“50 Economics Classics” – part II

I’m impressed with this book  - one of a very useful series by Tom Butler-Bowden which actually invite you in and keep you reading. Suffering as we do these days from a surfeit of choice (what the Germans poetically call “Die Qual der Wahl”), some people will be dismissive of such a “Reader’s Digest” approach. But when time is short and we are deluged with books – this is a quite brilliant idea. Of course we can all quibble with his selection (I passed on the books on investing) - but the book covers a 200 year period and includes figures whose work challenges what I detect in the summaries as an overly pro-market enthusiasm – such as Hirschman, Klein, Marx, Ostrom, Schumacher and Veblen.

I’ve made my own comments in the penultimate column. You can find Part I here

Book/author	date	Comment on selection	Argument offered by Butler-Bowdon
“The Rise and Fall of American Growth” Robert Gordon	2016	Bit too American – the idea of limits to growth has been developed by so many people	The greatest gains in living standards have already been made
“The Use of Knowledge” Hayek	1945	A short essay which gives the basic principles of Hayek’s challenge to the notion of planning	Societies prosper when they allow decentralisation of knowledge
“Exit, Voice and Loyalty” AO Hirschman	1970	A highly original thinker – whose work deserves to be rediscovered	Consumers have many options to get what they want
“The Economy of Cities” Jane Jacobs	1968	Challenged the trend toward scale and emphasised citizen choice	Cities have always been the main drivers of wealth
“The General Theory of Employment” JM Keynes	1936	Still a bible for my generation	Governments must actively manage the economy
“The Shock Doctrine” Naomi Klein	2007		Neoliberal doctrines have been a disaster for many developing countries
“Freakonomics” Steven Levitt	2005	An early book to challenge the religion of economics	Economics is not a moral science – more a study of how incentives work
“The Big Short” Michael Lewis	2010		Modern finance was meant to minimise risk – but has actually increased it
“Bourgeois Equality” Deirdre McCloskey	2016		The world became rich thanks to an idea – entrepreneurship
“An Essay on the Principle of Population” Thomas Malthus	1798	His shadow still looms over us	The world’s finite resources can’t cope with an increasing population
“Principles of Economics” Alfred Marshall	1890	One of the last clearly-written economics books	To understand people, watch their earning. Saving and investing
“Capital” Karl Marx	1867	A work which suffers from 150 years of exegesis	The interests of labour and capital always conflict
“Stabilising an Unstable Economy” Hyman Minsky	1986	A prophet honoured largely after his death	Capitalism is inherently unstable
“Human Action” Ludwig von Mises	1949	Surprised to find him included	Economics has laws which no person, society or government can escape
“Dead Aid”	2010	people like Bauer were much greater critics – but the author is a black woman	Countries grow rich be creating industries not by addiction to aid
“Governing the Commons” Elinor Ostrom	1990	Got the author a deserved Nobel prize	To stay healthy, common resources like air, water and forests need to be managed in novel ways
“Capital in the 21st Century” Thomas Pikety	2014	The book everyone has claimed to read – and noone has!	If inequality widens, there will be social upheaval
“The Great Transformation” Karl Polanyi	1944	An unreadable classic	Markets must serve society, not the other way around
“The Competitive Advantage of Nations” Michael Porter	1990	A very bad idea	Industry clusters and competition make nations rich
“Capitalism – the unknown Ideal” Ayn Rand	1966	I preferred “The Fountainhead”	Capitalism is the most moral form of political economy
“Principles of Political Economy and Taxation” David Ricardo	1817		A free-trading world will see each nation fulfil its potential
“The Globalization Paradox” Dani Rodrik	2011	One of the most original economists	Globalisation, national self-determination and democracy – only 2 are possible
“Economics” Paul Samuelson	1948		The best-performing economies combine classical and Keynesian approaches
“Small is Beautiful” EF Schumacher	1973	A brilliant mind ahead of his time	A new economics is needed which takes more account of people than outputs
“Capitalism, Socialism and Democracy” Joseph Schumpeter	1942	A powerful book which justified the notion of democracy consisting of “the circulation of the elite”	The dynamics of capitalism and its “creative destruction” is superior to other systems
“Micromotives and Macrobehaviour” Thomas Schelling	1978	Schelling was part of the war-games military complex	Individual choices produce “tipping points” – with major effects
“Poverty and Famines” Amartya Sen	1981	An important thinker but not a good writer	People starve not because there isn’t enough food but because economic circumstances change (!!)
“The Ultimate Resource” Julian Simon	1996	Economics at its most arrogant	The world will never run out of resources – because ingenuity not labour, capital or materials
“The Wealth of Nations”  Smith	1776	The moral philosopher whose basic message has been twisted out of recognition	“the wealth of a nation is its people – not its government” (!!)
“The Mystery of Capital” Hernando de Soto	2000	A favourite of right-wingers	Property rights are the basis of prosperity
“The Euro” Joseph Stiglitz	2016	Highly readable	The ideological underpinnings of a failed currency
“Misbehaving – the making of behavioural economics” Richard Taler	2015	The more presentable face of economics	How psychology has transformed economics (??)
“The theory of the leisure class” Thorstein Veblen	1899	Odd to find in the selection	The great goal of capitalist life is not to work
“The Protestant Ethic and the Spirit of Capitalism” Max Weber	1890	Very influential book!	Culture and religion are the overlooked ingredients of economic success.

