Total fertility rates in Europe (children per woman), 2010. (Source: Eurostat)

My early political thought was in large part opposed to the “myth” of the demographic collapse of Europe, particularly as promoted by American neoconservatives and other Anglo-chauvinists, supposedly caused by spirit-killing effects of “liberalism” (welfarism-socialism), which, tied with Muslim immigration, would lead to “Eurabia.” These writers were taking a grain of truth, and as propagandists and vulgar polemicists are skilled at doing, turned this into an unadulterated fantasy pandering to the prejudices of their readers.

But there was a grain of truth. In whole swathes of Europe, entire nations, people have lost the will to reproduce themselves and/or are fleeing their country for prosperity elsewhere. This dramatic trend, which is affecting virtually all of Southern and Eastern Europe, will significantly change Europe’s internal balance of power and the continent’s relationship with the world. Italy, Portugal, Spain, Greece, Cyprus, Latvia, Lithuania, Hungary, Romania and virtually all of the Balkans are just some the “childless and jobless” countries which risk falling into econo-demographic death traps.

Even before the crisis, the populations of Latvia, Lithuania, Bulgaria and Romania were declining rapidly (their populations have shrunk between 4.8% and 13.7% since 2001). The euro crisis is aggravating and distorting these trends, causing a “baby recession” fertility drop and mass emigration (notably to Germany and emerging countries). Will this human hollowing-out of nations spread to the rest of Europe?

Fertility: A key underlying factor

The fertility rate is perhaps the most fundamental underlying variable: How many children does each woman have on average? Here we have a remarkable convergence between Teutonic Europe, Southern Europe, post-Communist Central Europe (including the Balkans), and post-Soviet Eastern Europe. Across the entire zone, women have between 1.2 and 1.6 children, with most hovering around 1.4, including Germany, Italy and Spain. Post-Soviet Europe (Russia, Ukraine, Belarus, Moldova…) is in a similar range, although the average is closer to 1.5.

The only countries with near-replacement level fertility (besides Turkey) are in the old liberal fringe: France, Belgium, Netherlands, Britain, Ireland and the Nordic countries – that is, the countries with strong indigenous modern democratic traditions (as opposed to countries where liberal democracy was either imposed by foreigners or is an imitation of foreign traditions).

For most of Europe, the fertility figures are really, really bad. We have these categories:

• EU average 2010: 1.6
• British Isles, Nordic countries, Belgium-Netherlands, France: 1.8-2.05
• Teutonic Europe, Southern Europe, Central and Eastern Europe, Balkans, former Soviet Europe: 1.2-1.5
• Russia: 1.6
• Turkey: 2.05

It should be stressed that collapsing birthrates are a universal trend synonymous with “modernization” (especially urbanization and female education).

The global average fertility rate in 2010 was 2.45, while Europe and Central Asia’s was 1.81. East Asia’s fertility rate has now fallen below Europe’s while the fall is well underway in South Asia, Latin America, the Middle East and North Africa. The only region with still very high fertility is Sub-Saharan Africa (almost 5).

Europe’s fertility is pretty “normal” for the developed world. Compare the EU’s 2010 average (1.6) with American whites (1.7), Canada (1.59), China (1.55), Japan (1.39), South Korea (1.24), Taiwan (1.11) (sic!), Iran (1.86), Cuba (1.46), and City-States Hong Kong (1.11), Macau (0.93) and Singapore (0.79). Europe’s fertility is indeed in line with what is normal for developed countries, in fact it is significantly better than East Asia’s, but that doesn’t mean the trends within Europe are unremarkable or inconsequential. (Most figures from the CIA Factbook.)

Note: fertility rates can bounce back up (already seen in Bulgaria and Russia, from very low levels). But these divisions between low/moderate fertility European countries have been pretty stable for 30 years. Demographic decline is hard to reverse as, after a generation of low fertility, the new cohorts of women are much smaller, requiring very high fertility to reverse the trend.

Population change 2001-2012: Mostly economically-driven migration

This major underlying factor, fertility, is relatively weakly affected by economic circumstances. Although an economic collapse tends to lower fertility, and sometimes prosperity can increase it, the effect tends to be a relatively minor “nudging” of a more deep-seated, long-term tendency.

Economics mainly affects overall population through migration. Already, over the past decade and even before the crisis, we have seen significant divergences within Europe. We have four broad categories of changes in population size over the 2001-2012 period:

• Collapse (-14% to -5%): Lithuania (-13.7%), Latvia (-13.6%), Bulgaria (-10.1%), Romania (-4.8%).
• Aging stagnation (-5% to +4%): Hungary (-2.4%), Germany (-0.5%), Poland (0.7%), Portugal (2.8%), Greece (3.3%).
• “Reasonable” growth (+4% to +10%): Belgium, France, Italy, Sweden, Britain, Netherlands (4.6%)
• Speculative growth (+10% to +20%): Ireland (19.6%), Spain (14.1%), Luxembourg (19.5%)

These figures reflect both underlying fertility (as we’ve seen, very low everywhere except for France, Belgium-Netherlands, Nordics, and British Isles) and migration (from the poor to the prosperous).

The crisis is partially scrambling these categories: the “speculative” growth countries (Spain, Ireland) and the stagnant peripheral countries (Portugal, Greece) are returning their “normal” status as exporters of humans. Instead we have these categories:

• “Reasonable”: moderate fertility, moderate-to-high immigration, middling-to-high economic growth (France, United Kingdom, Belgium-Netherlands, Nordics).
• Childless but job-rich: low fertility, high immigration, growing economy (Germany, Austria).
• Childless and jobless: low fertility, high emigration, either growing from poor base or developed but “peaked.” This concerns most of Europe: Poland, Spain, Portugal, Greece, Cyprus, Slovakia, the Baltic States, all of Eastern Europe except Russia, the Balkans…

“Childless and jobless Europe”: Entering the Demographic Death Trap

The “childless and emigrating” nations are perhaps the most interesting. They include both “depressed” post-communist Europe and the euro-crisis countries. Their demographic prospects are horrible.

The entire developed world faces the challenge of society’s ageing and in particular:

1. Paying for ever-rising age-related expenditure, notably healthcare and pensions…
2. …with an ever-shrinking base of young workers.

Obviously there are lots of other variables, for instance, the U.S. has a particularly irrational healthcare system (already absorbing an incredible 17% of GDP despite a relatively young population). However the underlying demographics and age-dependency ratios (the number of +65 year-olds to the number of working-age 15-64 year-olds) are perhaps the most critical factor.

Already between 1990 and 2010, the age-dependency ratio increased from 20.6 to 25.9% in the EU, including from 22 to 31.4% in Germany and from around 21.2 to 25.6% in France. Here are projections to 2060:

(Source: Eurostat)

In 2050, there will be only two working-age individuals (generously defined, as we include students) for every over-65 year-old. I do not believe these projections take into account the necessarily difficult-to-predict effects of the financial and euro crises.

The most extreme version of this phenomenon, among major nations, is Japan, which has both had extremely low fertility and low immigration. This, beyond disputes over this or that economic policy, is the ultimate cause of its so-called “lost decades” of economic stagnation. Already Japan has an old-age dependency ratio of 37% and the median age is 45.8. Japan today is roughly where the EU will be in 2030.

But Europe’s “childless and jobless” countries will get there much sooner. Low fertility in itself would doom them to Japanese stagnation, the fact in European countries of mass emigration of the young will accentuate this, meaning acceleration in the rise of the average age and in the age-dependency ratio.

Most Balkan and Baltic countries have largely failed to created viable autonomous economic models, Latvia, Lithuania, Bulgaria, Romania, Bulgaria have been largely emptying themselves of their populations, much like Caribbean countries. Poland, a success story today, does not look to have a good long-term future, although much depends on how much growth shale gas delivers and whether Polish emigrants (notably to the UK and Germany) plan on eventually returning home or not. One cannot over-generalize, there are reasonably successful intermediary nations, such as the Czech Republic and Estonia.

The Euro Crisis: From Nations to Provinces

The euro crisis will dramatically accentuate and accelerate these trends: fall in fertility, emigration (of the young and educated, “brain drain”), prolonged mass unemployment as wages are reduced without monetary devaluation (including hysteresis, loss of skills due to long-term unemployment), and cuts to infrastructure and educational investment (Mario Draghi recently repeated his call for both deficit reduction and lower taxes, implying the effort should be entirely through spending cuts). Between skill loss, brain drain, collapsed fertility and cuts to infrastructure and education investment, I think one should view with deep skepticism the claims that the “austerity medicine” will eventually help the peripheral nations to “recover,” even in the medium- to long-term.

It is difficult to estimate the effects of these factors taken together. Some preliminary developments to bear in mind going forward:

• There has been no significant or consistent job creation in the “austerity success stories” Ireland, Latvia and Lithuania. Latvia and Lithuania have achieved lower unemployment solely by exiling over 10% of their population.
• Ireland and Spain will probably see a decline in their population roughly proportional to their “unreasonable” migration-driven pre-crisis speculative growth (typical of this absurdity: between 2001-06 over half of jobs created in the EU 15 were in Spain).
• Portugal has seen over 2% of its population flee the country over the past two years (240,000 people).
• Germany, in contrast, attracted almost a million immigrants last year, overwhelmingly Eastern and Southern Europeans.

So far Southern Europeans have been less prone to leave their countries than their Eastern counterparts. But this may change as the economic and job situation fails to improve (although how bad things will be can vary significantly depending on whether Germany concedes a rational economic policy in the general interest of the eurozone as a whole, rather than just sticking to its own national interest, admittedly a tall order).

Like in Japan, we will see a rise in age-related expenditure and a dramatic decline in the working-age population across Southern and Central-Eastern Europe.

Japan, as a Nation-State, has an economic strategy and has, on balance, managed the consequences of its demographic “catastrophe” relatively well. In particular, Japan is a protectionist country which self-finances its (massive) public debt, protecting itself from financial market panic and international competition. The current experiment in “Abenomics” (devaluation, inflation, aggressive self-financing) is a classic example of decisive Nation-State action which will be followed with great interest.

In contrast, the peripheral European nations are no longer self-governing when it comes to macroeconomic policy. They have not been able to compensate for their demographic problems with sound and appropriate economic policy. On the contrary, EU authorities have, partly following the spirit of the European Treaties and partly bowing to the reality of German power, dramatically aggravated the situations of these countries. The peripheral nations face a “triple whammy” of inappropriate policies: crippling refinancing costs (because of lack of ECB/German solidarity, lack of inflation), the overvaluation of the euro, and automatic austerity (anti-Keynesian deficit reduction).

There is no indication these inappropriate policies will change except, perhaps and somewhat, refinancing costs (these have been lowered but remain high). The current situation benefits Germany and Berlin can veto any changes. This being the case, Berlin has overwhelming bargaining power, and so the German government has made temporary and circumstantial concessions (a bailout here and there) to get permanent and structural changes, notably on the banning of Keynesian deficit spending (Fiskalpakt, Six-Pack, Two-Pack), regardless of what future democratic majorities at national or EU level might want. This pattern will continue.

As a result, these inappropriate policies will not change. The peripheral countries may fall into permanent and self-reinforcing austerian vicious circles:

1. Age-related costs rise and the workforce shrinks due to childlessness and emigration…
2. …the government institutes tax hikes/budget cuts (usually respecting elderly voters), further undermining growth and crowding out investment…
3. …age-related costs rise and the workforce shrinks due to childlessness and emigration…
4. …and so on.

If things continue on their current paths, Spain, Portugal, Greece, the Balkans and most of Central-Eastern Europe will be transformed from living nations into hollowed-out provinces, gradually emptying themselves of their people under the twin pressures of emigration and loss of the will to reproduce. Falling under the domination of timid elderly voters, these gerontocracies and sell out their youth and their future, who will find their destiny in Germany, Britain or further beyond Europe. They will cling to the euro (guarantee of their pensions’ value) and “stability.”

Most of Southern and Central-Eastern Europe will likely be transformed into glorified retirement homes.  They will cease to be “nations” but become mere provinces of the Euro-German system (“Empire”), economically dependent on Germany and militarily and culturally dependent on America. They will cease to be autonomous socio-historical forces with their own life, but merely minor appendages to the Euro-German and American systems, providing very secondary markets and, it must be said, some much-appreciated labor for the German business-industrial complex.

This may be somewhat dangerous even for the center however: Spain, Italy and Greece may be so hollowed-out, elderly and impoverished that they may be too weak to even defend Europe’s borders and serve as viable buffer states for the Franco-German core. Already Greece is being overwhelmed as the “choke point” for immigration to Europe and, with the depths of the economic disaster there, we are seeing a sharp rise in violent racism and outright fascism.

Europe will be re-centered around four to five “true nations”: Germany, Britain, Turkey, Russia and, perhaps, France. (The destiny of France, critical to Europe’s future, remains as interesting and mysterious as ever, and one can imagine any number of scenarios.) The rest will be provinces. The only small or peripheral societies deserving the moniker “nation,” having a vibrant and autonomous life, will be the Nordics and perhaps half-a-dozen of the smaller continental countries.

It is interesting that Europe’s traditional dominant nations are maintaining themselves and remaining the only ones with any vitality, even in the strange, diffuse, difficult to seize postmodern age we live in. The euro will have accelerated and accentuated these processes – both the demographic collapse of certain parts of Europe and the decline of Europe in the world – while delaying the decline of Germany and allowing a partial renewal through (easy-to-integrate) European immigrants. However, in some places this classic peripheral decline is taking place without the euro and perhaps Spain, Portugal and Greece were doomed to decadence even without the folly of EMU. This “liberal decadence” is already inspiring counter-reaction, most notably in Viktor Orbán’s Hungary, although it’s not clear to me such reactionary revolutions will actually be able to address these trends.

Perhaps the enduring success of the major nations is due to their traditional power (the powerful make the rules to suit themselves, perpetuating that power). But I suspect it may also reflect deeper socio-cultural roots (national characteristics), which were the cause of their historical greatness in the modern age and persist in new forms to this day. The rest will become hollowed-out provinces, glorified retirement homes and, if they are pleasant enough, attractive tourist spots for global travelers to admire the ruins of once-proud nations.

***

The title of this post of course references the famous Irish patriotic song by Thomas Osborne Davis, “A Nation Once Again”. And as nothing is ever gained by defeatism, I’ll conclude on a more optimistic note:

When boyhood’s fire was in my blood

I read of ancient freemen,

For Greece and Rome who bravely stood,

Three Hundred Men and Three Men.

And then I prayed I yet might see

Our fetters rent in twain,

And Ireland, long a province, be

A Nation once again.

Marine Le Pen at a May 2012 Front National rally after finishing third in the presidential elections.

This is a guide to the French far-right nationalist party the Front National, based on numerous interviews, articles and polls. It also covers broader issues of French attitudes towards their democracy, immigration and Muslims. It is composed of the following subheadings:

1. What is the Front National?
2. Is support for the Front National growing?
3. Do the French agree with the Front National?
4. Where does support for the Front National come from?
5. What do French people care about? (It’s the economy, stupid.)
6. Conclusion: Permanent protest or a party of Government?

Last January a poll claimed that 87% of French said they wanted “a real leader in France to restore order.” The media were equally alarmed with a poll the same month which found that a majority of French thought there were too many immigrants, that Muslims had too many rights, that the police were not tough enough, and that “traditional values” were insufficiently defended. Most remarked upon was that 31% of people said they “completely or mostly agreed with the ideas” of France’s far-right party, the Front National.

The two major polls, one by Le Monde-TNS Sofres and the other by Ipsos-CEVIPOF, and were used by the media to portray France as a country apparently turning to racism, chauvinism and a kind of neofascism. In fact this was tremendously exaggerated, the picture has to be nuanced. But there is a general trend in Europe, France included, of rising social tensions and hostility to the political Establish, in large part due to the economic crisis. The British government, despite the country’s liberal reputation, has increasingly engaged in anti-immigration rhetoric. In Hungary, there has been violence against Roma by extremely ominous militias under the country’s extremely conservative government.  With the lasting economic crisis of the European unification project and ever-increasing unemployment, could it be that the Old Continent is returning to its nationalist past?

The case of France is interesting as a founding member of the European Union, as the home to Western Europe’s largest Muslim minority, and as the political stage for one of the continent’s most powerful far-right parties, the Front National.

1. What is the Front National?

The Front National can fairly be described as a nationalist party and aggressively anti-immigration party. The party has a diverse platform, often hard to pin down, that includes “law and order,” anti-immigration, and “anti-government” positions (tax cuts for small businesses, elimination of some local and regional government, hostility to the political class in general). It also includes a certain “high Statism,” economic protectionism and hostility to the European Union and the euro. However, the most distinctive plank remains an aggressive hostility to immigration and immigrants, despite a certain mainstreaming of rhetoric and the increasing use of anti-immigration rhetoric by the main center-right party, the UMP.

