Wednesday


Draghi and Padoan

If the Greek financial crisis were merely a financial crisis, i.e., a financial crisis and nothing else, it would be much less of a crisis than it appears to be today. Many commentators have remarked that Greek GDP represents only a very small portion of the total Eurozone economy, so that the amount of agony expended on the Greek problem is far out of proportion to the size of the problem. But the Greek financial crisis is not merely a financial crisis, it is also a political crisis, and it is a political crisis on many different levels. In so far as the Greek financial crisis is a political crisis, the financial crisis sensu stricto may be viewed as a trigger for larger events. It is this that has magnified the crisis.

Analyses of the crisis sometimes focus on the symbolic importance of a Eurozone nation-state going bankrupt, which is crisis for the idea of Europe, while others focus on the potential fallout and knock-on effects of allowing the Greek financial crisis to run its course without outside assistance (i.e., a bailout and debt forgiveness), which is a financial crisis that ripples outward and grows with its expansion — a trigger event with catastrophic consequences, the textbook case of which is the beginning of the First World War.

A few voices — not many, but a few — have suggested that, implicit in monetary union without banking union was the idea that future crises in the European Monetary Union (EMU) would force a reckoning that would presumptively be resolved by turning to ever closer European integration, so that Europe would gradually, hesitatingly, two-steps-forward-and-one-step-back, lurch its way toward full economic integration, and eventually even to full political integration. This is a more sophisticated analysis that sees the Greek crisis in a larger context, and I will not dismiss it out of hand, but I also cannot bring myself to make the many leaps that this argument requires. When have European crises been resolved by tighter integration? European integration has come about, when it has come about, as the result of peacetime negotiations, and not as a response to crisis.

This scenario has been hinted at (although not made fully explicit — nowhere is this formulation fully explicit) by no less a figure than ECB head Mario Draghi:

“This union is imperfect, and being imperfect is fragile, vulnerable and doesn’t deliver, doesn’t deliver all the benefits that it could if it were to be completed. The future now should see decisive steps on further integration.”

Even more recently, in an article on the front page of the Financial Times, “Italian finance minister says political union needed to ensure euro’s survival” (Monday 27 July 2015), Pier Carlo Padoan is quoted as saying, “The exit and therefore the end of irreversibility is now an option on the table. Let’s not fool ourselves… If we want to take that risk away, then we have to have a different euro — a stronger euro… To have a full-fledged economic and monetary union, you need a fiscal union and you need a fiscal policy… And this fiscal policy must respond to a parliament, and this parliament must be elected. Otherwise there is no accountability.” Here the whole program is laid out with the relentless logic of a domino theory: if you want to have the Euro, you need full-fledged, economic union, and if you want to have a functioning economic union, you need to have a European government with real power. The only thing missing in this account is the expectation that the first formulation of the Eurozone would inevitably result in crises, and the crises would be the trigger for these dominoes to fall.

Those who see the Greek financial crisis in its geopolitical context express concerns of Greek alienation from the Eurozone resulting in closer ties with Putin’s Russia, recalling Cold War fears when Greece was one of the proxy theaters of the Cold War. It is entirely possible that Greece, rebuffed by the Eurozone, may turn to Russia for loans, and the Putin would be ready and willing to provide these loans, despite the desperate condition of the Greek economy (and, for that matter, of the Russian economy as well), for political reasons rather than for economic reasons. (And in a changed political climate Russian loans would likely be paid back even if European loans were not paid off.) This strikes me as a more plausible scenario than the above interpretation involving a purposeful trainwreck.

It was a great Cold War coup that NATO was able to persuade rivals Greece and Turkey both to join NATO in 1952, when Greece was the only Balkan nation-state to be part of the western military alliance. Now other Balkan nation-states are NATO members, and Greece is not isolated in the region as a consequence of its NATO membership, but it would be a source of particularly acute tension to have a leftist Syriza government courting closer ties with Putin’s Russia at a time of European unease over Russian actions in Ukraine.

The attempt to unify Europe economically dates even to before NATO, and began as a geopolitical project to forestall European wars on the scale of the mid-twentieth century, and now that Eurozone is facing its greatest challenge since the implementation of the EMU, the unification of Europe will continue, if at all, as a geopolitical project.

The economic rationale for European economic union seems to be present — i.e., the economic union of Europe seems to make sense, but just because something seems to make sense doesn’t mean that it is practicable. In the particular case of Greece, accession to the Eurozone was highly impractical. Greece entered into the European Monetary Union (EMU) with a wink and a nod. There was a sotto voce acknowledgement that Greece did not meet the macroeconomic requirements of joining the EMU, but everyone looked the other way anyway because it was thought that Greece was hitching its wagon to a star; the EMU and the European wide common market was going to be such a grand success that the problem was going to be keeping the “wrong sort” out (like Turkey, which repeatedly expressed its interest in joining the Eurozone, but excuses were always found to exclude the Turks). Here the political rationale trumps the economic rationale.

When a large and diverse geographical area is contained within the borders of a single nation-state — as with the United States, Russia, China, India, or Brazil — this geographical diversity is often expressed in economic diversity, with wealthy regions and cities contrasted with impoverished regions and cities. Within a single nation-state wealth transfers will sometimes be undertaken to offset these extremes in the form of state institutions and mechanisms. These wealth transfers can range from generous to nearly non-existent depending on the nation-state in question. We see this in a much more limited way in the international system, when wealthy nation-states will sometimes give aid and assistance to impoverished regions of the world, but this kind of aid never reaches the level of wealth transfers seen within a single nation-state.

The unification of a nation-state from multiple territories, and the subsequent imposition of a unified system of banking and taxation, constitutes a microcosm reflecting the opportunities and risks that face larger-scale attempts at economic and political unification, as in the case of the Eurozone. The unification of Italy from 1815 to 1871 — a process requiring more than a half century, but roughly corresponding to the span of time of post-war Europe — and the unification of Germany in 1871, both contain detailed lessons for a unified Europe. The unification of Germany has, of course, been a fraught matter. Libraries of books have been devoted to the topic. The unification of Italy has sometimes been cited as one cause of the economic backwardness of southern Italy in comparison to the dynamic north of the country; coupling these diverse norther and southern regions into one national state with a single set of national institutions has not come without consequences.

The reader who has made it thus far may find themselves expecting me to make a case for the rescue of the Greek economy at any cost in order to salvage the geopolitical project of the Eurozone, which was, after all, never conceived primarily as an economic project. It is an economic project secondarily, but a geopolitical project primarily. I am not going to make this argument, which has been made many times, and which is fatally flawed. Europe remains a continent of nation-states (like every continent except Antarctica). Power lies in the sovereign legislatures of each nation-state, in their economic capacity, and in their respective militaries (or the lack thereof). If Europe is salvaged as a geopolitical project, it will be because some European nation-state, or combination of nation-states, determines that it is in their sovereign interest to salvage the Eurozone, and not because some abstract entity like “Europe” commands the loyalty of any population or its military forces.

In Armed Prophets of Revolution I cited Machiavelli’s distinction between armed and unarmed prophets. Here is the passage in question:

It is necessary, therefore, if we desire to discuss this matter thoroughly, to inquire whether these innovators can rely on themselves or have to depend on others: that is to say, whether, to consummate their enterprise, have they to use prayers or can they use force? In the first instance they always succeed badly, and never compass anything; but when they can rely on themselves and use force, then they are rarely endangered. Hence it is that all armed prophets have conquered, and the unarmed ones have been destroyed. Besides the reasons mentioned, the nature of the people is variable, and whilst it is easy to persuade them, it is difficult to fix them in that persuasion. And thus it is necessary to take such measures that, when they believe no longer, it may be possible to make them believe by force.

Machiavelli, The Prince, Chapter VI

While it is no longer the custom in Europe to offer up prayers for ideological programs, the secular equivalents of prayers are daily being published in the organs of mainstream thought in Europe. The Eurozone (and its advocates among Europe’s elite opinion) are unarmed prophets of transnational political unification. As unarmed prophets, we would expect them, following Machiavelli, to be destroyed. But Europe exists under the security umbrella provided by the United States, so that while the Eurozone itself may be an unarmed prophet, it is an unarmed prophet with an armed faction prepared to defend it.

What will the US, as the security guarantor of Europe, see as its geopolitical interest in European unification? Will the US provide the muscle to allow the great European experiment to continue, or will it accept European fragmentation, as long as that fragmentation does not follow the pattern of the Balkan wars following the breakup of Yugoslavia (that other great European experiment in the political unification of the South Slavs, whose earlier fragmentation provided us with the term “Balkanization” and triggered the First World War)? At present, the US is making only cautionary statements and is not actively involved in what is, in effect, the re-negotiation of the Eurozone. With an upcoming US election, one would not expect any new political initiatives from the US in regard to the Eurozone. With the US deeply mired in crises in other parts of the globe, Europe is not high on the agenda.

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During the initial iteration of the Eurozone Crisis I blogged extensively on the problem, and have occasionally returned to the problem in subsequent pieces, including the following posts:

The Dubious Benefits of the Eurozone

Shorting the Euro

Will the Eurozone enact a Greek tragedy?

A Return to the Good Old Days

Can collective economic security work?

Poor Cousins

What would a rump Eurozone look like?

