Strangers

Guest Post by The Zman

The purpose of the European project, at least the purpose sold to the public, was to provide long term stability to the continent, particularly economic stability. The lesson of the first fifty years of the 20th century was that nationalist competition among states led to economic instability and war. Therefore, cooperation among the nations of Europe on economic matters, as well as a common defense, would keep the peace and allow all nations to prosper together, as one continent.

Talk to sophisticated Europeans and they will give you some version of how a united Europe has kept the peace. Many will argue that open borders and a single currency have been the solution. The Euro has become a symbol for the end of individual people, replaced by the common people of Europe. One people, one currency. The economic and political arguments for Europe have become a religion of sorts for the sophisticated types. This was obvious in the Brexit vote, with all the shrieking and panic after it.

The trouble is the Euro is proving to be unworkable and possibly a disaster for Europe. Since the end of the Cold War, when the project was supposed to come into its own as the new organizational model for the continent, it has been one crisis after another. The answer each time has been a doubling down on political and bureaucratic unification, which results in a new crisis. Each time they muddle through one problem, the result in a new set of bigger problems to be addressed.

There’s a Holy Roman Empire vibe to Europe these days. At some point, one of these problems is going to prove unsolvable. At that point, the logic of the whole enterprise gets called into question. That was the reason the Germans were hell bent on bringing the Greeks to heel. The sensible solution was to let them leave, but that would have meant the EU was a voluntary association of nations. If the Greeks left then anyone could leave. It turns out that political unity only works when it is compulsory.

That’s what may be tested now that the Italians have voted to reject the structural reforms most thought necessary to avoid a banking crisis in the country. Like the Greeks, the Italian banking system is in shambles, but the bigger issue is their political and legal system. Italian society is not engineered to work in a German economic model. That leaves two possible solutions. One is for the Italians to adopt the German political system or for them to go back to the Italian economic model, that is, leave the EU.

It turns out that Italians like being Italian and will not abandon their culture without a fight. This is a replay of the Greek crisis, except that the Italian economy is twice the size of the Greek economy. There’s also the fact that the Italians are much more of a core European nation, in the broader political and cultural sense. No one in Europe felt bad about stomping on the Greeks. The French and the Spanish will not be enthusiastic about siding with Berlin against Rome in a fight, because what comes next for Rome is next for Madrid and Paris.

Once again, we are seeing what is a core failing of technocracy. Public policy is about trade-offs. In a liberal democracy, the people, through their representatives, wrangle over these trade-offs and arrive at a compromise that satisfies most people well enough to keep the peace. Logic is not what drives these deliberations. Tradition, culture and vested interests play the leading roles. Smart people know how to create a better health system, for example, but getting everyone to go along with it is impossible.

Technocracy has no mechanism for this. It is the sterile decision making of bureaucrats insulated from the consequences of their policy choices. The managerial state has the added defect of bestowing a form of tenure on its members. No matter how much they screw up, they never lose anything but some face. That has even gone by the wayside. Jamie Gorelick is a colossal screw-up, but she keeps getting better gigs after each debacle. Hillary Clinton came close to falling all the way up into the White House.

Inevitably, people begin to look at the managerial class the same way the commoners looked at the aristocracy in 18th century France. The average citizen of a Western country feels as if they are ruled by strangers. The result is the rising tide of populism we are seeing, which is nothing like the top-down variant a century ago. The Italian vote was not about nationalism, It was about rejecting rule by strangers. It is why Trump will be the next president and Britain will leave Europe.  People prefer the familiar to the foreign.