On February 22, I took part in a panel discussion entitled “Is Differentiated Integration Unavoidable for Europe?” at the CEPS IDEAS LAB 2018 “Europe — Back on Track”, an annual event of the Center for European Policy Studies (CEPS) in Brussels gathering Europe’s top decision makers and thinkers to discuss all the major issues confronting the EU. The EU might now move forward on a number of fronts as indicated in major speeches by President Macron and other European leaders: securing the external border, reforming the governance of the euro and creating a common capacity in the field of defense and external security.
Commission President Jean-Claude Juncker opened the debate, to which several of his colleagues contributed together with a number of prominent MEPs and national policy makers. The Foreign Minister of Belgium, Didier Reynders, gave the closing remarks, together with Lilyana Pavlova, the Bulgarian Minister for EU Presidency. Ivan Krastev delivered the final academic lecture.
My panel discussed differentiated integration as one method of striking a balance between unity and asymmetry that also has the merit of preventing political gridlock. At a time when Europe is being buffeted by various countervailing forces, should we expect more inclusivity or differentiated integration in the EU27? How can we accommodate more flexible ways of integration without creating a hard dichotomy and isolating certain member states? Do the EU institutions need to adapt their composition and procedures to accommodate various differentiated integration modes? How can political, legal and administrative unity be assured overall? I was joined by Frank Schimmelfennig, Professor of European Politics, ETH Zürich, and CEPS Researcher Sophia Russack, who moderated.
Abstract: All three of the traditionally recognized new institutionalisms – rational choice, historical, and sociological – have increasingly sought to ‘endogenize’ change, which has often meant a turn to ideas and discourse. This article shows that the approaches of scholars coming out of each of these three institutionalist traditions who take ideas and discourse seriously can best be classified as part of a fourth ‘new institutionalism’ – discursive institutionalism (DI) – which is concerned with both the substantive content of ideas and the interactive processes of discourse in institutional context. It argues that this newest of the ‘new institutionalisms’ has the greatest potential for providing insights into the dynamics of institutional change by explaining the actual preferences, strategies, and normative orientations of actors. The article identifies the wide range of approaches that fit this analytic framework, illustrating the ways in which scholars of DI have gone beyond the limits of the traditional institutionalisms on questions of interests and uncertainty, critical junctures and incremental change, norms and culture. It defines institutions dynamically – in contrast to the older neo-institutionalisms’ more static external rule-following structures of incentives, path-dependencies, and cultural framing – as structures and constructs of meaning internal to agents whose ‘background ideational abilities’ enable them to create (and maintain) institutions while their ‘foreground discursive abilities’ enable them to communicate critically about them, to change (or maintain) them. But the article also points to areas for improvement in DI, including the theoretical analysis of processes of ideational change, the use of the older neo-institutionalisms for background information, and the incorporation of the power of interests and position into accounts of the power of ideas and discourse.
On November 1, 2017, I gave a talk at the Center for German and European Studies entitled “What leadership for Germany in the EU, faced with rising populism and euro-fatigue?”
The talk centered around the following questions: What leadership will Germany bring to the EU in coming years, given a weakened Chancellor, a potentially fractious government coalition, and a rising populist opposition in the Bundestag for the first time? How will Merkel respond to the new French leader’s ideas about deepening integration, in particular on the Eurozone? How will she deal with the on-going refugee crisis, and the growing divisions between East and Western Europe? How Merkel deals with these challenges may very well determine the future of Europe in the near term.
I was just interviewed for aa September 25, 2017 news segment on BloombergQuint on the recent elections in Germany, Angela Merkel’s victory, and her upcoming fourth term as Chancellor. You can watch the entire segment below:
Last night I took part in a panel discussion on the upcoming German elections from a US perspective. Organized as part of the German Consulate’s “Konsultations” series, the conversation centered around the parties, the campaign, and what role German leadership should play in the future. Consul General Ralf Horlemann moderated the panel discussion with myself and Stephen Walt, Robert and Renée Belfer Professor of International Affairs at the Harvard Kennedy School of Government.
On Wednesday, July 12, I gave a talk entitled, Has Neoliberalism Gone Too Far? And if so, where do we go from here? as part of a panel discussion at the Bank of England on the theme of “The Big Political Economy Questions of the Next Five Years.” The event was sponsored by The Sheffield Political Economy Research Institute (SPERI), and the purpose of the special event and reception, hosted by Andrew Haldane, Chief Economist of the Bank of England, was to celebrate SPERI’s work over the last five years and to explore new ideas to shape SPERI’s agenda for the next five years.
