political revue


Year XLV, 2003, Number 2, Page 103



After the Second World War and at least up until the Kennedy years, the United States stood as the main inspiration for European unification and one of its staunchest supporters: quite the opposite of the old notion of “divide and rule”. But things have changed. The American government is far more favourable to enlarging the European Union (including Turkey) and Nato (perhaps also including Russia) than to deepening the former and rebalancing the latter. Rather than a politically integrated Europe, America would rather see a group of sovereign states, possibly cooperating with one another but not sharing commitments that could take precedence over those established individually with the United States. For American political circles, Europe is no longer the place where history is written.
The issue of American hegemony over the entire world came to a head first with the collapse of the Soviet Union, and then with the events of September 11. Terms such as “unilateralism” and “the benevolent Empire”, originally used only by a small group of neo-conservatives regarded up till then as brilliant but unrealistic, turned into buzzwords in mainstream American politics.
The prevailing idea is that since there is no way to withdraw from nor adapt to a world regarded as hostile, menacing, or at the very least unpredictable, the best option is to control and dominate it. The unavoidable corollary to this hegemonic theory is that it is necessary to prevent countries of any significance from advancing, as such countries might eventually become competitors and challenge the American order. Paul Wolfowitz, the current Deputy Secretary of Defence, embraced this political line in an official 1992 document entitled Defense Planning Guidance, but then left out all reference to this notion in the final version. However, in 2002, it was once again one of the central themes of the White House’s national security guidelines.
This approach is criticized extensively even within the United States. Except for government circles, there is widespread belief that the “arrogance of force” generates nothing but resentment and anger throughout the world, which sheer frustration will aggravate; moreover, America’s abandonment of the enlightened policy of the post-war years will drive people against liberal democracy, the market economy, and globalization; American imperialism will become its own worst enemy. This belligerent attitude, together with a state of permanent war, will not be without consequences for American society, and its institutions, values and freedoms.
As to the mudslinging match waged against Europe by America’s neoconservatives, the Europeans themselves should be emphasizing that, at the level of public opinion, the vision and values on either side of the Atlantic are more convergent than divergent, that European anti-Americanism is far less virulent that elsewhere in the world, and that Western Europe could be America’s staunchest and most dependable allies, should Washington dust off the equal partnership policy supported by John F. Kennedy in the early 1960s.
What kind of world is the United States trying to create anyway? Are the American people aware that their government has led our planet to a crossroads? Where the choice is between a unilateral hegemony, with America facing emerging threats alone, or a multilateral world system in which the United States surrenders some of its power in exchange for more support, and shoulders its remaining responsibilities in a manner more befitting to its own interests, those of its allies and the world as a whole.
After spending more than twenty years over-optimistically preaching the benefits of globalization, and predicting the triumph of the market economy and democracy, why has the United States now swung over to a pessimistic outlook — and September 11 cannot be the only reason — claiming that the country’s immediate interests take absolute precedence, with defence having a higher priority than the fate of mankind as a whole? The prevailing view of globalization today is one of gloom and doom; it is that of a mortal struggle, touching every continent, between “Good”, represented by the United States, and “Evil”, represented by an entity, undefined and indefinable, whose face changes with the changing circumstances.
Is a world such as this really inevitable? More importantly, is there a force somewhere, even one still in the bud, with the strength to change the course of human fate? What role might the Old Continent play, in finding a way out of this impasse?
The advocates of globalization see frontiers eclipsed by the rise of modern manufacturing systems and the new information and communication technologies. In such a world, inward-looking states lack the wherewithal to support national identity and are condemned to decline amid social discontent. Their role is merely to minimize the social impact of such discontent and ward off the threat of external attacks or civil war. Academics have described this, without a shred of irony, as the theory of the “evaporation of the state”.
Globalization has been defined as the epochal transition from a world dominated by states to a world dominated by markets; it has been seen as a return to the era prior to the first world war, a time when markets were expanding, production was flourishing and bourses were becoming all pervasive. Globalization is based on a handful of basic principles: free trade, the free movement of capital, non-intervention of the state in the economy. The advocates of globalization preach that it is the path towards wellbeing, cooperation between nations and world peace. With the triumph of the laissez faire attitudes of the 19th century, a globalized market will foster the organization of international production and maximize global wealth. The American political and economic system, therefore, is the perfect example, and the United States, the only real super power left, will guide the rest of the world. American leadership and the reformed Bretton Woods system will bring about cooperation between economic powers, and guarantee the functioning of the global economy.
The first objection that can be raised is from the perspective of economic theory. With respect to the initial teachings of Adam Smith, economic studies have explored the notion of the “imperfections of the market”, demonstrating how the postulates of perfect competition and perfect information are seldom proven in the real world. Moreover, already in the 1930s Lionel Robbins explained that every economic activity implies some sort of plan (“the choice is not between a plan or the absence of a plan, but between different types of plans”), that the “invisible hand” is in reality the work of the legislator, and that there is no market without the state. The anarchic egotism of the “animal spirits” cannot determine the common good. Moreover, the American leadership’s sustainability is based on the central theoretical core of international political economics, the “theory of hegemonic stability”.
