After the Fall

If the Euro collapses might this open the door to a renewed European politics? This is admittedly an unlikely outcome, but not an impossible one. It was clear from the disquiet at the Lisbon treaty that the dominant strategy for European integration does not enjoy popular support and, if anything, was giving credence to nationalists who argued that democratic safeguards were only secure within nations states. The obvious flaw in their argument is that European nations have had their room for international manoeuvre widened by the union, but there is no denying the democratic deficit. Their solution, dilution of the union, would only make the national communities more vulnerable to forces outside their control. So it would seem we are doubly doomed. European citizenship and the European public sphere have not emerged to manage the relationship between the integrated market and the institutions of the union, but the historic nation states are unable to master a globalized world. The people of Ireland already suspected that some kind of instrumental rationality drove the institutions of the union and in the last fortnight they have experienced it.

If the solution to the problems of European citizenship is not the nation, or any kind of pseudo-nationalist pan-European identity, the only move left is internationalist and cosmopolitan. However the US is suffering the a crisis of confidence in universalist politics. Is there some creative politics where a rational international order gets hammered out in a relationship between the Europeans and the Chinese. Do I need to become a lefty pacificist?

Atlantis in the Atlantic?

Just when will the default happen? Ireland is in the maw of bond markets right now, but Ireland only illustrates the extent to which all the polities that are not Germany have been socially and politically immobilised by the debt crisis. The bank guarantee offered by the Irish state made have made perfect sense as a means of averting panic, but there is no political point to in fact following through on the guarantee. Given the extent to which the guaranteed debt was extended by UK banks the real damage would be felt by sterling, not the euro. The time for high politics of the most devious and clinical variety has come, as has the time of popular mobilisation. Machiavelli would have understood.

Tough Questions

Great Speech by Obama tonight explaining his thoughts on national security. Guantanamo is where the rubber hits the road for the democratic Atlantic left though. The long-term goal is to avert the development of empire, and empire is not some straw man as any reading of Cheney's speeches reveals. The reality is that the US is the necessary nation and some key decisions about the international order come down to the US. Appealing to international institutions or international law as the legitimate context for resolving prisoner problems in the war with Al-Quaida is just irresponsible. That conflict defines international society but is also a legitimate US interest. So it is hard to see that Obama had any other option but to appeal to the principles of the founding documents and the operation of the US legal system as a guide to sorting out the "mess"he inherited. The long-term problem is that he made no space at all for any kind of internationalism, so if there is another successful attack we may end up going around the same cycle. As I've said before though, if we want an internationalist as US President we need to give him a win. Al-Quaida in Mountjoy?

How quickly it begins

One of the things I try to get students to understand is that change happens quickly and this morning illustrates that beautifully. A relatively minor, though systematic, scandal over MPS expenses has unleashed calls for wholesale reform of the UK political system. Just what that might entail is not clear. The Mail was calling on the Queen to fire the Speaker of the Commons late last week, revealing a breathtaking ignorance of English constitutional history (the last king who tried to do that ended up executed in front of Whitehall).  The Guardian, predictably, has other ideas on reform, too many and mostly contradictory, but it is astonishing to see calls for democratisation of the political system supported by the, accurate, argument that the UK needs to reorganise around a doctrine of popular sovereignty rather than parliamentary sovereignty. Last February that was too strong for the group at The Convention on Modern Liberty who were a self-selecting group of constitutional reformers. Today that is presented as common sense in the national newspaper most associated with the New Labour project (and is there anything as dead as that?).

A huge problem is that the US constitution has become the point of reference for calls for reform. That would be a terrible mistake as the last thing that a system with over-concentration of sovereignty needs is an imperial presidency. At least the regalian powers exercised by the Prime Minister operate through cabinet government (weak as that has been in recent years). There is no off the shelf solution and no way to short-circuit the reform process. Sooner or later we are going to have a constitutional convention. Historians of revolutions may suddenly find ourselves  equipped with pertinent skills!

The Rise of A New Nobilty

I rarely find myself in agreement with Martin Wolf, but in his FT column today he examines the long-term effects the bank rescues will have on our political economy. 

http://www.ft.com/cms/s/0/5e7dd89c-3f1c-11de-ae4f-00144feabdc0,dwp_uuid=653c5c4a-0ca3-11de-a555-0000779fd2ac.html?nclick_check=1

The "perverse incentives" that Wolf identifies have become the central issue because it will not take long for them to become normal. The political insurance against failure enjoyed by major financial institutions will turn them into extractors of rent with menaces. Once the market recovers too many individuals will identify their well-being with the benefit of those institutions and the constituency for real reform will be lost. Sadly I think that Wolf's perception that Obama has no stomach for a restructuring of the financial system is probably right. This is the price we pay for a man who was trained in constitutional law rather than institutional economics. The flaw in the thinking of otherwise interesting figures like Unger and Mandel is that they really take for granted that the old problems of scarcity and wealth are largely irrelevant in mature capitalist societies and I think Obama has acquired this position. He attention is given tot he failures of social democracy and the conservative liberalism that succeeded it as the dominant ideology of the American centre left. His project of democratisation does address those problems, but even those projects will fall apart if the power, interests and ideas of th new capitalist class are simply folded into the polity he is trying to build.

A European Foreign Policy

A fairly flat but still useful piece by Timothy Garton Ash in the Guardian this morning. International society is one of the most important pressures driving serious consideration of the European Union. There are two problems with the way Garton Ash thinks about the process, which I suspect is fairly shared among lots of policy thinkers. We have to take seriously the fact that international society isn't going to wait for the European Union to get its institutional act together forever. Sooner or later some kind of international crisis will impose itself and however and whoever responds on the European level will do more to shape Europe's international dimension than any amount of chat. This was already fluffed once when former Yugoslavia went to pieces, and while it is tempting to berate the Germans for having started the avalanche, they at least had a policy when everyone else had a set of pious aspirations. The problem is not to build the architecture, the problem is to decide what is the issue that is relevant to Europe, rather than its constituent states, and then allow the propaganda of the deed to do its work. Sarkozy may be incredibly irritating, but he seems to have understood the priority of activity in politics.

The other problem is a lazy use of the US as the analogue for a federal republic. The US constitution is unexportable and the institution of the Presidency recognised as the greatest gift to demagogues. The institution barely works in the US which has a rich and mature democratic culture, a president of Europe would be a disaster. So on this I agree with Garton Ash; a strong foreign minister for Europe with a mandate to identify Europe's interests in international life and to hold the feet of the nationals to the fire. A president should be a figurehead though, and leave the rest of us to make a European political sphere one issue at a time.

Unknown unknowns

Kevin O'Rourke has a fascinating paper, picked up by Paul Krugman, matching the declines in asset values, international trade and so on in 1929/30 with those in the past two years. Kevin argues the graphs are nearly identical, and the only difference is the learning from the first time around, which means elites are not making it worse with self-defeating policies. The obvious question then is what new mistake are we making that we can't see because we are fixated on avoiding the Great Depression? The obvious answer is that the fiscal stimulus can have perverse effects by insuring against political risk and by creating the conditions for hyper-inflation. If the movement that designed the architecture which has failed to protect well-being doesn't have to pay a political price for that failure then the rest of us may be paying a huge price in public irrationality for a long time. Wanting to make the bankers suffer isn't populism, it is a realistic assessment that an immovable elite, with political protection, a credible claim to be immovable and a set of privileges is a nobility. Someone is going to bear the costs of adjustment and if the power-brokers of the recent past do not, then their positions will become even stronger, their privileges more entrenched and increasingly identified as the public good. This could get a lot worse.