than the politically correct way to paper over local difficulties, as though the mere invocation of the promise of Europe could substitute for solving problems and crises that really affect the place.

Apparently for a majority of English people, he was prescient.
According to the Economist, Dani Rodrik, a Turkish professor at the Kennedy School at Harvard, has named something he calls the "Globalization Trilemna" that sums up discontent with and within the European Union:

In the late 1990s he pointed out that deeper economic integration required harmonisation of laws and regulations across countries. Differences in rules on employment contracts or product-safety requirements, for instance, act as barriers to trade. Indeed, trade agreements like the Trans-Pacific Partnership focus more on “non-tariff barriers” than they do on tariff reduction. But the consequences often run counter to popular preferences: the French might find themselves barred from supporting a French-language film industry, for example.

Deeper integration, Mr Rodrik reckoned, will therefore lead either to an erosion of democracy, as national leaders disregard the will of the public, or will cause the dissolution of the nation state, as authority moves to supranational bodies elected to create harmonised rules for everyone to follow. These trade-offs create a “trilemma”, in Mr Rodrik’s view: societies cannot be globally integrated, completely sovereign and democratic -- they can opt for only two of the three.

To this way of looking at things, the English majority in Britain has opted for democracy and sovereignty over integration. This was a vote about where people's values were located; they chose smaller, but for their own known kind.
Thomas Pikety, the French economist whose Capital in the Twenty-First Century meshed so neatly with the Occupy movement's fingering of the One Percent as the source of our increasing inequality, brings a French view to the strains in the European Union. He is even more pessimistic about the Union than Judt, twenty years on.

The legal and political system in which Europe has become ensnared which is ultimately based on the canonisation of free movement and the free market, with no serious counterpart in terms of collective regulation, will lead us straight to a whole series of Brexits.

... if we want to be able to adopt a recovery plan within the Euro zone calmly and democratically, to restructure the debts and adopt a common tax on company profits, etc., then the institutions have to be re-established on a democratic basis. There is a theory that the European institutions reached a state of ultimate perfection with the European constitutional treaty in 2005 (finally adopted in 2008 in the Treaty of Lisbon) and that all would be well if national political leaders and public opinion  finally had a proper understanding of these marvelous institutions and ceased to be foolish Europhobes.

The truth is that the present European institutions are seriously dysfunctional.

What all these authors agree on is that current European (and U.S.) elites are not finding ways to lead their populations through these strains. Quite possibly preserving inward-looking values, democracy, and a globalized capitalist economy is not possible. This is not good for the world. The Europe of the last few decades has been synonymous with civilized society; for it to revert to even petty barbarism would threaten human survival.
I'll give the last word in this collection of thoughts to that wise old currency manipulator and democracy activist George Soros who warns:

If disaffected voters in France, Germany, Sweden, Italy, Poland and everywhere else see the EU benefitting their lives, the EU will emerge stronger. If not, it will fall apart faster than leaders and citizens currently realize.


Rain Trueax said...

I mostly observed, through having a friend from Norway and one from Netherlands, how the ones in Europe saw it-- and talk about angry reaction. The one in Norway wanted into the EU. The one in Netherlands congratulated Britain from leaving and hoped Netherlands would follow. It's not simple for how it's seen. Economic levels may play a big role in it.

Hattie said...

Great summary, Jan. What I'm learning from reading blogs by people living in ordinary circumstances in England is they feel condemned to drab lives as amenities disappear . Seeing that woman abasing herself before the Queen would make me
blow a fuse if I were British.

Brandon said...

"Seeing that woman abasing herself before the Queen would make me blow a fuse if I were British."

You must be referring to new Prime Minister Theresa May kneeling before the Queen. It's a ceremonial act.