I was joined on the panel by Gavin Kelly, Chief Executive of the Resolution Trust, and Dawn Foster from the Guardian. Prof. Sir Keith Burnett, President and Vice-Chancellor of the University of Sheffield, chaired the event.
Neoliberalism has gone too far: it has undermined democratic capitalism—by which I mean both liberal capitalism and liberal democracy. We are experiencing the backlash today in the rise of populism, reflective of citizen discontent. The question is: what will replace neo-liberalism? Where do we go from here?
To answer, we begin by where we are coming from: the neo-liberal sources of current discontents.
The political economic sources come from the continuing resilience of neo-liberal ideas about how to govern the economy. This began with a focus on global free trade and ended with the triumph of financial capitalism and ‘hyper-globalization.’ Neoliberalism has pushed deregulation too far (viz. the Grenfell tower tragedy), and still lacks adequate international regulation (viz. Apple’s sweetheart tax deals in Ireland, or the very rich in Panama tax havens). Financial market liberalization is responsible for the financial crisis of 2008—and will be for the next one, coming soon? from shadow banking? It is also to blame for the sovereign debt crisis, where the Eurozone’s ‘ordo-liberal’ response of ‘governing by rules and ruling by numbers’ only made things worse, taking austerity and structural reform much too far.
The socio-economic sources of discontent follow from the political-economic, and include the massive rise in poverty and inequality—at levels we have not seen since the early 20th century—combined with the increasing numbers of people left behind with lower incomes, stagnant wages, worse jobs, ever since the 1970s…and no end in sight.
The socio-cultural sources of discontent, following from the socio and politico-economic are apparent in the growth of a politics of identity uncomfortable with the changing ‘faces’ of the nation, which targets immigration in particular. This includes a nostalgia for a lost past together with fear of the ‘other,’ and anger that ‘others’—immigrants, non-whites, women—are ‘cutting in the line.’
There are also purely political sources of discontent—clear in a populist upsurge not seen since the 1930s. As neo-liberal globalization (and Europeanization) has moved decision-making up to the supranational level, national governments find themselves caught between being responsive to citizens’ demands and being responsible for upholding supranational agreements. This means, in particular in the Eurozone, that governments may promise great new initiatives in campaign mode, and then deliver exactly the same as their predecessors. This has left citizens with a sense of loss of control along with growing distrust of governing elites and a loss of faith in their national democracies as well as in supranational governance. Put together, this helps explains the increasing turnover of incumbent governments, the high rates of abstention in elections, and the turn to populists.
It is no wonder, therefore, that in the UK, the Leave campaign slogan ‘Take back control’ resonated so much, as similar such slogans have across Europe. Or that Trump’s ‘America First’ did the same in the US, despite unfortunate echoes of a nastier past.
But populism is not the answer. In the UK, Brexit is a self-inflicted wound that used the EU as a scapegoat for very national problems linked to neo-liberalism gone too far—as evidenced by the anti-austerity focus of opposition in the snap election, and the ‘dementia tax.’ And let’s not talk about Trump in the US…with his curious mix of anti-neo-liberalism on trade and ultra neo-liberalism in his anti-regulation agenda, tax reduction for the rich, and benefits reduction for the poor.
So how to move forward? We need to tackle the problems at the sources of discontent. We need more equality, less poverty, more ‘social justice’, fair wages, a reining in of the financial markets, to make them work better for the ‘real economy,’ and did I forget to mention climate change? Plus, we need more decentralization, giving more power and responsibility back to national, regional, and local levels, even as we intensify coordination at supranational regional and global governance levels.
How do we get there? There is no appetite for global governance, and yet some things can only be done at the international level. At the national level, new governments could be elected with new majorities able—if they are willing—to tackle the national sources of the problem. At the regional level, in particular the EU, where there is no ‘government’, have to hope for new national governments to provide EU leadership.
But for all of this, need new ideas that challenge neo-liberalism and a globalization gone too far. There is no going back to 19th Marxian ideas…or to authoritarian ones. So how do we get there? In 2009, everyone waited for the paradigm shift that never came. And don’t hold your breath for a new positive revolution…Polanyi’s ‘counter-movement,’ that arose in response to classical neo-liberalism, may have gotten it right in the US, but got it wrong in Europe, with the rise of fascism and Nazism…
The way forward is the hard work of incremental change in ideas… where we don’t know what the new is until we have been living it for a while…only years later, looking back, was FDR’s bricolage in the US 1930s labeled neo-Keynesianism.