Democracy as skeleton, flesh AND blood

I have, these past few days, been fixated on the question of the future of education – triggered partly by what is apparently a famous TED video with Sir Ken Robinson about how modern schools tend to kill creativity in children - very impressive performance, with lots of laughs - so sad therefore to hear of his recent death. His books include "Creative Schools – the grassroots revolution that’s transforming our schools" (2015). 

When, however, I translate these thoughts into words, I discover that I’m writing about democracy which, of course, we know is in trouble – the masses, somehow, have broken loose and are no longer accepting what their masters are telling them. This, of course, has been a perennial fear of the elites – it has happened before and, in that sense, might have been anticipated.

But the elites are not as clever as before… so let me give them some simple advice – based on a simple adage - ”If you treat the general public as idiots, they will behave as idiots”. You have, for the past few decades, made the following assumptions about your fellows –

- They need to be worked hard - but bread and circuses will keep them happy

- Told what to do and measured by how well they do it

- Given a choice at elections only of those who represent an ever-circulating elite

- you no longer even bother going through the motions of serving up promises and manifesto programmes

- the public is so stupid and so easily distracted that they will believe any of your lies

- you can do whatever you want, safe in the knowledge that you have a servile media which knows that its basic business is to keep the public entertained

I spent more than 20 years of my life helping the establishment of new democratic systems in ex-communist countries and tried to convey a sense of what that involved in a definition which perhaps reflects the thinking of the period...... 

“The Government system in a democracy is made up of several structures or systems each of which has a distinctive role. It is this sharing of responsibilities – in a context of free and open dialogue – which ideally gives democratic systems their strength – particularly in

-   Producing and testing ideas

-   Checking the abuses of power

-   Ensuring public acceptance (legitimacy) of the political system – and the decisions which come from it”.

We used to call such a system “pluralist” – with reference to its multiple sources of power and legitimacy - but, these days, it seems that the public have become impatient with talk and favour instead action. demagogues and strongmen. This is a fundamental perversion of the spirit of democracy….and the focus in the final part of my (admittedly dated) definition on institutions is meaningless without ideas and discussion…. 

The key institutions for a democratic system are -

·       A political executive - whose members are elected and whose role is to set the policy agenda- that is develop a strategy (and make available the laws and resources) to deal with those issues which it feels need to be addressed.

·       A freely elected legislative Assembly – whose role is to ensure (i) that the merits of new legislation and policies of the political Executive are critically and openly assessed; (ii) that the performance of government and civil servants is held to account; and (iii) that, by the way these roles are performed, the public develop confidence in the workings of the political system.

