Month: June 2005

The European Union as a Third-Best Solution

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My posts below, as well as Shannon’s have gotten a lot of comments. I had meant to respond today, but I’d rather digest all those thoughtful comments for one more day. I also promised some posts on the Euro, which I also hope to be able to post tomorrow.

For now just this: I see from some of said comments that people have gotten the wrong idea about me. I actually value individual freedom and free markets as much anyone, but unfortunately we are not living in a perfect world where such things can be taken for granted, as some may have noticed. Like it or not, we need some institutions to at least achieve a reasonable (or even an unreasonable) approximation of same.

So, to rank the possible institutional arrangements in order of desirability:

1) In a perfect world, none at all. There didn’t need to be any EU, or WTO for that matter, for countries would have rational policies, without any obstacles to trade. Individuals and businesses would be unhindered in the free and voluntary exchange of goods and services (even so I would frown rather fiercely on the free and voluntary exchange of, say, money and arms between Germany and China; then again, in a perfect world the Chinese would only want to buy our weapons systems because they like their aesthetically pleasing looks, and wasn’t it Roger Bacon who said that this here *is* the best of all possible worlds, so… – but I digress).

2) Given a non-perfect world (leaving Roger Bacon and sales of weapons to China aside and under the table, respectively), where barriers to trade exist, both in the form of tariffs and the bureaucratic intransigence Jim Bennett was hinting at in his comment to Shannon’s post, some kind of institution is necessary to facilitate free trade in Europe. The institution I have in mind would be very different from the EU existing now, though. In this I am following the lead of James A. Buchanan, one of the Chicagoboyz above (he’s the sixth from the left), who received the Nobel Price in economics for his Public Choice theory. Buchanan and Viktor Vanberg, one of my professors at the University of Freiburg im Breisgau, had co-authored a paper (memory fails me as to title and publication date of the paper, but I think it is ‘Rational Choice and Moral Order’ from 1988), in which they laid out their idea for a European Union that would offer the most individual freedom and the best prospect for growth, given the constraints imposed on both by the world we live in.

In the European Union proposed by the two authors, each member nation would set all its policies concerning taxation, regulation etc, etc, independently from all others. The two guiding principles of the Union would be ‘voice’ and ‘exit’. This means that the citizens of each nation would have a say over all of these policies (voice), and that those who didn’t like the policies in the nation they are living in could relocate themselves as well as their possessions to the member state of their choice, without any bureaucratic hindrances, taxation and levies on their property etc, etc (exit). The only purpose of the European Commision would be to make sure that the two principles are observed by the various national governments.

The advantages this arrangement would offer are obvious: It is altogether democratic, while having the policies of the individual member states compete with each other. Nations would be free to put foolish policies into place, but would suffer the consequences immediately by seeing the most wealthy and industrious citizens leave for more accommodating environments. Over time this competition would weed out the most damaging political ideas. We see some of this in the real world, due to globalization, but it is a much slower process that also allows people to ignore problems for a long time, for they can live of the economic substance and wealth of their nation instead of actual income for decades, thus risking slow but inevitable collapse.

Unfortunately this system proposed by Buchanan and Vanberg is all but impossible, for Continental policies are traditionally extremely dirigiste, and our electorates would never tolerate this much freedom anyway. In fact, right now especially German and French voters would like nothing better than to sit on their behinds, live of the wealth created in the past, and to complain about the unfairness of the world all the way down.

This brings us to

3) the European Union that we have have, as the third-best solution I mentioned in the title of this post. For all of its warts, halitosis, running sores and so on and on, it still is the best that we can do right now. Its policies are horribly dirigiste and socialistic, but not nearly as dirigiste and socialistic as the policies the individual members would have if they were free to formulate them in any way they wanted to.

So, free trade among the members of the EU enforced by Brussels and common laws is the best we can hope for right now. Besides, while the various interest groups, trade unions, farmers’ associations and so on are united in their avarice, authoritarian leanings and general pigheadedness, the interests of the national subgroup of each diverge from that of the other subgroups. For the cake they want to carve slices from now is a Pan-European one, and the only way they can increase their own share is to go after that of their counterparts’ in other countries. Thus they keep each other in check, and the whole affair is as entertaining as a cage fight.

And to address this particular concern, too: There also is no danger of a European super-state. The centrifugal forces (so to speak) are too strong for integration beyond a certain point, and the attempt to proceed further anyway would rip the EU apart.

And for completeness sake there is

4) the EU dissolving, and the individual members again free to pursue the protectionist and even more socialist policies described above. The way least favored by myself.

In a nutshell, I’m no fan of the EU in its current form, but it is the least bad solution I can think of, given the current political climate and real-world constraints.

Propaganda of the Day

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“The last time the U.S. withheld funds, it led to a huge debt to the U.N. and inhibited our ability to lead within the institution,” Wirth said. “This is like trying to force a bank to renegotiate your home mortgage by refusing to make your monthly payments.”

