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There have been awkward revelations about Presidents Kohl, Mitterand and their personal relationship. The implication of these revelations must have a structural affect upon the European enterprise, founded as it is upon personal agendæ and 'visionary' will. That a bureaucracy has founded careers upon its success offers little stability if the fundamental glue is seen to be weak.
The European enterprise lacks a single structural rationale. It has been shaped by the history of the region and by the dynamics (and jealousies) of the Cold War. Three factors underpin much of the generic rhetoric that exists about Europe:
First, European powers began the Twentieth century as the centre of world power and civilisation. The first fifty years saw this torn apart, chiefly as a consequence of the failure of institutions to move from the Nineteenth century. Europe was thereby doomed to fight industrial wars over the issues of C19th society and industry. By the middle of the century, it had discredited is moral credentials and lost its economic and technical dominance. Something Had To Be Done.
What was done was to redress many of the issues of social and political inclusion. This had to be seen against a dual background: the attractions of the Communist pole and the shame generated by atrocity. The Something that was Done was, therefore, Polite. It was inclusive, uncritical and anxious, unassertive and determined to stick to the uncontroversial. This was, no doubt, all to the good, but it was a doctrine and not an organically-generated entity, and thereby lacked the critical checks and balances so central to a dynamic, evolving environment.
The second factor was, naturally, the Cold War. Europe was less of a player than a playing field, to the natural distress of the continental powers. (Britain, of course, sought a distinctive role.) The European Community, born in the struggle to regenerate amidst the rubble, in a time where central direction had become a habit, created to be the civil equivalent of NATO. It was centrist, directive, subject to group-think and subjected to the regime of the Nice and the Good to which we have already referred.
The world had two models in the Sixties: communism and capitalism, with Eurosocialism as a poor relation of both. Each disagreed, but there were no legitimate ground - based on understanding and evidence - to point objectively to which one best delivered what the respective populations chose for themselves.
Many models became at least questionable in the Seventies. The rise of Japan and the relative decline of the Soviet Union, the weakness of Britain and the muddle of middle America under Nixon, Ford, and Carter increased the uncertainty. France, however, followed Germany in its economic resurgence, Italy surpassed itself: events which now appear understandable as a return to long-term economic trend-lines then seemed a demonstration of a distinctive 'European' paradigm, surely capable of generalisation.
If this were to be so, then could not a cultural and economic Triad of equal but different parties offset the communist block: a caring Europe, a competing America, a consensual Japan? The equation was formed that influence equalled scale, that scale equalled cohesion, that European cohesion was to consist of the official continental consensus. Europe, tired of hanging separately, was to hang together.
The implications of this were slow to be felt and even slower to be discussed. If scale is to matter, the entity so concerned has to behave in a cohesive way. It is not enough to have common standards and a customs union: there must be common institutions about every aspect at which the scale is to be asserted. Such institutions did not exist. Instead, a weak bureaucracy was supplemented (and usually entirely outflanked) by traditional bilateral deals amongst traditional leaders. Europe had, as a result, much improved diplomacy - to be applauded - but also acquired a rhetorical superstructure which had little to do with what was actually being done in the engine room.
The third factor was a change in circumstance which regenerated old fears. By the mid-Eighties, the actual attainments of the community consisted of a successful customs union (bought, however, at the cost of free external trade) and a correspondingly unsuccessful system of agricultural support, which spent two thirds of the budget in the seeming aim of destroying the local environment and the prospects for prosperity of peasants everywhere that it dumped its surpluses. There was an experimental system of economic alignment, designed to shift risk from investors to workers. Then - as the US acquired clear global economic dominance and, as the market paradigm swept the industrial world - the Japanese weakened sharply and the Soviets collapsed.