Shades of the Interwar.

The tone of the party and its activists can be seen from their posters. A poster urging a no vote in a recent referendum to unify the Alsace region, which has passed between France and Germany numerous times, shows a German businessman grabbing a woman representing Alsace. The sort of poster you usually see in interwar history books…

Front National anti-immigration posters.

More common are anti-immigration posters opposing the purported “Islamization” of France, often featuring minarets, burqas, and the Algerian flag. One poster warns darkly against people staying at home on election day as “the immigrants are voting” (non-EU citizens actually cannot vote in French local, national or European elections).

The Front National youth wing tends to have particularly aggressive posters such as one declaring “You fuck France… Get the fuck out!” featuring a club-wielding thug with a dog. Front National activists have a weird reversal of victimhood as they argue they suffer from the “anti-white racism” of immigrants and non-white French citizens (notwithstanding the fact that white French hold the overwhelming majority of educational, economic, police and political power, that is, the ability to discriminate). So one youth poster says: “Enough with anti-French racism: THIS IS OUR HOME!” Another, featuring a stereotyped Muslim, urges, with no sense of contradiction: “Against racism… Stop immigration!” Another poster (liberally translated): “These colors don’t run.”

This table gives a sense of the Front National supporters’ positions relative to other parties’ (this poll was criticized for exaggerating the French’s conservatism, but it in any case remain useful for inter-party differences):

Source: Ipsos-CEVIPOF poll, “France 2013 : Les nouvelles fractures”

It would be wrong to describe the Front National simply as an old-style fascist party. Marine Le Pen, the party’s new leader after her father Jean-Marie, appears at rallies with statues and huge posters of Jeanne d’Arc. But it’s also a party that is self-consciously trying to become more “respectable” and “serious.” She has been partially successful at “de-demonizing” the party. While her father had called the Holocaust “a detail of history,” Marine Le Pen has made a point to condemning antisemitism and reaching out to Jews and Israelis. Indeed, in her early days as FN leader in 2011, she pulled off a small coup by meeting with the Israeli ambassador to the UN. Marine Le Pen is less gratuitously provocative than her father and, if her style against “the system” has a certain aggressiveness, this is if anything less violent than the systematically accusatory and frothing-at-the-mouth style of the leading communist-ish politician, the Front de Gauche’s Jean-Luc Mélenchon.

The Front National more and more argues the economic and social costs of immigration, rather than simply appealing to xenophobia. The non-negative portrayal of a woman of color in a 2007 election poster was noted. The country’s economic program is increasingly “social” and protectionist, loosely inspired by French heterodox intellectuals like Emmanuel Todd, Jacques Sapir and others who are anything but fascist. The leader of this “Strasserist” wing is led by Le Pen’s spokesman, Florian Philippot, a young (31) high civil servant. He is, incidentally, rumored to be gay and hence to have weakened the party’s response to gay marriage. When asked he refuses to confirm or deny, citing privacy.

The Front National itself is not immune to wider “progressive” social trends in French society. On gay rights or abortion, the Front National’s position, in principle opposed, is less clear than before. Conservative attitudes to the family are dead in France. An amazing 55.8% of French children are born outside of marriage, France being one of the leaders in this European trend. Stepfamilies and couples living together outside of marriage are extremely common. Marine Le Pen herself is a divorcée with three children who is currently in a relationship Louis Alliot, who happens to be Vice-President of the Front National… These trends have led some to speculate that it could become a socially progressive anti-immigration movement on the model of Pim Fortuyn (if this happens it will put Madonna’s comparison of Marine Le Pen with Nazism in an interesting light…).

Keeping it in the family: Marine Le Pen’s father, former Front National leader Jean-Marie Le Pen, and her niece, France’s youngest-ever Member of Parliament (23), Marion Maréchal-Le Pen.

Beyond this the Front National can be hard to pin down. Like virtually all French political parties today (and as in most Western countries), it increasingly “exists” in and through the media through the use of familiar slogans and soundbites. The shift from Reaganite anti-guv’mentism in the 1980s to Statist protectionism in the 2000s has a whiff of opportunism and suggests the party has little ideological depth or consistency. One sometimes has the impression that, like the rest of the French party system, the Front National does not have the depth or coherence of an old-style mass party and that it too has become a mainly media-based brand with weak roots in society. It is notable that neither the UMP nor the FN had a significant leadership role, although many politicians participated, in the massive anti-gay marriage protests of recent weeks.

It is impossible to say what a France under Marine Le Pen would look like. The situation would have to be dramatically different for this to be possible. However, in terms of nationalism and racism I suspect, although this is necessarily conjecture, a “Marine Le Pen’s France” would fall somewhere between Vladimir Putin’s Russia, Binyamin Netanyahu’s Israel and Viktor Orbán’s Hungary. Le Pen has been criticized for expressing her (qualified) “admiration” for Putin in 2011. FN leaders often express openness to a rapprochement with Russia and have similar positions on foreign policy (on the Iraqi, Libyan and Syrian wars for example).

2. Is support for the Front National rising?

There has not been a great, consistent rise in support for the Front National in recent years, in that sense the recent media coverage portraying a conservative France on the verge of authoritarianism is highly misleading.

The Le Monde-TNS Sofres poll graphs the numbers of people saying they “completely agree, mostly agree, mostly disagree or completely disagree with the ideas promoted by Jean-Marie/Marine Le Pen” since November 1984:

The 32% “agree” figure, which caused such a fuss last January, is fairly unremarkable in retrospect, having been reached as far back as October 1991 and almost reached in April 1995 and May 2002. The figure is rather erratic and seems to be a cyclical expression of discontent.

A similar result emerges from the FN’s various electoral results over the years:

The FN – with the exception of 2007, when a still shiny-new Nicolas Sarkozy aggressively campaigned on the themes of immigration and crime – has consistently achieved around 15% of the vote in presidential elections since 1988. Sure, the FN vote has also consistently risen, from 14.38% in 1988 to 17.9% in 2012, a mere 3.5% point increase over 24 years. This is interesting of course but it hardly justifies any immediate alarmism. (Indeed, commentators have been surprised at the FN’s recent inability to really capitalize on either the hardships of the financial and euro crises or of the acrimonious debate on gay marriage.)

Note that the FN achieved its “media breakout” in the early 1980s. The 1984 European and 1986 parliamentary elections, both of which featured proportional representation, enabled the FN to have 10 MEPs and 35 MPs, allowing them to firmly establish themselves in the French political and media landscape.

It is true that the FN is becoming somewhat “normalized” and “de-demonized.” The FN and its supporters used to be treated little better than plague-bearers by the media and political class. Today the FN is increasingly considered a “normal party” within the French right. According to the same poll, 51% of UMP supporters back either an overall alliance or ad hoc electoral alliances with the FN for the upcoming municipal elections. There has also been a steady increase in the number of people who believe the FN represents “a patriotic right attached to traditional values” rather than “a nationalist and xenophobic far-right (extrême droite).” Today, 44% believe the FN is “patriotic” while 43% believe it is “extremist.” In addition, 64% of self-described rightists consider the FN “patriotic.” In addition, despite the FN’s steady if very slow increase in electoral popularity, the number of French who say that the FN “represents a danger for democracy in France” has declined from 75% in 1997 to 47% today, almost reaching the low levels of when the FN was first broke out nationally in the early 1980s.

3. Do the French agree with the Front National?

Because the Front National has been demonized, people may be unwilling to say they agree with the party itself even if they agree with its ideas. In addition, especially with the rise and fall of Nicolas Sarkozy, France’s natural party of government, the center-right UMP, has increasingly sounded and acted like the FN on issues of immigration, Muslims and crime.

We can be relatively unambiguous: The French, to the extent they care about these issues, think there is too much immigration and that Muslims should “assimilate,” without showing any “ostensible” difference.

In general, a small-to-large majority of French consider that there are “too many immigrants” and that “immigrants [implicitly: and their descendants]” tend to mostly be “poorly integrated.” The Le Monde-TNS Sofres poll found that 54% of people “mostly or completely agreed” that there were “too many immigrants in France.” The Ipsos-CEVIPOF poll of the same month found that 70% believed there were “too many foreigners in France” and 62% that “Today, we don’t feel at home as before.”

In 2005, Jacques Chirac passed a law banning students, among other things, from wearing Islamic headscarves in schools. Numerous polls found that between 55 and 69% of French were “in favor a law banning ostensible religious symbols in schools.”

In 2010, when Nicolas Sarkozy passed the ban on face-coverings (specifically meant to target burqas and niqabs) in all public places, a poll found that 74% of French agreed. The law concerned about 2,000 burqa-wearing women in France, perhaps 0.1% of the female Muslim population.

In 2012, a poll found overwhelming support (83%) for the dismantling of Roma (“gypsy”) camps in France. In 2010, Sarkozy’s dismantling of such camps and sending of the inhabitants to their countries of origin, notably Romania, caused a major controversy with European Commissioner for Justice Viviane Reding because of racial discrimination. While the European authorities may have been right on this point, the French State had mandated a “systematic dismantling of illegal camps, in priority those of the Roma,” but this did not mean that Sarkozy was out of step with French opinion.

Finally, the most recent controversy concerned a Muslim woman fired from a daycare center for her refusal to remove her headscarf. A court cancelled the firing arguing that France’s uncompromising interpretation of State secularism did not apply to private sector organizations. According to one poll, 86% of people disagreed with the court’s decision and another poll found that 84% of people were opposed to the wearing of headscarves in all private organizations open to the public (the question did not specify whether there should be a legal ban or not).

There is room for nuance. The French tend to be more “tolerant” of the Islamic headscarf in public places, that is, even if they oppose it, this does not necessarily mean they want it banned. A 2006 poll found that 56% were opposed to banning the headscarf in public places. Interestingly, an overwhelming majority (about 75-80%) of French typically say that a French citizen should not be given priority in being hired over a legal immigrant. In 1991, it was more a 50/50 split on the issue. There has been a slight increase in the number of people who believe French citizens should be given priority over the course of the economic crisis (from 17% in 2010 to 24% in 2013).

As a whole however, France is a relatively conservative society when it comes to immigration and “assimilation,” something which is well-described by the Ipsos-CEVIPOF poll. The obsession with Muslims, which can often seem irrational or disproportionate, is a way of appearing to “deal with the race problem” without addressing the underlying issues (above all: mass unemployment in the “ghetto” banlieues). Hostility to Muslims is a unifying factor in white French society, able to unite conservative nationalists, leftist anticlericalists, Jews and Catholics. It is roughly the same mechanism of “unification through the Other” with black people and Amerindians in U.S. history or with Arabs in Israel and occupied Palestine.

(It goes without saying that polls showing a majority of people backing a discriminatory practice does not justify that practice. In a democracy the will of the majority is limited, above all, when it wishes to persecute minorities.)

4. Why do people support the Front National?

The Front National does particularly well among blue-collar workers and small businessmen, basically the white victims of the French postindustrial economy. An Internet poll found that 29% of blue-collar voters had voted for Marine Le Pen in 2012 (more than any other party, especially the Socialists and post-communists), 25% of craftsmen, shopkeepers and businessmen, and 21% of employees (salariés). Her electorate is disproportionately male (21% of men vs. 17.9% of total vote). Contrary to what is sometimes asserted, Le Pen’s electorate is not old. Only 13% of over 60s voted for her, aging conservatives prefering the predictable race-baiter Sarkozy to the unpredictable radical Le Pen. Support rises to 23% of 35-44 year-olds and a respectable 18% of 18-24 year-olds.

Interestingly, there is no longer any correlation in the départements (counties) between the Front National vote and the number of foreigners present. Here is the presence of foreigners from the Maghreb, Sub-Saharan Africa and Turkey in the various départements (left axis) over the  vote for Marine Le Pen in the 2012 presidential elections.

French départements: presence of foreigners from Africa and Turkey over the 2012 Le Pen vote.

In contrast, here is the correlation between unemployment and the Le Pen 2012 in the départements:

French départements: unemployment rate over the 2012 Le Pen vote.

As one might expect, the maps of the Front National vote and of areas with severe unemployment, coincide almost perfectly (both are concentrated in the northeast and southeast).

French unemployment, Q4 2007, vote for Marine Le Pen, 2012.

The Front National then, while notable for its focus on immigration, Islam and crime, may be primarily the reflection of economic insecurity caused by 30 years of failed French and European economic policies.

With the disintegration of mass party membership and structures, voters increasingly seem to vote based on their psychological disposition rather than organization or even ostensible interests. The Ipsos-CEVIPOF poll has some highly interesting results for questions asked to supporters (sympathisants) of different political parties. The key psychological dichotomy is between the “(masculine) aggressiveness and anti-systemism” of Front National supporters and the “(effeminate) tolerance and conformism” of Socialist Party supporters, each of these being at opposite ends of the French psycho-political spectrum. Bear with me.

Here are the results when you ask people whether they agree that “The unemployed could find work if they really wanted to”:

FN supporters tie with the UMP in believing the most (76%) that unemployment is basically self-inflicted by individuals not willing to look for jobs, in fact the FN has a slightly higher percentage “completely agreeing” with this than the UMP. This is despite the fact that FN supporters are predominantly in areas affected by extreme unemployment, that is, areas where the statement is least true. This paradox I believe can be explained by the  aggressive (and defensive?) disposition of FN supporters – the desire to blame others, both “the system” and individuals – well-reflected in the party’s campaign posters. Socialist supporters in contrast are the most “understanding.”

The Ipsos-CEVIPOF poll also had interesting questions implicitly measuring the “conformism” of the surveyed. It found that 62% of French believed that “most politicians are corrupt.” This was highest among FN supporters (87%) and lowest among Socialist Party supports (40%). Only 28% of French agreed that “The democratic system functions fairly well in France, I have the impression that my ideas are well represented.” The figure rises for Socialist supporters to 61% and falls for FN supporters to 2%. Finally, 18% of French believe that “politicians act primarily in the interests of the French.” The figure rises to 41% for Socialist supporters (again in the lead) and falls to 6% for FN supporters.

You get the same results when you ask people about the legitimacy (or corruption) of the media, although here Front de Gauche (communist-ish) supporters sometimes surpass the FN in being suspicious. You also get this amazing result that Socialist [sic] supporters are among the least likely (33%) to believe that “Money has corrupted the traditional values of French society” while the FN are the most likely to believe this (58%).  I am tempted to interpret these as expressions of the “ever-moderate,” ultraconformist disposition of PS supporters and the visceral, “anti-systemic” rejection of FN supporters.

Another example, following Budget Minister Jérôme Cahuzac’s resignation for tax-dodging, a poll asked the French about their attitude towards wealthy ministers and MPs. Interestingly, Socialist [also sic] supporters where the most likely to declare themselves “indifferent” as to whether a minister or MP was “very wealthy” (76% as against a 70% national average). In addition, Socialist supporters were the least likely (41% as against a 56% national average) to believe that politicians were “much richer” than most French. These questions, in a French context of antimaterialism, almost imply ill-gotten-goods acquired through corruption. Socialist tolerance may be an expression of reflexive party loyalty – the Socialists are in power, therefore the regime is legitimate – but I think it is also that in France the ultraconformist, moderate temperament expresses itself above all in the Socialist Party: the neoliberal regime is always legitimate, no matter its euro-austerity policies, financialization and mass unemployment hurting the little people, dissidents (starting with opponents to the Maastricht Treaty) are dangerous nationalists and/or antidemocratic.

5. What do French people care about? (It’s the economy, stupid.)

The above strongly suggests that the failure of Euro-French economic policies – the deindustrialization and financialization of the country, the advent of permanent mass unemployment – is a major, if not the major, reason for the Front National’s enduring success. More evidence in this direction is that, while most French are fairly conservative on issues of immigration and Islam, most do not consider these the most important issues.

Consider the results of the Ipsos-CEVIPOF poll, when French people were invited to say what the “three most pressing issues for France today” were:

1. Unemployment was cited by 56%
2. Purchasing power (pouvoir d’achat) was cited by 41%
3. Taxes and pensions (tie) were cited by 27%
4. Healthcare was cited by 24%
5. Insecurity (e.g. violent and petty crime) was cited by 20%
6. Social inequality and public deficits (tie) were cited by 19%
7. Religious fundamentalism was cited by 17%
8. Immigration was cited by 16%
9. Housing was cited by 13%
10. The school system and the environment (tie) were cited by 9%

Issues of economic security absolutely dominate French concerns, with “immigration-integration” issues relegated fairly far down the list.

