Can collective economic security work?

29 June 2011


The European Union is a unique economic and political partnership between 27 European countries.  It has delivered half a century of peace, stability, and prosperity, helped raise living standards, launched a single European currency, and is progressively building a single Europe-wide market in which people, goods, services, and capital move among Member States as freely as within one country.

The European Union (EU) is a political and economic community of twenty-seven countries, established in 1993 by the Maastricht Treaty. The European Union presently consists of 27 countries and has a total population of nearly 500 million citizens (497,198,740).

The idea of collective security can be traced back at least to Kant, whose short and widely influential work Perpetual Peace is as clear and as easy to understand as the Critique of Pure Reason is opaque and difficult to understand. There are many visionary ideas in Kant’s essay, all of which were ahead of his time, and most of which still remain ahead of our time. Here is Kant’s formulation of collective security:

“Peoples, as states, like individuals, may be judged to injure one another merely by their coexistence in the state of nature (i.e., while independent of external laws). Each of then, may and should for the sake of its own security demand that the others enter with it into a constitution similar to the civil constitution, for under such a constitution each can be secure in his right. This would be a league of nations, but it would not have to be a state consisting of nations. That would be contradictory, since a state implies the relation of a superior (legislating) to an inferior (obeying), i.e., the people, and many nations in one state would then constitute only one nation. This contradicts the presupposition, for here we have to weigh the rights of nations against each other so far as they are distinct states and not amalgamated into one.”


After considering the vicissitudes of “lawless freedom” and the perversity of war, Kant continues:

“…there must be a league of a particular kind, which can be called a league of peace (foedus pacificum), and which would be distinguished from a treaty of peace (pactum pacis) by the fact that the latter terminates only one war, while the former seeks to make an end of all wars forever. This league does not tend to any dominion over the power of the state but only to the maintenance and security of the freedom of the state itself and of other states in league with it, without there being any need for them to submit to civil laws and their compulsion, as men in a state of nature must submit.”

While Kant is known as an “idealist” philosopher in the technical sense of idealism, which is to say that Kant sees the world as ultimately constructed out of ideas, this essay of Kant reveals Kant as an idealist as the term is commonly used in conversation. In fact, Kant deserves to be called an idealist in both senses. It is hard to believe that Kant believed in the practicality of his proposals in his Perpetual Peace essay, but I don’t think that there is any question that he did so believe. Kant also wrote a wonderful little essay, which I have quoted on several occasions, in which he argues quite explicitly against those who maintain the impracticality of theoretical ideals.

Surprisingly, perhaps even shockingly, the world has tried to put some of Kant’s ideas into practice. While the League of Nations didn’t work out so well, we still have the United Nations, and though it can’t accomplish much, it is at least a nod in the direction that Kant visualized. The idea of collective security, then, in familiar to all, and can be intuitively summarized in phrases such as there being strength in numbers, all for one and one for all, and the like.

I would like to suggest that beyond collective security in the familiar sense that there is also the possibility of collective economic security, and I would argue that the European Union constitutes an attempt to realize collective economic security. I can easily imagine how others might disagree with me on this. I recall some time ago I was reading a Stratfor analysis in which the writer (probably George Friedman) argued that the rationale behind the European Union was ultimately security, and that the unification of the European economy was only a means to the end of getting Europe to work together abandon its militaristic ways so there wouldn’t be any more blood-lettings like the world wars of the twentieth century.

That Europe is and has been a deeply fractured place was recently reiterated on Stratfor by Marko Papic in The Divided States of Europe:

“Europe has the largest concentration of independent nation-states per square foot than any other continent. While Africa is larger and has more countries, no continent has as many rich and relatively powerful countries as Europe does. This is because, geographically, the Continent is riddled with features that prevent the formation of a single political entity. Mountain ranges, peninsulas and islands limit the ability of large powers to dominate or conquer the smaller ones. No single river forms a unifying river valley that can dominate the rest of the Continent. The Danube comes close, but it drains into the practically landlocked Black Sea, the only exit from which is another practically landlocked sea, the Mediterranean. This limits Europe’s ability to produce an independent entity capable of global power projection.”