Federal Germany 'got' the former GDR. Contemporary commentators - and, certainly, most Governments including that of the FDR - expected this to be a quick task of digestion. East Germany had been, after all, the powerhouse of the Warsaw Pact. ("What happens when the Russians go home? Average national IQ rises by 20 points.") A Grosdeutschland was about to tuck Poland under one arm and Czechoslovakia under the other, and the resulting 150 million or so would motor off to a golden future. France, having had Germans as uninvited guests three times in the previous two generations, saw this as desperately dangerous. Indeed, the German liberal establishment was unhappy. Conspiring over the heads of their respective electorates, therefore, the then-leaders Kohl and Mitterand set up a dynamic which was neither discussed frankly nor seen as resistible by other nations.
What were the options for the other European partners? Accepting a German superstate, abutting to but not of "Europe"? Not to be borne, or born. A Euro-core, which in practice would mean France and Germany, plus a few small economies? Not something from which to be excluded. This left the option of European integration. Given the intellectual baggage and the assumptions of the time, it seemed the only true option. Thus Maastricht, behind which, we now learn, bilateral deals lurked pas devant les domestiques.
The Euro, the further extensions of Euro-power and the projections for a 'wider, deeper' future sit very uneasily with national distinctions and with the need - the desire - to enlarge, at least, the customs union. National interests must cede much if a genuine pooling of decision-taking is to be made with respect to foreign policy, military power and the like. The Euro was launched with much reference to the Dollar: would it not be absurd for individual federal states to have their own currencies? So if California does not have its domestic Pound, Frank or Mark, then why should Euro-states seek such distinctions?
Exactly the same question, however, can be asked about the other aspects of sovereignty which these states have ceded to the Federal US government. How much is California or Idaho consulted about security policy, foreign affairs or - perhaps more significantly - about a wide range of domestic issues? In answer, they are consulted heavily, if indirectly, by well-established US democratic processes. These, in turn, are captured in structures that have been tested by time and built into the habits of the nation.
One has to ask, however, how Britain or Spain would feel about the swift suppression of their sovereignty to the same level as that which is accepted by their economic peers amongst the US states. More to the point, perhaps, is the absence from the European enterprise of the equivalent of the US decision-taking machinery, both in fact and in the confident esteem of the population. It takes generations (or harsh shocks) to create such confidence.
Punch, c. 1920
If the current Union is founded on mixed metaphors and retrospective motives, it is nonetheless what we have got. We start from here.
The future is innately uncertain, but there are shapes that we can be certain that we see through the murk. The world will be more complex. Established situations will change more quickly than hitherto, not least as existing and prospective barriers to change are eroded. More compartments in society and commerce will feel themselves uniquely expert, will be in consultation with those they consider to be their peers and will feel empowered to take independent action. Where they disapprove, they will assert veto.
Those who adapted to this world will show a number of properties.
The implication is that an adaptive region will see layer upon layer of commercial and institutional order, of cultural exchange and factor supply. These layers will be loosely but systematically coupled together, with the coupling enforced by systems scrutineers, who look for deviation from best practice, missed opportunities and the like. The transparency of this world will be enhanced by the huge importance that intangibles already play in market valuation, and the mechanisms that are evolving to recognise and represent this. Interfaces with complexity (data mining, virtual representations) will let us see the intangible as radio telescopes open up the dynamical, active nature of the heavens a generation ago.
There is a massive task of institutional change that is needed in any state if it is to meet the challenges of the next 30 years. The patterns of representation are often centuries old, and no longer meet the needs of consumerist, complex voters. The machinery of policy formation is set against a cycle time measured in decades, when what is now needed is continual tracking and adjustment. A myriad of expert (and more or less expert, but vociferous) policy and decision nodes have sprung into existence around subsidiary agencies, local government and non-governmental agencies. Managing complexity requires trust, for if we do not trust, then we cannot delegate; and if we do not delegate, then we cannot adopt the flexible, systems-based response that the times increasingly dictate.