An Alternative to the Euro

The Old World in Turmoil

Gibbon, Sartre, and the Eurozone

Europe and its Radicals

Default in the Eurozone

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Grand Strategy Annex

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Wednesday


Greek PM Alexis Tsipras and Finance Minister Yanis Varoufakis

Greek PM Alexis Tsipras and Finance Minister Yanis Varoufakis

Financial crisis or political crisis?

Democracy does not come naturally to the governments of Europe. Europe may have the institutions of democracy, and have them in a stronger form than elsewhere in the world, but democracy has shallow roots in the Old World, and in extremis we are not surprised to see Europe move in the direction of statism or populism. The problem of elite opinion, which I began to examine in The Technocratic Elite, is especially strong in Europe, and it repeatedly encounters the limits of engineering consent.

Because of the strong democratic traditions of the nation-states of the western hemisphere, governments are eventually aligned more-or-less with public opinion, but in Europe the attempt to maintain a facade according to which elite opinion is presented as mass opinion leads to periodic instability in which the distance between elite and mass opinion opens up like a fault line during an earthquake, at time swallowing whole the political order entire. The European press, which is itself split between elite opinion and mass opinion, documents this divide. If you visit a European nation-state you will find highbrow media of a quality far superior to that of the US, but you will also find popular newspapers and magazines pandering to the lowest common denominator (the “yellow press”). The individual who reads the Financial Times (as I do) is likely to never read The Sun, and vice versa.

I do not read the mass opinion press of Europe, so I do not know what it says, but I read quite a bit of the elite opinion media from Europe, and this tells us that Syriza, just elected to power in Greece, is a “radical party” of the left; the press also tells us that the National Front in France is a “radical party” of the right. There is a real concern, rooted in the painful lessons of European history, that Europe might once again turn to radicalism and extremism. How radical are these parties? Is Syriza a front for Stalinism or the National Front a front for fascism? Is Europe truly on a verge of an ugly populism that must be suppressed in order to assure the continuity of democratic institutions in Europe? This, as I read it, is the sotto voce position of elite opinion in Europe.

There are, of course, limits to European radicalism. One of the best explications of these limits that I have heard was to be found in a series of lectures by Jeremy Shearmur, an Australian philosopher and political scientist, who recorded a series for The Great Courses titled “Ideas in Politics.” Like many of my favorite lectures from The Great Courses, these have been discontinued and are no longer available (other discontinued favorites include An Introduction to Archaaeology by Susan Foster McCarter and The Search for a Meaningful Past: Philosophy, Theories and Interpretations by Darren Staloff). Shearmur noted in one of his lectures that if a truly radical government were elected, as soon as it came to power there would serious financial consequences: the currency would be bid down on international markets, foreign investors would seek to take their money elsewhere, and the country would become an international pariah. The leaders of a radical regime would then be forced from financial necessity to try to step in and calm the markets by making moderate-sounding statements. The lesson is that all the advanced industrialized nation-states are tightly integrated into the international financial system, and it would be quite painful for anyone of them–even a smallish economy like that of Greece–to separate themselves from this system.

What I have just described is a mechanism of moderation within elite opinion that guides the international system. It is assumed that political leaders will say radical things to get elected, but as soon as they get elected they will begin to moderate their stance. In fact, we have already seen this with Syriza in Greece, and the deal that Greece struck with the EU was not quite the renunciation of its bail out that Syriza had campaigned on. In fact, this pattern is so predictable that truly radical leaders with little or no concern for pragmatism have been elected on the assumption that, once they came to power, they would moderate their tone and their demands. This was one of the mechanisms that made it possible for Hitler and the Nazi party to come to power.

But this is not Germany in 1933. Conditions have changed. Indeed, we could with greater justification call these changes “radical” that to call contemporary European political parties or their leaders “radical.” The rule of Syriza is not going to initiate a new communist crackdown on Greek society, in which artists and poets will be jailed and Lysenkoism is imposed upon agriculture. Syriza may well effect an economic leveling that makes everyone except the nomenklatura and apparatchiks equally poor (this is, after all, what communist regimes typically do), but making everyone equally poor through economic policies known to be disastrous might be stupid, and it might mean the loss of an enormous amount of human potential, but it is unlikely to be criminal in the way that twentieth century communist regimes were criminal. Moreover, these are the policies that the people have voted for, and apparently it is necessary every single generation that people be taught a lesson on the unworkable nature of socialist economic policies.

If Syriza is communist (and Yanis Varoufakis, e.g., has been very upfront about the influence of Marx on his own views), it is a kinder and gentler form of communism (to borrow a phrase from George H. W. Bush). And if the National Front is fascist, it is kinder and gentler form of fascism. No more than Syriza is going to jail opposition intellectuals is Marine Le Pen and the National Front going to preside over a Kristallnacht aimed at Muslims living in France, though if you read the records of elite opinion in Europe you very clearly get the idea that there is a profound undercurrent of anxiety that extremists will come to power in Europe who will repeat the most brutal episodes in European history. However, this anxiety seems to be almost entirely focused on a right-of-center populist reaction against Muslim influence in Europe, as elite opinion journals seem to have little interest in the rise of an extremist left.

It could be argued that Europe would benefit from some political diversity (not to mention controversy), since monolithic elite opinion since the end of the Second World War has had the practical effect of denying the bully pulpit to alternative views. The election of Syriza in Greece, the rise of Podemos in Spain, the rallies of Pegida in Germany, and the improving poll numbers of the National Front in France are in this sense welcome. In so far as they give the bully pulpit to politicians who do not automatically mouth the euphemisms of elite European opinion, they actually give greater credibility to the EU and its programs.

In so far as the EU and the PR spin doctors of Europe’s elite opinion seek to deny even a voice to radical and marginal parties, they are making the same mistake in relation to politics today that they made with religion in earlier centuries. Instead of a free market of ideas, the attempt to shape a top-down definition of acceptable views has the opposite effect of making the “official” view laughable while piquing curiosity about the other views. In so far as some view is universally condemned in official sources, intellectually alert individuals will take notice and will suppose that there is something of interest and possible even something that is a clear and present danger to the established order in these marginal views.

Of course, the Europeans are not so stupid or as vulgar as to ban minority views outright (although there are a number of laws that make it illegal to make certain claims), but kinder and gentler elite opinion (like kinder and gentler communism and fascism) can be almost as effective in mere disapproval as it can be in outright legal sanction. Again, one need only pay attention to the monolithic on-message character of European politics. If you’re a careerist, you cannot possibly afford to neglect this.

With Round Two of the Eurozone crisis being played out across Europe, and headlines looking a lot like they looked a few years ago, although this time with Syriza in power in Greece, European elite opinion is faced once again with kicking the can down the road or dealing with the problems on the merits. Given the record of European elite opinion being so tightly focused on message, in contradistinction to meaningful action, the likely result seems to be further muddling through while hoping all turns out OK in the end. How many times can Europe lurch to the brink of crisis only to lurch backward from the brink at the last possible moment? European elite opinion worries about the brinkmanship of Europe’s radicals, but it is elite opinion itself that is pushing Europe toward the brink.

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During the initial iteration of the Eurozone Crisis I blogged extensively on the problem, including the following posts:

The Dubious Benefits of the Eurozone

Shorting the Euro

Will the Eurozone enact a Greek tragedy?

A Return to the Good Old Days

Can collective economic security work?

Poor Cousins

What would a rump Eurozone look like?

An Alternative to the Euro

The Old World in Turmoil

Gibbon, Sartre, and the Eurozone

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Grand Strategy Annex

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Tuesday


European People's Party leader Jean-Claude Juncker.

European People’s Party leader Jean-Claude Juncker.

A great deal of contemporary political stability — much more than we usually like to think — is predicated upon the careful management of public opinion and the engineering of consent. The masses that constitute mass society in an age of mass man have the vote, and as voters they play a role in the liberal democracies that populate Fukuyama’s end of history, but we must observe that the role the voters play in democracy is carefully circumscribed. (A perfect example of this is the lack of transparency built into the US electoral college, adding layers of procedural rationality between the voters and the outcome of the process.) There is always a tension in liberal democracies predicated upon the management of public opinion of how far and how hard the masses can be pushed. If they are pushed too hard, they riot, or they fail to cooperate with the dominant political paradigm. If they are not pushed hard enough, or if they are not sufficiently fearful of authority, again, they might riot, or they might not work hard enough to keep the wheels of industry turning.

So political elites don’t push, they nudge. The nauseating paternalism of the “nudge” mentality among contemporary politicians (which, instead of being called “engineering consent,” which is a term that carries unfortunate connotations, is now called, “active engineering of choice architecture”) derived the book Nudge: Improving Decisions about Health, Wealth, and Happiness, seeks to apply the findings of behavioral economics to public policy decisions — with the proviso, of course, that it is the people in charge, the people who make public policy, who know best, and if we want a better world we need to give them a free hand to shape our choices. Unfortunately, the working class masses are not in a position to actively engineer the choice architecture of political leaders, although it is at least arguable that the political elite need an engineered choice architecture far more than the masses.

The European Union has been testing the boundaries of how far the European masses can be pushed (or nudged) to cooperate in bringing about the vision of a unified Europe, and with the Euroskeptics winning in many different regions of Europe, it appears that the European masses are pushing back by failing to cooperate with the dominant political paradigm. The political class of the European Union has just been handed a sharp rebuke that is a reminder of the limits of engineering consent, and they have been remarkably open and honest about it. German Chancellor Angela Merkel was quoted on the BBC on the need for economic development, “This is the best answer to the disappointed people who voted in a way we didn’t wish for.”

