Who will save the eurozone?

Understanding the crisis and why foreign debts matter, with a little help from German philosopher Jürgen Habermas

Topics: Economics, Philosophy, Debt, LA Review of Books, Eurozone,

Who will save the eurozone? (Credit: Flickr Creative Commons)
This article originally appeared on the L.A. Review of Books.

“WHO WILL WILLINGLY DIE for [. . .] the EEC?”

When Benedict Anderson asked this sarcastic question in 1983, referring to the European Economic Community, a now-forgotten ancestor of today’s European Union, he did not have to add that, for better or worse, many people are willing to die for their nation. They’ve proved it, war after war after war. Anderson’s point was that nationalism moves mountains, but its potent we’re-all-in-it-together feeling tends to stop short at the border. The survival of your country may be capable of stirring your gutsiest emotions; the survival of the eurozone almost certainly isn’t. Unless you’re a banker.

Los Angeles Review of Books

 

 

In “The Crisis of the European Union: A Response,” a much-discussed collection of recent essays and interviews, the eminent German philosopher and public intellectual Jürgen Habermas turns Anderson’s argument on its head. In fact, Habermas notes, sacrificing our lives in battle is no longer at the top of most people’s to-do list. And much of the credit for this goes to supra-national entities like the European Union, which have made patriotic bloodshed much more infrequent. Now it’s time to take another step. The spirit of self-sacrifice should be demilitarized. Habermas proposes that it should be extended to fellow humans who do not happen to reside in our countries, and it should be extended from issues of life and death to issues of living standards.

What seems to have provoked Habermas to write this book is the fact that his fellow Germans do not think it’s any of their business if the Greek government, say, can’t pay its debts and the Greek people are being bled dry by an extreme, European-imposed austerity program. Why the indifference? Habermas blames the European Union’s leaders, who adore the euro but have never encouraged a sense of common political community to match the common currency. Long a critic of his own country, the 83-year-old Habermas is quietly furious at the German and French governments for choosing, as he sees it, national self-interest over solidarity with the European Union’s economically weaker nations. They have thereby jeopardized an experiment in cosmopolitan togetherness that is, he reminds us, both bold and noble, and that should be getting better press.



Excited European commentators have compared The Crisis of the European Union to Kant’s incendiary cosmopolitan manifesto of 1795, “Perpetual Peace,” which demanded an end to warfare between nations. Like Kant, Habermas is intrigued by the possibility that if people were to think of themselves less as members, belonging to a nation, and more as free-standing, rights-bearing individuals, they would have more fellow feeling with individuals in other nations. (One section of the book, on the concept of human dignity, makes the case for a sort of human-rights cosmopolitanism.) Like Kant, Habermas has always invited the question of why rights-bearing individuals would give rise to more solidarity with others than the self-owning individuals of free market ideology or, to put this another way, why self-interested individuals would care about norms of justice that, however desirable, seem to them distant and abstract. And like Kant, he therefore has to fight off the sinking feeling that, humans being crooked timber, nothing straight can ever be built out of them.

The big difference is that, two hundred years later, political institutions like the European Council and the United Nations are already in place. (The UN figures here because cosmopolitanism in Europe, as Habermas presents it, is a stepping stone toward cosmopolitanism at the world scale.) These supranational institutions need only to be filled up with popular emotion. But how to do this? How to whip up enough popular enthusiasm so that, to begin with, it will seem politically expedient and legitimate for the European Union to rescue the populations of Greece, Spain and Italy from the economic nightmare into which they’ve been plunged both by their own bad politicians and by the European leadership’s misplaced faith in austerity? Otherwise, the euro zone will likely collapse, and with it the European Union itself.

Is it utopian to imagine that Europeans who have no intention of dying for the European Union might nonetheless be coaxed into contemplating a lesser sacrifice, an economic sacrifice?

The obvious answer is yes, it is utopian. Bail-outs are not popular among German voters, to put it mildly. Themselves the victims of previous austerity programs, ordinary Germans have reason to feel that they have already sacrificed too much. The sort of popular enthusiasm that does make the news these days has largely been racist and xenophobic. Stereotypes of lazy, self-indulgent Mediterraneans who just don’t want to work have made a sudden and widespread come-back in northern Europe. As always, the stereotypers ignore how much of the system’s work their victims do. As always, they seize on one or two juicy anecdotes of real misbehavior in order to back up false generalizations. Even in Greece, the rise of the neo-fascist Golden Dawn party, which won almost 7% of the last vote, testifies to the power of this illogic. When a retired Greek pharmacist sets himself on fire in Constitution Square because he can’t stand the humiliation of being unable to meet his financial obligations, when young Greeks with university degrees are scrounging for their dinner in garbage bins, it’s easier to blame the hapless Pakistani and Kurdish migrants, their faces (indicating either laziness or eager competition for jobs — it hardly seems to matter) all too visible in the public squares of Athens, than to figure out the devious financial mechanisms and stratagems that are actually responsible for the country’s misery.

