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May 25, 2006

Garton Ash and Diversity

Tim Garton Ash muses on the diversity of Europe:

In the great age of Renaissance Florence, diversity was indeed the dynamo of Europe's extraordinary creativity. There's a marvellous book called The European Miracle, by the economic historian EL Jones, that explores why Europe rather than China - scientifically and technologically more advanced than Europe in the 14th century - produced the scientific, agrarian and industrial revolutions that led the world into modernity. In brief, his answer is: Europe's diversity.

But this was the diversity of a restless, often violent competition between cities, regions, states and empires. Florence and Siena, England and France, Christian Europe and the Ottoman empire - they did not resolve their differences by coalition agreements and endless negotiations in airless committee rooms on the Rue de la Loi in Brussels. To reverse Churchill's post-1945 adage: they made war-war not jaw-jaw.

Many readers will remember the speech that Orson Welles put into the mouth of the gangster Harry Lime, in the film of Graham Greene's The Third Man: "In Italy, for 30 years under the Borgias, they had warfare, terror, murder, bloodshed - they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, 500 years of democracy and peace, and what did that produce? The cuckoo clock." Has Europe today entered its age of the cuckoo clock?

Of course I'm not suggesting that what we in Europe need is another good dose of warfare, terror and bloodshed; but I am wondering aloud about the conditions in which diversity produces dynamism and creativity. The question for all Europeans today is whether the path we have chosen since the end of our last 30 years' war (from 1914 to 1945) - the path of permanent, institutionalised, peaceful conflict resolution, both domestically and internationally, inspired by the "spirit of solidarity and consensus" that the former European commission president Romano Prodi has promised to rebuild in his new Italian government - is capable of producing a dynamism to match that of the US, let alone of the rising powers of Asia.

No, I wouldn’t be advocating more war in order to increase the diversity of Europe, and thus growth, either. However, he’s identified, and then rather missed, the important point. We can have diversity, different ways of doing things, and then let people trade and find out what works. That’s exactly what the old City States he uses as his model were doing. Experiment, play around with things, a form of evolution via competition will show us the better (for we’ll never find the best) ways of doing things.

Which is what the Single Market is supposed to be all about. Get on with it, swap the results and we’ll see what happens. This is how economies grow, people take a chance, most fail, some succeed and that’s how we progress.

Unfortunately, the people running this at the centre actually believe that they should be running it. The EU is setting rules at the centre which apply to all, undermining that vital diversity and thus cocking up the system. Just as one trivial example, countries such as France, with masses of wild open space and low population density, must follow the same laws on landfill as tiny crowded places like Holland. An acknowledgement of diversity would allow each to use whichever methods suited their specific circumstances best...not the imposition of a single rule for all.

Repeat the argument and fade: CAP, CFP, External trade tariffs......

So let’s actually have what made us Europeans rich in the first place: diversity. To which end the European Union can help by buggering off.
Worstall3_8_23

May 25, 2006 in Economics | Permalink

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Comments

With subsidised immigration all we get is "diversity of quality".

Posted by: AntiCitizenOne | May 25, 2006 10:14:42 AM

But in a monetary union, such as the Eurozone, isn't convergence of the constituent national economies either a necessary condition for, or consequence of substituting a single currency for separate national currencies?

"In the conflict between 'economists' and 'monetarists,' throughout the history of European monetary unification, from the Werner Plan to the Maastricht Treaty, Mundell stood firmly on the side of the 'monetarists.' To simplify, the monetarists believe that the fixing of exchange rates and the adoption of a common currency will ensure sufficient convergence of the economies seeking to join the union, especially that of their inflation and interest rates. What is important is to give up credibly the idea of having an autonomous national monetary policy and to establish the institutions necessary for the management of a common monetary policy. For their part, the 'economists' believe that the adoption of a single currency should be the crowning of a lengthy process of convergence of the economies seeking to join the union; the 'economists,' the most vocal representatives of whom were the Germans, therefore set the most rigorous conditions possible for the creation of the common currency, as can be seen from the Maastricht criteria and the Stability Pact. The 'monetarists' have quite rightly seen these requirements as delaying tactics."
http://www.imf.org/external/np/vc/1999/121399.htm

Whichever, 'monetarist' or 'economist' perspectives, as we are witnessing, absent economic convergence, monetary unions don't function well, which explains why the governments of the three largest economies in the Eurozone - France, Germany and Italy - have each felt impelled to breach the terms of the Eurozone's Stability and Growth Pact they signed up to in 1997. Choices have to be made: Is diversity compatible with European monetary union?

Mundell on: Optimum Currency Areas:
http://www.columbia.edu/~ram15/eOCATAviv4.html

Posted by: Bob B | May 25, 2006 10:56:14 AM

Well as I write I am on holiday in Croatia, and am in Dubrovnik, a former city state. Well worth a weekend stay, although so many tourists, we are off to Miljet Island to get away from them all (hopefully!).