Charles P. Kindleberger looks toward the Pax Britannica of the 19th century and the Pax Americana of the 20th century to support his argument that the international economy cannot function correctly unless there are common ground rules for all the actors, enforced by a hegemonic power (a “stabilizer”). The role of the stabilizer is to supply the system with certain essential public assets such as: monetary stability, control of the economic cycle, military security, compatibility between the development and the protection of the environment.
Let us now see if there are still sufficient grounds in the 20th century for attributing this role to the United States.
Since the mid-1980s, the United States has been the most indebted country on earth. With the advent of the Reagan Administration, the theory of supply-side economics came to the fore, which was based on reducing the role of the federal government, slashing taxes and social welfare spending, and placing total trust in the market economy. For some five years, simultaneous hikes in defence spending generated a period of remarkable economic growth, which ended with the stock market crash of 1987. All that remains is the legacy of the twin deficits: a ballooning federal budget shortfall and widening trade gap. A situation which has left the American and world economy distorted to this day. During the 1990s rising American productivity levels gave rise to a period of significant economic growth with the stock market skyrocketing to unprecedented levels. In reality, Americans have been living beyond their means for decades. Personal savings rates have hit rock bottom while spending levels have been boosted by foreign borrowings, a buoyant stock market — at least up till 2000 — and, until last year, a strong dollar, which reduced the cost of imports, since the rest of the world has been experiencing a lengthy period of sluggish growth, if not recession (everyone but China, that is).
The tax hikes introduced by the Clinton administration cut the federal deficit and handed over to the Bush administration a budget surplus that has now become a sizable deficit. The forecast for 2003 alone is for a deficit of 304 billion dollars, without counting the amount set aside for the war in Iraq.
At the end of 2002, the net financial debt of the United States towards the rest of the world amounted to approximately 2,200 billion dollars, up 130 per cent over 1998; the trade deficit in 2002 billowed to 435 billion dollars (over 1.2 billion a day, or some 5 per cent of the GDP). The relative decline of the American economy, the fluctuating value of the dollar, the fact that America’s massive foreign debt will have to be narrowed and living standards scaled down, low savings rates, the crisis tearing apart the education and health system, the need to adapt to a rapidly evolving world economy, characterized by strenuous competition, regional accords and the instability of the international financial system: all these factors lead to the conclusion that the economic and financial crisis that the world has known for the last three years is not likely to be cyclic.
Furthermore, the “theory of hegemonic stability” mentioned above is based on the existence of a single “stabilizer”, which means regarding the existence of two monetary poles alongside the dollar (the euro and the yen) as a threat to world stability. Alternatively, there is no way USA could be attributed the role of the stabilizer of the early 21st century. So having ruled out the possibility of a hegemonic leader, it is obvious that none is necessary, and therefore “post-hegemonic cooperation” becomes a distinct possibility (R.O. Keohane), based on international institutions with enough power to regulate the globalization process in the presence of a multipolar international system.
As to the functioning of the global economy over the past several decades, suffice it to mention the criticism levelled by many academics.
Effects on poverty: the flexibility of the labour market has significantly reduced wages and weakened all forms of employment protection. Trade deregulation combined with high interest rates (for those countries obliged to apply the “recipe” of the International Monetary Fund) have destroyed jobs and increased unemployment. Stock market deregulation without effective regulation has caused economic instability and higher interest rates. More privatization without a corresponding increase in competition or at least the close monitoring of monopolies, has led to higher prices for consumers. Budget austerity (higher taxes, lower spending on welfare and education), has increased unemployment and sparked social cohesion. Altogether, these measures have in many countries obliterated the very layer of society that is indispensable for healthy economic growth — the middle class — and contributed to enriching an elite minority.
International Monetary Fund policies: The IMF’s initial mandate was to strengthen world stability and supply or locate financial resources for countries threatened by recession. Though never having officially amended its mandate, the IMF seems now to be at the service of world finance, rather than the world economy. Its intellectually inconsistent and contradictory behaviour makes sense only if one assumes that its mission is to serve the interests of the international financial community.
Consequences of the so-called “Washington consensus” (an agreement dating to the 1980s between the IMF, the World Bank and the American Treasury, on policy towards developing countries): globalization, as it has so far unfolded, has failed to produce the results it promised — results which it can and must deliver. The result of “consensus politics” has all too often been that of benefiting a small minority at the expense of the majority. Commercial interests have prevailed over the environment, human rights, social justice and democracy in the name of a simplistic model of the market economy which should rightly be defined as “market fanatism”.