·       An independent Judiciary – which ensures that the rule of Law prevails, that is to say that no-one is able to feel above the law.

·       A free media; where journalists and people can express their opinions freely and without fear.

·       A professional impartial Civil Service – whose members have been appointed and promoted by virtue of their technical ability to ensure (i) that the political Executive receives the most competent policy advice; (ii) that the decisions of the executive (approved as necessary by Parliament) are effectively implemented; and that (iii) public services are well-managed

·       The major institutions of Government - Ministries, Regional structures and various types of Agencies - should be structured, staffed and managed in a purposeful manner

·       An independent system of local self-government – whose leaders are accountable through direct elections to the local population The staff may or may not have the status of civil servants.

·       An active civil society – with a rich structure of voluntary associations – able to establish and operate without restriction. Politicians can ignore the general public for some time but, only for so long! The vitality of civil society – and of the media – creates (and withdraws) the legitimacy of political systems.

·       An independent university system – which encourages tolerance and diversity

But such bodies are merely the skeleton of democracy – conversation and discussion is its lifeblood and is built on civility and respect

Take the fundamental issue of education about which the public has become increasingly vexed as international league tables have demonstrated national weaknesses in systems which are now seen as crucial for a country’s economic success…..To whom do we – and should we - turn for advice on such things?

- Politicians – who have the authority to make changes?

- Teachers – who have the responsibility for managing the system of schooling?

- Experts – who study the workings of the system?

- Parents – who have variable degrees of responsibility, activity and expectation?

- Pupils – who have their own expectations and attitudes?

When we ask such a question, the variability of the answers is quite amazing. Each country tends to have its own pattern – with the Finnish system regularly quoted as the most successful but outlier country in which highly-trained professionals are trusted to get on with the business. Most people would probably still respond to the question with a reference to the need for collaboration - few would trust the politicians. 

And yet that is precisely the situation in which most countries have landed!

Many of my generation are still marked by the critique of schools conducted from the 1960s by the likes of Paul Goodman, Ivan Illich, Paulo Freire, RF McKenzie and even Neil Postman. In that sense Ken Robinson is part of an honourable 50 year tradition which includes psychologist Howard Gardner of Multiple Intelligences fame. And it is to this strain of thinking I would like to devote a future post.  

50 Economics Classics

Although one of my favourite genres is intellectual history, books about the history of economic ideas or of political philosophy tend to be somewhat boring – it’s as if the requirement to be comprehensive robs the author of his/her passion. I’m thinking, for example, of Roger Backhouse’s  Penguin “History of Economics” (2002) 

But – as I noted a year or so ago – the last decade has seen significant improvements 

The academic community has always taken a dim view of popularisation – the eminent economist JK Galbraith who wrote “The Affluent Society” in 1958 suffered very much from academic jealousy as did the historian AJP Taylor in the same period – so it is great that some writers and journalists have turned increasingly to the world of science and ideas.

Grand Pursuit; the story of economic genius (2011) is a good example.  Written by Sylvia Nasar, a Professor of journalism (who also produced “A Beautiful Mind” about game theorist John Nash), it attracted a rather sniffy review from one of the doyens of Economics - Robert Solow..  

Not, however, that I want to discourage academics from writing well and for the general public! I was delighted to discover recently a “popular” book by academic philosopher James Miller Examined Lives – from Socrates to Nietzsche with a nice interview here. Alan Ryan is another academic who writes well although his On Politics is just a bit too voluminous a history of political thought for me. These extensive notes give a useful sense of what would be in store for any brave reader

And a foray into my favourite Bucharest (remaindered English) bookshop duly unearthed “50 Economics Classics – your shortcut to the most important ideas about capitalism, finance and the global economy” by Tom Butler-Bowden (2017) - one of a series I had never heard of but which promises to top the amended list of my next “Most Accessible Reads on Economics”.