Renewal of institutions needs to start, as does any re-engineering process, from an understanding of the deliverable and the processes needed to achieve delivery. The deliverable, increasingly, is itself a process - maintaining defence, competitiveness, social support - rather than an entity: a fleet of frigates, financial support to a specific industry, a welfare cheque. As with health maintenance organisations, the modern structure is tasked to keep matters fit, rather than to deliver specific treatments when they are ill. What should be done in the case of sickness is context dependent and usually handled with one of a number of options. The nature of the actual delivered option will change, continually, as events move on.
What is the role of the European Union in such an environment? What should such an organisation deliver for its citizens, as opposed to the self-esteem of its political elite? There are four principles that seem to have deep resonance with contemporary affairs.
One should unify only that which generates direct benefits by being integrated.
Large things have the virtue of sharing costs. If something can be settled once, then it is foolish to replicate it. The US, for example, have recently harmonised the process of drug approval across their states, cutting costs to 3% of what was true before and roughly halving time to market. Costs can, however, often scale with or faster than size. A unified collection of value added tax across Europe would probably be more costly than doing this at a national level.
Integrated things have fewer frictional barriers and commend themselves to the networked approach that was discussed above. The chief barriers of this sort in the Union are regulatory, and connected with the protection of domestic industries: German coal mining, which costs around twice national average wage per worker to guarantee a job, for example, or the common agricultural policy, which costs the average consumer around 15% of the average wage.
Many latent solutions, embedded in a network of capabilities, afford better adaptability than harmonised (but obsolete, rigid) machinery.
First principle theory suggests that evolution will produce one species for each variable that exists to be exploited in each habitat. In practice, captured in debate as the so-called 'paradox of the plankton', many more species co-exist in a relatively simple habitat, such as the deep ocean. The reason why this is so revolves around the dynamical response of the system as a whole to fluctuations: latent responses live at low levels and then blossom, and in so doing change the system itself. Much the same appears to be true about innovative milieux. Latent solutions and different ways of doing things prove the 'genetic' resource from which response and new solutions emerge. Impoverished or simplified structures are innately less resilient and inventive in their response.
Societies today offer people options where previously they provided blueprints. Those who have to choose their life - and live with the consequence - feel the need for security. Identity is often closely linked to place, and there may be comfort in a two speed world, in which a part of life is lived in the global marketplace, and a part in familiar tranquillity. Social integration may be disadvantageous, and the myriad of compartments that will characterise the societies of the next generation may well relish a strong element of local or ethnic identity.
It is striking that those nations whose populations - as opposed to establishment - has the greatest enthusiasm for the European adventure often express similar interests. Their own nation is subject to erratic political thrusts, for whatever reason. Northern Italian populations see the South as obscurantist, populist, corrupt. The EU is a balancing forces against this. Others - Spain, Portugal, Ireland - have been impressed by inward resource flows, but also see the EU as a modernising, almost subversive element. It allows in the influences which the political establishment has resisted for generations.
The Union is, in fact, retrospective at its heart. This said, there are many who are, evidently, ready to welcome something which is more configured towards the horizon. There may well be a case to 'mine' such positive sources and think what they may mean to the overall enterprise. Might this be the source of a vision for the future? The European enterprise as the means by which to develop out from a prolonged cold war pupation.
Complexity is overcome by insight, which is in turn derived from access to knowledge. More strategic and consultative regulatory and legislative habits would rapidly propagate through the policy community and commerce.
It was possible for Leibnitz to travel from Bavaria to the outskirts of Paris without leaving the forest. Human existence impinged lightly upon the natural world. Policing was ad hoc, armies were raised as needed. The state consumed less than a tenth of GNP.
Today, humans live in an artificial world. It is sustainable only because we manage they system. The state spends about half of all value added. It regulates and oversees at least half of the process of value generation. It had best be making good choices. The entire economic output of the year 1900 is delivering in two working weeks today, and - on trend - in one working week in 2010. Responses cannot be a step function measured in administrations, but a continual process of re-framing and managed enquiry.