Timothy Wirth, president of the United Nations Foundation

Uh… no. Witholding funds to the U.N. is more akin to a casino withholding credit to a gambling junkie who can’t win and can’t stop.

Quote of the Day

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The government structure of the Internet, too, is highly libertarian. Most of the critical work consists of defining standards, and these are hammered out by ad hoc engineering task forces on a “just-in-time” basis. When I first heard Vint Cerf proselytize about the Internet in 1993, what sold me was not the network structure. It was the political structure. I remember thinking to myself, “My goodness, this is how government really ought to work. When a problem comes up, a task force gets together and proposes a solution. When the solution is adopted, the task force dissolves. How refreshing!”

Arnold Kling, “The Collectivist Feeling”.

Quiz question: How does this comment apply to our recent discussions about the EU?

(The Arnold Kling article is exceptionally good, BTW, so be sure to RTWT.)

The other media bias – misinformation and agitation against the European Union by parts of the British press

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Conservative and libertarian Britons are pretty uniformly hostile towards the European Union. While the EU deserves plenty of criticism, our dear British colleagues frequently go over the top, or go after Brussels for abuses of power that actually were perpetrated by the British government.

This obsession with the allegedly diabolical European Union seems mostly due to the almost uniformly hostile coverage of the issue by most of the British press.

The Economist, which opposes the European Constitution (as do I), reports this about said coverage:

That more critical tone [in the press of other European countries – RG], however, will have little in common with the feisty, fantastical coverage of the treaty in the British press.

Of the 30m Britons who read a daily, about a quarter read papers which, though broadly pro-European, print much that criticises the EU. The remaining three-quarters read papers that are unremittingly hostile to France, Germany and “Brussels”. This camp includes broadsheets as well as tabloids: The Times and the Daily Telegraph virtually never print an opinion piece that presents the EU in a favourable light.

A flavour of the Sun’s likely style during the referendum campaign can be gleaned from its already published “Guide to the EU constitution’’: “Our army will have to follow EU orders”; “We will be ordered what to say at the UN: the new EU foreign minister will speak for Britain at the Security Council”; “We will lose control of our borders and have no say in who enters the country.” There is no truth in any of those statements: all armies will remain under national control; the EU foreign minister will not be able to speak for Britain unless every country (including Britain) first signs up to a common policy; and Britain has an opt-out from EU policies on borders.

British journalists get away with such factual inaccuracies because editors and proprietors encourage them, and because they face no sanction. Whatever the rights and wrongs of the constitutional treaty (The Economist has argued that it belongs in the dustbin), no fair-minded person can claim that the British press will cover the referendum in an even-handed way. Eurosceptics can justly argue that in other EU countries the media will lean towards the treaty. But the bias of the continental papers will lack the strident, visceral and mendacious style of the British press.

(Emphasis mine).

This mendacious style applies to all issues concerning the EU. For example, a staple is the ‘flood of rules and regulations’ the EU is allegedly afflicting on the member nations. The British press also likes to single out the most silly examples.

Guess what: All national governments are issuing an astonishing amount of rules and regulations, and if you put a similar spotlight on those you’d get comparable results. The EU also is replacing existing ones in the member states by its own, to facilitate the free flow of goods and services across Europe. This streamlining of the rules and regulations of the 25 members also saves companies and individual citizens from having to navigate an incredible bureaucratic thicket, every time they want to do business across national borders. Yes, the powers of the individual member states is curtailed, but more often than not this is in the interests of the individual citizens of said states.

Like I said above, there is much to criticize in the EU, but an honest critic will at least acknowledge the advantages it brings once in a while.

Miniter on Felt

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Perhaps it’s because I was born after the events, and have some historical distance, but the whole Mark Felt case never meant that much to me. I was far more interested in the consequences it had on journalism, than in the man himself.

Brendan Miniter, assistant editor of OpinionJournal, weighs in with an essay chastising those on the Right who are being as unseemly as those on the Left trying to make Felt’s role into some sort of cause celébre and an object for hero worship.

But if Mr. Felt isn’t personally a hero, his actions look a lot more heroic than the actions of those who’ve had the most biting words for the now 91-year-old man who at the time was the No. 2 official at the FBI. Pat Buchanan, a former speechwriter for Richard Nixon, called Mr. Felt a “snake.” Charles Colson, another Nixon aide, who served seven months in prison for obstruction of justice, said Mr. Felt was “violating his oath to keep this nation’s secrets.” Watergate conspirator turned radio personality G. Gordon Liddy, who also served time, is quoted as saying bluntly that Mr. Felt “violated the ethics of the law enforcement profession.”

These are valid points, though they ring rather hollow coming from the defenders of a corrupt administration, two of whom spent time behind bars for their crimes. And in any case, even if Mr. Felt acted for the wrong reasons, his actions helped pull the nation out of a moral downward spiral.

Brendan even has a good note for Jimmy Carter, whose performance has been rather lackluster. The piece shows an ability to view history’s big picture, and thus is worth your attention.

[Cross-posted at Between Worlds]