His approach is to select and summarise (in a few pages) 50 books whose focus span the key issues tackled by economics - over a 200-year period. Included are both old and new “classics” – Pikety and Graeber as well as Marx and Hayek.

Most such books go for the chronological approach – with the result that readers tend to flick the opening pages and pick up interest only toward the book’s middle. Perhaps it’s the influence of post-modernism, but it’s pure genius that this author goes instead for what might be called the “fatalistic” approach and selects his books instead alphabetically    

As a result, for example, Milton Friedmann rubs shoulders with JK Galbraith; Naomi Klein with Keynes; Adam Smith with Hernando de Soto etc

And, naturally, there are as many historians and journalists in the list as pure economists…..he even lists for each entry the books with which it can be compared…..

I’ve developed one of my famous tables as a tribute – with my final column amending in some cases what some might fault as a generous attitude to the market…

I’ll start with the first dozen…… 

Book/Author	Year	Issue	Argument
“Lords of Finance” L Ahamed	2009	The gold standard and the 1920s	Fixed ideas in economics can have disastrous results
“The microtheory of innovation” WJBaumol	2010	Entrepreneurship	We neglect those to take risks at our peril
“Human Capital” Garry Becker	1964	Unfortunately the book spawned the dreadful notion of human resources	The most important investment we make is in ourselves
The Second Machine Age	2014	Probably the most famous of the techno-optimist books about IT	“Techno revolutions have to allow for the advance of everyone”
“23 things they don’t tell you about capitalism” Ha-Joon Chang	2011	An early mass book questioning economic orthodoxy	Many nations advanced by breaking the rules of orthodox economics
“The Firm, the market and the Law” Ronald Coase	1988	One of the most famous articles in the history of the subject	Why firms exist – the role of transaction costs
“GDP; a brief but affectionate history” Diane Coyle	2014	This index of economic success (like economics) rests on some very questionable assumptions	How we measure inputs and outputs has significant effects on people and nations
“Innovation and Entrepreneurship” Peter Drucker	1985	It’s as important as the traditional factors of land, labour and capital
“The Ascent of Money” Niall Ferguson	2008	A british historian who likes to provoke and scandalize – but writes well	Finance has been the crucial ladder in the making of the modern world
“Capitalism and Freedom” Milton Friedman	1962	Funded by “The Reader’s Digest” and dodgy billionaires to pull the wool over our eyes	A hymn to the free market
“The Great Crash” JK Galbraith	1955	One of the classic analyses of the Great Depression	It’s apparently government’s job to stop speculative frenzies
“Progress and Poverty” Henry George	1879	His ideas still live	When land – rather than people and production – is taxed, prosperity increases

Snippets

1. Romanian efficiency and European obfuscation and exploitation

I this week completed the (Pfeizer) vaccination process (in the city of Ploiesti) with Romania being credited with having vaccinated about 12% of its population – putting its performance very much in the main body of European countries.

And I have to say I was pretty impressed with the efficiency of the organization I saw in the school gymnasium – with help for those filling out the forms quickly on hand. 

As indeed I had been earlier when I had started the process of getting the new Certificate of Residence I require as a citizen of a country which is no longer a member of the EU. A Brexit help-desk has been set up in the Ministry of the Interior which deals with such things – and their response to my question about required health insurance was immediate, helpful and correct.

And the two visits I had to make to the Tax and Public Health authorities to acquire the necessary paperwork took only a couple of hours…

Even Romanians despair of their country – but my experience suggests that all is not lost! 

Ask me, however, about the paperwork I get from my (Austrian) bank; (Italian) electrical or (French) water companies – and that is a very different matter. I simply can’t understand the complicated information they send me…. The bottom line, however, is that they all charge too much….

 2. One Party Government

This May will see the Scottish Nationalist Government celebrate its 10^th year of overall control of the system of devolved government in my country (having initially operated as a minority government from 2007). Here’s a very useful – if dated - French take on the situation which doesn’t quite catch the recent sense that – despite the much-praised leadership of Nicola Sturgeon during the pandemic – the government had been somewhat inert in fields such as education. 