Interestingly, Front National supporters, while they tend to live in areas plagued by high unemployment, were actually least likely to mention unemployment as a major issue, only 38%, as against 68% of leftists and 55% for the centrist Modem and the center-right UMP. One is tempted to see an example of displaced aggression of FN supporters, venting their economic  frustrations on Muslims and immigrants.

An April 2013 Ifop-Ouest France poll found similar results. Here is what people said when they were asked whether various issues were “absolutely a priority” (tout à fait prioritaire):

1. 79% said the fight against unemployment
2. 58% said healthcare
3. 54% said crime (délinquance)
4. 53% said education
5. 52% said economic insecurity (précarité)
6. 51% said increasing of wages and buying power
7. 43% fighting against illegal immigration and limiting new taxes (tie)
8. 33% said improving the situation of the banlieues (suburban “ghettos”)
9. 30% said saving public services
10. 29% said protecting the environment

In fact, most polls since 2011 have found this rough hierarchy of priorities:

1. Unemployment (+70%)
2. Healthcare, education, crime, reducing deficits, purchasing power, income insecurity (+50%)
3. Immigration, excessive taxes (30-40%)
4. Improving the banlieues, the environment (25-30%)

While most French have “intolerant,” assimilationist attitudes towards Muslims and immigration, these do not typically rank among their most important concerns. I am tempted to interpret the ever-increasing rhetoric and action (especially symbolic) against Muslims and immigrants, despite the relative low interest in this of the French, as a kind of compensation of the French State for its complete inability to address the more important economic concerns (the most fundamental economic powers, budget and currency, having been delegated to unelected EU officials).

As a side note, support for UKIP and Tory Euroscepticism in general seem to be based on similar forms of frustration and compensation. UKIPers also tend to be anti-immigration, although the frustration is vented chiefly on the EU (the “explanation for their misery”). The Conservative Government compensates for its economic failure by taking (again mostly symbolic and rhetorical) action against immigration and the EU. The British case is however interesting in that, unlike France, it actually has macroeconomic sovereignty. The overwhelming majority of American economists (libertarians, conservatives and “good liberals”) actually agreed with the Front National in the 1990s that the creation of the euro was ruining the French economy. I have yet to see any arguments that non-membership of the EU would really benefit the British economy, or at best only very marginally.

Conclusion: Permanent protest vote or a party of Government?

France has not seen a far-right surge but the Front National is here to stay. The economic frustrations that fuel the FN will persist because, in particular, the French Left, which traditionally met the concerns of French workers, is castrated. The Socialist Government has no power over either monetary or budgetary policy – these having been completely outsourced to Brussels and Frankfurt – so they are powerless to do anything to address their constituents’ concerns. Stimulus and devaluation are outlawed. The only possible avenue to increasing employment within the system would be to dramatically cut wages and increase job insecurity (“flexibility”), going against core Socialist principles and the overwhelming concerns of left-wing voters, dominated by purchasing power and jobs.

The situation will get worse. Already François Hollande is grotesquely unpopular, with a disapproval rating around 70-75%, after less than a year in office. The economic situation will remain horrible in most of the eurozone at least until the 2017 presidential elections, and it’s not actually clear that the situation will even begin improving by then.

On the current course, the Front National cannot be a natural party of government. While Marine Le Pen, like her father, could very well make it to the second round of the presidential elections, she would be overwhelmingly beaten in the run-off by any mainstream candidate. The FN is becoming (somewhat) mainstreamed but its share of the vote is increasing far, far too slowly. It is increasingly respectable among center-right voters, and UMP-FN alliances seem likely. But the FN cannot afford to enter a coalition government unless it is on its own terms (radical anti-immigration policies, protectionism, euro-secession), otherwise it would alienate its supporters.

However, it is worth noting that a full breakdown of the euro-liberal order in Europe is not impossible. The Maastrichtians have shown their economic incompetence and “monetaro-sadism.” Peoples across Europe are increasingly frustrated with “welfare for the banks” and austerity for the people. Without further, major concessions from the European Central Bank and Germany – implying trillions of euros in guarantees and liabilities through OMT, Eurobonds or the Banking Union – peripheral default and alleged “financial meltdown” appear guaranteed.

I am not making a prediction on this, but supposing the euro-liberal order collapses, the Front National could play a leading role. Emmanuel Todd, as moderate a “good liberal” democratic intellectual as you will find, has expressed the hope that the ruling Socialist Party could lead the transition away from euro-liberalism and the renewal of the Nation-State. He spoke of “revolutionary Hollandism,” that François Hollande would radicalize as the eurozone inevitably collapsed under the weight of its incoherence. He later qualified this saying “in five years, he’ll either be a [historical] giant or a dwarf.” Nothing is impossible, but breaking with the euro would prove particularly difficult for the Socialist Party given its conformism, all the more so because the temperaments of the Socialists and their natural eventual “radical” allies, the (relatively aggressive) Front de Gauche, are so different.

In contrast, the establishment center-right UMP is in fact less conformist and more critical on European questions. A UMP-FN alliance is anything but impossible. Éric Zemmour – probably the most popular French right-wing intellectual including among UMP politicians, the expression of its reactionary id, a sort of cultivated French Rush Limbaugh – dreams of an “Orbánized” Nicolas Sarkozy returning to power in 2017. If the collapse of the euro-liberal order must occur and be managed, the Front National would be free to participate in the Government and already today the UMP is ever-less hostile to an alliance in principle. This may be the most realistic scenario for what still seems unimaginable, a Government of the Front National, creating a nationalist and sovereign regime in France, with all that this would entail.

A typical, and unsurprising, response was that I was idealizing national democracy today. This is a legitimate point of discussion. The fact is that virtually nowhere is classic Western-style liberal democracy working well, at least not in the North American and Western European heartlands. This suggests there are broader trends at work affecting all these countries.

The eurozone is an easy target as it is formally undemocratic (elected representatives of the people have no say over monetary policy, soon will have limited “wiggle room” for budgetary policy, as Jörg Asmussen puts it, and eventually the same for wage, labor and general economic policies). But euro-critics need to answer the charge: isn’t it necessary that national democracy itself to have become heavily dysfunctional for 17 national democracies to create the euro-regime? The eurozone may be merely an aggravating factor or the most open expression of democratic decline in the West. 

I want to start with clear definitions. I do not have a Rousseauist vision of democratic practice encompassing a clear “general will” and the holy communion of the Nation. That is an ideal to strive for, a necessary legal fiction (“We the People…”), and perhaps something that exists in the greatest moments of a nation’s history, but it is not the reality of day to day politics.

My standard of Western liberal democracy is set by the actually existing liberal democratic Western regimes of the past two-and-a-half centuries. The democratic aspect is actually highly variable: suffrage is typically limited (to the propertied, to men, to whites, etc) and the vote is often distorted (overrepresentation of rural areas, rotten boroughs, minoritarian institutions). In a liberal democracy, as opposed to other regimes, the emphasis is most often on liberal, that is, freedom of speech, rule of law (including peaceful, electoral transitions of power) and liberty.

We can identify democratic cycles in which there is progression of the effective power of the people, most typically through the extension of suffrage and the limitation of the power of oligarchy, followed by periods of renewal in oligarchic power and marginalization of the people. There is an eternal, “dialectic” struggle between these two tendencies. For liberal democrats this is, as we say today, a feature not a bug. As Machiavelli wrote five centuries ago about the Roman Republic:

I affirm that those who condemn these dissensions between the nobles and the commons, condemn what was the prime cause of Rome becoming free; and give more heed to the tumult and uproar wherewith these dissensions were attended, than to the good results which followed from them; not reflecting that while in every republic there are two conflicting factions, that of the people and that of the nobles, it is in this conflict that all laws favorable to freedom have their origin, as may readily be seen to have been the case in Rome.

Liberal democracy then exists on different levels. First and most fundamentally is the liberal democratic framework – one of law, civil peace and individual liberty – which allows for social and political pluralism, the confrontation of ideas, and peaceful competition, above all between “the commons” (the people) and “the nobles” (the oligarchy). Second there is the place of a particular liberal democracy along the “popular-oligarchic” spectrum, which inevitably varies over time. Personally I side with the popular end, but this may be because we live in a particularly oligarchic age.

In fact, there always needs to be balance between these two tendencies. If one is “too oligarchic” one ends up with a traditional Latin American dictatorship in which landowners and the high bourgeoisie “own” democratic institutions (Parliament, courts, presidency…) and the people (peasants, workers, middle class) are wholly marginalized. If one is “too popular” one ends up with a plebiscitary dictatorship (sometimes in the Roman sense) as with Napoleon III or Juan Perón. Such a classification goes beyond the traditional left-right dichotomy, as Raymond Aron asks rhetorically in his Opium of the Intellectuals (p. 23): “Should Perón’s dictatorship, supported by the descamidos and despised by the high bourgeoisie, attached to its privileges and to Parliament, which it created and defends, be regarded as left-wing or right-wing?”

Excesses in either direction lead to the end of liberal democracy. The oligarchy, or bourgeoisie, tend to be attached to institutions, law and predictability, but being made up by definition of people apt at accumulating money and power, left to themselves they ensure their “liberal” institutions are wholly dominated by themselves and exclude all others.  The commons, or peasants, workers and middle class, in contrast are too concerned with making a living, too disorganized and too uneducated to form a predictable, cohesive regime in themselves. At best, middle class elements organize peasants and workers, at worst it degenerates into “permanent revolution” and a classic military-bureaucratic dictatorship. Hence we have the two primary degenerations of a liberal democratic regime: liberal oligarchy and democratic (plebiscitary) dictatorship (often we don’t even have the genuinely plebiscitary aspect, but simple military-bureaucratic dictatorship of the Napoleonic or Leninist type).

Much of our history can be understood according to this democratic oscillation, back and forth, between the popular and oligarchic poles of liberal democracy. This is, simplifying somewhat, fairly straightforward for United States history:

Propertied oligarchy –> Jacksonian democracy –> Gilded Age –> New Deal/Great Society –> Reaganite revolution –> ???

In Latin America, the striking “pink tide” of liberal democratic, sovereign and leftist regimes – often replacing various oligarchic and U.S.-supported regimes – represents a rare and salutary shift to the “popular” pole of liberal democracy (including Chávez, Bachelet, Lula, the Kirchners, Morales, Ortega, Correa…). In general, the regimes of Charles de Gaulle, Vladimir Putin and Hugo Chávez represent heavily “popular” examples, plebiscitary, personalist-charismatic, somewhat illiberal and contemptuous of parliamentary niceties, but that remain broadly within the democratic spectrum because they are undeniably electoral regimes.

In the West today in contrast we are heavily skewed towards the “oligarchic” side. In the U.S. the plutocracy, moneyed elites have, mostly through campaign finance, taken full control of many key institutions of the notionally democratic regime (much of the Democratic Party, basically all of the Republican Party, corruption of the Senate into a vetocracy). In Europe, and specifically the eurozone, this has taken a very different form through the gradual cession of all economic powers to an unelected and irreplaceable transnational bureaucracy.

The optimistic take is then that we are not facing a fundamental failure of liberal democracy – after all standards have always been pretty low – but merely an oligarchic moment in a normal cycle. The delirious excesses of the oligarchy will eventually lead to popular blowback and a correction. The U.S. could see, if only by the force of demographics, a new multiracial and social-democratic natural majority. The Eurocracy’s systemic failure and disregard for popular will and interests will eventually lead to the triumph of the “populists” – your Grillos, Syrizas, Golden Dawns, True Finns and Front Nationals. The key challenge in this scenario is to ensure the “populists” that beat back the oligarchy are themselves liberal democratic. It is a fact that the popular-democratic tendency, from Lincoln to FDR, often also has an illiberal component and the risk of authoritarian excesses, because their role is precisely the breaking of the unjust laws and undemocratic system created by the oligarchy.

I very much share the view of the Italian school of elitism (Mosca, Pareto, Michels) that “Democracy” (capital “D”) is impossible and oligarchy inevitable. Small groups of humans inevitably accumulate power and this is especially evidenced by those movements most obsessed with democracy – the old Marxist parties – which inevitably degenerated from mass movements into either middle class-dominated reformist parties or authoritarian Leninist parties (and dictatorships).

The key virtue of liberal democracy – least bad of regimes – is not that it is “absolutely” or perfectly democratic in a static state, but that it is a dynamic process that allows us to try to balance popular interest and law through peaceful confrontation and competition. Max Weber and most of the Italian elitists were quite jaded on democracy, but they recognized however this great virtue, which is the ability in a democratic regime for the elite to renew itself, or be purely and simply replaced, without violent and unpredictable revolution. This is the beauty of British political history from 1688 – as against French, German or Russian history – with peaceful shifts of power from political factions representing landowners, to the bourgeoisie, to the working class.

In the liberal realist tradition, we are only talking about electoral (democratic) competition between oligarchies, not direct or “true” democracy (considered impossible). There needs to be a peaceful possibility of regime change. Here, depending on your point of view, you might consider things to be working as before: PASOK has been annihilated in Greece and Syriza or Golden Dawn could bring about a new regime, Beppe Grillo has brought the Italian oligarchy to its knees, and so on. There is the potential for regime change, if the people want it, and that is enough.

Has individualism killed democracy?

To this “optimistic” interpretation – that we are still in fundamentally democratic regimes suffering through an oligarchic moment that will pass – there is a pessimistic one, which is that democracy is no longer possible in the “postmodern” world.

Rest easy, I am not about to inundate you with Pomobabble. But “postmodernity” I think is a useful term for understanding the strange and confusing place developed societies are in today. Democracy may no longer be really possible today, not because of globalization per se – the Nation-State remains unquestionably a powerful force to be reckoned with – but because of internal developments that are the side-effects of postwar prosperity: narcissistic and libertarian individualism.

Let’s get to the basics. Any human society is made up of thousands or millions of human beings, of little semi-rational atoms, deciding individually but embedded within, and in constant, intense and complex interaction with, the rest of society. The idea of democracy is that this collection of atoms can self-govern in a meaningful way and that power be wielded not by a selfish minority, but by and for “the People.” Democracy, meaning self-government, is partially synonymous with freedom.

This ideal, and it is always an ideal, paradoxically typically requires less freedom of action for individual persons. A human being’s spontaneous impulse, his id, is inherited from our prehistoric past, roaming across Africa in small groups, obsessed with consuming salt and sugar, with social “face,” and having sex. These impulses were reproductively useful and appropriate in that context. They are not useful in a context of any kind of “civilization” – most obviously sedentary agricultural civilization, which immediately goes about crushing sexual drive in particular. These impulses are also not compatible with our “rational development” or technical progress, the most obvious consequence is the relentless rise of obesity, perverse consequence of our prehistoric nutritional longings are our “success” today in meeting them to excess. The individual human being has to be disciplined to work, to not philander, to help one another, to organize oneself against other (aggressive) societies. From this emerges the State, organized religion, business and all the various “rationalizing bureaucracies” human societies have invented.

Traditional liberal democracy supposed political elites that represented society, in some way, either by being associated with an organization of which a large part of society were (disciplined) members or by representing the values of society. These organizations were typically churches, businesses, guilds (“corporations” of craftsmen and liberal professionals), trade unions, mass political parties, and so on. The competition of these groups – in the case of Britain the change of power from the landholding elite (Tories) to the bourgeoisie (Whigs) to the unions (Labour), decided by the sovereign voter – is what produces traditional Western democracy. However individually experienced these groups are oppressive: churches limit thought and social acceptability, unions and parties discipline members, and so on.

In modern and premodern society, all institutions (including and especially the family) were individually oppressive in this way. But they were the only way to organize the millions of semi-rational atoms in human society and, better still, have them share the same ideas and values. A collective of individual intelligences can only act collectively if they have the cohesion coming from either discipline (top-down or peer-to-peer) or if they already share the same values and ideas in their minds (they are “on the same page”). Collective action, collective will, democracy do not seem to be logically possible in a society in which every individual is an absolutely free, erratic, uncoordinated actor, free to completely disregard others.

Based on this postulate, we can better understand the degeneration of Western democracy. The economic success of the postwar years produced as consumerist society in which mass leisure and education was possible (1950s). This led to a new generation of individuals for whom life did not “require” traditional discipline, life was good, it could be enjoyed, relentless work was less necessary, sex could be free (of children), and so on (1960s). This was the (inevitable?) byproduct of the incredible economic security which the broad mass of Western populations achieved in the postwar years. The result was to reduce the need for traditional organizing and intermediary groups. From the 1960s to the 1990s, the father’s authoritarian power over the family evaporated, the churches emptied, and trade union and (communist and mainstream) party memberships collapsed. Young people became free to pursue their (“irrational,” narcissistic) “dreams” rather than their material self-interest (hence the incredible “over-investment” in higher education and student debt despite declining economic returns, with in particular record postgraduate and journalistic studies despite collapsing career opportunities). These represent the characteristics (pathologies?) of the transition from what Marxists call the Kingdom of Necessity to the Kingdom of Freedom, enabled by the stunning success of mass production and consumption of postwar capitalism. Freed from want, everyone is free to thoughtlessly pursue their narcissism to its (absurd) logical conclusion. Perhaps the most striking related development of this period is the collapse of the birth rate below replacement levels. Is not having and raising a family the most burdensome life-long duty one can have – is it surprising that people, when given the chance, decide to shirk that “responsibility”? I do not say whether these trends were good, bad or avoidable, but simply observe them.