This European openness about the failure of Europe’s political class to effectively engineer the consent of the governed for the political and economic programs planned by the political elite is an important corrective to the American tendency to see conspiracies and secret cabals behind every unexpected turn of events. In Europe, the politicians have been honest that they wanted one result, and the people gave a different result. French President François Hollande was quoted as saying he would, “reaffirm that the priority is growth, jobs and investment.” Why are Merkel and Hollande united in seeing the need for jobs and economic development? Because they know that workers making good wages and who see a future for themselves and their families will mostly let the politicians have their way. It is when times are not good that voters push back against the grandiose dreams of politicians that seem to have little or no practical benefit. Europe’s political class is well aware that if the European masses have growth, jobs, and investment that they will be far more compliant at election time.

However, Hollande also said of the Eurozone financial crisis (now apparently safely in the past) that Europe had survived, “but at what price? An austerity that has ended up disheartening the people.” This latter statement demonstrates the degree to which Hollande fails to understand What is going on even as the ground shifts beneath his feet. One must understand that when European politicians talk about “austerity” what they really mean is resisting unchecked deficit spending, which would then be justified on Keynesian grounds. (I earlier called this the Europeanese of the financial crisis.) It isn’t “austerity” that has disheartened the people; it is Europe that has disheartened the people, the Europe of the European Union, but this realization is almost impossible for true believers in the European idea.

The tension between the masses in representative democracies and their putative political representatives has become obvious and explicit with this EU election in which “Euroskeptics” have been the most successful candidates. This tension can also be understood by way a very simple thought experiment: If you really had a free choice to elect whomever you liked as your political leader(s), are the political representatives you have now the ones you would choose? I think that any honest answer to this question must be, “No.” And this leaves us with the further question as to how these “leaders” came into power if they are not the choice of the people. The answer is relatively simple: these where the leaders that the political system produced for the consumption of the public. The public isn’t happy with its leaders, and the leaders aren’t happy with the public, but they are stuck with each other.

There is a limit to the extent to which the disconnect between rulers and ruled can grow before a social system becomes unworkable. Early in this blog in Social Consensus in Industrialized Society I suggested that two paradigms for the social organization of industrial society had been tried and found wanting, and that we are today searching for a further paradigm of social consensus to supersede those that have failed us. The mutual alienation between political elites and working masses in the liberal democracies of today is a symptom of the lack of social consensus, but in so far as these classes of society feel stuck with each other we have not yet reached the limits of the disconnect.

However, this mutual alienation tells us something else that is interesting, and this is the continued role of mythological political visions in an age of apparent pragmatism. The alienation that lies at the root of what Eric Voegelin called “gnosticism” in politics is here revealed as the alienation of the leadership of a democratic society from the people they presumptively represent (Hollande said of the EU that it had become, “remote and incomprehensible”) and of the people from its “leadership.”

Gnosticism is a worldview in which secret knowledge is reserved for initiates into the higher mysteries. Here is one of Voegelin’s definitions of gnosis:

“…a purported direct, immediate apprehension or vision of truth without the need for critical reflection; the special quality of a spiritual and cognitive elite.”

Eric Voegelin, Autobiographical Reflections, Collected Works Vol. 34, Columbia University, 2006, Glossary of Terms, p. 160

How does the claim to gnosis reveal itself in our pragmatic, bureaucratic age? Gnosis is necessarily distinct for each of the political classes, each of which has created its own political mythology in which it is an unique and indispensable historical actor on an eschatological stage. For mass man, gnosis takes the form of “consciousness raising,” whether being made aware, for the first time, of his status as a worker (proletarian), his race, his ethnicity, or any other property that can be employed to distinguish the elect. Access to official secrets is the special privilege and the secret knowledge of the elite political classes — the elect of the nation-state — so that to compromise these secrets and the privilege of access to them is to call into question the political mythology of the elites.

The creation of universal surveillance states is part of the this development, since the efficient management of mass man is predicated upon knowing the masses better than the mass knows itself — knowing what the mass wants, what will placate its tantrums, how hard it can be pushed, and, then the masses push back, how they can be most effectively distracted, mollified, and redirected. The extreme reaction to the revelation of official secrets as we have seen in the hysterical responses on the part of the elite political classes to Wikileaks and the Snowden leaks are the result of challenging the political mythos of the ruling elite.

In Europe, residual nationalism, ethnocentrism, and communism still resonate with some sectors of the electorate, and all of these can be be the focus of a purported gnosis; it is precisely the fragmented and divided nature of these loyalties that has kept Europe a patchwork of warring nation-states, and which threatens to torpedo the idea of a unified Europe. In the US, the intellectual lives of the workers have evolved in a different direction, which has resulted in an entirely new political mythology born out of a syncretism of conspiracy theories. (Political conspiracy theories also play a significant role in Africa, Arabia, and parts of Asia; perhaps they will yet come to the European masses.) The elite political classes are contemptuous of the conspiracy theories that excite the masses, even when these conspiracy theories verge uncomfortably close to the truth, but they are jealous in the extreme of their own “secret” knowledge obtained through surveillance. Thus we experience what Ed Snowden has called the Merkel Effect, wherein a member of the elite political class is subject to the very surveillance to which they have subjected others, and it is regarded as a scandal. The masses, on the other hand, are often defiant when their conspiracy theories are subject to rational examination, calling into question their own “secret” knowledge of how the world functions.

It is important to note that both the rise of conspiracy theories on the part of the masses and the rise of surveillance on the part of elite classes are parallel developments. Both classes of society are seeking forms of secret knowledge — that is say, this is the perfect illustration of Voegelin’s thesis on the role of gnosticism in contemporary political societies.

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Some past posts in which I have considered Europe, the European Union, and the Eurozone…

The Dubious Benefits of the Eurozone

Will the Eurozone enact a Greek tragedy?

A Return to the Good Old Days

Can collective economic security work?

Poor Cousins

Gibbon, Sartre, and the Eurozone

The Economic Future of Europe

An Alternative to the Euro

The Old World in Turmoil

The Evolution of Europe

The Idea and Destiny of Europe

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Grand Strategy Annex

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Monday


euro-map

In my previous post, Akhand Bharat and Ghazwa-e-hind: Conflicting Destinies in South Asia, I discussed the differing manifest destinies of Pakistan and India in South Asia. I also placed this discussion in the context of Europe’s wars of the twentieth century and the Cold War. The conflicting destinies imagined by ideological extremists in Pakistan and India is more closely parallel to European wars in the twentieth century than to the Cold War, because while Europe’s wars escalated into a global conflagrations, it was, at heart, conflicting manifest destinies in Europe that brought about these wars.

A manifest destiny is a vision for a people, that is to say, an imagined future, perhaps inevitable, for a particular ethnic or national community. Thus manifest destinies are produced by visionaries, or communities of visionaries. The latter, communities of visionaries, typically include religious organizations, political parties, professional protesters and political agitators, inter alia. We have become too accustomed to assuming that “visionary” is a good thing, but vision, like attempted utopias, goes wrong much more frequently than it goes well.

Perhaps that last visionary historical project to turn out well was that of the United States, which is essentially en Enlightenment-era thought experiment translated into the real world — supposing we could rule ourselves without kings, starting de novo, how would be do it? — and of course there would be many to argue that the US did not turn out well at all, and that whatever sociopolitical gains that have been realized as a result of the implementation of popular sovereignty, the price has been too high. Whatever narrative one employs to understand the US, and however one values this political experiment, the US is like an alternative history of Europe that Europe itself did not explore, i.e., the US is the result of one of many European ideas that had a brief period of influence in Europe but which was supplanted by later ideas.

Utopians are not nice people who wish only to ameliorate the human condition; utopians are the individuals and movements who place their vision above the needs, and even the lives, of ordinary human beings engaged in the ordinary business of life. Utopians are idealists, who wish to see an ideal put into practice — at any cost. The great utopian movements of the twentieth century were identical to the greatest horrors of the twentieth century: Soviet communism, Nazi Germany, Mao’s Great Leap Forward and the Cultural Revolution, and the attempt by the Khmer Rouge to create an agrarian communist society in Cambodia. It was one of the Khmer Rouge slogans that, “To keep you is no benefit, to destroy you is no loss.”

The Second World War — that is to say, the most destructive conflict in human history — was a direct consequence of the Nazi vision for a utopian Europe. The ideals of a Nazi utopia are not widely shared today, but this is how the Nazis themselves understood their attempt to bring about a Judenrein slave empire in the East, which Nazi overlords ruling illiterate Slav peasants. Nazism is one of the purest exemplars in human history of the attempt to place the value of a principle above the value of individual lives. It would also be said that the Morganthau plan for post-war Germany (which I discussed in The Stalin Doctrine) was almost as visionary as the Nazi vision itself, though certainly less brutal and not requiring any genocide to be put into practice. Visionary adversaries sometimes inspire visionary responses, although the Morganthau plan was not ultimately adopted.