 One criticism which has been raised in recent years about the apparently social-democratic Scottish Nationalist Party (SNP) is of its tight discipline – any challenge to its authority is quickly dealt with. In a small country. This can and does profoundly affect reputations and careers.

The UK Civil Servant is a very useful and thoroughly independent website - so this critical assessment is all the more significant – 

The SNP came to power in Scotland having had no previous experience of government and with few core policies other than Scottish Independence. It had a charismatic and controversial leader in Alex Salmond but wasn’t supported by any heavyweight think tanks, nor by experienced Special Advisers. The new government accordingly leant heavily upon Scottish Government civil servants. The latter work within the rules and customs of the wider UK Civil Service, and in particular are supposed to avoid any sign of political allegiance. 

In practice, partly as a result of ministerial pressure, and partly because it was the only way to ensure smooth and effective administration, senior officials became close to SNP ministers and were more obviously supportive of SNP policies than their London colleagues (or the Public Administration Select Committee) thought wise. More recently, Scottish Permanent Secretary Leslie Evans has of course been accused of lack of impartiality in the handling of the investigation into Alex Salmond.

 The parallels with the Boris Johnson government in Westminster are all too clear. The Johnson Cabinet is weak and inexperienced, having been chosen exclusively from the ranks of Brexiteers. It has a charismatic but controversial leader and no obvious core policies other than to get Brexit done. Its promise to “fix the crisis in social care once and for all – with a clear plan we have prepared” was a lie. It didn’t have any idea how it intended to take advantage of post-Brexit freedoms, nor did it have an “oven-ready Brexit deal”.

Its closest supporters may not be drawn from post-UKIP ‘fruitcakes’ but they are certainly not drawn from mainstream industrialists, scientists and economists – or even heavyweight think tanks. Its most prominent Special Advisers, in the form of Dominic Cummings and his close colleagues, clearly had no clue how to get things done in government.

 But weakness has to be concealed under shows of apparent strength – with bullying and cronyism as a result. Lord Acton put it most succinctly – “All power corrupts – and absolute power absolutely…”

And it all culminated in recent weeks with committee scrutiny of the two leading figures in the Nationalist drama (Salmond and Sturgeon) - reduced in recent years to squabbling figures as Salmond has faced, and successfully fought off, accusations of sexual harassment – and then brought forward his own counter-accusations against the Scottish government and party figures of wrongful behaviour. The Scottish public may have had rich spectacles as a result – but it has hardly been an edifying or useful experience – as this rather gossipy LRB article makes clear - 

The committee appointed by the Scottish Parliament to inquire into the Scottish government’s mishandling of its investigation into the first two allegations against Salmond (both made by civil servants) has been sitting regularly since August 2020.

It rapidly descended into a partisan free-for-all, with opposition members less interested in the HR error which led the investigation to be ruled unlawful (after a judicial review brought by Salmond) than in trying to find the killer question that would somehow lead to Sturgeon’s resignation. They took evidence in the morning and took to social media in the afternoon. 

No one has come out of it well: not the committee members, or the obfuscating civil servants, or Salmond, who refused to apologise for his ‘inappropriate’ behaviour, or Sturgeon who, though full of regret, could not shed light on all her government’s mistakes………. 

The SNP’s problems are not all linked to the Salmond allegations. After nearly fourteen years in power, the party is exhausted. But, with or without Sturgeon at the helm, there is no effective opposition (the Tories’ Scottish leader isn’t even in the Scottish Parliament, and Scottish Labour’s leader, Anas Sarwar, its sixth in the last decade, has only just been elected). The polls were predicting that on 6 May the SNP would regain the majority it won in 2011 (despite a PR system that was supposed to prevent absolute majorities) and lost in 2016, but now a hung parliament is being forecast (and a drop to 49 per cent support for independence). I find it hard to imagine that the spirit of 2014 will ever be rekindled.

