The Euro is in trouble, and the news just keeps getting worse. There is now open talk of a post-Euro Europe, and such a turn would be a serious strike against any robust European Union. After an all-night session last night, however, Europe’s leaders are cautiously optimistic that a deal can be struck to save the Euro and preserve European unity.

The collapse of the Euro would, of course, be a devastating blow to the cosmopolitan aspirations of the European intelligentsia who, at least since Kant, have dreamed of European unity and the political peace and economic prosperity that would inevitably result. Indeed, so much is invested in this version of European union—including financial resources, intellectual energy as well as reputations of Europe’s best and brightest—that failure has been virtually unthinkable even as the facts on the ground appear to indicate that the unthinkable needs to be thought.

Nevertheless, it appears that those calling the shots will double down on their bet that Europe and the Euro can survive and thrive as a single political unit with a single currency. This renewed commitment to a united Europe will, of course, require a reinvigorated effort to remedy the putative causes of the current crisis and these remedies will invariably include increased power to a central body that can better monitor the European economy and ultimately dictate fiscal policy. In short, we will be told that the Eurozone is suffering due to insufficiently centralized power and the obvious solution—one that will finally realize the peace and prosperity that has thus far been tenuous—is more centralization.

This possible “solution” to the European crisis reveals the degree of hubris required to persist in a failed experiment. It also reveals a stunning lack of political imagination, for the obvious alternative—decentralization with local currencies, national sovereignty, and federalism—has been contemplated only by reactionaries and others with little effective voice in the current structure. Their time may be coming.

Of course, suggesting that decentralization is the answer will be met with skepticism by the true-believers in European unity. What about the virulent nationalism that racked Europe for so long? What about the economic destruction not to mention the wars and death that plagued Europe for centuries and culminated in the blood-bath we call the twentieth-century? In short, is decentralism possible without tribalism?

This is a fair question and one that needs to be answered. But this objection is hardly a compelling reason to reject it out of hand, especially when it seems obvious that the centralization that effective unity is utopian in theory even as events on the ground show it to be unworkable and ultimately dangerous. It is utopian, for it rests on an assumption that perpetual peace and prosperity are (always) just one policy away; it is unworkable if the current troubles are any fair indication; and it is dangerous, for centralization of power slowly erodes all competitors and there is no reason to imagine that such a power will be benign forever. The treaty currently under discussion, for example, includes an unspecified “automatic correction mechanism” for countries that break the rules. Hmm.

Decentralization, on the other hand, is not utopian, for it harbors no false illusion of perpetual peace. And while the prospect of a renewed and vicious nationalism must always be guarded against, this is surely no more frightening than an absolutely centralized power without peer. In fact, while nationalisms can be countered by other nations, a unified and centralized authority can be countered by nothing other than good will and optimism.

Ultimately, the issue turns on matters of scale. Through this lens, the current crisis (and this is merely part of a broader crisis that extends beyond Europe) appears as a failure to appreciate the fact that optimal human institutions—those that facilitate human flourishing—cannot exceed a certain scale, and when they do, they will inevitably suffer.

Europe’s problems, then, present an opportunity to reconsider ideas that have been ignored for too long. A renewed commitment to the principles of political decentralism, economic localism, and cultural regionalism is a radical prescription for a Europe haunted by the specter of unity, but it would provide the opportunity for Europeans to reconsider the meaning of citizenship, culture, and community on a scale that is meaningful, which is to say, suited to human beings.

As the crisis deepens and as centralizing solutions continue to show themselves inadequate, perhaps one day in the not-too-distant future saner heads will prevail and consideration of human scale will emerge as an idea whose time has come. The sooner we on this side of the Atlantic learn this lesson the better we will be able to manage our own troubles.

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13 COMMENTS

  1. Perhaps when we are finally finished with the pistol-whipping of absolutism regarding “local ” vs. “Federal”, we might find that an intelligent species knows how to order its life in a scaled and subsidiary manner.

    The principle benefit of most local political action is that it occurs amongst neighbors, for better or worse and does not have the resources nor time to pursue the kinds of elaborately epic charades that the Federal Freebooters seem so consumed by.

  2. Article 3b of the Maastricht Treaty institutionalized subsidiarity in the European Union. So, why is subsidiarity so scarce, if existent at all, in Europe?