I strongly suspect there is a direct relationship between the collapse of fatherly authority and the collapse of authority of these institutions in general. The family is the immediate social universe of the individual. It defines his place in the world and his relationship (of submission, of mastery, of collaboration, of affection) with others. Organized human life often appears to be a psychological projection (often quite explicit) of these family relations onto other bodies, such as the State, the church, the workplace, etc.

Perhaps the most potent symbol of this trend is the eternal teenager, rebellious, aimless, self-gratifying, narcissistic, individualistic and completely “free” (unguided by any authority). Naturally, he is also completely insecure and frightened at his condition as a lone “thing” in an uncaring, aimless and inscrutable universe. Allan Bloom in his The Closing of the American Mind, an interesting book though I think it can only be a first sketch, writes about campus politics:

America is experienced not as a common project but as a framework within which people are only individuals, where they are left alone. To the extent that there is a project, it is to put those who are said to be disadvantaged in a position to live as they please too. The advanced Left talks about self-fulfillment; the Right, in its most popular form, is Libertarian, i.e., the right-wing form of the Left, in favor of everybody’s living as he pleases. The only forms of intrusion on the private-life characteristic of liberal democracies, taxes and military service are not now present in student life. If there is an inherent political impulse in man, it is certainly being frustrated. But this impulse has already been so attenuated by modernity that it is hardly experienced.

Students may indeed feel a sense of impotence, a sense that they have little or no influence over the collective life, but essentially they live comfortably within the administrative state that has replaced politics.

This kind of individual – the leftist and the libertarian – is what predominates in campus politics, united in common rejection of all authority, the embrace of what one used to call licence (as in licentious, a term one could forget exists in the English language). They are the politically explicit version of the general wave of post-1970s individualism. Rejection of the father, of membership and submission to the family, was followed by an inability of individuals to think themselves as part of any broader whole. Above all the best example is the rejection of trade unions from the 1970s onwards, going from the defenders of the working stiff to the narrow vested interest always defending “them” as opposed to “me.” The most extreme version of this today is Beppe Grillo’s Five-Star Movement in Italy, being based on direct, individual citizen participation in politics through the movement, and a complete rejection of intermediary bodies: the refusal to talk with all media organizations, the abolition of the provinces, the banning of trade unions and the end of public financing of political parties.

Indeed, trying to organize the semi-rational atoms of human society into something coherent and cohesive is constant effort. This is why religion becomes organized. It is why trade unions and communist parties, rightly, have traditionally thought of their role as the organization and education (and discipline) of working people, to encourage them to be virtuous in addition to representing them in the face of business. It is hard for any individual to will himself to do what is right for himself, it is especially so when one doesn’t have a favorable social environment, education and economic security. To know what is good is a luxury, we all must draw on others’ experiences and reflections to know what is good for ourselves. Recall that virtue, virtù, has etymologically meant prowess or strength of character, implying not merely Christian goodness but willful mastery over oneself and one’s “weaknesses.”

Rootless, “virtual” political parties

When society is so atomized – the churches, parties and unions gone – only two organized groups remain: the State and business, those two fundamental rationalizing and disciplining forces in society.

All this may explain the degeneracy democracy in the West and in particular of the left. Before, political parties often had a certain depth, they were the expressions of other organizations that had actual memberships and (economic, social, ideological) power. Business remains, so the right tends to persist relatively coherent, albeit with a rather weak and damaged base. (Consumerism inevitably leads to individualism and the breakdown family authority, turning conservatives into “self-hating liberals,” even more prone to teen pregnancy and divorce than the general population, but hankering verbally for Christian virtue.) The left, in contrast, has nothing, or should I say, all that remains is the mostly passive support of a certain psychological type – well-thinking middle class “cosmopolitans” – who invariably end up staffing media organizations, schools and academia. This is not a sturdy base, except for the teachers if they are exceptionally well organized (as in France).

Political parties and leaders today seem to exist mainly in the media. They go on talk shows. They get a part of the (typically steadily shrinking) vote, apparently out of tradition, often because two-party systems prevent new rivals from emerging. Left and right simply bounce back and forth, the political leader occupies the spotlight for a while, basks in the media attention and enjoying the perks of officialdom, then leaves office having done little, going off to the lecture circuit or to lobby for the rich and powerful. Such is the life of a Statesman today.

There are significant variations by country. In the U.S. corporate capture is more explicit, with a radically oligarchic faction (the Republican Party) fighting to control key institutions to block any popular reforms and a more reasonably pro-business faction (the Democratic Party). In Europe, the (leftist) leader comes to power, does as he pleases, then leaves office, unaccountable to voters and activists. In Germany the left passed the intensely controversial Agenda 2010/Hartz IV reforms that massively increased labor insecurity, reduced wages, and increased poverty and inequality (the left was then promptly removed from office). In the UK it was the left which accepted the Thatcherite hypertrophied speculation-based financial system and engaged most enthusiastically in the bizarre and murderous American crusades in the Greater Middle East. In France it is the left which established the inviolability of total free movement of capital and created the euro-straightjacket, accepting anti-Keynesian and antisocial conditions that are repulsive to moderate American liberals. I think these developments are only understandable if we posit that parties everywhere have simply become completely cut off from any kind of contact with the people. Their leaders exist atop of society, in a media bubble, polls give them some idea of mood, but they don’t lead society because there are no longer any organizations that are representative.

The most extreme recent case of this was the 2011 Canadian elections which saw the New Democratic Party become the Official Opposition, because the Quebecker vote shifted massively away from the nationalist Bloc Québécois. Turnout was 61.94% (about a half-a-percent increase over the previous election), the NDP has no roots in Québec, and some of its candidates were monolingual Anglophone placeholder candidates:

The huge majorities the NDP registered in many ridings [constituency seats] were gained without real organisation or presence of the party. However, it fielded a candidate in every riding, not only to sustain the illusion of a potential party of government but also to benefit from the generous state funding for every vote a party gets under the election laws. Many of these candidates were poteaux (“poles”), as they are known in Quebec — stand-in placeholders without known roots as activists in unions or social movements in the respective communities

This is an extreme case, but it is not really untypical of the kind of “rootless back and forth” between political parties of past decades, candidates vying for power through the media, the parties having no significant presence in most constituencies, and an ever-smaller portion of the voting public deciding between them.

The specifically American version of this phenomenon is actually quite old: the “pointless primary” in which people are invited to decide between a bunch of nameless upstart politicians and almost-famous governors for who will become the “Leader of the Free World.” It goes without saying that, being a non-entity, having no political machine at his disposal, voting for a name is always disappointing as he rarely is in a position to actually do anything when in office (perhaps unsurprisingly, the left is rather more prone to this: it began with Carter, continued with Clinton, reached its zenith with Obama, the right – welded by the economic interests and class cohesion of the 1% – is more organized although not immune to these trends).

I can’t decide if the case of France is interesting or boring. Here is the cycle: the Socialists (and center-right) commit to creating/defending the European Economic and Monetary Union, governments become grotesquely unpopular increasing rapidly as they implement necessary “structural reforms” and austerity measures that hurt employment, the current government is eliminated in the next election, the new government does the same thing, and so on, back and forth. Such it was in 1995, 1997, 2002, 2012 (and given François Hollande’s incredibly rapid fall into abyssal unpopularity, this is likely to continue). Economic policies however always remain basically the same, organized by the Euro-French class of high civil servants and central bankers. Jacques Chirac was elected in 1995 campaigning against the “social fracture” (record unemployment) and then turned after less than two years. Lionel Jospin was elected in 1997 campaigning against the euro “Stability Pact,” eventually keeping it unchanged but for adding “and Growth” to the title. The European Constitutional Treaty was rejected by referendum in 2005 under Chirac but was reinstated with cosmetic modifications as the Lisbon Treaty by Nicolas Sarkozy in 2009. Finally, François Hollande was elected in 2012 campaigning against austerity and the German-proposed Fiskalpakt, but once in power he accepted the Pakt without any modification whatsoever (beside introducing a parallel and genuinely pathetic “window dressing” of a “Growth Pact”). There is a problem with a society, of individualists and partly of cosmopolitans, who oppose certain very specific policies (austerity and structural reforms) but which is unable to oppose its cause (EMU).

The question is whether indeed today a new democracy is possible, whether we can shift the pendulum back towards popular democracy and against oligarchy. It is “not normal,” in a democratic society characterized by universal suffrage and individuals obsessed by economic insecurity, that wealth concentration and inequality should increase. At the very least, it isn’t normal that no major political party seriously try to address the issue. Even in the depths of the worst economic crisis since World War II, most redistributive proposals – when the left doesn’t actually further the oligarchic policies – have generally been pretty tepid. This may (perhaps!) ultimately be a product of the atomization of society rather than the conscious political choice of leftist leaders.

By this interpretation, we need a new model of democracy. In the West, consumerism, individualism (“liberal-libertarianism”) and neoliberalism follow one another perfectly. While consumerism appears to be a universal trend, I will be curious to see how cultural norms change in Russia, Saudi Arabia and China. The appearance of the inevitability and universality of individualism and neoliberalism may only be Romano-German (Western) chauvinism.

In the West, we have hints at new models, mostly enabled by technology. There is the confrontational model against oligarchy through the radical transparency of organizations like WikiLeaks. There are experiments in web-based direct democracy, like the German Pirate Party and the Five-Star Movement, which whatever their foibles are important, both immediately and as learning experiences, and should be followed closely. The old-fashioned referendum can also be a way of short-circuiting the oligarchy, with interesting results particularly in U.S. state referenda on drugs and gay rights. We have to undertake democratic experiments in our new interconnected yet atomized society.

It will be important to find new models and methods because, whatever one says about limitations due to globalization or the promises of a communist knowledge-based “open source” economy, the (Nation-)State always remains, ultimate decider of economic power, law and violence. The question is how the State can be limited where necessary and returned to popular control where possible.

To conclude on a more optimistic note, we may be in a non-cyclical transition of the democratic regime in addition to the oligarchic-populist cycle. In France or the United States, “liberal democracy” originally meant a conservative regime backed by an alliance of the bourgeoisie and conservative peasant and farmer majorities. The emergence of the urban working and middle classes, more vulnerable to economic (as opposed to climatic) instability, led to new regimes above all characterized by the welfare state. Working classes have been disappearing for decades, now it is the turn of the middle class to disappear (increasingly limited to a shrinking number of high corporate and some government jobs), leaving a less economically differentiated services-based precariat, with wildly differing levels of education and intelligence. We will have to think, and experiment, to build the democratic systems most suited to this new social condition.

This chart uses very simple assumptions. It takes the OECD economic outlook data on headline and underlying primary public budget imbalances and look at the impact on GDP if these were brought to zero, assuming a fiscal multiplier of 1.3 (the median of Olivier Blanchard’s range of 0.9-1.7).

We see here an amazing divergence: If we assume that the regular deficit must be reduced to zero, with ever-greater austerity, tax hikes and budgets cuts every year, then there cannot be a eurozone recovery for another 5-10 years. The situation in all countries must worsen severely, especially the crisis countries, leading to really incredible levels of unemployment.

In contrast, if we only balance the primary budget (revenue minus spending, not counting interest on existing debt), then we could have growth today, eurozone-wide, because on average the eurozone has a primary surplus. Germany, Greece and Italy in particular would be able to launch massive Keynesian stimulus programs without further indebting themselves, debt-to-GDP would shrink with the resulting growth.

It is a patent illustration of just how disastrous the eurozone’s reliance on “market discipline” to reduce deficits and debt is. The eurozone has had a primary surplus for 11 out of 17 years between 1995 and 2012. The eurozone has had a primary surplus since 2012, Greece since 2011 and Italy since 2006. If there were either Eurobonds, pan-eurozone debt, or if the Member States were allowed to refinance themselves directly through the European Central Bank, we would simultaneously have lower deficits and more growth.

Note: the OECD’s primary deficit figures are cyclically-adjusted, so they are adjusted for increased revenue because of growth or loss of revenue because (austerity-caused) recession, giving us the medium-term primary budget balance. Greece, because of the severity of the recession, will only have a unadjusted primary surplus in 2013, while Italy has had one since 2010. See p. 130 of DG ECFIN’s economic forecast (also not the usurious interest rates many states have paid for decades, often 5-10% of GDP annually absorbed by finance).

This reality, of primary surplus in particular in Italy in 2011, showed that the imposition of even more punitive austerity on Greece and Italy was purely gratuitous. If there were an ounce of real solidarity between Germany and the periphery, or if the ECB behaved like a central bank accountable to European citizens, as opposed to subverting and coercing their governments, there would have been no further austerity. Instead they actually toppled the Italian and Greek governments, replacing them with loyal Eurocrats Mario Monti and Lucas Papademos, and inflicted policies which unnecessarily further reduced growth and increased unemployment.

On a personal note, these events in the summer-through-winter 2011 is what shifted my analysis from being circumstantially anti-austerity to systematically anti-euro. They showed that power within the eurozone was wielded by a minority, Germany and the ECB, against the will of the majority of eurozone citizens in a flagrantly undemocratic, gratuitous, punitive and, dare I say, “imperialist” way.

I am not convinced that the eurozone’s inherently undemocratic structures (long remarked upon) can be changed. The reasons for Maastricht being undemocratic in 1992 – the German hostility to inflation and fiscal transfers, and the related requirement that monetary policy be beyond democratic accountability and control – have not changed today. In fact, in the current circumstances, of capital flight from the periphery and the impossibility of peripheral competitiveness improvement through devaluation, Germany’s bargaining power is infinitely stronger. So long as the peripherals refuse to seriously threaten euro-withdrawal, Germany will be able to impose exactly the treaty changes and integration it wishes, inscribing its specific policy preferences as European Basic Law, unchangeable by any democratic majority, European or national.

If the eurozone cannot be democratic, it can survive. ECB board governor Jörg Asmussen makes a convincing case that the “idealists [federalists] and cynics” are exaggerating in their belief that the only alternatives are an impossible eurozone federation or its breakup. The chart shows us that, if refinancing costs can be brought down further (and they are falling) through even minor German concessions, then there will be room for significant debt-free stimulus in Portugal, Greece and Italy. More generally, lower refinancing costs would dramatically reduce the need for further austerity and recession. José Manuel Barroso’s declaration that austerity “had reached its limits” is a recognition of this and it is unlikely he would have said this unless it represented the broad consensus of European governments (perhaps even Berlin).

However, if the Portuguese, Irish, Latvian and Lithuanian “success stories” are any indication, any improvements would in most cases be at best job-weak or even jobless recoveries. Unemployment, in the best case scenario, is likely to remain massive and long-term for years (the “success stories” suggest there is no job creation whatsoever for about 5 years after the initial adjustment, presumably another 5 or maybe even 10 years to reach pre-crisis job levels). But they would be recoveries which, with a little glimmer at the end of a decade-long tunnel, might fortify morale. (A first example of “recovery” in Greece has been identified by the New York Times and Reuters, but I think The Economist‘s econ correspondent is rightly underwhelmed.)

As Mario Draghi has noted, there is significant political will to maintain and “complete” the euro project. Elites in Poland, Lithuania and Latvia are pushing, despite the healthily skeptical opposition of public opinion, to join the euro as soon as possible. Citizens in the periphery have, so far, been too afraid of euro-withdrawal to reclaim their economic freedom of action. (Even though today - ignoring eventual issues of pan-European financial instability – in the cases of Greece, Italy and Portugal, on the verge of unadjusted primary deficits, such a withdrawal would be entirely beneficial in terms of reducing unnecessary austerity (not even counting the benefits of devaluation).)

So, even if the eurozone is economically inefficient and indeed oppressive, it could endure. European standards of living in the postmodern age remain high by global standards. The cohesive societies and welfare states of the nations have been able to compensate for some of the worst consequences of eurozone dysfunction and “sado-monetarism.”