In other words, the way forward requires new rhetorical leaders and ideational entrepreneurs—to win elections with a new set of ideas. Not a Trump—there are no new ideas here, just bad, VERY BAD old ones (to use his language, and hand gestures)—but possibly a Macron…whose bricolage of ideas from the left and the right, to make something new, might be just the ticket.
But where does Macron get his ideas? Or any new political leader? For the specifics, they need technical entrepreneurs in expert networks and state administrations working out the intricacies of new policies. Here too, incremental change is key. We can see the beginning signs of new incrementally developed ideas…for example, as Central Banks develop and circulate ideas about macroprudential regulation; as sustainable growth has become the buzzword everywhere (except in Trumpland)
As for the Eurozone, here too there has been significant incremental change: the EU Commission went from ‘governing by rules and numbers’ in 2010 to 2012 in the European Semester to reinterpreting the rules ‘by stealth’ to allow for more flexibility from 2012-2015, and since then to the politics of flexibility, with more legitimizing debates with the Council and the member-states. We could imagine that in the near future that the EU will be seen to have gone from its original ‘paradigm’ of ‘expansionary fiscal contractionism’—the ideas behind austerity and structural reforms (Dellepiane-Avallaneda 2015)—to a new paradigm of ‘expansionary stability,’ or ‘stable expansionism,’ in which the stability rules have been made truly compatible with growth-enhancing policies. As for the governance processes, why not flip the European Semester, from hierarchical top-down instrument of deficit and debt control to a bottom up member-state instrument of industrial policy for national growth and prosperity?
Politics in fact is also necessary—with bottom up political movements, and social movements provide of new ideas, and as new ideas bubble up from the bottom. It is tremendously important for liberal democracy, and not just liberal capitalism, to give back control, meaning give national governments power over their economies, with more control over market forces, and allow much more regional and local autonomy, international and national … since cities and sub-national regions are often where experimentation and innovation begins. Open markets, yes, but not just with recompense for the losers, but ways to turn losers into winners.
This is the last chance for western industrialized democracies that have pushed capitalism too far. We need a renewable of liberal capitalism combined with a renewal of democracy. And for these, we need to ensure the incremental change in good new ideas…otherwise, thing will be, to paraphrase Trump, A DISASTER!!!
I was asked the following questions recently by the Spanish national newspaper LA RAZÓN. See my responses below.
1. Could Macron´s labour reform be the reason for the failure of his legislation?
It could be. But if he does not do it, he will fail in his ambitions to make French grow again economically. And if he fails to bring about successful reform, he also loses out in his attempt to appear more ‘credible’ to Germany, so as to be able to get reforms of Eurozone governance and policy that will help all Eurozone members to do better.
2. Macron promised to renew French politics, would you say he is on the right path to it?
Macron has the best chance to renew French politics. Mixing policies deemed on the ‘right’ because they liberalize labor markets, increasing flexibility in hiring and firing, and on the ‘left’ because they provide new security for individual workers through unemployment insurance and retraining programs is an appropriate mix. It is key to get both sets of policies through, also in the interests of ‘social justice’, given the dualization of the French work-force that has ensured continuing high levels of unemployment (altho nowhere near the Spanish level) and youth who find themselves unemployed or in part=time or temporary work for much too long. The reality is that these reforms won’t do much in the short-term although they are likely to in the medium-term. But they are certain to raise business confidence immediately, which will get the economy going through more hiring and investment, help reduce unemployment, and make France again able to help lead in Europe.
3. Considering his majority in the government, will the opposition to Macron be on the streets?
Yes, the opposition will be on the streets. Here, the big question will be whether citizens support Macron or the protests. My guess is that they will support Macron, who has the legitimacy based on his clear statement that he would engage in these kinds of reforms, and his massive win in the Presidential elections and majority in the legislatives. 4. His predecessor, François Hollande, wanted to change European politics, will Macron be more successful?
Yes!!!!! There are big differences between Macron and Hollande, the ‘normal’ president who reversed his electoral promises almost immediately, who did little to challenge rules that didn’t work for France, other than to promote a discourse of ‘growth,’ and did very little to push for greater EU solidarity. Hollande had little credibility on the European stage, Macron already has a great deal, as a new phenomenon, having won election with an entirely new party, pledging to renew French and European politics.
Here is the link to the Spanish article, which was published yesterday.
See my comments on Le Pen’s defeat in Monday’s Boston Herald. I said, “Le Pen is not going away, but this is a major defeat for her.” As the article notes, I attribute Le Pen’s success to her charisma and name recognition and said it will be tough for another nationalist to pick up her momentum. “This is a family enterprise, in many ways.”