  3. I don’t know, but maybe it is similar our situation in the U.S., where powers are reserved to the states, but over time the Federal government grows more powerful. If you don’t assert your rights, you lose them, and it is hard to be assertive when you are dependent. In a recent fiscal year here in Pennsylvania, almost 40% of our state budget was funded by the federal government. We pay our taxes to Washington, they set the conditions on its use, and send it back to us. This is bound to erode our power for local decision-making, but is inevitable when the majority of the electorate wants a federal solution to every new problem that arises.

  4. Hugh- Subsidiarity is a concept that can’t work in societies that are radically secularized and individualized.

  5. We need a renewed understanding that the role of the state is to preserve peoples, not just protect rights. The function of borders is to protect peaceful mutual co-existence. True, sometimes it fails when a nation decides not to respect other nations’ borders. But that is their fault, not the fault of borders. The EU has decided to not go for mutual co-existence, but mutual abnegation, to dissolve all the ancient and venerable peoples of Europe. Maybe this will bring peace, but at the cost of the extinction of the peoples of Europe, when you could have had both.

  6. “This possible “solution” to the European crisis reveals the degree of hubris required to persist in a failed experiment. It also reveals a stunning lack of political imagination, for the obvious alternative—decentralization with local currencies, national sovereignty, and federalism—has been contemplated only by reactionaries and others with little effective voice in the current structure. Their time may be coming.”

    Firstly, the EU isn’t a “failed experiment”. In fifty-plus years it has succeeded in rebuilding Europe after being subjected tothe bestial carnage of Anglo-American barbarism, and has provided a safe and compelling refuge for former Warsaw Pact nations seeking a viable alternative to Russian domination and political subservience.

    Secondly, setting the clock back a few moments to Mazzinian national patty-cake reveries is neither imaginative nor reactionary.

    “This is a fair question and one that needs to be answered. But this objection is hardly a compelling reason to reject it out of hand, especially when it seems obvious that the centralization that effective unity is utopian in theory even as events on the ground show it to be unworkable and ultimately dangerous. It is utopian, for it rests on an assumption that perpetual peace and prosperity are (always) just one policy away; it is unworkable if the current troubles are any fair indication; and it is dangerous, for centralization of power slowly erodes all competitors and there is no reason to imagine that such a power will be benign forever. The treaty currently under discussion, for example, includes an unspecified “automatic correction mechanism” for countries that break the rules. Hmm.”

    The same arguments were (and still are!) made against the very nation-states that today are held up as paragons of “localism”.

    Also, competition takes on different forms.

    Finally, as Machiavelli pointed out, Princes (or governments) have to worry about domestic enemies AS WELL AS FOREIGN ONES (i.e. extra-European enemies). How on earth does “localism” address any of this?

    “Decentralization, on the other hand, is not utopian, for it harbors no false illusion of perpetual peace. And while the prospect of a renewed and vicious nationalism must always be guarded against, this is surely no more frightening than an absolutely centralized power without peer. In fact, while nationalisms can be countered by other nations, a unified and centralized authority can be countered by nothing other than good will and optimism.”

    Totally false and erroneous. (Who said anything about “absolutely centralized power without peer” anyway?) As a matter of fact nationalism IS often portrayed as utopian; leaving aside the fact that there is nothing necessarily wrong with utopianism. (The real question is which utopianism is to prevail, not utopianism as such.) Nationalism used to be countered by rival nationalisms. Today only a “unified and centralized authority” can contend with the forces working against European civilization. And these forces will insure that more than mere goodwill and optimism will keep centralized authority in check.

    “Europe’s problems, then, present an opportunity to reconsider ideas that have been ignored for too long. A renewed commitment to the principles of political decentralism, economic localism, and cultural regionalism is a radical prescription for a Europe haunted by the specter of unity, but it would provide the opportunity for Europeans to reconsider the meaning of citizenship, culture, and community on a scale that is meaningful, which is to say, suited to human beings.”

    You may wish to reconsider all of this in the light of the experience of the ancient Greek city-states facing Macedon, or the Italian states of the “Cinquecento” facing the barbarous Transpadanes.

    There is no meaning to your use of the the term meaningful.

  7. anglo american barbarism? Missed that chapter in the old history book

    I don’t know – looks to me like Sarkozy and Merkel have found good use for a crisis – so we fought two world wars to make sure Germany did not take over Europe militarily – and now they take over Europe financially. I find it hard to imagine that European govt’s and their people really want their budgets reviewed and approved by Germany.

    And this plan doesn’t do a thing to address imbalances of the core to t he periphery – when you see youth unemployment hovering around 30% in Spain – and the protracted unemployment and recession the other periphery countries will experience – really looks like a recipe for destabilization.

