Nick Hanauer: Beware, fellow plutocrats, the pitchforks are coming

We need a visionary hope

        One of the most famous quotes in economic theory to be read and re-read ...

           
          John Maynard Keynes (1936): The General Theory of Employment, Interest and Money:

…Have they insufficient roots in the motives which govern the evolution of political society? Are the interests which they will thwart stronger and more obvious than those which they will serve?

I do not attempt an answer in this place…. But if the ideas are correct… it would be a mistake, I predict, to dispute their potency over a period of time…. The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas….

There are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.

Umberto Eco: The Library as a Model for Culture: Preserving, Filtering, ...

Europe's dilemma

Over the last 30 years, globalization has shaped our societies for good or bad. We may be discontent about it and try to limit its adverse effects on wages and social protection. Technology has also shaped globalization; the emergence of new economic powers has conferred a new political structure. Those countries which will not have a continental dimension will become politically irrelevant. Like in a chess game, the pawns can move one step at a time, in one direction, but against them the knights, the towers, the Queen move in all directions .Imagine if Europe transforms into the United States, it would become a tower.

Europe is the richest continent of the world, technologically advanced, more populated than the United States, Russia or Brazil, but lacks political power. The paradox is that it does not seek for more powersmainly due to its internal divisions. Yet it cannot by itself provide economic stability,  resolve migration issues, bring legality and peace in our Mediterranean confines and to turn into a federal governance in order to address the problems increasingly posed by globalization. 

Those who want and fight for the United States of Europe know that there is no other way in the global economy if it wants to bring much needed stability and security to its citizens. Last June, an open   letter signed by more than 200 academics was forwarded to Heads of State and government. It indicated some of the necessary reforms to make Europe work better, in particular the completion of the eurozone governance and called for a " clear roadmap and timetable to complete the banking union and to reach the fiscal, economic and political unions by the end of the European legislature .

Citizens need a vision and a way forward to a Europe based on democracy, solidarity and subsidiarity. Nothing else can win back their trust towards the Union. The alternative is the spread of the social perception of an inevitable and irreversible decline, which fosters the rise of populism, nationalism and xenophobia. Leadership implies responsibility towards the citizens of today and tomorrow"

To be or not to be, that is the question. Hamlet chose not to be and had the end that Shakespeare has told us. We, Europeans are making the wrong choice and if we do not remake our Europe we'll have the same end.  Yet, Europe has the potential to shape its economic and political future as it did in the aftermath of WWII. 

Is Europe disintegrating?

In this end of year, economic optimism can bring some reason for hope. Most economists and international organizations urged Germany to increase its public investment to offset a dramatic contraction of demand in the rest of Europe.  This is finally going to happen: public expenditure is set to increase  - albeit modestly and too late - not just for boosting European growth but due to the massive arrival of refugees.  

Europe is facing two big crises - the eurozone and the migration crisis that are intertwined . As the president of the Commission Juncker reckoned,  without free movement of people, the single currency that the same people can spend in any part of the euro area does not make sense. The Schengen agreement has been put into question by the massive wave of refugees going from one country to another and by the terrorist threat beyond borders. This argument has also been used by populist parties to call for closing borders to the refugees.

These crises did not just occur in sequence. The long crisis of the eurozone has actually deprived governments of the will and capacity to act as well as their capital of trust and credibility which would be needed today to address the borders crisis. AS Germany plays a key role in both crises, Greece is  again seen as a scapegoat.

But, as P. De Grauwe points out,  the euro and migration crises have common features and flaws . In both cases, Europe's response has been partial. In the first case, the single currency was introduced but national budgets remained separated. During recessions, debt and deficit soar in vulnerable countries and capital flows  move toward stronger countries creating more divergence within the eurozone.   In the case of Schengen, borders were abolished but police and intelligence bodies remained separated and today there are no common coastguards  and border controls  The consequence is that with the euro, governments confronted to uncontrolled capital movements  cannot guarantee economic stability. While regarding Schengen, without a real integration of police forces, the same governments cannot guarantee security to their citizens. Furthermore, the concentration of powers on national governments rather than on the European Commission made decision processes more cumbersome and ineffective. 

Europe's founding fathers assumed that building a process of cooperation among States to resolve common challenges would inevitably lead to a closer integration in the absence of any alternative. But this is what happens today : if these common tasks remained unfulfilled , it does not mean that they will be brought to completion in a near future; it might go into  reverse and  even lead to the disintegration of Europe. 

As Ph. Legrain put it, " .EU leaders are weak, divided, and seemingly incapable of setting out a credible vision of the future benefits that European integration could provide, without which they cannot rally popular support and convince recalcitrant governments to bear their fair share of current costs. In the absence of an effective, common response, Europe’s crises fester, feed on each other, and foment unilateralism". Common solutions require at least four criteria: "a correct shared understanding of the problem, agreement on an effective way forward, willingness to pool more sovereignty, and political leaders able to drive change forward."

As these criteria are now missing, Europe has to reinvent itself . It has no fixed identity and is always remaking itself and will move over time. But the question is whether it will continue deepen its integration process on the road to a federation or alike or go backwards to the predominance of sovereign States. 

Globalization, Religion, and the Secular

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