Repair, Reform, or Abolish the European Union?

One of the proposed NCFCA resolutions is about Europe. If chosen students can make the case to parents that travel to Europe for in-person research is key to success. Parents will likely say no, but with determined advocacy they may offer support for future research in Europe. ( American Logos helps train and support debaters for World Schools competitions in Europe.)

The proposed NCFCA resolution: Resolved: The European Union should be substantially reformed or abolished.

One compelling affirmative would be to “abolish” the politics and regulation of the current European Union but keep the European common market, How the EU lost its way: Brussels was never meant to have so much power (Politico.eu, March, 28, 2017) reviews the history of the European common market from the signing of the Treaty of Rome in 1957 to the expansion of federal regulatory powers.

Today, every liberal democracy — from the United States to New Zealand — has cause to celebrate the achievements of the Treaty of Rome. By lowering barriers to trade and encouraging peaceful development, it set the stage for an era of expanding prosperity.

And yet today, two different ideas of Europe have come into conflict. One aligns to the original idea behind the Treaty of Rome. The other deviates from it, and calls for a centralization of power in Brussels.

Similarly the United State federal government, was to be limited by the Constitution to just those powers and policies that could not be managed by the states. Trade and investment policy, for example. Special interests in each U.S. state could be counted on to lobby their legislatures for subsidies and trade restrictions that would benefit local companies from companies in other states. But the commerce clause in the Constitution forbids these trade restrictions.

Similarly, the European common market would reduce trade and investment barriers between E.U. countries. The Politico.eu article continues:

The political reasoning that inspired the treaty was a combination of two principles: sovereignty and subsidiarity. The treaty was signed by countries that only made concessions on their sovereignty when absolutely necessary. These were measured, deliberate and slight additions to national entities, not attempts to delegate competencies to supranational institutions.

With this in mind, the European Common Market was designed not to overreach into nations’ sovereignty. Brussels, the first of what should have been a rotating venue for EC institutions, was conceived as a minimal force for coordination and was never supposed to become the permanent capital of a new, let alone enlarged, European Union.

Regulatory super-states in the U.S. and E.U.
E.U. regulations steadily expanded just as federal regulations in the U.S., and for similar reasons. For more on the U.S. regulatory burden, see Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, (CEI, 2018). A great many E.U. and U.S. regulations are important and well-intended, but also a great many were created by special interests and lobbying efforts to subsidize and protect established companies, associations, and industries from competition.

(George Soros blurb for Legrain’s book doesn’t mean Legrain supports most Soros projects…)

Philippe Legrain, author of European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right (2014) is a valuable source in E.U. problems and reform proposals. See, for example Democracy in Europe: The urgent need for a “European Spring” (Brussels Times, April 4, 2018). The elite insider nature of E.U. institutions has opened the door for nationalist parties across Europe. LeGrain writes:

This lack of openness and transparency in EU institutions is symptomatic of a much bigger and broader problem. The EU is not undemocratic, as some critics claim. But nor is it democratic enough. That urgently needs to change.

We are living in an era of immense political disenchantment. Establishment politicians, political institutions, liberal democracy itself – all are under attack. The political class, technocratic policymakers and the so-called liberal elites are widely seen as incompetent, self-serving, unaccountable and corrupt.

Populist demagogues who claim to speak for “the people” are quick to take advantage and whip up fear and anger. In the Italian elections in March, various populist parties won 54% of the vote, and pluto-populist Silvio Berlusconi’s Forza Italia a further 14%.

So great is the political rage that even long-established countries threaten to split, whether it is Scots seeking independence from London or Catalans from Madrid.

So it isn’t surprising that a relatively recent and fragile international entity like the EU – a largely elite project that feels remote and often incomprehensible to many Europeans, and whose raison d’être is to overcome the xenophobic nationalism that is now resurgent across Europe – is being tested to destruction right now.

Also recommended is Alberto Mingardi of the Bruno Leoni Institute in Italy. Mingardi, in The European Union According to Hayek  (Wall Street Journal, March 23, 2012), draws from F.A. Hayek’s writings in discussing E.U. problems:

Centralized government allocates resources badly—regardless of its intentions. The very nature of centralization makes it impossible to collect and compute all the information that is needed. This is as true for any grand scheme of industrial planning as it is for the government-led welfare systems that characterize Europe’s “social model.” …

The European social model that trade unions and political parties still defend with such passion was ill-conceived from the start. A market system cannot work properly if a society aims to dole out rewards and punishments like a teacher in a classroom. Market institutions are anonymous and blind. Imposing upon them any preordained scheme of merit and reward will just make coordination between individuals—and, thus, wealth creation—more difficult.

See also, from Marginal Revolution University, The Eurozone Crisis, a 1.5 hour free course on European Union issues and economics.

What’s the future of the European Union and the Euro? The Eurozone Crisis is one of the most important issues in the world today. In this free three week mini-course, we cover both the institutions that make up the European Union and the underlying economics that are behind the crisis. We cover what is considered “consensus” knowledge by economists while also adding our own speculations in the mix.