The IMF’s decision-making procedures: the decisions of the IMF are based on a queer blend of ideology and bad economics, poorly disguising private interests. The Fund applies standard decisions that fail to take into account the real interests of the inhabitants of the countries they are applied to. No feasibility studies are carried out, nor are there debates and in-depth analyses on the effects of other possible solutions. Decisions are taken behind closed doors, and discussion in any form is discouraged. Countries on the receiving end of IMF decisions are prevented from raising objections. Democracy is nowhere to be seen.
From this albeit brief and partial description of our globalized world, there is no doubt at that the main problem lies in the democratic deficit: that is, in the lack of procedures and powers rooted in the democratic method in places and at levels where the main problems of our age could be effectively tackled and solved; while democratically elected legislative bodies, and thus the ability of the people to influence the decisions of the executive, exist only in (some, not all) national states overwhelmed by the scale of today’s many massive problems.
Even in the European Union, which many regard as enjoying a high level of democracy, the Council of Ministers — the Union’s foremost decision making body — features an odd mixture of legislative and executive powers which should have been banned since the French Revolution. The European Parliament, the only democratically elected body, does not represent the legislative, whilst the Commission, which must seek the confidence of Parliament, is not a real government.
No public organization is directly accountable to the citizen — neither the United Nations, nor the International Court of Justice, World Health Organization, International Monetary Fund, World Bank, World Trade Organization, etc. The decision-making rule common to all these institutions is “one state, one vote”, while instead the rule of democracy is “one man, one vote”. Therefore, in a world divided into sovereign states, it is the sovereignty of the state — subject to the rule of force — that prevails over democracy.
We have seen how the United States cannot assume a hegemonic role and protect world order alone. The recent emphasis on military issues is a direct consequence of the relative economic decline of the United States. In any case, the best of all worlds is one not dominated by a single great power, but rather one based on a multilateral system in which great regional areas coexist peacefully. A world where economic and financial globalization is not left to the rule of the most powerful, but regulated by forms of global governance arising from a lengthy and undoubtedly conflict-ridden process, which nevertheless will be all the more effective as regional groupings decide to travel the federal and democratic route.
Let us now go back to the role that Europe might potentially play.
If we believe that the ultimate goal of history is the gradual achievement of peace through the political unification of the human race. If we also believe, with Kant, Hamilton and Albertini, that politics is based on relations of power, and that the logic of power is to preserve and strengthen itself at the expense of others. If we believe that peace and the common good of a plurality of states cannot be attained through international cooperation but only through international democracy, by creating a supranational state: Kant stated that there can be law only where the state exists, while where the state does not exist, the rule of force prevails. If we believe in all of this, then the logical conclusion is that the only way to nurture the seeds of federalism and initiate the process of world unification, is by creating a European federal state, with competences in the areas of economic and monetary policy, internal security, defense and foreign policy. This is also an indispensable stepping stone towards restoring relations of equal partnership with the United States of America, which will also allow American politics to turn its back on the degeneration caused by its current hegemonic leadership.
The significance of founding a federal European state — i.e. the affirmation of law and the democratic method beyond national borders — will be that of sparking the federalist phase of universal history. After the consolidation of the European Federation, federalism will thus be more active than it is today, and federalists will realize that the new state, being the first fundamental step towards the creation of a world Federation, constitutes only a temporary entity which, in time, will be eclipsed by the spread of interdependence.
With the federal European state, the culture of disavowing the political division of mankind will assert itself: for the first time in human history, the conditions will exist to put into practise the right not to kill. The process will go beyond European Federation, and lead eventually to world federation and the emancipation of men and women everywhere.
Besides being a crucial step towards world federation, European federation will represent an example to the rest of the world of successfully overcoming conflict, fostering wellbeing, embracing the democratic model, safeguarding cultural, linguistic and religious minorities, and seeking sustainable development.
It will drive the development of economically disadvantaged nations, even following its dependence on international trade.
Rooted firmly in cultural, linguistic and religious pluralism, it will not allow the myth of the “European nation” to emerge, and its legitimacy will be based exclusively on “constitutional patriotism” (J. Habermas). It will, moreover, ensure more solid foundations for the functioning and action of the UN and all the international public institutions, enhancing and reforming world governance, albeit with the limitations posed by the slow and difficult passage from a unipolar to a multipolar world balance.
Moreover, the federal European state will enshrine a political scenario that will give European citizens the freedom to choose between an economic and social model based on a trimmed down version of the Welfare State and a less interfering role for government (i.e. the essentially Darwinian, British-American model) and a system of social security and mixed economy based on solidarity (the European or Rhineland model).
The failure of European unification would mean a return to anarchy in the “new Middle Ages” with the United States, for a certain period, playing the part of the declining Empire, in a world where mankind has the technological capability of destroying itself.
Corrado Magherini



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