Monday, October 7, 2013

The paradox of Europe

In "The Globalization Paradox" Dani Rodrik establishes the trilemma between an internationally integrated economy, political democracy and the nation state. The three things together are not possible, and societies must choose at most two of them. In the 1920s most developed nations chose to exclude de facto political democracy by sticking to the gold standard, keeping the formalities of the nation state but making it impossible for majorities to impose their will. After the second world war, nation states limited international economic integration and preserved the possibility of majorities imposing their will for example through an expanded welfare state where democracies had this preference. Another possibility if to make progress toward a global federalism, making compatible democracy in a new global governance and global economic integration, but by leaving behind the nation state as we know it. Many may think that this is impossible, and certainly Dani Rodrik thinks that it is not even desirable, because nation states allow for diversity and experimentation. However, making progress towards federalism is possible at the European level, and we have certainly already seen much progress in this direction, for example in the Schengen agreement that establishes common border controls, or in the common monetary policy. The problem is that these arrangements are imperfect (as seen in the euro crisis or in the tragedy of immigrants in Lampedusa). The solution of the euro crisis and the Lampedusa tragedy is the same: we cannot stay in the middle. Either we make progress towards a more integrated, fully democratic and federal Europe, or we restore national border controls and national currencies. I believe it is much better to go forward, because there are many ghosts hidden in the European geography, and more Europe is needed as a collective good to keep peace and stability. In Europe, my preference for the two feasible sides of the Rodrik trilemma is clear: leave the nation states behind. The problem, and the deeper paradox, is that the decision has to be made by the nation-states themselves, because the European Union is a union of nation-states. They have voluntarily surrendered already much sovereignty, and they should surrender much more.

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