But the eurozone will remain inefficient. The emerging “eurozone governance” is entailing a kind of imperfectly applied central planning where all indicators across all Member States – already inflation and monetary policy, now budgets, eventually competitiveness and wages – must be brought into line with German standards. Our shadow Gosplan is DG ECFIN and specifically its (increasingly binding) Macroeconomic Imbalance Procedure indicators. This has authoritarian results in the crisis states: unions are crushed, wages are slashed and there is an assumption that the country’s private wages can and must be slashed in Statist fashion by the national government.

This isn’t really working, especially in terms of competitiveness. Private sector wages are refusing to decline even in mass unemployed (>15%) Portugal, Latvia, Lithuania and Ireland - following the basic psycho-economic principle of the downward stickiness of wages, you can devalue or you can stop wages from rising, but people don’t like to work as much for less money. At best you get a slow relative improvement compared to others, while these countries have had around 0% labor cost growth over 2008-12, Germany has had 9.1%.

This is slow, inefficient, requiring a permanent population of mass unemployed to adjust, really quite pathetic compared to what you can achieve with a solid, old-fashioned devaluation. It’s working even less for the major nations: labor costs in France, Italy and even Spain (amazing!) are rising normally and not improving significantly relative to Germany. The only exception is Greece, in which labor costs (wages) have shrunk 11.2% over the same period. So nuking the economy, which seems to be the plan for Cyprus, is indeed a viable alternative to devaluation within the eurozone.

The biggest uncertainty however is whether Germany can consent to the kind of solidarity required so that only primary deficits are reduced, as opposed to a catastrophic and impossible focus on headline deficits. It isn’t clear to me that Germany will be willing to commit to this solidarity – liabilities and implicit transfers – to durably reduce peripheral refinancing costs and eliminate default risk. So far refinancing costs are decreasing, somewhat mysteriously, but given the lack of improvement of the real economy in Spain and Italy, a new crisis, it seems to me, will occur eventually unless markets are really, really convinced solidarity is coming. Mario Draghi’s Jedi mind trickery will reach its limits, eventually Germany will have to accept bailing out Spain and Italy, either through Eurobonds, or through bailing out their banks, or through conceding unlimited ECB bond purchasing (or all three?). If anything, as time passes, Germany seems to be increasingly explicit in its hostility to these ideas. To require treaty change for Banking Union is to very explicitly say you don’t want it to happen for the foreseeable future.

But who can foresee the future? Perhaps a post-election Merkel will forget her Luthero-Prussian discipline. A full-on OMT bailout of Spain, as blameless a nation as any in the euro-mess, seems theoretically possible. Germany has indirectly bailed out Spanish banks in the recent past and the Spaniards, among whom Europhilia has been the norm for 40 years, may be willing to submit to complete Euro-German control to receive a bailout. But will that be enough?

An OMT bailout of Italy seems palpably impossible:

1. Beppe Grillo or Silvio Berlusconi would have to join the Social Democrats and the comprador Mario Monti in accepting submission to Euro-German austerian control.
2. Angela Merkel would have to accept the not inconsiderable political and economic risks of lending unlimited funds to the Land of Bunga Bunga.

I really don’t think this is a reasonable or realistic prospect.

The global point is this: the near-impossibility of genuine financial solidarity (transfers!) and risk-sharing between nations and the inherent weaknesses of central planning will mean the eurozone will remain inefficient for the foreseeable future. You need central control of deficits, financial solidarity, and coordinated pan-eurozone wage-setting. This is asking a great deal, can 17 national democracies always individually give the “right” answers forever? Are we really going to successfully repress wages simultaneously in Spain, Italy and France, according to German levels? And are we going to see these 17 democracies accept to permanently put general economic policy – as has happened already for monetary policy and is happening for budgetary policy – permanently outside of democracy control? In a context of permanent mass unemployment above 15-25% in many countries? I guess it isn’t impossible, but this is a pretty tall order.

There will be many new Golden Dawns and Five-Start Movements and True Finns. In virtually all countries, including relatively prosperous ones, by far the most important issue for people is jobs and the economy. People repeat this in polls incessantly. Today, in Greece, France, Italy, Spain and elsewhere, elections have no impact on economic policymaking because this is preset in unchangeable European Basic Law and enforced by unelected “independent” officials in the ECB and DG ECFIN. Eventually this contradiction – between the most fundamental desires of the people and the complete irrelevance of elected officials – will have dramatic consequences on the notionally democratic regimes of Europe.

Because let us be clear: headline indicators (inflation, deficits, wages) are just the tip of the iceberg in each country, they each are the product of specific complex social compromises, balances of power between capital and labor, political and national cultures, really they are the crudest economic expression of entire societies. Each society has its own economic norms and rhythm, the attempt to make these all conform completely with the German model will require the coercive attempt to socially engineer Greeks, Italians and French to act like Germans. Are we really going to Germanize the Latins and Hellenes – to accept Germanic discipline and consensus – whose societies, behavior, habits, culture and customs are the fruits of centuries of history? I personally have little doubt that such attempts at social engineering – like the communist and neoconservative attempts – will not be successful.

There is the theory that in the long-term Germanic discipline imposed on the periphery will make them stronger. I have literally no idea how people can convince themselves of this. Social cohesion is being undermined, long-term unemployment and skill loss is now a mass reality, education, training and training budgets are being slashed, social cohesion is collapsing and the better-skilled are often exiling themselves in a classic braindrain. Does anyone seriously believe that this is the recipe for growth? Crisis nations are obviously simply being damaged by this and this will be long-term damage. Their economic dependence on Germany, their inferiority, will continue to grow. (Are there actually any examples of growth being achieved through this kind of masochism? It seems so patently false to me I find the argument very obnoxious and so lacking in minimal empathy as to be basically hateful. Certainly similar IMF policies are generally judged to have been failures in Latin America, Asia and Africa. In the case of Latin America it led to the discrediting of the liberal-oligarchic ruling classes and their replacement in various democratic left-wing and nationalist revolutions. A presage for Europe?)

George Soros, one of the best commentators by far on dealing simultaneously with the historic, economic and political aspects of the eurozone as a whole, is probably on the right track in comparing the eurozone to the Soviet Union:

It could last quite a long time, the same way as the Soviet Union, which was a very bad arrangement, lasted for 70 years. However, I think that eventually, it is bound to break up the European Union. The longer it will take, and it may take generations, those will be lost in terms of political freedom and economic prosperity. The solution is to me a terrible tragedy for the EU. And it’s happening to the most developed open society in the world. To me it’s a terrible tragedy. It doesn’t have villains, because I don’t think that Germany is doing it with bad intentions but its happening out of a lack of understanding of very complex problems.

The eurozone can collapse tomorrow or endure for years. But it will always be inefficient, fragile and undemocratic – with mass unemployment and “postdemocratic” control of economic policy fueling “populist” revolt. Like the Soviet command economy, it will severely retard and distort the normal economic development of the nations that compose it, causing lasting harm.

I add this second chart to illustrate just how divergent the eurozone “strategy” is relative to the rest of the world and to show how the eurozone has already achieved a considerable budgetary adjustment. The eurozone strategy of debt-reduction isn’t really working in Europe, but it would even more catastrophic elsewhere.

The most rational (efficient) and socially just (at least in terms of unemployment) way of reducing debt would, obviously, be to keep deficits high, flood the economy with money and inflate away the debt. This is what Japan, the United States and the United Kingdom are effectively doing. If the UK and U.S. paired this with decent redistribution – if they taxed the rich properly – they could easily reach a socially just and efficient recovery. The eurozone, in contrast, because of the inanity of the Maastricht ideology, the flaws of the treaty and German hegemony, has implemented the most socially regressive and economically inefficient way of reducing debt.

I read this little book by John Kenneth Galbraith, the great American liberal economist of the Twentieth Century, over a couple days. I was disappointed. It’s not much more than a narrative history of the speculative stock boom of the late 1920s United States, with just a little bit of analysis at the end. It is history as “one damn thing after another,” with obviously perfect hindsight, made all the more boring because it is financial history, which is to say, a minutely documented record of the mood swings and various tricks of those people who dedicate their lives to “making” money by spinning it in circles. Dismal stuff.

This said, Galbraith is a good writer and there’s quite a few excellent passages, that I quote here that resonate with me, on speculative booms, “pointless meetings” of business and political leaders, central banking, regulation and more that strike me as perfectly relevant to politics today.

One cannot read the book without thinking of the financial and euro crises. The 1920s “investment trusts” – shell companies whose job was to invest in other companies, possibly other investment trusts, forming vast pyramid schemes – were something like then’s subprimes. Somehow, in a mysterious, complex and opaque process that I can never quite wrap my head around, through “leverage” and “fiduciary innovations” (Galbraith’s words), these things “made money”… at least until the bubble popped. Blue Ridge, a sub-sub-investment trust owned by Goldman Sachs, saw its shares go from a value of 24 in September 1929 to 3 by 29 October, an amazing eightfold division. Overinvestment in aviation and radio was the equivalent of the overinvestment in Silicon Valley startups of the 1990s dotcom bubble.

At the core of the book is the “bubble”: when people with money’s overoptimistic perception of the economy becomes disconnected from reality. I find it interesting how in so many places we find this completely human psychological problem of distinguishing between our fantasies and realities, and of denial. We find this problem again and again in relationships, economic bubbles, monetary policy, wars, revolutions, dictatorships… In short, it all boils down to the very difficult thing it is – because there is a price – for human beings to recognize failure.

The bubble becomes speculative when people invest not because of the fundamentals, but purely because they predict value will rise short-run (they predict that other people will consider it more valuable), and so quite rationally want to buy-sell. Eventually one has to escape this euphoria, but how does one pierce the bubble without causing a catastrophic fall in prices and mood? How can it be done smoothly without sparking panic? Is that not, perfectly described, the dilemma European policymakers have faced since the mid-2000s when it became clear that all the “growth” in Ireland, Spain, Greece and elsewhere was nothing but a horrifying “eurobubble”? The most insane example of this in Europe was the Spanish property bubble (la burbuja) which really was (is) something out of this world. On this, these graphs from Wikipedia are worth a thousand words:

Square meter price of housing in Spain, in euros.

My favorite part is the “new paradigm” phase when, at the peak of denial, people create a truly fantastical alternate reality, a new system explaining how “everything is different,” justifying the delusion. Examples would include the “new economy” justifications prior to bursting of the dotcom bubble (“infinite money from websites!”) and the subprime bubble (“infinite money through ‘financial innovation’!”). It reminds me of the fantasy world of “building socialism” created by the Stalinists when the human horror and agricultural disaster should have been obvious. At the risk of forcing the analogy, the Soviets however were able to continue living in the “fantasy world” for decades, “socialism” was a fact, however dysfunctional daily life was, until the failures were slowly acknowledged and the “bubble burst” very rapidly under Mikhail Gorbachev. It may seem like a forced analogy, but I think it is actually a very similar dynamic.

Galbraith’s interpretation of the crash is a mix of psychology and sociology. Wealth inequality was massive by the 1920s, this meant there were huge amounts of money being slushed around the country and in the pursuit preserving it or making more money. The boom and crash represent the mood swings of the tiny group of people who were playing with these money symbols. Their mood swings, by investing huge amounts of economic resources (capital) in projects that become reality-detached – Floridian real estate or the stock market – severely and unsustainably distort the economy, until it can only be unwound with an adjustment that means the recognition of wealth loss, with severe knock-on effects on the real economy. This interpretation of financial instability as heightened by wealth concentration fits nicely with my own explanation of why wealth equality correlates with fiscal sustainability.

Interestingly, the psychological interpretation, means Galbraith seems to put more faith in investors just knowing they can’t make money from nothing – they get burned after a big crisis and simply know better until they forget. He is not opposed to regulation, but says agencies tend to become “senile” or “a branch of the industry” within a matter of decades. Eventually, he seems to suggest, boom and crisis will inevitably return.

The following are some quotes from the 1992 Penguin edition (book originally published in 1954.

On the roots of the 1920s [sic] Florida property bubble (p. 32):

[The American people] were also displaying an inordinate desire to get rich quickly with a minimum of physical effort. The first striking manifestation of this personality trait was in Florida. [...]

This is a world inhabited not by people who have to be persuaded to believe but by people who want an excuse to believe. In the case of Florida, they wanted to believe that the whole peninsula would soon be populated by the holiday-makers and the sun-worshippers of a new and remarkably indolent era.

On fantasy and reality (p. 40):

Early in 1928, the nature f the boom changed. The mass escape into make-believe, so much a part of the true speculative orgy, started in earnest. It was still necessary to reassure those who required some tie, however tenuous, with realty. And, as will be seen presently, this process of reassurance – of inventing the industrial equivalents of the Florida climate – eventually achieved the status of a profession. However, the time had come, as in all periods of speculation, when men sought not to be persuaded of the reality of things but to find excuses for escaping into the new world of fantasy.

Note: The “technological” justifications for investment in cutting-edge stock were aviation and radio. As in the dotcom bubble, legitimate investment in legitimately revolutionary technologies became exaggerated.

On the “mystique of central banking” (p. 54):

These men do not issue orders; at most they suggest. Chiefly they move interest rates, buy or sell securities and, in doing so, nudge the economy here and restrain it there. Because the meanings of their actions are not understood by the great majority of the people, they can reasonably be assumed to have superior wisdom.

On Weberian rationalization (p. 70):

Local electric, gas, water, bus, and milk companies [in the 1920s] were united in great regional or national systems. The purpose was  not to eliminate competition, but rather the incompetence, somnambulence, naïveté, or even the unwarranted integrity of local managements. […] There was no false modesty when it came to citing the advantages of displacing yokels with a central management of decent sophistication.

A cute “Rumsfeldian” quote avant la lettre; here Galbraith is explaining why businessmen and politicians’ “incantations” to inspire “market confidence” – reassurance that everything was fine and the economy’s “fundamentals” were “sound – were believed (p. 99-100):

[I]t cannot be stressed too frequently, that for effective incantation knowledge is neither necessary nor assumed.

That much of what was repeated about the market – then as now – bore no relation to reality is important, but not remarkable. Between human beings there is a type of intercourse which proceeds not from knowledge, or even from lack of knowledge, but from failure to know what isn’t know.

On the “embezzlement cycle,” particularly interesting given the recent corruption scandals in France, Spain and elsewhere (p. 153):

[There] is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth. […] At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country’s businesses and banks. [...] It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be disonhest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks.

The stock market boom and the ensuing crash caused a traumatic exaggeration of these normal relationships. […] Within a few days [after the 1929 crash] , something close to universal trust turned into something akin to universal suspicion.

On “pointless meetings,” which I have to say, have become really extraordinarily popular among political leaders in America and in Europe, at both EU and national level (p. 158-9):

[President Herbert Hoover] was also conducting one of the oldest, most important – and, unhappily, one of the least understood – rites in American life. This is the rite of the meeting which is called not to do business but to do no business. […]

Meeting are held because men seek companionship or, at a minimum, wish to escape the tedium of solitary duties. They yearn for the prestige which accrues to the man who presides over meetings […]. Finally, there is the meeting which is called not because there is business to be done, but because it is necessary to create the impression that business is done. Such meetings are more than a substitute for action. They are widely regarded as action. […]

[S]cholars, who are great devotees of the no-business meeting, rely heavily on the exchange-of-ideas justification. […] Salesmen and sales executives, who also are important practitioners of the no-business gathering, commonly have a different justification and one that has strong spiritual overtones. Out of the warmth of comradeship, the interplay of personality, the stimulation of alcohol, and the inspiration of oratory comes an impulsive rededication to the daily task. […]

The no-business meetings of the great business executives depend for their illusion of importance on something quite different. Not the exchange of ideas or the spiritual rewards of comradeship, but a solemn sense of assembled power gives significance to this assemblage.  Even though nothing of importance is said or done, men of importance cannot meet without the occasion seeming important. […] What it lacks in content it gains in power from the assets behind it.

Reading this I could only think of the endless “job summits,” “Syria summits,” “environmental summits,” and even “beer summits” – both nationally and internationally – that are our leaders’ substitute and simulacra for action. Exaggerating a little, one could say the pointless meeting is the fundamental ritual of Europe’s de facto state religion…

Confidence-inspired yet? Angela Merkel, François Hollande and José Manuel Barroso at a “summit” with the business leaders of the European Roundtable of Industrialists.

On regulatory agencies (p. 184):

[R]egulatory bodies, like the people who comprise them, have a marked life cycle. In youth they are vigorous, aggressive, evangelistic, and even intolerant. Later they mellow, and in old age – after a matter of ten or fifteen years – they become, with some exceptions, either an arms of the industry they are regulating or senile.

On certainty (p. 189:

When people are least sure they are often most dogmatic. We do not know what the Russians intend, so we state with great assurance what they will do. We compensate for our inability to foretell the consequences of, say rearming Germany, by asserting positively just what the consequences will be. So it is in economics.