In the wake of the unprecedented destruction of the Second World War, the destiny of Europe has been widely understood to lie in European integration and unity. The attempt to unify Europe in our time — the European Union — is predicated upon an implicit idea of Europe, which is again predicated upon an implicit shared vision of the future. What is this shared vision of the future? I could maliciously characterize the contemporary European vision of the future as Fukuyama’s “end of history,” in which, “economic calculation, the endless solving of technical problems, environmental concerns, and the satisfaction of sophisticated consumer demands,” constitute the only remaining social vision, and, “The struggle for recognition, the willingness to risk one’s life for a purely abstract goal, the worldwide ideological struggle that called forth daring, courage, imagination, and idealism,” have long since disappeared. …

After the horrors of the twentieth century, such a future might not sound too bad, and while it may constitute a kind of progress, this can no longer be understood as a manifest destiny; no one imagines that a unified Europe is one people with one vision; unified Europe is, rather, a conglomerate, and its vision is no more coherent or moving than the typical mission statement of a conglomerate. Indeed, we must view it as an open question as to whether a truly democratic society can generate or sustain a manifest destiny — and Europe today is, if anything, a truly democratic society. There are, of course the examples of Athens at the head of the Delian League and the United States in the nineteenth century. I invite the reader to consider whether these societies were as thoroughly democratic as Europe today, and I leave the question open for the moment.

But Europe did not come to its democratic present easily or quickly. Europe has represented both manifest destinies and conflicting manifest destinies throughout its long history. Europe’s unusual productivity of ideas has given the world countless ideologies that other peoples have adopted as their own, even as the Europeans took them up for a time, only to later cast them aside. Europe for much of its history represented Christendom, that is to say, Christian civilization. In its role as Christian civilization, Europe resisted the Vikings, the Mongols, Russian Orthodox civilization after the Great Schism, Islam during the Crusades, later the Turk, another manifestation of Islam, and eventually Europeans fell on each other and during the religious wars that followed the Protestant Reformation, with Catholics and Protestants representing conflicting manifest destinies that tore Europe apart with an unprecedented savagery and bloodthirstiness.

After Europe exhausted itself with fratricidal war inspired by conflicting manifest destinies, Europe came to represent science, and progress, and modernity, and this came to be a powerful force in the world. But modernity has more than one face, and by the time Europe entered the twentieth century, Europe hosted two mortal enemies that held out radically different visions of the future, the truly modern manifest destinies of fascism and communism. Europe again exhausted itself in fratricidal conflict, and it was left to the New World to sort out the peace and to provide the competing vision to the surviving communist vision that emerged from the mortal conflict in Europe. Now communism, too, has ceded its place as a vision for the future and a manifest destiny, leaving Russia again as the representative of Orthodox civilization, and Europe as the representative of democracy.

On the European periphery, Russia continues to exercise an influence in a direction distinct from that of the idea of Europe embodied in the European Union. Even as I write this, protesters and police are battling in Ukraine, primarily as a result of Russian pressure on the leaders of Ukraine not to more closely associate itself with Europe (cf. Europe’s Crisis in Ukraine by Swedish Foreign Minister Carl Bildt). Ukraine is significant in this connection, because it is a nation-state split between a western portion that shares the European idea and wants to be a part of Europe, and an eastern part that looks to Russia.

What does a nation-state on the European periphery look toward when it looks toward Russia? Does Russia represent an ideology or a destiny, if only on the European periphery and not properly European? As the leading representative of Orthodox civilization, Russia should represent some kind of vision, but what vision exactly? As I have attempted to explain previously in The Principle of Autocracy and Spheres of Influence, I remain puzzled by autocracy and forms of authoritarianism, and I don’t see that Russia has anything to offer other than a kinder, gentler form of autocracy than that what the Tsars offered in earlier centuries.

Previously in The Evolution of Europe I wrote that, “The idea of Europe will not go away,” and, “The saga of Europe is far from over.” I would still say the same now, but I would qualify these claims. The idea of Europe remains strong for the Europeans, but it represents little in the way of a global vision, and while many seek to join Europe, as barbarians sought join the Roman Empire, Europe represents a manifest destiny as little as the later Roman Empire represented anything. But Europe displaced into the New World, where its Enlightenment prodigy, the United States continues its political experiment, still represented something, however tainted the vision.

The idea of Europe remains in Europe, but the destiny of Europe lies in the Western Hemisphere.

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Grand Strategy Annex

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Riots in Sweden?

23 May 2013

Thursday


Stockholm riot

Since when are there riots in Stockholm? Who could even imagine social unrest in Sweden, that classic example of successful welfare state socialism? Sweden the exemplar of progressive social policies? And then there is the old joke that America is the second most Americanized country in the world — after Sweden. What’s going on? What went wrong? Is the dream of the Scandinavian welfare state unraveling?

No one is innocent in this shocking episode, neither Sweden, nor the immigrant communities that have increasingly come to Sweden, taking advantage of its generous social welfare benefits and its open immigration policy.

Sweden immigration graph

Sweden’s self-image as a progressive society has led to its opening its doors to increasing numbers of immigrants and refugees, and Swedish society is in the process of being transformed as it attempts to assimilate these immigrants, who increasingly come from a profoundly different social, cultural, and ethnic context.

In the Wikipedia article Demographics of Sweden we read:

“According to Eurostat, in 2010, there were 1.33 million foreign-born residents in Sweden, corresponding to 14.3% of the total population. Of these, 859,000 (9.2%) were born outside the EU and 477,000 (5.1%) were born in another EU Member State.”

In other words, almost ten per cent of Sweden’s population comes from outside Europe. Ten per cent is enough of a population to make a real difference, especially if this ten per cent identifies with a different social, cultural, or ethnic tradition than that of its host country.

And again from Wikipedia:

The fastest growing groups of foreign-born residents in Sweden between 2011 and 2012 were the following nationalities:

Syria (+5,153)
Afghanistan (+3,995)
Somalia (+3,801)
Bosnia and Herzegovina (+2,458)
Iraq (+2,361)
Thailand (+1,941)
Iran (+1,821)
Eritrea (+1,741)
Turkey (+1,176)
China (+1,161)

The issue of Muslim immigration into Europe has been discussed extensively, and usually in a highly politicized context. Muslim immigrants complain of discrimination while doing little to assimilate, while Europeans have expectations of immigrant assimilation while doing little to accommodate the profoundly different culture they have received into their midst.

So, it’s time for some blunt talk. State structures in the Middle East, where many Muslim immigrants originate, have always been weak. The institution of the nation-state has been imposed on the region by the international system, although it resonates but little with the peoples (i.e., the nations) whose interests these nation-state putatively represent. That is one reason (among many) that the region is torn by violence: state regimes in the region lack intrinsic legitimacy, so they cannot enforce an internal security regime.

The lack of a viable state or national identity in the Middle East has been compensated for by a strong sectarian identity. Muslims see themselves as part of the global Ummah, the global community of Muslims, and identify with this community more than their putative political community. When Muslims immigrate to Europe, they continue to identify with the Ummah and not with the nation-state to which they immigrate — just as they did at home.

The Europeans, on the other side, made it easy for immigrant peoples to retain their traditional identities rather than to attempt to assume a new social identity. For my American readers, it may perhaps be worth mentioning that Europe does not assimilate immigrants in the same way that the US does.

For all the US problems with immigration and social identity, it is virtually effortless to become an American. If you arrive in the US from another country, the day you step off the airplane you are a Swedish-American or a Somali-American or an Armenian-American, and so on. All you have to do is to speak English and call yourself a such-and-such-American, and it becomes true as soon as you say it. This is the ultimate political performative language (to borrow a term from J. L. Austin).

It is not so easy to become a European. In fact, it is almost impossible to become a European. If I were to move to Italy tomorrow, and stay there for the next thirty years (if I should live so long), at the end of thirty years I would still be an American living in Italy. I would not be an American-Italian. One cannot simply assume European identity in the way one can seamlessly assume and assert American identity.

We have already seen the results of these European-Muslim immigrant tensions in the riots in Paris and London. Now these tensions have reached as far north as Sweden. The same tensions exist in Sweden despite the efforts of the Swedes and their government to be tolerant, and this is partly the result of pure numbers: neither France nor the UK have an immigrant population of ten per cent from outside Europe, and if they did the problem would be even worse. It is probably more difficult to “become” a Frenchman or an Englishman than to be accepted as a Swede.

In the Financial Times article, Swedish riots spark soul-searching on immigration, we read the following:

The big problem in a suburb such as Husby, where immigrants represent about 80 per cent of the population, is unemployment, particularly among the young. Swedish youth unemployment stands at 25.1 per cent, about triple the level of overall joblessness. And much of that youth unemployment is concentrated among immigrants from countries such as Iraq, Afghanistan or Syria. “Sweden isn’t that different to other countries when it comes to problems of integration in larger cities where we have these suburbs with a lot of unemployment,” says Per Adman, an associate professor at Uppsala university. He points out that the media often refers to “unemployed young men” without specifying that they are predominantly immigrants.

It can be interpreted as an attempt to studiously avoid racial profiling to refuse to specify the differences within statistics between native-born Swedes and immigrants, and we often find this in the US media and police reports, in which one has to read between the lines to try to understand what is really going on. This is a strategy of tolerance that probably has limits. In so far as a democratic country relies on public education and accurate media reports for intelligent public policy discussion, even the best intended efforts to avoid the stigmatization of immigrants can result in false information and false public impressions that leads to a failure to engage with the problem as it is.

And it continues. After a fourth night of rioting, the BBC in Stockholm restaurant torched as riots spread reported:

Stockholm police spokesman Kjell Lindgren said the rioters were a “mixture of every kind of people”.