3. The new-style Clown politician

Beppe Grillo has a lot to answer for….Since his arrival in Italian politics more than a decade ago,  comedians have become serious political figures – although it was, arguably, Ronald Reagan who made politics a world of “make-believe”. It’s therefore entirely appropriate that it’s a dramatist who brings us this one of the best analyses of Boris Johnson 

Observe classic Johnson closely as he arrives at an event. See how his entire being and bearing is bent towards satire, subversion, mockery. The hair is his clown’s disguise. Just as the makeup and the red nose bestow upon the circus clown a form of anonymity and thus freedom to overturn conventions, so Johnson’s candy-floss mop announces his licence.

His clothes are often baggy – ill-fitting; a reminder of the clothes of the clown. He walks towards us quizzically, as if to mock the affected “power walking” of other leaders. 

Absurdity seems to be wrestling with solemnity in every expression and limb. Notice how he sometimes feigns to lose his way as if to suggest the ridiculousness of the event, the ridiculousness of his presence there, the ridiculousness of any human being going in any direction at all.

His weight, meanwhile, invites us to consider that the trouble with the world (if only we’d admit it) is that it’s really all about appetite and greed. (His convoluted affairs and uncountable children whisper the same about sex.) Before he says a word, he has transmitted his core message – that the human conventions of styling hair, fitting clothes and curbing desires are all … ludicrous. And we are encouraged – laughingly – to agree. And, of course, we do. 

Because, in a sense, they are ludicrous. He goes further, though – pushing the clown’s confetti-stuffed envelope: isn’t pretending you don’t want to eat great trolleys of cake and squire an endless carousel of medieval barmaids … dishonest? Oh, come on, it’s so tiresome trying to be slim, groomed or monogamous – when what you really want is more cake and more sex. Right? I know it. You know it. We all know it. Why lie? Forget the subject under discussion – Europe, social care, Ireland – am I not telling it like it is, deep down?

Am I not the most honest politician you’ve ever come across? Herein the clown’s perverse appeal to reason. 

Perry Anderson on the European Edifice

I’m delighted that someone (on Open Democracy) has seen fit to try to summarise Perry Anderson’s two important – but typically over-loqacious – LRB articles about the institutions of the European Union

Perry Anderson’s essay ‘Ever Closer Union?’ explores the significance of the different institutions within the European Union. Their common principle, he finds, is that they minimise democracy, with the leaders of the most powerful states directing the affairs of the union from within an impregnable fortress of rules.

Anderson starts with the European Court of Justice, established in 1952 as part of the European Coal and Steel Community, which evolved into the European Economic Community and eventually the EU - noting that the first president of the court was an Italian fascist, the first German judge a “devoted” Nazi, one of the first advocate-generals another German who was heavily involved in running occupied France during the war, and the other advocate-general a Vichy functionary, “in charge of co-ordinating the first wave of persecution of French Jews”.

Not all appointments to the court were fascists, but they “were nearly all political” – few had any legal qualifications.

The second set of appointments continued this pattern: a politician from Germany’s centre-Right Christian Democratic Union, the son of a leading Dutch politician, the brother of the Italian finance minister (and a former aide to the fascist minister of justice), a one-time Nazi, now Social Democrat, from Germany, an Italian who had helped administer occupied Rhodes in the war, a French appointee who had served the military governor of Algeria and a leading light of the French MRP, another Christian-Democrat party (who at least had a law qualification and had served as a minister of justice).

This latter, Robert Lecourt, “was an ardent federalist” who had been a member of the Action Committee for a United States of Europe, founded in 1955 by the influential European unionist Jean Monnet. It was Lecourt who “wrote [a] historic verdict overturning a national law” in a landmark case that a small Dutch company brought against the Dutch government.

The next year, Lecourt issued the judgment in another landmark case, brought by two Italian lawyers against their own government. With these two rulings, “the cornerstone of European justice was laid”.

After Lecourt became president of the court in 1967, he was joined as a judge by Pierre Pescatore, brother-in-law of the Luxembourg prime minister, who was “a more outspoken and prolific champion of federalism even than Lecourt”, with “one bold judgment after another sealing the court’s authority over successive aspects of the life of the Community”.