My point is that really the EU chiefs have fallen into the trap, common in many public agencies, that they are actually running the economy, and they are responsible for its rise and fall. Which is nonsense of course - they have influence, but their problem is they don't realise the useful limits of this influence! Another bugbear of mine is that government tries to simply do too many things, instead of concentrating on the things that could really make a difference if they were got right - e.g. in the UK its making education, skills and training truly reflect the needs of employers and the economy; or its making urban centres quality places to live etc.

Anyhow, off to sip on an espresso in the narrow streets of Dubrovnik. Not missing the day job much. My wife is trying to convince me that we must buy a holiday home on Vis Island, but I am trying not to even acknowledge this...

Posted by: angry economist | May 25, 2006 11:10:36 AM

"My point is that really the EU chiefs have fallen into the trap, common in many public agencies, that they are actually running the economy, and they are responsible for its rise and fall. Which is nonsense of course - they have influence, but their problem is they don't realise the useful limits of this influence!"

Not too sure about that. When push came to shove on signing up to the Euro, the German government certainly had its way and joined despite the advice it received from German economists in an open letter to the Financial Times in February 1998:

"More than 150 German economics professors have called for an 'orderly postponement' of economic and monetary union because economic conditions in Europe are 'most unsuitable' for the project to start.

"The call to delay Emu 'for a couple of years' is made in a declaration signed by 155 university professors and sent to the Financial Times and the Frankfurter Allgemeine Zeitung newspaper in Germany. It signals intensified opposition to the government's euro policy.

"The declaration was organised by Manfred Neumann, professor of economic policy at Bonn university and chairman of the Bonn economics ministry's council of expert advisers. It signals concern among professional economists about Bonn's determination to begin the single currency on January 1 1999. . ."
http://www.internetional.se/9802brdpr.htm

We now know that those German economists were correct in their assessment. If anything, they under-estimated the problems that would come home to roost with loss of national monetary autonomy.

Dubrovnik is a lovely place. I was there in happier times at a student camp in 1958 when there was perceptive talk among Yugo-slav campers with us about whether the country could survive Tito.

Posted by: Bob B | May 25, 2006 11:33:07 AM

Europe has swapped "restless diversity" for incompetent micromanagement, implementing the lowest-common-denominator policies designed by "the cream" of more than twenty Civil Services.

No wonder it's a fucking stultified mess!

Posted by: Jeff | May 25, 2006 12:21:02 PM

In the modern sense the promotion of "diversity" usually means the promotion non-Christian religions such as Muslims/Sikhs/Hindus etc or (on the sexual orientation side) homosexuals/lesbians - strange but true

Posted by: Terry | May 25, 2006 1:26:58 PM

"Just as one trivial example, countries such as France, with masses of wild open space and low population density, must follow the same laws on landfill as tiny crowded places like Holland."

I am fascinated that you would use landfill as an example;

Knowing little of Europe I wonder if you could expand a bit. Certainly, wouldn't you agree, that limitations on what and how should be the same pretty-much everywhere e.g. no toxics, must be compactable/compacted, layers of soil etc etc...I am not upon the details but I am pretty sure that there is a proper way to do a garbage dump and a sloppy, careless way which leads to pollution problems and doesn't produce usable, buildable land.

So are you talking more about locational criteria? Or what? Thanks.

Tim adds: Perhaps I expressed myself badly. The European Union is making a determined effort to reduce the amount of landfilling on the continent. This might make sense for a small crowded country like Holland. It might not make sense (for example, certain forms of sorting for recycling to reduce landfill volume) for a large sparsely populated place like France. But in the EU, all must follow the same rules.

Posted by: David Sucher | May 26, 2006 6:06:33 PM

Thanks. I have no fully-formed opinion. My own frame of reference would be the States, of course, and my own, Washington, which has a fairly dense city, Seattle, where I live, and some various serious wide-open spaces 300 miles away and closer on the eastern side of the Cascade Mountains.

I would suggest that growth being what it is, the folks in far-off cow-counties would be very unwise to conduct landfills which have anything more than the minimum impact, if for no other reason than for continuing their areas as attractive. Rural areas (all over the world, I guess) have a dying population base -- it's been happening for a cetuyry at least, I think -- even when they produce loads of food and raw materials. If they are to turn around it will be because urban dwellers move to them for a more pleasant place to live. So keeping their house clean and somewhat near urban standards makes sense. When it comes to water pollution issues, I don't it's even arguable.

The issue of sorting/recycling is an interesting point.

And then again, I am speaking of my State, not yours.

Posted by: David Sucher | May 26, 2006 6:34:54 PM