The role of wealth concentration (p. 194-5)

In 1929 the rich were indubitably rich [...] it seems certain that the five per cent of the population with the highest incomes in that year received approximately one-third of all personal income. [...] This highly unequal income distribution meant that the economy was dependent on a high level of investment or a high level of luxury consumer spending or both [spending on which is more erratic]. [...] This high-bracket spending and investment was especially susceptible, one may assume, to the crushing news from the stock market in October 1929.

Galbraith mentions the, it has be called hysterical, bipartisan belief in 1930s America, also inscribed in Franklin Roosevelt’s electoral platform, that the solution was to balance the budget and that leaving the Gold Standard would be a disaster. Here he is on this “dogma” which perfectly describes the Maastrichtian’s ideology and the current eurozone structure (p. 202):

The rejection of both fiscal (tax and expenditure) and monetary policy amounted precisely to a rejection of all affirmative government economic policy. The economic advisers of the day had both the unanimity and the authority to force the leaders of both parties to disavow all the available steps to check deflation and depression. In its own way this was a marked achievement – a triumph of dogma over thought.

On the human tragedy and willful paralysis of the Depression (p. 204):

Finally, when the misfortune had struck, the attitudes of the time kept anything from being done about it. This, perhaps, was the most disconcerting feature of all. Some people were hungry in 1930 and 1931 and 1932. Others were tortured by the fear that they might go hungry. Yet others suffered the agony of the descent from the honor and respectability that go with income into poverty. And still others feared that they would be next. Meanwhile everyone suffered from a sense of utter hopelessness. Nothing, it seemed, could be done. And given the ideas which controlled policy, nothing could be done.

I have to say, having attended U.S. congressional hearings and watching streamed European parliamentary committees, I found Galbraith’s description of such proceedings in the 1950s – at once theatrical, serious and often lazy, then and now – almost touchingly familiar. Here it is shortened, if still quite long (pp. 13-16):

I believe that almost everyone enjoys testifying before a friendly Congressional Committee or evena moderately censorious one. For the moment you are an oracle, a minor oracle to be sure, but possed of knowledge important for the future of the Republic. Your words go down in an imperishable, if sadly unread, record. Newspapermen, one or two at least, are present to transmit your better thoughts to the world or, more frequently, your worst ones, for these being improbable, have novelty and seem more likely to merit a minor headline. […] [The audience] listen attentively and critically; and Congressional Hearing has about it a touch of theatre and this is helped by having a competence and critical house. […]

[During one hearing] [a]s the testimony gave way to questions, more Senators came in. This is perhaps the most trying time of any hearing. Each in his turn apologizes graciously for being late and thenaskes the questin that has occurred to him on the way over. The question is always the same [note: “Will we have a stock market crash?]; and the Senator does not know that it has been asked before […].

The experienced witness observes that the question, though it bears a resemblance to some already asked, has been formulated in a novel way. Then he gives an answer which is the same in substance but decently different in form from those offered before. The audience is especially appreciative of able handling of such details.

The question is: Are the Baltic states, especially Lithuania and Latvia which both have currencies pegged to the euro, proof that austerity can work? Are they “successes” as described by IMF Chief Christine Lagarde and some American conservatives? Most analyses of these have tended to focus on GDP. I will focus on employment.

The financial and euro crises had particularly brutal effects in these countries: GDP shrank almost 15% in Lithuania in 2009 and over 20% in Latvia between 2008 and 2010. The countries have had partial recoveries since, 3.5% annual growth in Lithuania since 2010 and over 5.5% annually in Lithuania since 2011. Each country will have lost about half a decade of growth.

Unemployment was massive in the wake of the crises. In 2010, Lithuanian unemployment peaked at 18% and Latvian unemployment at 19.8%. Unemployment has fallen significantly; by the end of 2012 it was “only” 13.3% in Lithuania and 14.3% in Latvia. There was no improvement, and even some worsening, during the second half of 2012.

These figures are “pretty good” given the scale of the collapse and, unlike the euro-periphery, at least there are plausible and significant signs of improvement. But what the unemployment figures don’t say is that they have not been achieved through job creation.

Annoyingly, Eurostat doesn’t have figures on the absolute numbers of jobs, however, we do have job growth, or the annual change in the absolute number of jobs.

The employment growth figures are dismal. In Lithuania, 6.8% of jobs were destroyed in 2009, 5.1% destroyed in 2010 and – after a small recovery with 2% job growth in 2011 – job destruction resumed in 2012 with 6.7% of jobs lost. In Latvia, 13.2% of jobs were destroyed in 2009, 4.8% destroyed in 2010, and 8.1% destroyed in 2011, only returning to tepid job creation of 2.6% in 2012.

Baltic “austerity success” has at best meant “jobless recoveries” characterized by GDP growth but no job creation.

How do we then explain the fall in unemployment despite catastrophic job destruction and jobless recoveries? The answer is almost certainly mass emigration. According to official figures the net migration rate (number of people entering the country minus number of people leaving the country) was an amazing -2.37% for Lithuania in 2010 and -1.26% in 2011, while for Lithuania the figure for 2011 is -1.12%. These are world records. In 2012, according to CIA figures, the few countries with higher net emigration figures than this include Syria and Jordan…

These migration figures are however problematic in the Schengen Area of free movement. In the absence of systematic border controls, EU governments have only a very imperfect idea of the extent of population movements.

An alternative measure is to look at change in total population as a proxy. There has been a demographic collapse in both Lithuania and Latvia over the past ten years. According to Eurostat, between 2007 and 2012, the Lithuanian population was reduced by 377,000 people or an 11.1% reduction of the total, in Latvia there were 240,000 less people, or a 10.5% reduction.

In fact, there is a statistical break in the data as both countries did their population censuses in 2011 for the first time in a decade, revealing a huge drop in the population. The authorities dramatically underestimated population decline up to 2011 and this decline estimated to have continued into 2012.

Given that there has not been a significant change in Latvia and Lithuania’s natural population change rates (births minus deaths, which tends to be a far more reliable figure than migration), this remarkable collapse is almost certainly due to emigration. It is impossible to say exactly during which period between 2000 and 2011 the emigration occurred, however it stands to reason that the detected increase in emigration of 2008-2011 onward corresponded to even bigger undetected movements and a proportionally larger part of the 2000-11 total emigration.

As Mark Adomanis shows, Russia, a country often alleged to be an economic and demographic disaster, is if anything a genuine role model compared to the Latvian “success story.”

The Baltic “austerity successes” look a lot less impressive if one takes this into account: How impressive would Lithuanian or Latvian unemployment figures be if over 10% of the population hadn’t been removed, apparently through emigration? In all likelihood, rather than the 13-14% unemployment of today, there would be 20 or even 25%, comparable with Spain or Greece.

Lithuania and Latvia can only be considered “models” of austerity or possible solutions if we consider exiling 10% of the population to be a desirable model for Spain, Portugal, Greece, Ireland et al. For the GIPS alone, this would mean moving, at a minimum, about 6.5 million people. This is an “economic model” characteristic of underdeveloped countries, those who export people more than things, typical for example of Caribbean nations like Jamaica or Martinique.  In fact this is happening in Portugal, as hundreds of thousands emigrate, partly going to other European countries, but also to developing countries like Brazil, Mozambique and Angola.

Some will answer that the GIPS have “always” had high emigration, to which one can reply a qualified yes, noting however that this model of permanent underdevelopment is usually accompanied by high fertility. Europe is successfully creating a genuinely original model of permanent underdevelopment: massive peacetime emigration from countries that don’t have high population growth, but which in fact already have naturally declining populations due to sub-replacement fertility.

The EU is actively promoting this, notably with its “Youth on the Move” initiative, turning travel – normally a positive way to broaden horizons and foster exchange – into a crude band-aid for the dysfunctions of the single currency by sending the teeming masses of unemployed peripheral youth to the core, above all to Germany.

The inability to devalue within the euro remains a huge part of the problem. As Paul Krugman notes, despite austerity and mass unemployment, labor costs declined only slightly in Lithuania (-1.4%) and actually increased in Latvia (+1.3%) between 2008 and 2012. Locked in the euro-peg, over four years there has been only a slight relative increase in competitiveness, as eurozone labor costs have increased about 8%. This is a far cry from the speed and magnitude of competitiveness gains possible with a good old-fashioned devaluation (after 1992, Sweden overcame a similarly severe economic crisis with a massive devaluation of over 30%). It is likely a major factor in the complete failure to create jobs in both Lithuania and Latvia.

However, as Matt Yglesias argues, though the Baltic austerity stories cannot be sold as an economic success, they can be considered a political success depending on what objectives one has: “The Latvian government places more importance on securing independence from Russia than on the short-term trajectory of Latvian living standards.”

The Baltic ruling elites do not see any future for their countries other than clinging to Germany (and America) for safety and melting into the broader European continent. Perhaps, given their diminutive size, this is a reasonable objective, and membership of the eurozone is the symbol of its success.

The peoples of these countries, I think far more reasonably, are skeptical however. The Latvian government is on track to join the euro in 2014, even though a majority of the population is currently hostile. The Lithuanian government hopes to join in 2015, even though a recent poll found 57% of people opposed. Citizens should be warned: Once locked in the “euro-trap”, there will be no going back, and there will be no solutions to joblessness in future economic crises, other than to leave their country.

In short, the question is: Do we really need to break up the euro? To which I answer, if one is attached to democratically accountable economic policymaking and moderately progressive, Keynesian economics, simply yes.

Phillips expresses the question a little differently:

This particular issue: transformation at a pan-European level vs retreat to national democracies – is *the* key issue at the moment in terms of what an alternative might look like, or how to get there.

I first want to stress what an excellent and necessary writer Phillips is. As he notes on his blog’s about page, while Anglophone media and pundits (Krugman et al) have done a good job showing us why and how euro-austerity is an economic and social disaster, there has not been nearly as much discussion on the antidemocratic disaster that is the eurozone crisis. The eurozone is a scandal not just in terms of its economic and social results but also its process, which mingles unaccountability, secrecy and what Jürgen Habermas has called “postdemocratic autocracy.” Phillips was identifying early the undemocratic turn which even many europhiles now recognize (Jean Quatremer, Jean-Paul Fitoussi, Sylvie Goulard).

Phillips has been an indefatigable chronicler of the dismal business that is undemocratic rule in the eurozone. Specifically, the eurozone crisis has meant:

• The impossibility of changing EU policies through elections.
• A staggering increase in EU institutions’ power over virtually all aspects of economic life, specifically the rise of a secrecy-obsessed, monstrously powerful, and bank-friendly European Central Bank and of paternalistic faux-cosmopolitan functionaries.
• The pure and simple imposition of EU/ECB demands on elected governments in Portugal, Italy and elsewhere.
• Finally, the implementation of eurozone objectives requires varying degrees of increasingly-tyrannical practices such as systematic use of decrees to sideline parliaments, labor conscription, and other measures.

The eurozone crisis is indeed effectively a permanent coup d’État against democracy (sometimes this is literally and ostensibly the case as with the (temporary) imposition of EU bureaucrats Monti and Papademos on Italy and Greece). Phillips has aslo written some excellent analytical summaries of the situation on bank welfarism and the ECB’s power to subvert government and the role of Germany.

I share these analyses. The apparent difference between Phillips and me is on what to do now. He sees the possible emergence of a European demos and argues for a new internationalist campaign to promote transnational social democracy and solidarity. He is skeptical of euro-breakup as a solution:

To argue for the overthrow of the current European austerian regime via a retreat to nations or ‘southern bloc’ is not so much problematic for any supposed awakening of slumbering daemons […], but that it does not target all those responsible for the crisis and for austerity. Domestic elites are left alone. While Papandreou, Berlusconi, Socrates and now Anastasiades were thrown under the bus, is the appropriate response really allying with these characters and the rest of their class, who still back the Brussels consensus and would have done little different to Merkel were they in her shoes?

Moreover, the Agamben view [which argues for a "Latin Empire"] abandons those ordinary Germans to the depredations of the CDU-SPD-Green policy concurrence. The division in Europe is not between north and south but between the elites and the rest of us. To coin a phrase (an admittedly imprecise one to be sure, but still): the 1% versus the 99% – of all of Europe.

I agree that a turn towards “southern unity” will not be particularly useful. But I in contrast argue, simply put: nothing is possible within the euro. Any return to reasonably public-interested and accountable economic policy must entail a renewal of national democracy. This is not an appeal to chauvinism, but I think to a democratic realism and a return to fundamental classical liberal principles. It opens the possibility that social-democratic victories in specific countries can serve as the building blocks for a new international order placing democracy and well-being over corporate oligarchy.

Point 1: The Eurozone cannot be democratized

The first point is that I am simply not convinced that the euro can be made into something reasonably democratic and economically and socially rational. I have become incredibly pessimistic on this. First is an outline of what will likely happy if the eurozone survives.

Start with the basics: the euro follows a logic, very explicit in the 1992 Maastricht treaty, that is “anti-Keynesian” in the extreme: the fight against inflation takes precedence over all other economic objectives (employment, growth), central bank financing of governments and fiscal transfers (“bailouts”) are outlawed, public deficits should always be below 3% and tend towards zero. In addition, there is an antidemocratic principle in that these rules on non-reviewable independent of electoral majorities and monetary policy is to be implemented by a completely “independent” European Central Bank which, in fact, is not be accountable to any elected legislature in Europe.

For a moderate American progressive, for anyone with a cursory knowledge of optimum currency area theory, or even just for a pragmatist democrat who believes policy should be adapted to specific circumstances and should be democratically accountable, these provisions are simply insane.

They are a recipe for economic underperformance and “autopiloted” policies indifferent to economic circumstances and elections. When economic crisis and asymmetric shocks strike (e.g. when a country suffers a worse recession than others), the lack of fiscal transfers would, given the Maastricht targets, mean the automatic implementation of self-defeating austerity. In the absence of devaluation, adjustments could only be made through neoliberal labor reforms. This, as my links suggest, was all foreseen by people as different as the moderate American liberal Paul Krugman, the French neogaullist Philippe Séguin, and British political scientists Kenneth Dyson and Kevin Featherstone.

This is the natural course the eurozone must take if it survives: ever-greater anti-Keynesian EU control over national budgets and the end of labor rights in Europe. There will be something like the job insecurity of America, but a bastardized version of that antimodel, with no “generous” liberals pushing for stimulus to limit unemployment; but only the indifferent men of the ECB and DG ECFIN, with their mandate and their ideology, ensuring massive structural unemployment and inequality in Europe for decades.

The financial crisis and the emergence of “too-big-to-fail” banks have added a new dimension which was not entirely foreseen: the need to “save the banks” and prevent sovereign defaults, at the risk of the collapse of the entire European economy, with the ECB always “making the call”: lending €1 trillion [sic] to the banks through LTRO, largely without conditions, and the blackmail of national governments to adopt specific policies by threatening to tank countries’ financial systems if they don’t comply (coups in Greece and Italy, forcing Ireland to bailout its banks, forcing Portugal into a bailout, ultimatum against Cyprus…). Perversely, but predictably, the antidemocratic structures for the ECB demanded by Germany mean Frankfurt even escapes Berlin’s control: they have ensured that they simply have no recourse when the ECB arbitrarily violates the letter and the spirit of the Maastricht treaty by lending to the peripherals and making German taxpayers indirectly liable for potential losses.

The ECB, as Transparency International has pointed out, is a “democratic black hole.” But its power will increase with the proposed Banking Union which, while still vague, will give the ECB the duty to supervise banks to ensure they behave appropriately and the power to decide which banks fall and which banks are to be bailed out. The “moral hazard” issues are enormous and, given the ECB’s record pre-financial crisis, the ability of these pseudo-enlightened so-called technocrats to forestall speculative bubbles is doubtful in the extreme.

This is the horrifying picture that emerges from eurozone survival: the final elimination of democratic control over budgetary policy (falling into line with monetary policy), the elimination of labor rights across Europe, the continuance of tight-fisted anti-Keynesian monetary policy, massive and permanent structural unemployment, and the hegemonic power of a Eurocratic-financial oligarchy, escaping all democratic control by virtue of completely unrestricted capital flight and the ECB’s so-called “independence.” In short: a bureaucratic, oligarchic, austerian, antidemocratic and antisocial nightmare.

I am not convinced, if the euro survives, that this can be avoided. A (social-)democratization of the euro would require a complete reversal of all of its founding principles. Why do I not believe this is a plausible objective?