When does promoting the illusion of integration (such as citing a mixture of “every kind of people” involved in a riot in a neighborhood that is eighty per cent immigrant) contribute to the formation of a mendacious society that makes things worse instead of better? And one cannot appeal to a status quo to be restored, maintained, or achieved. Demographics tells us that populations change over time, and either you find a way to manage the change, or you succumb to chaos and social disintegration.

Riots in one of the most stable and tolerant societies on the planet is an unambiguous sign of social disintegration, though in the name of integration it will be called anything but this.

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The Stockholm neighborhoods most affected by rioting.

The Stockholm neighborhoods most affected by rioting.

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Since writing the above yesterday the Swedish Minister for Integration, Erik Ullenhag, has issued an official statement about the rioting in stockholm, Minister for Integration Erik Ullenhag comments on the unrest in some Stockholm suburbs, which is interesting in several respect. The statement in its entirety is copied below.

Society must make it clear that it is never acceptable to burn cars or throw stones at the police. The people of Husby want a society where the rule of law prevails, they want to be able to feel safe and secure. We must remember, the cars that are burning do not belong to people who live in the centre of Stockholm, they belong to people who live in Husby.

In the short term, this is a matter for the police. In the long term, it is a matter of making a change for the better where people live, so that more children and young people can successfully complete school and more people get jobs.

What we are seeing are extreme, unusual events. But we need to be absolutely clear about one thing: we can never accept violence. Violence has a negative impact on social segregation. We know there is discrimination based on where people live, and these events do not improve the image of these residential areas, where there are plenty of positive things going on too. At the end of the day, what this is all about is that we must create a positive belief in the future in areas at risk.

And one positive thing is that civil society has taken to the streets. That adults in the community are helping to calm down the situation in these areas. The Government is not actively involved right now – this is a matter for the law enforcement authorities. But we are taking long-term action, for example by taking measures to increase the visible police presence.

This is a small group of individuals. They are young boys and men who are not representing the 15 percent of foreign born living in Sweden today. Several of them are known by the police and some of them don´t even live in the area where they now burn cars.

Swedish integration policy is now focusing on jobs and education. We can see that school results in some of these areas are bad. But we can also see that we have schools in these areas where the kids are working very hard and doing extremely well.

The minister here asserts that “The people of Husby want a society where the rule of law prevails,” but the problem here is that when the minister speaks of the “rule of law” he means the territorial principle in law which is now nearly universally adopted by nation-states, whereas the Muslim immigrants, is so far as they see their identity in terms of the global Muslim community, the Ummah, does not look to the state as a source of law, but to the traditional law associated with this identity, which is Sharia. In so far as those who understand their political identity in terms of the Ummah, distributed across many different nation-states, and in so far as they look to Sharia as the law of the Ummah, they implicitly understand the “rule of law” as the personal principle in law, i.e., that an individual be judged according to the law of their ethnic or sectarian community, and not in terms of a geographically defined nation-state. So while political representatives can use glittering generalities like “the rule of law” and “civil society,” they do not necessarily mean the same things when they use the same words.

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Grand Strategy Annex

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Friday


There is a famous song by The Beatles that begins, “I read the news today, Oh boy.” This is what I felt like when I looked at today’s Financial Times (since I am still a newspaper reader, despite the declining position of the papers today). The Old World once again appears to be coming apart at the seams. All around the Mediterranean basin, throughout the region where once reigned the Roman Empire, there is turmoil: the Eurozone economic crisis playing out in Greece, Italy, and Spain, the Egyptian military canceling the election results, and civil war in Syria.

The failures in Europe and the failures in the Arab world will certainly interact in unpredictable ways. What remains to be seen — unlikely though possible — is whether these failures escalate each other and result in a complex catastrophic failure of the complex system that is the Old World. Will European economic failure mean that peoples from the Arab world will no longer seek to migrate to Europe, or will it mean that Europe’s weakness will create the conditions allowing a greater transfer of population? This is a complex question, and only time can tell what direction events will take.

When the Eurozone was created there were predictable but also believable claims made on its behalf that it would surpass the US as an integrated economic zone. Now we know that this is not going to happen. The next few years and decades will see countless analyses of what went wrong with the Eurozone. There will be more than one diagnosis, and ongoing events in Europe will continue to churn the mix, turning up further interpretations.

What lies ahead for Europe? Will Europe have a “lost decade” such as Japan experienced, or more than a decade? Again, only time will tell, but there are some general observations that can be made. The future of European development will exemplify regionalism rather than continental integration. I have suggested that a new economic zone in Northern Europe, a modern analogue of the Hanseatic League, might be more successful as an economic bloc. Even if nothing so ambitious is tried again, and there is no Hansa to replace the Euro, the economics of Northern Europe are likely do much better than those of the south. All one needs to do is to look at their economies today to see that they are set for future development, while much of Southern Europe is set for stagnation.

It took a decade for the Euro to reveal its fatal weaknesses. It took a year for the Arab Spring to reveal its weaknesses. It would be easy to be cynical about what has been accomplished, or what was not accomplished, by the protests throughout North Africa, the Levant, and the Persian Gulf, but we should not abandon our hope so quickly.

The Arab peoples have been living under perversely repressive regimes for decades, and in some cases for centuries. Such stagnancy from retrograde regimes cannot be shaken off in a year. We should understand the Arab Spring, whatever its successes or failures, as one of those periodic uprisings that mark societies struggling to free themselves. There will be further unrest, and more Arab Springs to come in the future.

Denis Diderot, committed as he was to the extirpation of the old order in the Old World, notoriously said, “Men will never be free until the last king is strangled with the entrails of the last priest.” This was never more true than it is today, although today we ought to say, “Man will never be free until the last Sheik is strangled with the entrails of the last Mullah.”

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Thursday


A reader, Greg R. Lawson, commented on my last post, The Economic Future of Europe, including the following:

“Bigger issue now is, what does the US do with its western flank in an era most believe to be defined by the rise of Asia?”

Since my post about the European economy suggested a kind of European regionalism, I immediately began to think of the regionalism that I had described in a global context, i.e., I began to think in terms of global regionalism, and I realized that this would be a fruitful geopolitical perspective.

It is of the essence of geopolitics and geostrategy to think of social, economic, political, diplomatic, and military milieux in terms of their geographical distribution. That these generic strategic trends in human history are not equally distributed, and that the physical topography of the globe has a direct impact upon their distribution, shapes the world in which we live — the possibilities, the opportunities and the constraints.

A region is geographically defined, but not defined by nation-states. This distinction is important, because in the contemporary international system, the power is vested in nation-states. However, it must be observed that it has been primarily economic, military, and diplomatic power that have been vested in nation-states. Social, religious, and intellectual power have been attracted to the locus of economic, military, and diplomatic power of the nation-state, but the non-state structure of social, religious, and intellectual power has never been entirely eclipsed by the nation-state.

In the Islamic world, for example, the idea of the Ummah — the global Muslim community — is an important idea, and not a mere abstraction. The Ummah defines a region that is not a nation-state, just as do Catholicism, capitalism, and petrochemical producers.

A map of global Muslim populations shows the geographical distribution of the Ummah, which constitutes a region, but not a nation-state.

In the past, all regionalism was bioregionalism. A people’s way of life followed from the biome and the particular ecosystem in which they lived. Prior to the industrial revolution, the food that you ate, the clothes that you wore, the buildings in which you lived and worked, and the work that you did was all a function of your ecological situation. Since much of the language that one uses on a daily basis is derived from one’s food, clothing, shelter, and work, and the concepts embodied in language express these ideas, the greater part of our intellectual life also reflected bioregionalism. (This has been a theme I have urged since I started writing this blog.)

A map of terrestrial biomes from Wikipedia; each biome fosters a particular form of life in terms of the ecological resources that are regionally available.

With the Industrial Revolution this strong sense of regionalism was compromised once it become routine to import foodstuffs, clothing, building materials, and even forms of work that had not previously existed, or existed in the form that they came to have under industrialization. However, new and abstract forms of region began to supplement the declining strong forms of regionalism that once so completely defined life. Thus industrialization has changed regionalism, but has not eliminated regionalism. This is significant.

In the early part of the twentieth century many of the most advanced thinkers of the time seized upon internationalism as the direction in which the world was headed — what I would call the dominant strategic trend. A part of this intellectual fashion for internationalism was due to Marxism, which was always international in conception and ambition — communism was frequently called “international communism” in order to focus attention on it as a global movement, the communist anthem was called the “Internationale,” and the gatherings of the International Workingmen’s Association (IWA) were called “Internationals” — but not all of this fashion for internationalism can be attributed to communism.

The Wobblies were an explicitly international organization.

Many major thinkers who were in no sense Marxists consistently thought and expressed themselves in internationalist terms. Bertrand Russell is a good example of this. For Russell and many others, the obvious telos and rationalization of the de facto global political order could be nothing other than internationalism. This may sound a bit odd to my readers in the US, as internationalism never had much of a following in the US, where popular sentiment has often demonized the United Nations and other internationalist movements and organizations. And yet we did experience the international style in modern architecture, and a variety of related international movements made themselves felt in the US no less than in Europe.

But internationalism faltered under repeated blows to the international system throughout the second half of the twentieth century, not least the Cold War that divided the international system into two systems, at war with each other, and contesting their mutual periphery.