In Pescatore’s view, it was the spirit of the Treaty of Rome – the 1957 treaty that established the European Economic Community – rather than “a merely literal reading”, which must prevail. The court’s initiatives were “celebrated by [Dutch writer Luuk] van Middelaar as the coup that essentially founded today’s Union”.

Scholars such as Germany’s Dieter Grimm challenge Pescatore: those who drafted the treaties creating the European Coal and Steel Community and the European Economic Community, he argues, would have regarded the court’s key decisions as “revolutionary because the principles they announced were not agreed in the treaties... and almost certainly would not have been agreed on had the issues been raised”.

 

The British author Thomas Horsley also doubts the legitimacy of the court’s power-grabbing work: the Treaty of Rome granted the Court of Justice judicial oversight only “with respect to acts of the Union institutions”, not those of member states. The contrary decisions cannot be claimed to represent the spirit of the treaty when its text clearly states the opposite, says Horsley: the court “is irrefutably subject to compliance with EU treaties”.

 

All-powerful, incomprehensible

In any normal democracy, says Anderson, a court’s decisions are “subject to alteration or abrogation by elected legislatures. Those of the [Court of Justice of the European Union] are not. They are irreversible.” It would require a new treaty, signed by every member state, to overturn an Court of Justice decision – a wholly improbable scenario. Meanwhile, every decision has constitutional force, such that it must be reflected in each successive EU treaty, whose consequently extreme length renders them, in effect, “enormous cryptograms beyond the patience or grasp of any democratic public”. As the court’s current president said in 1990:

 

“There is simply no nucleus of sovereignty that the member states can invoke, as such, against the Community.”

 

But what of Germany’s ‘basic law’ (Grundgesetz), supposedly immutable, as administered by the German constitutional court in Karlsruhe? The judges there have declared that it cannot be overridden by the Court of Justice of the European Union, but in considering five challenges over the years have always avoided any actual confrontation.

Horsley criticises the European Court of Justice not just for its lack of democratic legitimacy but for its weakness in technical expertise, not least because a court of general jurisdiction is so wide in its scope that ‘expertise’ has little bearing.

Grimm makes a broader criticism: in issuing “prohibitions of discrimination against foreign companies” with such “missionary zeal”, “almost any national regulation could be understood as a market access obstacle”.

 

2. The European Commission

In his essay, Anderson turns then to the European Commission, the ‘government’ of the European Union, which comprises one politician from each member state, supported by tens of thousands of civil servants. He starts with its first president:

 

“Between 1958 and 1964, [Walter] Hallstein presided over a Commission that was a dynamo of energy in finding ways and means to circumvent the Treaty of Rome in the higher interests of European unity.”

 

The commission and its key directorates – for competition and legal services – were responsible for 80% of the cases brought before the Court of Justice, so building “an ever more extensive edifice of European law trumping the rights of national legislatures”: what Hallstein described in 1964 as “the beginnings of a real and full ‘political union’”.

It would be another 20 years before an equally activist president took office: Jacques Delors, “a far more charismatic and commanding figure than Hallstein”. He oversaw the introduction of the Single European Act and the drive towards a single currency, embodied in the Maastricht Treaty.

He also pursued a “solidarity” agenda, seeing redistribution as part of cross-regional social justice. However, the scale of the cohesion funds he secured was, Anderson thinks, “little more than the alms of an instrumental charity”.

 

Structurally, the enlargement of the European Union has allocated a commission post to each of the 27 remaining states, such that a majority, even if representing less than 13% of the EU’s population, could in theory outvote the commissioners from the six largest states, representing 70% of that population. But, says Anderson: “Decisions are always taken by ‘consensus’ – that is, behind a façade of unanimity, under impulsion or veto of the six major states.”