This would require, first of all, a refounding of European basic law (treaty change). This would in turn require unanimity with all the difficulties we can imagine. We would need:

1. One or more successful referenda
2. Simultaneous social-democratic revolutions in all the major eurozone countries, especially Germany
3. The goodwill of all 27 EU governments (including treaty change opportunists like the UK)

In particular, Germany would have to abandon its ideological economic dogmas (deflation and austerity) and to go against its immediate interests (by accepting fiscal transfers for 5-10% of its budget for a eurozone “federal” budget and submission to a Latino-peripheral eurozone majority). Put simply, I maintain that that this is simply not a reasonable or realistic program.

There are very good reasons for this and go back to why the Maastricht negotiators came up with that treaty’s absurd provisions in the first place. The Germans, in good faith, abandoned their prized Deutsche Mark and their Bundesbank’s supremacy, but this was on the condition that the euro would entirely respect narrow German economic interests and ideological principles. This goes beyond the German government, this intransigence is also the reflection of the legitimate preoccupations of German public opinion. No taxpayer, in any country, likes to see his money go to foreigners. Every citizen has fetishistic objects of national pride, however absurd they may seem to outsiders. As a Bundesbank-president-to-be once told a British colleague: “You have the House of Lords, the Queen and your established traditions – we have the Bundesbank.”

There cannot be a European democracy because the fundamental interests and ideals of the German demos are different from those of other national demoi. There is not the common feeling necessary either for voluntary submission to the democratic majority or for economic solidarity. Multinational democracy may “work,” with some marked dysfunctions, in Canada or Belgium, it plainly will not work in an area as economically and culturally diverse as the eurozone. The West German taxpayer tolerates, grudgingly, a huge transfer of wealth to East Germany in the name of the national ideal, he refuses even minor solidarity with the demonized GIIPS. Two-thirds of Germans approve, rightly or wrongly, Angela Merkel’s tight-fisted and authoritarian management of the crisis.

The periodic violation of certain German taboos – bailouts and ECB bond-buying – should not mislead us: this in no way suggests a democratic and rational eurozone is possible, it only suggests the German government is willing to go some way to preserve the euro, its exports and its banks. Eurozone democracy, in the absence of a complete and incredibly selfless social-democratic revolution in Germany, is impossible.

Point 2: The Nation-State remains powerful in the face of globalization

We need to really question the idea – promoted in good faith by alter-globalizers and, perhaps, Maastrichtians – that the Nation-State is simply impotent and dépassé in the era of globalization. I assert: a newly-elected government, so long as it is not insolvent and has monetary sovereignty, can implement a program in which, broadly speaking, economic policy benefits the general citizenry. I am not convinced that:

@craigjwilly Basically, I would say that even w finances in order, nation-states are still chastened by capital flight and economic sabotage

— Leigh Phillips (@Leigh_Phillips) April 7, 2013

Capital controls, nationalizations, bank defaults, self-financing of deficits, the reduction of the debt through inflation, devaluation – whatever the inevitable constraints of economic reality, these remain extremely powerful tools for any country to manage both general international economic problems and the distributional impact of economic crises and adjustments.

This remains the case so long as the country has not abandoned core-State powers (pouvoirs régaliens) to international institutions. Whatever the undemocratic faux-cosmopolitan constructions built by national elites, I am simply not convinced that the Nation-State is impotent today. Any independent government, if it doesn’t need a bailout, cannot really be coerced by the WTO, the IMF or even really the EU. I am always impressed at the ability of even small and/or poor countries – Malaysia, Ecuador, Iceland, Argentina, Venezuela… – to simply lift two fingers to the global oligarchy and do as they like. And if these countries can do this: Why couldn’t bigger, richer countries like France, Italy or Germany be able to?

The only case where a government is paralyzed is when it needs to beg for money, when its government is simply subverted (coups d’État in the Mossadegh, Lumumba, Allende or, almost, Chávez cases) or when it has abandoned a core-State power (pouvoir régalien). The eurozone is a particularly egregious form of the latter: in forbidding the central bank from financing public budgets, eurozone governments have willingly made themselves completely dependent on the financial markets, with massive costs in terms of interest rates paid to the financial sector and economic instability. They are de facto completely dependent, when things turn sour, on the eurozone “shadow state” dominated by the ECB, DG ECFIN and the creditor countries (Germany).

Witness instead the flexible, pragmatic attitudes taken by Great Britain, the United States, Japan, Poland or (in the 1990s) Sweden. If some of these countries have regressive policies, namely Britain, this is the free and sovereign choice of its government. With Abenomics, Japan has embarked upon a radically different economic policy. Any of them, and especially the U.S., could sovereignly adopt social-democratic redistributional policies if there were a majority for it (the problem with America is the indigenous corruption of its democracy, not imposed by globalization’s constraints, more on this later).

We feel particularly impotent in Europe, but this largely due to the euro itself. I think Krugman’s arguments on this in 1997 remain valid and are worth quoting at length (New York Times, “We Are Not the World”):

[C]ritics of globalization often cite France, whose Government has taken no serious action to reduce its double-digit unemployment rate, as the perfect example of how states have become powerless in the face of impersonal world markets. France cannot act, according to a recent New York Times article, because of the demands of “European economic integration – itself partly a response to the competitive demands of the global marketplace.”

French policy is indeed paralyzed – not, however, by impersonal market forces but by the determination of its prestige-conscious politicians not to let the franc decline against the German mark. Britain, which has been willing to let the pound sink relative to the mark, has steadily reduced its unemployment rate with no visible adverse consequences.

The cause of France’s paralysis, in other words, is political rather than economic. True, the country must meet the conditions laid down by the Maastricht treaty of 1991, which is supposed to lead to a unified European currency. But creating this currency is more a political than an economic project. Its main purpose is to serve as a symbol of European unity, and many economists think that the costs of the common currency will exceed its benefits. It would actually be more accurate to say that French politics has battered markets rather than the other way around. […]

But the overheated oratory poses a more subtle risk. It encourages fatalism, a sense that we cannot come to grips with our problems because they are bigger than we are. Such fatalism is already well advanced in Western Europe, where the public speaks vaguely of the “economic horror” inflicted by world markets instead of turning a critical eye on the domestic leaders whose policies have failed.

All this remains true today. In fact the current crisis is nothing but a horrific, magnified repeat of the 1990s crisis of EMU-austerity necessary to create the euro, with the caveat that it is much more difficult to leave the euro than to leave the then-EMS, especially with the advent of too-big-to-fail.

I am simply not convinced that, outside the euro, we are “slaves of the markets” and that national social democracy is impossible. In Europe, the problems are plainly due to the “original sins” of the Maastrichtians: unrestricted capital movement both within Europe and between Europe and the outside world; the eurozone’s construction based on an unaccountable central bank with an antisocial mandate.

I would go even further: an enlightened social and environmental protectionism – targeting exports from antisocial tyrannies like China or Kyoto Protocol non-signatories – is perfectly possible and can be used both to preserve national economic models and pressure foreign governments to adopt international environmental and social standards. Worlds are possible beyond the dogmas of the euro and completely unrestricted free trade (although it hard to say, today, exactly what the limits of possibility of those worlds are!).

Point 3: France chose impotence and corruption

The case of France is extremely important and needs to be addressed. It’s also one that moves me personally as someone born and raised there, as a French citizen. In no developed country in the world, I think it is fair to say, is “neoliberal” globalization so contested and the egalitarian impulse so strong. At the same time, I want to stress, barely exaggerating: France, its elite, is basically responsible for every mishap concerning the euro. The Germans did not want the euro, the Germans did not want to include Italy in the euro, the Germans did not want to keep Greece in the euro. These are all France’s fault.

This begs the question: Why the hell did France, and in particular the self-style “Socialist” President François Mitterrand, pressure Germany to create the insane euro-system together? Historians will argue about this for a long time to come, but I am not convinced this was the critical factor:

@craigjwilly Tell that to the late F Mitterand. Pre-euro, elected on a robust socialist mandate. Capital flight forced him to trim…

— Leigh Phillips (@Leigh_Phillips) April 7, 2013

My personal interpretation is that French socialist thought had long been corrupted by the need to appear “as radical as” the (Stalinist) French Communist Party. As a general rule in France, the prestige of novelists, revolutionaries and “philosophers,” was (is?) too great. The mainstream American, Scandinavian, British or German lefts, when they were faithful to their mission, wanted to improve the conditions of the poor, working and middle classes. The French left was “revolutionary” and a promised vaguely defined “different life.” This Utopianism, the belief in some Grand soir, led to extremely fuzzy thinking. They could only disappoint once they had taken power in 1981. This intellectual vacuum and penchant for irrealism, as far as I can see, is the reason why the pseudo-radical French Socialists could accept a European Economic and Monetary Union that perfectly moderate American liberals could only find repulsively antisocial and anti-Keynesian.

Simplifying a bit, had the French Socialists been reasonable – and I think the continuing high equality in France and the relative fiscal discipline compared to the U.S., UK, Japan and GIIPS attest to this – something like a “Latin Sweden” would have been perfectly possible, through healthy devaluations and a strong industrial policy. This is what Jean-Pierre Chevènement argued in the 1980s and was the consensus view among international economists in the 1990s. The French elite chose to say the course.

Concerning why Mitterrand himself pushed for the euro, the topic is worthy of more investigation and is highly interesting. I cannot psychoanalyze him. The most plausible interpretation, to me, is that Mitterrand – “the Florentine,” a famous Machiavellian, in my opinion not much more than a nihilist with not much interest in anything other than his own power and vanity – was initially motivated by Realpolitik. He openly obsessed about German economic power and the annihilation of the Deutsche Mark, “their atom bomb,” the be-all-end-all of his European policy. (A related power-political objective was the end of dollar supremacy.)

This policy had a self-reinforcing logic of its own once started. It required a massive accentuation of deindustrialization and unemployment as a result of austerity and the overvaluation of the franc (in short, the indiscriminate application of German monetary-budgetary policies in France, regardless of differing national circumstances). Both Socialists and “Gaullists” invested their credibility in this policy. Once started, they couldn’t turn back when this was proving extremely economically costly or when it was unclear whether the new “European” Central Bank would serve French interests. In war, love and money, how does one admit a mistake a say it was all “for nothing”? It is never easy and elites often simply fail, preferring to dig in ever-deeper denial until they lose power or the system collapses.

The French State – well known for its authoritarian tradition, renewed in the Republic’s Gaullist form – was simply able to impose this level of economic sacrifice upon the French population in the name of the raison d’État that was the permanent elimination of German economic power.

“Everyone” understood that the eurozone was meant to contain the power of the “irresponsible” and “dangerous” German nation and people für ewig. This is why the French pushed for Italian and other Latin memberships, out of the retrospectively ironic and naïve assumption, born out of the French elite’s traditional disregard for legal and constitutional niceties (juridisme), that a Latin majority would be able to simply dominate the eurozone despite the Maastricht treaty’s provisions. The Germans accepted all this out of national self-abnegation and legitimate awareness of their historic crimes.

That the eurozone completely backfired and, in fact, ended up massively empowering Germany, is irrelevant to this point. In retrospect it may seem obvious that the imposition of German-style budgetary and monetary policies on countries that are not Germany, whose labor force and businesses were always able to adapt to periodic revaluations of the Deutsche Mark, would lead to economic disaster for those countries (few apparently foresaw this, notably the Bank of Italy’s Antionio Fazio). We can say, with a sense of irony but not paradox, that the euro is the bastard child of French cynicism and German idealism, a child that grew up to be the exact opposite of what its parents intended.

Jean-Pierre Chevènement in his highly interesting book La France est-elle finie ?, especially first hundred pages, argues the French elite went along with this because of two centuries of decline and trauma: after 1815, the long demographic stagnation and economic underperformance of the Nineteenth Century, 1871, the bloodletting of 1914-18, the misery of victory and dependence on the fickle Anglo-Americans, the disaster of 1940, the doomed colonial wars… By then French elites had lost confidence in the French Nation-State, the Republic, and Mitterrand made a “Pascalian bet” (Chevènement’s expression) of something beyond the Nation, which would be called “Europe.” The French elite dreamed only emulating of Anglo-American finance and German money.

The Maastrichtian turn was all the more regrettable given that in fact, by 1980, France had “finally” overcome its status as an economic laggard and achieved its modernization: GDP per capita was 20% higher than Britain’s, for the first time in over a century France was growing demographically faster than its neighbors, and French industrial and technical prowess was evident in the TGV, Airbus, nuclear, defense and telecommunications.

French unemployment, Q4 2007, vote for Front National candidate Marine Le Pen, 2012.

So France pushed for the “original sins” of total liberalization of capital flows (both within and without Europe) and a German-style common currency under unaccountable ECB control. The French economy, and indeed the society itself, have been grotesquely distorted by these “reforms.” With overvaluation and austerity, French industry has been annihilated and mass unemployment made the norm, feeding the rise of the Front National (today, the French map high unemployment correlates almost exactly with the Front National vote, the vote ironically does not correlate at all with the presence of immigrants). Apparently to “compensate” for this, the French financial sector has been extraordinarily hypertrophied: last time we checked, French banks had over €500 billion in net loans to the periphery – far, far more lending than had done German banks – massively contributing to the faux-growth and speculative bubbles of the eurozone, and making France completely dependent on the goodwill of the ECB and Germany.

We have to change course. Why should we let men like Jean-Claude Trichet destroy the last remnants of French democracy? Why should we place economic policy, and nobody really gives a damn about anything today except jobs and economic security, beyond the reach of elections? Why put an end to our magnificent two-hundred-year long struggle and experiment in republics and democracy? I think of this, that it is done in the name of euro-financial oligarchy, and I am filled with hatred.

Point 4: Eurozone breakup would discredit corrupt national elites

A return to national currencies and the end of the euro will do enormous damage to established national political elites. It is impossible to say who would emerge from the new order, no doubt they would reflect Europe’s inherent diversity, with nationalist, socialist, democratic, authoritarian and “populist” triumphs. In many countries, elites will be swept away, with all the risks and opportunities that entails.

There are risks but, to be brutally frank, I find that a Europe-wide euro-financial austerian tyranny is plainly more dangerous. I fully agree with Phillips that “Eurosceptics are in most cases outside Scandinavia a swivel-eyed, hard-right bunch of nativists.” I also agree with his provocatively-titled: “Don’t let your slightly racist gran be the only one to take on Europe’s silent coup.” Too many well-meaning cosmopolitans, and I was among them, with paternalist contempt for the “common man’s” prejudices, also supported the euro in no small part because people like Margaret Thatcher and UKIP opposed it.

So between Berlusconi and Trichet, there’s no ambiguity in my mind that one must side with Berlusconi. One is, for all his corrupting influence, an electoral politician that can be replaced. The other is an autocrat for a system that is electorally-indifferent. I’m personally willing to go pretty far with this, the French Gaullists can sometimes be pretty obnoxious, but this is easily redeemed by their being the only democrats who oppose the euro. (Another problem with France is that the neofascist Front National makes up the overwhelming majority of the eurosceptic, everyone else being hatefully conformist, including the Front de Gauche.)

After the euro, not “everything” will be possible, but freedom of action will feel almost limitless compared to today. Democratic politics will not be magically purified, but electoral competition will become meaningful again. People care above all about economic issues (jobs, public services, welfare…) but, within the euro, whomever you vote for, you will get the same policies of austerity and hard money. Leftist parties, in particular, could actually propose – think of that! – progressive and Keynesian economic policies.

Is not the rise of anti-system “populists” in Italy and France, above all, due to the impossibility of left-right alternatives? That the left, permanently excluded from power because of the strength of communist parties, then instantly converted to Maastrichtianism, which is to say, to make themselves nothing but the enforcers of permanent austerity and structural reforms. The possibility of alternative economic policies will dramatically reduce the “need” to vote for Grillos, Le Pens and Michaloliakoses (and I am not saying these are morally equivalent, Grillo is, as far as I can see, a perfectly legitimate and highly interesting democrat).

Eurozone breakup would, in all likelihood, also discredit the Agenda 2010/Hartz IV consensus in Germany. The financialized French economy would also be discredited and the country would have to find new foundations in a real and industrial economy. The discredit of the status quo may be such that radically new European policies may become possible.

Point 5: “Realistic” plans for progress, democracy and international cooperation

I do not consider a return to national currencies to mean rejecting international cooperation or even, for that matter, European integration in other areas.

In fact, I think the EU, built upon a renovated “community method” could play a major role promoting international social, financial and environmental norms and, if necessary, defending itself through protectionism. I have reasonably high hopes for the “coalitions of the willing” of reinforced cooperation and the new qualified majority rules of 2014 (passage requiring 55% of States representing 65% of the EU population) in the coming years. The Emissions Trading System and the Financial Transactions Tax, for all their problems, could be harbingers of positive things to come. Analogous democratic international organizations – so long as they stay clear of core-State functions and fiscal redistribution, which will never work without a common “demos” – could be created in other continents for the same goals.