The global village that was once imagined as the consequence of universal telecommunications technology and a rapid global transportation network has not come to pass, any more than the “melting pot” model of diversity, which latter has since been replaced by the “tossed salad” model. Instead, the global village has become a place of its own, the region of cyberspace, which touches upon physical space at millions of points of contact, even while remaining distinct. We could map cyberspace onto physical space, or physical space onto cyberspace, but in each case the map is not the territory and the two spaces cannot be shown to be identical.

Internationalism, then, did not happen, or, at very least, did not happen as it was expected to happen. Instead, the growing complexity of the world facilitated the emergence of ever more forms of regionalism. Some have read in these tea leaves the perennial nature of the nation-state, but this is a delusion arising from limited imagination. The ultimate dissolution of the nation-state will come about not as a result of internationalism, but rather from a flourishing regionalism that subdivides nation-states like the inheritance of traditional estates when not checked by a custom of primogeniture. But this will not happen for a long time yet. Other trends must play themselves out for hundreds of years yet before the nation-state is a mere historical curiosity.

The structural forces in the world, then, that create and sustain regionalism are themselves important strategic trends that must be recognized. But that is not all. Above and beyond particular regionalisms there is regionalism itself as a force in world history. And we must even go beyond the understanding of regionalism as a strategic trend of the global system that facilitates other strategic trends. This is not at all wrong, but it is too limited. We must learn to understand regionalism on its own account, both driving other developments even as it in turn is driven by anterior developments.

Let us consider, very briefly, some of the major strategic trends of our time, and we will see that they are strongly regional trends:

● The Decline of Europe By “the decline of Europe” I do not mean the relative decline of European economic importance due to the increasing economic activity of other regions of the world, but the decline of the European idea as a force in world affairs. Europe has not only retreated from the apotheosis of its 19th century colonialism, it has turned against itself and its traditions and has adopted an attitude of atonement, frequently expressed in the form of foreign aid. Part of this attitude of atonement is also expressed by the liberal immigration quotas that has led to the rise of Eurabia. Europe is facilitating the disappearance of its own unique tradition.

● The Rise of Asia As with the decline of Europe, so too with the rise of Asia: this is partly about improving economic performance and industrialization, but it is just as much about the confidence of Asian peoples to assert themselves in the world as the Europeans once asserted themselves, and to do so they have borrowed heavily from the intellectual resources of the European tradition even while distancing themselves from that tradition. Colonialism and neo-colonialism are condemned, while quasi-colonial activity (like China’s growing role in Africa) is called anything but colonialism. More importantly, this is done with a clear conscience, as was also the case during Europe’s period of colonial expansion.

● The Stability of US Power Despite a great deal of declensionist talk that I have discussed in other posts (especially my recent From American Exceptionalism to American Declensionism), the American economy will remain the largest in the world for some time, and even after China’s economy becomes the largest in the world in terms of absolute numbers, the US economy will have the greatest productivity of any economy on the planet for an even longer period of time. The springs of ambition and invention have by no means peaked in the US, and we can expect the American people to continue to assert themselves aggressively in world affairs has has been the case since the end of the Second World War.

These three strategic trends together necessarily mean another strategic trend:

● The Shift from an Atlantic center to a Pacific center I have discussed the decline of Atlanticism and the possibility of a Pacific-centered world order in other posts. With the stability of US power as the fulcrum, the center of world affairs will slowly shift from the Atlantic, dominated by a declining Europe, to the Pacific, dominated by the rising Asia. I emphasize here that this shift will be slow and gradual.

The shift from an Atlantic-centered world to a Pacific-centered world will be a consequence of the decline of Europe and the rise of Asia, and thus this shift will not be consolidated until these developments are mature. In other words, the 21st century will not be the Pacific Century, but rather the century of the fluid periphery (see below), one of the developments of which will mean the shift to a Pacific-centered world order. It will be the 22nd century that will be the Pacific Century. So you see that when I say that this shift will be slow and gradual, I am talking on the order of centuries, not years or decades.

The shifting world center from the Atlantic to the Pacific is but one aspect another another major strategic trend that will be expressed in many different forms, and this is:

● The Fluidity of the Periphery The fluidity of the periphery will be expressed in a variety of distinct movements and changes, but the very fact that the periphery of the mature and established de facto global political order will be fluid is significant. In the past, the periphery was not fluid, but static. Nothing happened in the periphery, which was one reason that Ovid so lamented his exile to Tomis (now Constanţa, Romania) on the Black Sea. The periphery was once the edge of civilization, dominated by stalled technologies. In the future, more things will happen, and more history will be played out, on the periphery than in the center. The fluidity of the periphery will involve, but will not be limited to, the following:

* Atlantic to Pacific Shift The fluidity of the periphery will include the above-mentioned strategic shift from the Atlantic to the Pacific, but this shift will occur on such a time scale that it would be unnoticeable to most living through the shift except that we will know to watch for it. This will be a macro-temporal revolution in world history, and as such almost invisible to the micro-temporality of individual consciousness.

* Globalization Globalization in turn can be understood by many different labels — it is what I have called the extension of the industrial revolution to those parts of the world that have not yet industrialized; this global economic growth has been called “re-balancing” by Thomas P.M. Barnett; at the same time “re-balancing” might also be called a leveling of the global economic playing field, and this has also been called the global rise of the middle class. More tendentiously, I might call this strategic trend The End of Poverty, for when the gains of global industrialization are consolidated over the next two hundred years, one of the profound developments will be the end of the kind of poverty (made visible by the contrast between rich and power, and made more visible yet by the telecommunications technology that emerged from industrialization) that had typified the human condition since the dawn of agriculture and urbanism.

* Divisions internal to the Periphery Uneven development will more and more mark the fluid periphery, as some nation-states in Latin America and Africa develop rapidly, joining the global economy and catapulting their populations on a new trajectory of development, while other nation-states in Latin America and Africa cannot break out of the failure cycle, continuing to stumble and stagnate while neighboring nation-states pull far ahead of them. These divisions within the periphery will foster instability and tensions, as populations inevitably seek to better their lot by moving from failed and failing states into neighboring successful states.

* Global Divisions The consolidation of the democratization of the Western hemisphere will continue to contrast with non-democratic, non-representative, autocratic regimes throughout the fluid periphery and indeed throughout the Eurasian landmass. While there will be democratic regimes in the Western hemisphere that perpetuate the failure cycle, the slower pace of life that results will constitute a de facto social consensus for a society not to live in the fast lane. By contrast, outside the Western hemisphere, the failure cycle will be exacerbated by non-representative regimes that impose failure upon a restive population. These global divisions will be expressed as geostrategic tensions, which will in turn be expressed as flows between the divisions, and these flows — of populations, of resources, of smuggled contraband, of technology, etc. — will flow through the periphery, further destabilizing regions already destabilized by divisions internal to the periphery.

There are limits to the fluidity of the periphery. Fluidity is constrained by regional stability. Now by “regional stability” I do not mean a part of the world that is political stable (which is how the term is usually used in contemporary discourse) but rather that regional strategic trends that are geographically defined by not embodied in formal institutions. Actually, a distinction could be made between formal and informal regions, but I haven’t thought this through yet, so I will leave this potential distinction to another time. I hope that the reader will see, without further elaboration, that the same structural forces in the global system that create regions are powers that limit the latitude of other regions, sometimes simply by their existence, and other times by actively working against the strategic trend expressed by another region.

So that is my sketch of regionalism and how it will play out at least over the next two hundred years. I hope that even if the reader disagrees with the details of the picture that I have sketched, that you will at least see the power of differently-defined regionalisms in the global system, that this regionalism is a force to be reckoned with, and that regionalism may possibly become the dominant strategic trend, or a dominant strategic trend, over the long-term future.

There is much more to be said regarding regions, and I hope to think more on the matter, now that I have proposed it to myself in this explicit form, but for the time being I will close with the observation that regions are likely to play a larger role in history than either internationalism or nation-states.

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Monday


The eurozone currently consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

There is no question that it is unwise to engage in speculation at a time when events are poised at a moment of decision, but is there any moment that is truly free of historical consequence, when speculation might be a safer and more certain undertaking? I think not. Another time I will attempt to explain why not, which involves a careful consideration of several points in the philosophy of history, but I will leave that particular justification for another time and boldly press forward on the prospects of the Euro and the Eurozone, even as the Greeks continue to have difficulties forming a government after their recent elections, and even as the new president-elect of France, Francois Hollande, has not yet revealed the precise policies that will be implemented in the attempt to make good on his campaign promises assuring growth instead of austerity.

I have several times discussed the nature and difficulties of the Eurozone, first in a trio of posts about the crisis in Greece as it first become evident — The Dubious Benefits of the Eurozone and Will the Eurozone Enact a Greek tragedy? and Can punitive fiscal policy work? — and then in further posts about the Eurozone periphery more generally, beyond Greece — A Return to the Good Old Days, Can collective economic security work? and Poor Cousins. My most frequently read post on the Euro, Shorting the Euro, while still accurate is no longer timely. Since then I wrote What would a rump Eurozone look like?.