    Bond markets don’t look so happy with the plan either – and I thought the whole point was to calm the bond markets down?

    Worrisome.

  8. “rebuilding Europe after being subjected tothe bestial carnage of Anglo-American barbarism”

    There is no reason to read any further after this reveals the writer to be utterly insane.

  9. I agree on the whole, but to complicate things a bit…

    The issue with Europe, and also with institutions like the IMF, World Bank, WTO, etc., is that the scale of economic control does not match the scale of political control. You have central bankers, largely under the influence of Berlin, exerting such powerful financial pressures that they have effectively fired two democratically elected heads of state. As such, there is no formal process, or at the very most not nearly enough formal process, by which the central bankers and fiscal policymakers are accountable to the citizenry of Greece and Italy.

    This is one of the greatest innovations of the US Constitution, I’d argue, and why the Great Compromise is aptly named. Our bicameral legislature gives the big states a bigger voice in one chamber but keeps the smaller states from being overwhelmed via their (IMO, currently somewhat out of control) influence in the Senate. The Constitution also manages to balance localized control with federated powers and centralized powers. Yes, it’s under constant debate, but that’s a good thing.

    Even if the eurozone falls apart, the long game for Europe is still going to be towards some form of union. I’ve been saying for at least 15 years now that while everyone has been saying that the age of the nation-state is fading, I think what’s replacing it slowly is a “union state,” which manages to combine multiple divided units into a semi-sovereign union government. This isn’t exactly brand new — the oldest one I’ve dug up is the Iroquois Confederacy (sometime in the 1450-1600 CE range), but has been replicated with varying degrees of success in the USA, the USSR, the UK, Yugoslavia, UAE, the Netherlands, and in less formal form, economic unions like the African Union, Mercosur, and NAFTA/CAFTA. The pressures that drove this aren’t going to change, but the ones that will succeed will be the ones that don’t focus exclusively on monetary, fiscal, and trade issues, and pay plenty of attention to solving the very sticky political problems.

  10. There’s nothing “Utopian” about union as a concept. Economically, it worked during the Medieval period through the Hanseatic League, politically through the HRE, and there is, of course, the entire history of the New World to show that geographically large groupings of culturally synonymous individuals can work together perfectly fine as well. Even in this instance, the problem is not some nebulous issue of scale or culture (which you avoid actually defining), but the simple lack of a real central bank with the only powers that makes a central bank worthy of that title; the ability to print money and act as lender of last resort.

    How was a monetary union without a unified monetary policy ever going to weather a financial crisis? How was a monetary union without a unified bond mechanism ever going to successfully respond to demand shocks or bank runs? How was a monetary union lacking simultaneous transfers to weaker member states ever going to ensure that large members didn’t horde all the benefit to themselves and bully everyone else? How was a monetary union constructed slap-dash from the desires of an unelected elite ever going to have the support of the citizens of the economy they administered? The answer to all of these questions, as this crisis shows, was “It can’t”.

    Regionalism is not the solution; if anything, it is the regionalism of the Germans in insisting their banks be made whole at the cost of everyone else that is tearing the EU apart right now; not the “Utopian” insistence that a unified economy should be managed as one. What we’ve seen here is a failure of nerve, not of political philosophy. Let the ECB print Eurobonds and this crisis ends tomorrow; simple as that. However, that won’t fix the systemic problems in the EU. A Union can work, but not as a pet-project of the political and capitalist classes.

  11. Perhaps the Bond Markets might be assuaged by printing presses but calming them is like calming a Zombie. The principle defect in thinking within the current rigged-capitalist mindset is that where we were once interested in producing tangible things of worth, the entire system is now primarily a carrion eater, giving renewed credence to the selection of the Bald Eagle as our beloved icon.

  12. MTBinDurham: The Iroquois league is the oldest example of a federation that you can come up with? What about European feudalism? That was a federation of sorts — even a confederation at one stage. How about the Swiss confederation? And there were confederations back during the Roman Republic.

    I’m a bit touchy on this topic because of all the idiots who claim that the U.S. Constitution was based in part on the Iroquois confederation. These people understand neither the U.S. Constitution nor the Iroquois system of confederation, and spread a lot of ignorance about both of them. There is a lot to be learned from the Iroquois system and other moiety systems that should be of interest to people who care about community. But these are a different type of confederation than the U.S. or European type.

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