Relying exclusively on a diffuse “internationalism” will have achievements only through its influence on national politics. I am always struck at just how little was achieved by the socialist and pacifist internationalisms of the past: In 1914, the German Social Democrats voted for war credits and Jean-Jaurès was assassinated, in the interwar years the “International” was Stalin’s plaything, the end of the Cold War cannot be attributed to postwar Western European pacifists.

I believe, and this could be an interesting debate on philosophical differences, that major progressive achievements are virtually always achieved through the national activism and the Nation-State. France 1789, Europe 1848, Britain 1945, Central Europe 1989: all these revolutions were above all national revolutions. This is not surprising: political consciousness, to the extent it exists, only really exists nationally, political power always exists in the (Nation-)State. Ergo, progressives can only implement actual progress, today still, through the conquest of Nation-States. These can then serve as the building blocks, the stepping stones, for international cooperation. But no progress will ever be achieved through disembodied, “cosmopolitan” in aspiration only, internationalism.

This also has a very simple and explicit basis in classical liberal thought. When it became apparent that the British Empire could not be made to respect their rights, the Britons of America founded their secessionist legitimacy on the famous sovereignty of “We the people,” the North Americans. In France this is more explicit. Here is Emmanuel-Joseph Sieyès’ influential 1789 pamphlet, What is the Third Estate?, looking at how the nobility justified their privileges:

One is not free by privileges, but by rights which belong to all. That when aristocrats attempt, at the very price of this freedom, showing themselves unworthy, to keep the people in oppression, it [the people] will demand to know why. If [the nobility] responds based on the right of conquest, one has to admit this would mean going a bit far back in time. But the third [estate] must not fear going back in time. It will refer to the year that preceded the [Frankish] conquest; and because it is today strong enough to not let itself be conquered, its resistance will no doubt be more effective. Why not send back in the forests of Franconia all these families who maintain the mad claim of being born of the race of the conquerors and to have inherited their rights? The nation, so purified, could console itself, I think, at believing it was reduced to being composed of the descendants of Gauls and Romans.

This is hard stuff, one can see how it can lead to excesses, but the point remains legitimate: membership of the Nation is defined by the acceptance of all the rights and duties of citizenship. (Note: This was written in a context when the French nobility claimed the right to rule based on often dubious theories about Germanic descent, as the descendents of Frankish conquerors.) All the European liberals of the Nineteenth Century, inspired by the French model, thought that liberal democracy was synonymous with national unity and independence (Italy, Germany, Poland…).

Hostility to the condition of apatride – not those who are denied citizenship (Jews and Roma are victims), but those who refuse to be constrained by the rights and responsibilities of (inevitably national) democracy – is a precondition for classical liberal democracy. This all remains profoundly relevant. Imperial and aristocratic oligarchies yesterday, financial and bureaucratic oligarchies today.

Point 6: We don’t know what is realistic today

I do want to concede that it is uncertain what is possible today. We are in a new place characterized by technological innovation, information revolution, environmental limits, social fragmentation, etc. We are in a new phase of modernity (postmodernity?) with as much potential and uncertainty as at the dawn of the Industrial Revolution.

Is there actually any policy that would ensure a return to economic growth? Demographic and environmental factors – scarce energy – may make growth impossible even with the best policies. We may have reached the point where technology leads not to growth, but to marginal efficiency gains, and at best only compensates for the growth-killing effects of energy scarcity and climate change.

The developed countries have clearly in some sense lived “beyond their means” since the 1980s. The question is how we make the adjustment and who pays for it. For me it’s clear the most economically efficient and socially just method would involve a dose of stimulus, of inflation and progressive taxation. Those who have enriched themselves, with the ever-growing inequality of the West since the 1980s, should pay. The youth should not pay, not being responsible for the economic irresponsibility and delusions of their parents.

I don’t have a unified theory for the decline of democracy since the 1980s. It’s unclear whether this is cyclical or structural. The structural, or pessimistic, explanation: Our societies are characterized by individual atomization, the collapse of family authority, the dissolution of religious and collective beliefs and organizations, marked inequality of educational achievement (whereas, at the zenith of democracy, everyone was literate and virtually no one went to university) and ageing. We may have simply lost the ability, with the (almost certainly inevitable) individualism of the 1960s, for collective thought and action. Is social democracy possible in a context where big trade unions and mass parties no longer really exist? Is progressive politics even possible today when the average voter is 45 or 50 years old? I don’t know the answers to these, but it is striking how oligarchy and inequality are triumphing in the United States, Canada, the United Kingdom and the eurozone. Oligarchs are increasingly apt, in the traditional Latin American mode, to capture democratic and minoritarian institutions to preserve their interests (e.g., the U.S. Senate, the House, campaign finance).

The cyclical, or optimistic, explanation: Western “democracies” have always gone through progressive and regressive phases. The role of good citizens, in principle, is to always be pushing that boulder back up the hill, to maintain the democratic tendency. We see this in U.S. history: Propertied oligarchy –> Jacksonian democracy –> Gilded Age –> New Deal/Great Society –> Reaganite revolution –> ???

In America, a horribly decadent country by any measure, we may be on the verge of a progressive multiracial democracy, purely by the force of demographics. We may be on the verge, in Europe, of a breakdown of the absurd existing order and the dawn of progressive and rational democratic politics. Or perhaps we will degenerate into American and European (financial) oligarchies. It’s the uncertainty of the observer’s imperfect knowledge, but perhaps also our freedom to fight for and choose our collective destiny.

I also have strong hopes for the Internet as enabler of democracy. Information-sharing and debate are possible like never before, to an incredible extent, making the TV- and paper-based “democratic debate” of the past seem downright primitive. Unprecedented transparency enabled by WikiLeaks, OffshoreLeaks, Anonymous, and their equivalents, appears inevitable. Direct, “neo-Athenian” democracy is theoretically technologically possible today, even for large nations, and I will be following the experiments of the Pirates and the Five-Star Movement with great interest. Great changes are underway. On the flipside, technology is always morally neutral and can just as easily be used for tyrannical ends.

In the end, as a liberal realist (first a realist, then a liberal), I consider skepticism to always be a healthy predisposition. In reality the people never exercise power, this has always been held by elites. All “democratic” movements inevitably fall to Robert Michels’ “iron law of oligarchy,” and this in fact most obviously true in the most pseudo-democratic political movements, social-democratic parties inevitably become dominated by “bourgeois” middle class elements and communist parties simply interpret the “dictatorship of the proletarian” as their own bureaucratic dictatorship. This will not change. At best, we have “bursts” of democracy as an elected, often radical, elite implements the popular will. We then have democratic preservation, which in fact means competition and checks between elites, in which, at best, public opinion decides between.

In any events, for all the changes of recent years, these elites hold power still, in partly national and partly international oligarchies. But the implicit power of the Nation-State – of the border, of the gun, of tax code, of the currency – remains there, dormant, waiting to be conquered and used by those who would be mandated by the people to do so. There is a reason we traditionally, apparently somewhat pompously, capitalize the State. Not because it should be deified, but because it holds power of life and death, and its existence, form and self-defense define how we live, it is something of a divine responsibility.

This is why, I think, while not everything will be possible when the eurozone breaks up, nothing will be possible so long as it remains whole.

Click to enlarge.

This post seeks to document, and partly explain, collaboration between the United States of America and Western European states (most being democracies founded under U.S. protection after World War II) in military and political interventions in the Balkans and the Third World.

How to read this chart:

• This chart is necessarily a simplification.
• Bold is reserved for “hot” interventions (direct combat) and/or countries with a loading role.
• “Opposed” denotes mere verbal opposition and/or mostly passive resistance.
• “Insurgents” means a country armed rebels against the Western intervention.
• “International law” is necessarily ambiguous. Operations with a clear U.N. Security Council mandate are green. Those in flagrant violation of the principle of non-aggression in absence of genocide and/or of U.N. resolutions are red (Suez, Israeli occupation/settlement, Kosovo, Iraq, Libya). I leave grey when the intervention can claim legal backing from the local regime (regardless of whether it is a “puppet” regime). I have put in red flagrant subversion of the nakedly neocolonial type (Iran, Congo).
• I leave grey areas where there was no significant role of a given country (eventual corrections are welcome).
• I have omitted a number of interventions which had no “Euro-American” element, notably numerous “end-of-empire” British interventions and most U.S. interventions in Latin America. I include Chile for comparison with Iran and Congo.
• Israel is something of a special case that can only be crudely summarized in this chart. I put U.S. green for its arms and U.N. vetoes, UK in green for U.N. vetoes, the EU in green for extremely friendly trade regime with Israel (half of the country’s trade is with the EU) and participation in numerous EU research, development and other programs.
• Some of these may be subject  to change: e.g. America’s relative passivity on Syria and the relative hawkishness of France and Britain.
• I use “neocolonial” in a basically neutral sense: Reassertion of a European power in its traditional colonial area of domination (legitimate or not).

Observation: The Three Phases of Euro-American Interventionism

We clearly see several different phases and types of intervention. They have different proportions of rational “selfish” self-interest (maintaining control of resources, neocolonialism) and more purely ideological struggle (American anticommunist “crusades”).

The three phases are broadly:

• U.S. support to European neocolonial interventions (1945-60) to maintain their traditional (colonial) domination of a typically resource-rich country (Indochina, Iran, Congo). Americans, more-or-less opportunistically, cite the supposed threat of Communism to forget their Wilsonian principles.
• U.S. ideological “crusades” (1960-1990) in the Third World (Vietnam, Nicaragua, Angola). Europeans typically indifferent or opposed.
• An explosion in post-Cold War Euro-American interventions (1990-20..) in the Balkans and the Middle East. Europeans are no longer indifferent, but actively collaborate. U.N. mandates sometimes used, but international law ignored when necessary. Virtually always under U.S. leadership. Marked “flexibility” in justifying paradigm (Bush’s “New World Order,” Clinton’s “liberal interventionism,” Bush’s “War on Terror,” Obama’s “Long War”…).

Rendered as a table we get:

Incidentally, this history is also why no one, outside the West, takes seriously the Western concepts of “liberal interventionism” and of the supposed moral superiority of Western foreign policy relative to Russia, China or anyone else. They remember how the West toppled Mossadegh, Lumumba and Allende. They know too that Western governments are only too happy to forget “international law” and U.N. resolutions when these don’t suit them – as in Israel, Kosovo, Iraq and Libya.

The Russians and the Chinese (or, for that matter French Gaullists) are “open realists,” that is, they acknowledge the amorality of international affairs. European and American governments, in contrast, are talk like “liberal-moralists” – they preach human rights and international law – but in practice they apply these completely selectively according to whether it suits their interests (e.g.: “hypocrisy”). Following Machiavelli, I personally am a great fan of things being stated simply as they are.

As Anatoly Karlin put it:

@craigjwilly Basically, the Cold War was Tolkien (well not quite, but almost). The “New Cold War” is G.R.R. Martin (everybody is a bastard).

— AK (@AnatolyKarlin) September 30, 2012

The Cold War within Europe lends itself to a Manichaean interpretation (Free Nations vs. Evil Empire), while intervention in the Third World, and the world today in general, has no side with a particularly credible claim to moral superiority. (Indeed, while one could criticize the Communists for creating despotic regimes here and there, they could claim they were fighting against actual White Supremacist regimes in the form of the French and Portuguese colonial empires and Apartheid South Africa. Not exactly cut and dry.)

Interpretation: Why so few U.S.-European differences?

The U.S. and the European states usually tolerate one another’s interventions and often actively collaborate. Outright opposition, and this is always non-violent and typically only verbal, is rare.

The three major cases of U.S.-European disagreement are: U.S. opposition to the Anglo-French-Israeli 1956 invasion of Egypt, French opposition to the Vietnam War, Franco-German opposition to the Iraq War. Europeans and Americans are then sometimes a check on one another’s “imperialism,” but this is rather rare.

Only in the case of American opposition to Suez was the opposition effectual: the Eisenhower administration successfully economically blackmailed the UK and France to withdraw. This unequal relationship – Western Europe is a bigger economic and demographic mass than the U.S., but its power is diluted and diffused by the diversity of its governments – goes a long way to explaining European military and psychological dependence on the U.S.

The response of European nations is necessarily diverse because of the diversity of strategic cultures and the normal “opinion swings” of individual governments. In practice, European states are incapable of generating an independent, common response. European states’ foreign policies can be in a given crisis can be summarized as either supporting (and attempting to influence) U.S. leadership, or opposing it. This is also why, in practice, EU sanctions, practically the only “real” EU common foreign policy area, virtually only affect regimes the United States wants to topple. The U.S. is the only government capable of shepherding the Europeans into adopting a common position.

The diversity of European strategic cultures can be divided according to degree of interventionism and Americanism. The former Axis powers, smaller powers and the EU itself are used to a passive, non-responsible approach to international affairs and following (benevolent) U.S. leadership. The interventionist, still-proud imperial powers and victors of the Second World War take on more proactive roles: asserting an autonomous sphere of power for France and convincingly participating in U.S. interventions for Britain (I mean Britain’s contributions are not, as with virtually all other European countries, basically negligible). Almost all European, both East and West, countries are “Americanist,” with the exception of France and (to a lesser extent) the neutrals.

The diversity of European strategic cultures can be crudely represented:

Though Europeans are too divided to have a cohesive, independent position, their national roles should not be downplayed. The “interventionist” Europeans often push the Americans towards more aggressiveness, as was the case of the UK against Iraq in 1990, of France against Libya and Syria in the 2010s. This autonomous action of the two traditional European imperial powers remains, however, fully within an American-dominated system. They lead, at best, at the margins. European opposition – France and Germany against the Iraq War, Italy, Poland and Germany against the Libya War – tends to be purely verbal and “benevolent.”

The reality of Euro-American collaboration also qualifies claims of transatlantic differences. In truth the Robert Kagan “Europeans are from Venus, Americans are from Mars” school actually is quite accurate: European governments, typically align themselves with the U.S., but they still invest far less in the military, European peoples are far more antiwar than the U.S. or European governments, and European elites themselves are more attached to international law, especially in areas other than war and peace, than the American elite. There is no truth whatsoever, at least on topics of war and peace, of an emerging European “counterweight” to the U.S., as imagined by American EU-philes (Jeremy Rifkin, T.R. Reid) and partisans of an Europe puissance (Guy Verhostadt, Daniel Cohn-Bendit). (The claim of the EU as a counterweight to the U.S. is far more plausible in the “low politics” of market regulation, health, environment, finance, international law and so on.)

The European alliance with the Arab petro-dictatorships: Is an alternative possible?

The necessary, but not sufficient, explanations for this unique Euro-American system of intervention and control of the Balkans and the Middle East are: 1) the creation during the Cold War of the structures of Euro-American military cooperation and of the acquired reflexes of European deference 2) Europe’s massive dependence on Middle Eastern oil.

These are the necessary conditions for the massive explosion in Euro-American wars and interventions. I am not convinced they are sufficient. European and American intervention in the Balkans was a choice. European participation in the War on Terror – and in particular British, Italian, Spanish and Polish participation in the illegal Iraq War – was also a choice.

More rational, in terms of Realpolitik, is the objective alliance between European “liberal democratic” nations and the petro-dictatorships they rely upon for oil. These are the absolute monarchies, often hyper-conservative, of the Gulf: Saudi Arabia, Bahrain, United Arab Emirates and Kuwait.

This alliance perhaps was implicit in Western support for Iraq against the “revolutionary” Iranian regime from 1980 onwards. This support became explicit following Iraq’s invasion and annexation of Kuwait in 1990. The French and British, funded by the Germans, helped Americans evict the Iraqis. Today, we have massive arms sales to these regimes (Germany sales of €1.42 billion in 2012 alone) and a French base in UAE. All this is mainly opportunistic and ad hoc. There is no coherent “European” strategy. In the 1980s, France sold huge amounts of weapons to Libya and Iraq, only to go to war with these countries later.

There is certainly a rationality in absolute European support for the petro-dictatorships their economies depend on for oil. I am not convinced this is ironclad however. Most oil producers aren’t particularly picky about who they sell too (witness Hugo Chávez’s sales to the “satanic” U.S.A.). I am not convinced Europeans are forced to arm the reactionary petro-monarchies to the teeth. There is every possibility that they could partly rely on them, partly on Russia or Iran, or even, in an alternate reality, on Saddam Hussein. The Europeans have made a free choice, perhaps understandable but definitely contestable, to support these regimes above all else. The choice of a pro-petro-monarchy, anti-Russian and anti-Iranian strategy is basically passive, largely due to Europeans’ automatic deference towards U.S. leadership within the Euro-American system.