The Eurozone is a great economic experiment in the way that the US is a great political experience: both have represented a revolutionary new order while building on past experience. This, if nothing else, makes the Eurozone fascinating. In the categories of my own thought the Eurozone is not quite an intelligent institution since it was constituted with mechanisms for nation-states to enter the Eurozone but no mechanisms for a nation-state to exit the Eurozone. Most culpably of all, the Eurozone was designed without a mechanism for either 1) forcing compliance of member states with its standards, or 2) forcing member states to collectively come to the aid of a failing member state (or, I could also observe, some combination of the two).

If the Eurozone had had either of these two mechanisms — compulsory and enforceable standards, or compulsory wealth transfer from richer to poorer states — the acute problem in Greece at the moment, and the possibly chronic problems in Italy, Spain, Portugal, and Ireland, would present definite options. Without a formal mechanism for resolving the crisis, the financial crisis becomes a political crisis that it did not have to become.

The consensus in the financial press at the present time is that the Franco-German core of the Euro will remain intact, and that Francois Hollande will not set out to enact any radically socialist policies (cf. President Hollande and the IMF) that would doom either France or the Euro to the kind of perpetual economic twilight experienced by the nationalizing likes of Hugo Chavez, Evo Morales, or Cristina Fernandez de Kirchner. Hollande knows well enough on which side France’s bread is buttered, and his campaign rhetoric must be understood as something entirely parallel to the “red meat” speeches given in the US by both Republicans and Democrats during the primary season, only to be dialed back drastically when it comes to the general election.

But matters are altogether different outside the Franco-German core of the Eurozone, as what was once merely whispered is now on the front pages of the newspapers: the likelihood that Greece will leave the Eurozone. (cf. Greece, France and the future of the euro and EU central bankers ponder Greece euro exit) Indeed, today’s Financial Times had Greece on the front page (Fear grows of Greece leaving euro) and the inside pages (Greek exit from eurozone ‘possible’) as well as a new week-long series, “If Greece goes…”

What will the Greeks do if they leave the Eurozone? Will they take to the printing presses and start printing Drachmas until everyone has a satisfying pocketful of money and the economy is driven into hyperinflation and the Greeks impose on themselves the austerity that they were unwilling to accept from the Germans? Since it seems to be universally believed that a bloated public sector and no expectation of paying taxes is a good thing, maybe they will suspend taxes altogether in Greece, and add anyone who likes to the public payroll dole. Not surprisingly, such steps aren’t going to revitalize the Greek economy, promote prosperity, or stoke economic growth.

What Greece does have to offer is an enormous tourist industry, whose beaches and islands and quaint hotels with tavernas around the corner will suddenly become attractive to northern Europeans when they once again because an inexpensive playground, which will happen if Greece exits that Euro and allows a fully floating Drachma that can be bid down on the international currency markets. Of course, tourists hate riots, and they would prefer not to see news stories about pensioners committing suicide in the capital as a protest. A single negative newspaper story can ruin an entire tourist season, and the hotels and restaurants wait and hope that next year will be better.

This may sound cynical, but it is realistic, and as close to true as I cam capable of getting. In actual fact, the reintroduction of the Drachma will necessarily be partial. The very wealthy already hold their assets in financial instruments not directly linked to Greece. Those not truly wealthy, but who have enough assets that they know to protect themselves, will already have their assets (other than real estate) moved out of Greece to the extent that this is possible. For the lower income bracket, the lower prices that will likely come (barring hyperinflation) from Greece re-adjusting its internal price mechanisms will make life slightly more affordable, but any assets held in Greece will essentially be ruined.

In practice, Greece will use both the Drachma and the Euro, because the Euro isn’t going away; the Euro will continue to be used in the rest of Europe, and will continue to be used as a secondary reserve currency around the world. The Euro will continued to be used in Greece, but Greece will no longer have any rights in determining administration of the Euro. I suggested once that the adoption of the Euro in peripheral European countries could be understood as a pre-emptive Euroization of the European periphery, with “Euroization” understood analogously to “Dollarization.” Greece will be related to the Euro as Ecuador is related to the US dollar. In fact, Greece will come close to approximating what I have called currency pluralism.

Under these conditions, the Greek economy will slowly and gradually improve its position, but no one will mistake the Greek economy as a peer competitor to the core states of the Eurozone. The Greeks will learn that if they riot, they will damage the one source of revenue that they can count on — tourism — and those who can accept this deal will reconcile themselves to life in the slow lane. The ambitious will leave for other parts of Europe or to America.

What will the rest of Europe do upon the exit of Greece from the Eurozone?

The Eurozone is a paradigmatically technocratic institution that presumes to organize and administrate the ordinary business of life without imposing any kind of ideological constraints on member states. Critics of the free market model of western capitalism linked to liberal democracy never tire of pointing out the ideological presuppositions of trans-national institutions like the Eurozone, the World Bank, and the IMF. I imagine that many of the Greek leftists now aspiring to form a government probably buy into much of this critique. But as they rail against the center and consciously enact policies intended to prove that they were right all along, they will only be guaranteeing the economic marginalization of Greece.

The implicit ideology of the Eurozone, however, is not that of the “Washington Consensus” with its deregulation and privatization, low tax rates and minimal government (otherwise known as Yanqui imperialism). Rather, the ideology of the Eurozone is that of the post-modern welfare state, with its cradle-to-grave social support system and a social consensus in which (in the words of the oft-disparaged Malthus), “each man’s share of labour would be light, and his portion of leisure ample.” You can call this the “Brussels Consensus” if you like.

In very small nation-states with ethnically homogeneous populations and a strong Protestant work ethic, the Brussels consensus works marvelously — in fact, it works better in such places than it works in Brussels itself. And that is why the Scandinavian nation-states regularly top all lists of the world’s stable democracies with the highest standards of living. But the rest of Europe, much less the rest of the world, cannot make itself over as Sweden or Norway, Denmark or Finland. However, those regions of Europe and the Eurozone that already approximate this social milieu, will continue to thrive in the economic context of the Eurozone.

As the Eurozone moves northward and begins to add stable and growing economies from the former Soviet periphery — chiefly Poland, but also the Baltic states — the geographical area of the Eurozone will come more and more to resemble that of the Hanseatic League, the great medieval trading network of Northern Europe (a trans-national corporation from before the age of nations and corporations). If you are unfamiliar with the Hanseatic Leagues, I urge you to watch Jonathan Meades’ wonderful documentary, Magnetic North, which offers a sketch of the trading bloc that is both erudite and amusing.

The Glory that was Greece and the Grandeur that was Rome may soon be severed from the industry and commerce that is Northern Europe, and Europe will continual to evolve regionally in ways that are consistent with regional economic cultures. Balkan Greece will have its own Orthodox tradition in the Balkans. Catholic Southern Europe (Italy, Spain, Portugal, and the Mediterranean islands) will eventually realize its own slower track version of the Eurozone, closer to the Eurozone than Greece, but not quite the same as the Franco-German core. Protestant Northern Europe will continue to optimize the currency union for those nation-states that are capable of maintaining the economic standards of the Eurozone.

If the Eurozone treaty can grow and evolve and change with the times, the Eurozone that will result will be more efficient and effective than the Eurozone as it is known today. If only those nation-states that are peer competitors can enter the currency union on terms of being true economic equals, this bond will grow and strengthen over time. The “Euroized” periphery will benefit from the trickle-down from a vibrantly economically competitive Northern European economic zone, but life will be different for them. It is silly to pretend otherwise.

There will be both opportunities and dangers in this changed and changing Europe. As has been the case from time out of mind, the clever and the ambitious will exploit the opportunities and will live well; the slow and the timid will will accept their lot.

Thus Europe will come to exemplify the maxim that Thucydides attributed to Athens at the height of Athenian hubris, though displaced from the political into the economic realm: the strong will do as they will, while the weak will suffer what they must.

Is this kind of economic hubris unsustainable? Not in the least. It was the model for Europe in antiquity, as we have seen in the case of Athens, and which was no less true of Rome, and it was the model for Europe again throughout the Middle Ages. This is the European way, however much they seek to deny it.

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Grand Strategy Annex

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The Evolution of Europe

4 January 2012

Wednesday


Detail from an early modern map of Europe; Europe has always been both one and many, divided into kingdoms or nation-states, and yet pictured as one on a map.

The idea of Europe will not go away.

Even as European economic and political institutions are undergoing paroxysms due to a financial crisis (which is largely a debt crisis), the idea of Europe is as strong as ever, and still exhibits its ability to exercise profound influence merely through its spiritual presence in the world.

Thirteen former dissidents in Hungary have issued a manifesto — The Decline of Democracy – The Rise of Dictatorship — that explicitly calls on Europe and European institutions to intervene in Hungary:

“The advocates of democracy and the rule of law within and outside Hungary must not acquiesce in having the government of a member state of the European Union crush these universal values. Nor should the European Union just sit back and watch as it is being held hostage by an outdated, provincial tyrant. It is in the interest of both Hungary and the European Union to make a stand against the prime minister of Hungary. The leaders of the European Union are right in their decision to tighten integration, but this step should be taken not only to combat the financial crisis but also to challenge political crises and risks. The European Union may disintegrate not only for economic reasons but for reasons of pursuing disparate and antidemocratic policies as well.”

The manifesto ends with this paragraph:

“Europe is at a crossroads too. Hungary is a sad example of what may happen wherever there is a concentration of crisis tendencies, aggravated by attempts to resolve problems caused by an economic and social crisis with authoritarian means and a policy of nationalistic isolation. Instead of prosperity and stability, such a policy can only lead to suppression, conflict and turmoil. The desperate situation of present-day Hungary should be a warning for all of us: if Europe is prepared to help Hungary, it will also help itself.”