So how is a popular case going to be made? Habermas doesn’t go into the details, but one can imagine him arguing that German prosperity has largely depended not just on German industriousness but on highly profitable loans and exports to countries like Greece and Spain. Germany could not have sold its exports unless the countries importing them couldn’t manufacture these items themselves and therefore couldn’t compete. Add the hypothesis that membership in the eurozone has stopped these countries from competing — stopped them from developing industries that could compete — and you get a somewhat less one-sided view of why the Germans are so doing so much better these days. Some would see this as guilt-tripping — their poverty is not just your business, it’s your fault! But perhaps nothing less will do.

Habermas has tried as hard as anyone to keep alive the memory of Nazi atrocities in World War II. But time marches on, and the Germans, like Americans, are resolute presentists, primed to resist any allusions to “ancient injustice” that might come with a price tag attached. For the Greeks, on the other hand, this history is not ancient at all. In Greece the massacre of whole villages by German soldiers is a live memory, as is the looting and the occupation-induced famine in which some 200,000 Greeks died. (This summer I visited one village that was burned and the old people, who could not run and hide, were shot. Inhabitants of the village still remember their names.) Beginning in 1942 the German occupiers demanded that Greece pay, monthly, the cost of being occupied. Over the past two decades various Greek governments have raised the subject of that theft, which amounts to $14 billion in today’s dollars (without interest). Germany has dismissed the idea that it owes Greece anything. There is a certain short-sightedness in the German insistence that debts must always, always be repaid.

By this account, Germany owes a double debt to Greece: once for World War II, and once for the profits it has made out of the eurozone system that is now threatening to implode. Does this unofficial mode of accounting have any chance of replacing the official balance sheets, or even casting doubt in Germans’ minds as to the correctness of their arithmetic? It’s a political question, and one that might also apply to the US. It was the US that invented the toxic derivatives that are now held by so many European banks, and it was Goldman Sachs that showed the Greek government how to cook its books so as to win entry into the euro — all in a day’s work on Wall Street. In the US, too, our relative prosperity has arguably depended on our government doing everything in its power to see that the worst costs of the crisis are paid by foreigners who don’t vote in US elections. As the 99 percent, we think of ourselves as victims of globalization, and rightly so. But what about the cotton farmers in Mexico or Nigeria who were driven to the slums and sweatshops by cotton subsidies handed out to American agribusiness? Are Americans, who have economic troubles of their own these days, ready to recognize the justice of some sort of pay-back? If not, we can’t point the finger at the Europeans.

Habermas’s heart is so clearly in the right place, and the forces arrayed against him are so unlikely to give an inch, that it seems churlish to quibble over the small stuff. But the stakes are high on these subjects, so precision is of the essence. Habermas clearly wants some transfer of resources from rich to poor. There are times when he speaks as if this could be accomplished by the program of human rights. (The evidence on human rights is not on his side; the human rights establishment has always preferred civil and political rights, which tell governments to stop doing something, over economic, social, and cultural rights, which demand that governments do something for their citizens they are not yet doing. But this could change.) At the same time, however, direct references to economic justice and transfers of wealth seem to give him the willies. Global inequality is one of those things, he says, that “cannot be erased overnight.” Granted. But this is no excuse for letting global inequality slide to the bottom of the agenda, where it is likely to stay buried. In his darker moments Habermas seems to have decided that people in the more prosperous countries just won’t stand for it, that they feel, however unjustly, that they have earned everything they have, and that a major concession must therefore be made to their sentiments.

It’s as such a concession that I understand Habermas’s otherwise mysterious proposal that the United Nations should be “restricted to the core tasks of peacekeeping and of the global implementation of human rights.” This statement calls in effect for the UN to cease its operations in the area that it calls “development.” In other words, it should give up as not sufficiently “core” the task of trying to raise the living standards of people in poor countries. Why? Habermas doesn’t say, but it can only be because development means redistribution, and redistribution, he fears, will upset people in rich countries. It’s hard not to see his drop-development idea, which Habermas brings up more than once, as a gesture of compromise with what he takes to be off-the-record rich-country orthodoxy. He seems to assume, and perhaps rightly, that the people of Germany and northern Europe now feel themselves in direct economic competition with the world’s poor, some of whom are already living as migrants in European cities. It’s as if he were saying that prosperous northern Europeans will not feel solidarity for poor southern Europeans as long as they feel threatened economically by the still larger masses of still poorer non-Europeans. Under these circumstances, he suggests, we should just let the rest of the world go, at least for now. If we can get a bit more solidarity inside Europe, that ought to satisfy us even if it also means that the walls of Fortress Europe will get a bit higher. This would explain why the reform he envisages would “promote the competitiveness of all economies in the euro zone.” It sounds like this might come at the expense of economies outside the euro zone.