The knowledge economy is not a ".com" world. It is concerned to harness knowledge so as to derive excellent options for policy and implementation. It is plural, gradualist, process-based, concerned to engross the many and not to alienate the few. This is as true of commerce as it is of the state. The habits of oversight are greatly stimulated by working with peers or regulators (or the regulated, or competitors) who derive advantage from this approach, or who expect it from contributors who wish to be heard, or who wish to gain advantage. Oversight is universal: once generated, it can be propagated widely, developed and subject to critique.
State apparatus which goes about its business - in spending on welfare or research, in stimulating industrial development, in creating infrastructure - can do this through the traditional methods of political spoils division and pork, or through rational enquiry. The process defines the methods used, and the appropriateness of the investments that are ultimately made. Corruption is bad for many reasons, but not least because it diverse resources from adaptive to weak ends: bridges where no bridge is needed, farm support that does little but spoil the rural environment and distort its economy. Jackal fights over fiscal pork does little better, and neither do the habits of the cold war commend themselves to spending priorities in the new millennium. The engines of enquiry need to be finer, broader, more adaptive; and so the habits of adaptability and lightness of touch will spread through the union's commerce.
One force that would make undoubted impact would be the following. Subsidiary agencies should be responsible for strategic reports to their parent, and these commentaries should:
The fact of (1) would generate enthusiasm for (2). Institutions and their clients would be locked in a knowledge based system of enquiry. Appropriate and dynamically-shifting solutions would then be locked into a framework of representation and legitimacy.
Response teams may allow action where it is impossible to get all-state commitment. Permission to act, and consequent swift action, comes from intellectual preparedness. States should network around contingencies and experiments.
States will not cede unilateral power unless they gain equivalent or greater advantage. Where like is in alliance with something other than its peers, the asymmetry of advantage is such that no action is likely. Germany will not let the likes of Hungary command its resources. Where unlike cultures seek generic ends, the mismatch that ends many commercial joint ventures may well defeat good intentions. Fine nations though they are, the Italian and British approaches are doomed to differ on most issues of implementation.
We have discussed the advantages of pluralism. National goals and capabilities are plural. Making use of these depends on insight, both on the issues and upon mutual goals and capabilities. Ways of talking about issues - and apparent priorities - may well conceal deep accord, or at least tacit concord. All of this requires considerable analysis, familiarity and working over of medium term contingencies. There is much less of this than done than might be expected, not least due to the pressure to enact (or blunt) pointillist legislation.
The EU states try to do too much, and talk too little about what could need to be done. There seem to be limited frameworks within which this could be undertaken, and it may be that Europe is being let down by its think tanks. It would be worth financing a network for this purpose; but even better to slow down and think.
These four principles would, together, inform a quite distinct European Union. It would be wider, sometimes, and deeper, at times; and would know why it was either of these things, and would be clear as to the costs and benefits to each member of so doing. There would be less anxiety about the discussion of strategy, for their would be something defensible at the heart of the enterprise that was not backward-looking.
War was once fought to capture primary production, and on occasions to exert a pressure upon a leader to do what the wager of it wanted. Ultima ratio regum. None of this is meaningful amongst the current partners: one cannot capture the sources of the knowledge economy, and war is so catastrophic to complex economies as to confer no advantage. There is a symmetry of deterrence.
The greatest threat to the European Union is that is will become over-complex and overly-embedded in yesterday's issues, constrained by demographic change and bypassed by technological change and the networked infrastructure of the rest of the world. The example of Japan is before us all: once world dominant, now crippled by non-direction and debt, faced with an ageing population for which there is inadequate provision and surrounded by unstable but dynamic economies. All that it has are the minds that it has trained and the habits of organisation that it can deploy. That is no more than all of us have. We had best make good, strategic use of it, drawing on the best that we can find. Japan has not become isolationist: it cannot do so. Europe, by contrast, could do so; and the resulting storm in the Atlantic would benefit none.
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