Abstract
One wonders what David Runciman saw in this book, when he blurbed that the author “succeeds admirably in showing where Europe might be headed.” There are, to be sure, admirable aspects of this book. But when one cuts through the elegant prose, the lightly worn erudition, and the sober assessment of Europe’s current problems, it’s clear that the author has no idea where Europe is headed. There’s nothing wrong in that. Futurology has always been a mug’s game that political theorists have done well not to play. Despite its misleading subtitle, David Marquand’s new book is not really about the future of Europe, but about the present. Like everyone else writing about Europe these days, Marquand wants to explain how Europe got itself into such a mess.
Marquand’s argument can be summarized very quickly.
Verdun and Auschwitz are the twin catastrophes that animated the postwar European project. The construction of the European Union (EU) was a splendid success until about 2005, when problems set in. Ultimately, these problems stem from four great ambiguities that its founding fathers failed to resolve: ethnocultural nationalism, national sovereignty, territorial boundaries, and democratic politics. Marquand urges Europeans to confront these ambiguities by way of an open and searching public debate. To facilitate this debate, Marquand recommends a directly elected EU president, a stronger EU parliament, and greater scope for plebiscites.
Marquand is absolutely correct to highlight these four ambiguities. He is unquestionably correct, when he says that “a fudge” at the start of the project helped build consensus, but that this “fudge” now holds Europe back (p. 52). Unfortunately, Marquand neglects to mention a fifth ambiguity, which in many respects is the most important of the lot: welfare capitalism. Europe’s political architects never came to terms with the preconditions of a successful form of welfare capitalism. They never confronted Friedrich von Hayek’s argument that a multinational federation would lack the solidarity to sustain a cross-national redistributive welfare state. In his brief discussion of the EU, John Rawls drew exactly the same conclusion. But whereas Hayek advocated a multinational federation to thwart a redistributive welfare state; Rawls advocated a Europe of nation-states. Only in a nation-state, so Rawls argued, would a redistributive welfare state be feasible. 1
For much of its history, the EU has been able to develop without confronting the solidarity deficits that exercised both Hayek and Rawls. This period came to an end in 2010 with the emergence of the so-called Eurozone Crisis. Simply stated, Greece and Portugal and maybe also Italy and Spain cannot prosper in a Monetary Union dominated by Germany. For Marquand, the “design flaw” in the European Monetary Union (EMU) was to construct a Monetary Union absent a Fiscal Union. Marquand’s diagnosis is doubtless correct. However, this “design flaw,” this failure to introduce a supranational budget, was less a cognitive error than a function of fundamental social and political constraints. Even today, a European Fiscal Union is much harder to bring off than Marquand recognizes. Here’s why.
First, a European Fiscal Union—a common European tax and expenditure policy of sufficient scope to address economic imbalances—would entail a shift in power from the national to the European level of government. Since the European level of government is less democratic than the national level, such a shift entails a democratic deficit. Marquand would remedy this deficit by introducing an elected President and “Union-wide referenda on fundamental questions” (p. 138). There is no more fundamental question than the question of the obligations of creditworthy states (currently, Germany, Netherlands, Finland, Slovakia and a few others) to debtor states. Given a vote, people in the creditworthy states are likely to elect to sever their ties to Southern European debtor states. If this happens, then the European Fiscal Union will go nowhere. In solving Europe’s democratic deficit, Marquand will have exacerbated Europe’s solidarity deficit.
The second problem with a European Fiscal Union is that it presupposes either a common European model of welfare capitalism or a variety of models of welfare capitalism each of which are roughly comparable in productivity. For much of Europe’s postwar history, the European level of government did little to constrain the very different varieties of welfare capitalism that took shape in Europe’s member states. Sweden, Germany, Italy, Greece, and so forth—all had quite different regulatory systems governing their labor markets, product markets, and the provision of healthcare and pensions. Despite the differences in these models, the EU was supposed to bring about a convergence in national economic outputs. Indeed, the EMU simply could not work in the absence of such a convergence. Not only did this convergence not take place, but the economic gap between Northern and Southern Europe—Germany and Greece, in particular—grew larger over the last decade. Ultimately, the Eurozone Crisis is a consequence of this divergence in economic growth.
A European Fiscal Union cannot itself solve the problem of economic imbalances between Northern and Southern Europe. These imbalances require structural reform in the less economically successful member states. Bluntly stated, Greece and Italy must either become more like Germany in the way they organize their labor and product markets, or they must abandon the Euro. In other words, the EU cannot survive unless it becomes more united and less internally diverse.
Marquand has a lot to say about diversity, but unfortunately he never connects this part of his argument to his discussion of a European Fiscal Union. In the weakest pages of the book, Marquand presents us with a picture of a pluralist, communitarian Europe very different from an individualist, homogenous America. Here Marquand’s argument dissolves into a form of fact-free, cod sociology. 2 Phoenix is more similar to New York, than Madrid is to Barcelona; the American Dream is one of individuals; the European ideal is one of groups. Setting aside these absurdities, we are left with three puzzles that Marquand never successfully resolves: (1) How can Europeans have an open and public debate while lacking a common language and media? (2) How much cultural diversity is consistent with a Fiscal Union? and (3) What is the point of constructing a politically integrated EU rather than a Europe of Nation-States?
To take these questions in reverse order, the point of constructing a politically integrated EU is surely to ensure that Europe is powerful enough to shape global institutions in accordance with its own interests and values. The alternative is to rely upon the United States or some other great power. A Europe of Nation-States will be too weak to achieve anything significant on the global stage. Absent this geopolitical goal, there is not much to motivate the European project. The historical memory of Verdun and Auschwitz, which Marquand emphasizes, are unlikely to have the animating force in the future that they had in the past.
In order for Europe to be a potent force in global affairs, it needs to solve its economic problems. The obvious solution here is to accept the superiority of the German model of welfare capitalism. The German model manages to combine high levels of productivity, strong forms of collective bargaining, and a level of social equity that is far superior to most other European states. Europe’s future, if it has one, involves a Europe modeled on Germany. Doubtless, this will entail far-reaching transformations in Southern Europe and elsewhere. In some respects, a German Europe will be less diverse, more homogenous, than current arrangements. But it is a fantasy to think that a European Fiscal Union can flourish in the presence of divergent forms of welfare capitalism. The solution to the solidarity deficit that troubled Rawls and pleased Hayek is to create similar work and life conditions throughout Europe. In short, a European Fiscal Union requires a European Social Union.
A European Social Union entails not merely similar work and life conditions, it also requires a common language. English is de facto the common European language; it is important that it becomes quickly the de jure common European language. The EU wastes enormous amounts of money translating all its documents into 24 languages. That money would be better spent ensuring that everyone in Europe speaks English. A common language would also help facilitate the open debate, the creation of a European demos, that Marquand favors. He is wrong, however, to think that Europe can solve its democratic deficit without first creating more internal homogeneity. It would be disastrous for Europe in its present state to elect its President and to enact referenda on important topics. Europe’s democratic deficit, lamentable though it is, can only be solved in an environment of solidarity and trust, which in turn requires similarity of language and life-conditions.