Commissioners are appointed for five-year terms and supported by 33,000 permanent bureaucrats, who preside over the union’s accumulated set of rules, the acquis communitaire, which has grown from some 2,800 pages at the time the UK joined the European Economic Community in 1973 to a mammoth 90,000 pages capturing all the behaviour and norms that a succession of subsequent applicants were required to sign up to before admission.

 

Anderson calls it “the most formidable written monument of bureaucratic expansion in human history”; together with the 34 “procedures” used within the commission, it makes the workings of the union virtually impenetrable for normal citizens – though presumably not for the army of 30,000 registered lobbyists in Brussels, mostly representing corporate interests.

 

The acquis – in its complexity and scope – serves further to consolidate the centrality of the court and the commission at the expense of member states, along with their constitutional courts, their diplomats and their civil servants; and it is in a state of constant expansion.

3. Powerless parliament

As for the European Parliament – originally a mere ‘Assembly’ – the minor accretions of power over the decades have scarcely moved the dial in terms of democratic accountability. The 705 MEPs, supported by a staff of over 7,000, cannot “elect a government, initiate legislation, levy taxes, shape welfare, or determine any foreign policy”. In short, concludes Anderson, “it is a semblance of a parliament, as ordinarily understood, that falls far short of the reality”, within which political differences become “all but completely invisible”.

 

Turnout in European elections has often fallen below the 50% mark; likewise, attendance by the deputies at parliamentary sessions. Most decisions on legislation are reached at ‘trilogue’ meetings between representatives of the commission, the parliament and the Council of Ministers, which comprises ministers from member states’ national governments. Anderson cites Christopher Bickerton’s book ‘European Integration’:

 

“Between 2009 and 2013, 81 percent of proposals [from the commission] were passed at first reading via the trilogue method; only 3 per cent ever reached third reading, which is where texts are debated in plenary sessions of the Parliament.”

 

Anderson sees a wide gap between the parliament and those it ostensibly represents. Eighty per cent of Dutch MEPs supported the draft European Constitutional Treaty, which was rejected by 62% of Dutch voters in 2005. The previous year, only 39% of the Dutch electorate had turned out for the European parliamentary elections; compare that with the 63% who voted against the wishes of their MEPs on the constitutional treaty.

“The Parliament,” Anderson says, “is the least consequential component of the Union” – but at least it supplies a “measure of the legitimation that any self-respecting liberal order requires”.

 

4. The European Central Bank

By contrast, the European Central Bank, created to manage the single currency under the Maastricht Treaty of 1992, is subject to no accountability other than the remote prospect of a new treaty. The Eurozone central banks nominate one member of its governing council each, supplemented by six executives. “Its proceedings,” notes Anderson, “are secret, its decisions are formally unanimous [and] no dissent is ever published.”

Although the economies of the Eurozone countries are very different, this fundamental factor was disregarded in what Anderson sees as a drive by the promoters of the euro “to create a currency which would lock those states that adopted it so close that they would be obliged to follow monetary union with political union”.

 

In practice, that political union proved beyond the reach of the Maastricht negotiations, but its absence has exacerbated the stresses inherent in managing economies of different sizes, different structures and different levels of development.

One way of dealing with these stresses would have been for the bank to issue public debt, but Maastricht forbade that: such was reserved for member states only. When Mario Draghi, the bank’s third president, found a way to evade this in order to deal with a financial crisis within the Eurozone in 2009, his head of research later told the Financial Times that “the whole concept of getting around European rules and doing QE [‘quantitative easing’, or creating money] without calling it QE was extremely clever”.

Draghi’s measures were in apparent contradiction to articles 123 and 125 of the 2007 Treaty of Lisbon and were legally challenged. The European Court of Justice came to the rescue, however, with what Thomas Horsley called “herculean” contortions.

The two essays appeared in the London Review of Books in January and are EACH some 10,000 words long. They may now have some restrictions on their viewing

https://www.lrb.co.uk/the-paper/v43/n01/perry-anderson/ever-closer-union

https://www.lrb.co.uk/the-paper/v43/n02/perry-anderson/the-breakaway