For many European leftists, “Europe” was always a bad idea, a ploy of the bankers. What Greece needs therefore is not hand-outs from Germany but to recover its lost sovereignty. For Habermas, “Europe” is a good idea that has fallen into the wrong hands. It’s time for the people to take the idea back from the bankers. The politics that matters now is less a demand for more democracy within the nation, where it takes familiar forms, than a demand for democracy beyond the nation, where it remains to be invented.

This sounds pretty good. But is Habermas really ready to push for it? When he speaks of “politics,” what he often seems to mean is laws. A law is a principle that’s been agreed on. Politics aims at agreement and sometimes gets there, but at its heart is its “in the meanwhile”: an ongoing process of disagreement.

You can see the virtues of Habermas’s respect for law in his famous slogan “constitutional patriotism.” Anti-cosmopolitans argue that real solidarity will never emerge except from ethnic, religious, and national sameness. Habermas insists that people don’t need as much sameness as they think in order to feel solidarity with each other. Beyond ethnic or religious or national identity (the sort of thing that leads to intolerance and war), powerful loyalties can also get attached to the constitution as a guarantee of the equal rights of all. But Habermas’s faith in law has a disadvantage, and it’s a big one. It discourages political struggle based on fundamental differences of perspective and interest. And it’s only serious, long-term political struggle of this sort that could ever make transnational economic solidarity into a reality.

At the transnational scale, Habermas says, “problems of distribution arise which cannot be dealt with in the same way as violations of human rights [. . .] but have to be worked out through political negotiations.” The issue of distribution can’t be separated off from the messiness of political negotiations, and Habermas would like to avoid this disorder. That’s another reason why he proposes that the UN should drop development and focus exclusively on human rights and peace-keeping. Peace-keeping and human rights can at least appear (correctly or not) to follow from universal norms on which all reasonable people should be able to agree. The same cannot be said of the distribution of economic resources. There are many different and incompatible reasons for feeling that you deserve a certain share of society’s resources. How to distribute resources is the quintessential political question: where resources are concerned, conflicts of vision and interest are fundamental and, though agreement is possible, controversy is inescapable. Habermas says that he wants solidarity between Germans and Greeks, but he does not seem to want the political struggle that would be necessary in order for Germans and other northern Europeans to reach agreement with their Greek, Spanish, and Italian neighbors over what they all deserve. His preference for moral principles on which there ought to be no difference of opinion, like the principles of human rights, is the flip side of a distaste for politics, where differences of opinion are to be expected. Habermas doesn’t really want to fight. He wants to be right.

About the specifics, I think on the whole he is. A democratic reform of the UN Security Council, which Habermas proposes, would be an excellent idea, little as the five permanent members will enjoy surrendering their (undemocratic) veto power. If anything can help overcome the present world-wide cynicism about its actions and inactions, it might well be equal voting rights at the top. A supranational entity like the UN or the European Union, once empowered by popular anger at the current economic mess, might well have better luck regulating international finance than the US government has had. Habermas is not speaking to Americans in particular, but it is in our interest, too, for the European leadership to save the eurozone from the growthless, austerity-imposed catastrophe that is now looming. The Obama presidential campaign is only one of the likely victims if Europe cannot come up with a quick rescue plan for the economies that its own policies have sent spiraling downward. The US economy can’t take another hit like that without flinching.

These things are well worth fighting for, and fighting for now. But perhaps the best way to read The Crisis of the European Union is philosophically, with your eye on the long term. Habermas is a philosophical optimist. The Enlightenment in his view is not a fatally compromised concept, as some would have it, but an incomplete project that we can and should help bring closer to realization. For him, the fact that the peoples of Europe have been willing to surrender as much national sovereignty as they have to the Brussels bureaucracy deserves to be looked at as a kind of miracle. After all, it was not long ago that Europeans were routinely butchering each other on the battlefield. If the nations of Europe could give up on prerogatives like war-making — not so long ago who would have imagined it? — then other moves beyond national self-interest are also possible. At present, the gut-level recognition that relative abundance here at home may be intimately dependent on relative deprivation somewhere else and that measures therefore have to be taken to even things out, doesn’t seem quite ready to be submitted for the approval of the voters. But that’s no reason to think its day will never come.

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