Nevertheless, I think that there is a certain segment of people who see strength in numbers economically, in way that that is not tied to security. Sometimes bigger is better, and especially so when one is attempting to deal with the consequences of mass society engendered by industrialization. It could be argued — in fact, I would argue — that the economic success of the US was due in no small part to is large (ultimately continental) contiguous land area under a single political regime. If North America had been political divided like South America, it is unlikely that its economic development would have taken the particular path that it did take.

I have mentioned in some previous posts that Gaddafi has argued on many occasions for a “United States of Africa,” and while this is perhaps impossibly visionary, if it could be made to work it would have great economic benefits for the continent. Similarly, the European Union is sometimes characterized as a “United States of Europe,” and with hope and the aspiration that its collective economic and technological clout might rival that of the US. So even though the term “collective economic security” is not used, the idea is out there, and has been the basis of practical policy objectives.

The Wikipedia article on collective security quotes A.F.K. Organski on five (5) basic assumptions of collective security:

In an armed conflict, member nation-states will be able to agree on which nation is the aggressor.
All member nation-states are equally committed to contain and constrain the aggression, irrespective of its source or origin.
All member nation-states have identical freedom of action and ability to join in proceedings against the aggressor.
The cumulative power of the cooperating members of the alliance for collective security will be adequate and sufficient to overpower the might of the aggressor.
In the light of the threat posed by the collective might of the nations of a collective security coalition, the aggressor nation will modify its policies, or if unwilling to do so, will be defeated.

This is formulated in terms of security from military attack, but it could be reformulated, mutatis mutandis, to address collective security from an economic standpoint. Economically, the threat to economic security comes not primarily from a military assault but from an economic crisis. This should seem pretty intuitive to most people these days, since the global economy is only now pulling out of what is being called the “Great Recession,” which was triggered by the subprime mortgage crisis — a genuine financial crisis if there ever way one — and even more recently the Eurozone was been faced with major crises as Portugal, Ireland, and Greece have come close to defaulting on their debt payments. (Most of the today’s Financial Times was about the Greek debt crisis.)

Well, interpreting Organski’s basic assumptions in terms of collective economic security, we see that the idea turns into a disaster:

In an economic crisis, member nation-states will be able to agree on the cause of the crisis.
All member nation-states are equally committed to contain and constrain the crisis, irrespective of its source or origin.
All member nation-states have identical freedom of action and ability to join in containment and de-escalation of the crisis.
The cumulative power of the cooperating members of the alliance for collective economic security will be adequate and sufficient to contain the economic crisis.
In the light of the economic power wielded by the collective might of the nations of a collective economic security coalition, the cause of the crisis will be intimidated into cooperation, or failing to do so, will be contained.

The amusing thing about this is that, while this remains a coherent set of principles when reformulated in terms of economic security, it is even more spectacularly impossible than when formulated (as in the original) in terms of politico-military security. This makes the disaster of these principles particularly interesting, because it shows us that a coherent body of thought can be utterly unworkable despite its coherency.

The reader may well respond to me by saying that I have no basis whatsoever for my claims about collective economic security, and this is not even a fair way to summarize the mission of the EU. I would agree that this is certainly not the be-all and end-all of the European Union, but on the other hand what I did explicitly say about was that the idea of collective economic security is out there.

The idea is out there, but it has not (perhaps, until now, unless I have been anticipated, which is more likely than not) been made fully explicit. What that means in practical terms is that the idea is present implicitly, and the implicit presence of an idea is an idea with deniability. People can and do think in terms of ideas that have not been made explicit, and when they do so they often think in a way that is sloppy, vague, imprecise, and riddled with fallacies.

One of the virtues of making an idea fully explicit is that weaknesses and faults become as obvious as strengths and virtues. When an idea is out in the open and is debated and discussed in explicit terms, its strengths and weaknesses can be compared in a rational and systematic fashion. When an idea remains in the shadows, by contrast, it has a subterranean influence without being critically assessed. This can be unfortunate, since a vaguely appealing implicit idea is not balanced by an explicit consideration of its limitations.

One of the reasons (though certainly not the only reason) that ideas are never made fully explicit is that they are “unthinkable” for some reason or another. It takes a visionary mind to think the unthinkable in explicit terms. Herman Kahn famously did this for nuclear war during the height of the Cold War. I am not suggesting that collective economic security has anything like the unthinkable character of nuclear war, but I am suggesting that we have not had an economist since Malthus who was willing to think through the economically unthinkable.

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Grand Strategy Annex

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