It would be difficult to find a more strongly worded brief on behalf of internationalism and the European idea as an ideal to which the dissidents appeal, and for the maintenance of which ideal they explicitly urge intervention on the part of other Europeans. The Hungarian dissidents regard themselves as Europeans, and they are urging other Europeans to intercede in Hungarian affairs in order for Hungary to exemplify common European ideals.

Thus the idea and the ideal of Europe continues to inspire political change and inform political action, even at a time when Europe is a beleaguered political entity. But the idea and the ideal also change, however gradually, so that to be European means different things at different times.

Another recent news item is that the “technocratic” government of Mario Monti in Italy has passed a law effective with the new year that allows service industries in Italy to be open for business twenty-four hours per day, seven days per week, Sundays and public holidays included. While there is already some push back on this law, and other proposed economic liberalization in Italy, from a free market stand point these laws are welcome and long overdue.

However, it could also be argued that these new trade liberalization laws represent a threat to European traditions and European culture, and if this argument has not be made already, I’m sure that it eventually will be made. “Blue laws” have a long history in Europe, and anyone who has traveled in certain European countries and tried to find an open store on Sunday can attest, they are effective in changing the character of commercial society and economic activity.

Such changes in the law are enacted under financial pressure. Europe is experiencing what yesterday’s Financial Times called “the worst economic crisis since 1945” — and it might be added the the years immediately prior to 1945 were no picnic either. Financial stimulus is needed, so measures that might not be considered under other conditions are enacted now in extremis. Once enacted, it is difficult to imagine that Europe would return to its traditional blue laws; once repealed, they are likely repealed forever.

This is one way in which the pressures of industrial-technological society and the finance capital typical of the Western nation-states implacably if gradually pushes culturally unique regions toward a common model of socioeconomic organization. None of this comes about as a result of a “grand plan” — it just happens because this is the most rational way to organize a large industrial economy, and inefficiencies will inevitably be targeted during financial crisis because making the change is less terrible than experiencing a financial collapse. To continue with the development of free market capitalism is less radical at this point than attempting to turn back the clock and reconstruct the institutions of a past civilization in which these financial pressures did not force the hand of political entities in cultural change.

It is precisely such developments that are often dismissed and criticized in Europe as “Americanization,” and dismissed and criticized in the rest of the world as “Westernization,” when it is in fact neither. Industrial-technological civilization reveals a natural teleology in its development toward particular institutions, especially financial and economic institutions. The pressures that force such changes are utterly blind to any plan to model themselves after America or the West, as I have argued many times. We can expected criticisms based on the resemblance of these institutions to American or Western institutions, but this appearance is based on deep structural forces that have already played out first in America since America had the fewest traditions with which to contend.

Europe plus free market capitalism will be something different from Europe simpliciter. Europe will still be Europe, but it will change. That is the way of the world, and more particularly it is the way of Western civilization that Europe itself defined.

The saga of Europe is far from over.

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Grand Strategy Annex

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Saturday


What was once in the recent past spoken only in a hushed whisper is now openly discussed and debated: the break up of the Eurozone. But what exactly does “break up” mean in this context? The term implies a catastrophic failure that is not likely to come about, however painful a Greek exit from the Euro would prove to all the Eurozone economies. The Economist Intelligence Unit is calling the Eurozone crisis “€urogeddon,” which seems a bit dramatic for the financial press. With dire news following day upon day it would be easy to be very pessimistic about the Eurozone at the present time, but I am not pessimistic, although the short term outlook is not good. Being able to distinguish the short term prospects of an institution from its long term prospects is crucial in this context.

What exactly would a “break up” of the Eurozone look like? Here is what the Economist Intelligence Unit says in their report, “After €urogeddon? Frequently asked questions about the break-up of the euro zone”:

Firm predictions are tricky, but broadly a fracture between a strong northern “core” and the weaker “periphery” looks most likely. The process would, in our view, probably entail periphery countries breaking off individually to leave a “rump” of northern countries still within a currency union. Once one peripheral country (say, Greece) left, all the other vulnerable countries would probably follow. This means that Portugal, Ireland, Italy and Spain would leave the euro, although not necessarily immediately. Malta would probably leave, and Cyprus would have little choice but to exit as its banking system would be nearly wiped out by a Greek collapse. Up to ten countries could remain members of the euro: Germany, France, Austria, Belgium, Finland, Luxembourg, the Netherlands, Slovakia, Slovenia and Estonia (the last three all being small, open economies like Malta and Cyprus, but with healthier fundamentals).

It is interesting to me to see how this analysis — which I believe to be entirely reasonable and defensible — follows the principle of distinguishing center and periphery, which is something that I have been thinking about recently, and which I wrote about in The Farther Reaches of Civilization and The Second Law of Geopolitical Thought.

Thus a “break up” of the Eurozone would likely involve recession, riots, civil unrest, and bank failures (all these are also discussed in the Economist Intelligence Unit paper quoted above), but it would not be a catastrophic failure. We are not likely to see the dissolution of the Eurozone. The Euro currency will not only survive, but will eventually strengthen as the weaker and underperforming economies of the Eurozone leave the currency union and pursue a different — and marginal — economic path. The underperforming economies will devalue their labor, eventually attracting a little investment on the basis of this devaluation, and will more or less be relegated to a permanent twilight of an economy based almost entirely on tourism. (This is the obvious fate of Greece, and is likely the fate of Greece even if it remains within the Eurozone.)

A rump Eurozone would in fact be a healthier and more sustainable Eurozone than the current Eurozone, which attempts to treat underperforming economies the same as nearly optimal economies. The current Eurozone, with its peripheral members included, is like a cart pulled by two horses — a plough horse and a race horse yoked together. The financial markets are already anticipating this longer-term strengthening of the Euro. If the markets were expecting a catastrophic failure in which the Euro entirely disappeared and all the Eurozone member nation-states reverted to a national currency, we would see the Euro driven down dramatically. The Euro has fallen, but it still remains well within a ten year horizon of trading values. Nothing truly dramatic has happened to its value. If a catastrophic failure was expected, the Euro wouldn’t be trading ten or twenty percent down from its highest value, it would be trading at ten percent of its highest value.

Euro exchange rate with the US dollar in the second half of 2011.

The Eurozone still remains one of the great socioeconomic experiments of human history — an experiment on a grand scale, like the Constitution of the US, which attempted to put Enlightenment-era values into actual practice as a political institution. We recall that the US, in the course of working through its experiment, has encountered some major obstacles, such as the Civil War. As it happened, the US did not break up, or even shed its underperforming regions; however, it maintained its unity only through force of arms. This is significant.

One of the radical and novel aspects of the Eurozone is that it has been voluntary; no military power was been employed either to establish the currency or to further the expansion of the Euro or to secure its ongoing unity. We cannot place too much importance upon this unique historical fact. The very existence of the Eurozone is a living and vital rejection of the Stalin Doctrine. This is not only historically unusual in global terms, it is remarkably at variance with European history itself, which has been unparalleled in its violence and bloodshed.

Because the Eurozone is voluntary, it can afford to be flexible over the long term. It may not have been initially conceived as a flexible institution that could grow or shrink as political and economic conditions change over time, but I think that it could become something like this. Even while the peripheral economies may fall away, several nation-states continue with their accession process to join the Euro. From the experience of the Euro so far, we can more or less predict which economies will be able to successfully join the Euro, deriving a benefit thereby, and those economies which cannot successfully function as a part of the Eurozone.

The voluntary and egalitarian nature of the Eurozone will not vanish with a Greek default and exit from the currency union, even if the exit of Greece takes another member states out of the currency union at the same time. In fact, it could be argued that the experience will make the Eurozone more voluntary and more egalitarian. If the Eurozone comes to include formal protocols both for entering and for exiting the Eurozone, the voluntary nature of the association will have taken a step toward rationalization, and the Europeans will have accomplished something that the US was not able to accomplish: peaceful succession.

I am optimistic that the Eurozone (under the security umbrella provided by overwhelming US military force) may become one of human history’s first truly intelligent institutions. In some earlier posts I made a distinction between the grades of flexibility in institutions, and suggested that humanity might someday be capable of living under intelligent institutions which can take account of their own need to change over time, and the effect this change intelligently and peacefully, rather than being dragged kicking and screaming into the future. The Europeans have proved that they can learn from history, and have demonstrated this by peacefully creating and living within the Eurozone. If they can learn to live without solving problems through force of arms, there is hope that they can also learn to live with truly egalitarian, flexible, and intelligent institutions that can learn from past mistakes and incorporate change into the very structure of that institution. Time will tell.

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Note Added 04 July 2015: While the above was written years ago, the analysis is still more-or-less accurate, and I can stand by most of the claims I have made. I have further elaborated on the past difficulties and future economic possibilities for Europe in the following posts:

Poor Cousins

The Economic Future of Europe

An Alternative to the Euro

The Dubious Benefits of the Eurozone

Shorting the Euro

Will the Eurozone enact a Greek tragedy?

A Return to the Good Old Days

Can collective economic security work?

What would a rump Eurozone look like?

The Old World in Turmoil

Gibbon, Sartre, and the Eurozone

Europe and its Radicals

Default in the Eurozone

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