Earlier this week (April 25, 2023), I saw a Twitter exchange that demonstrated to me…
Eurozone Dystopia – video presentation
Life returns to a more normal situation today as I have arrived back in Australia. But I have plenty to catch up on today so to free up some time I am posting the full video of my first presentation in Maastricht (March 6, 2017) as part of the 2017 Joan Muysken lecture.
The Joan Muysken Lecture has been named after Joan Muysken, the first professor of macroeconomics (1984-2014) appointed at the University of Maastricht, when the university began life as a regional development strategy to provide work transitions as the Dutch government closed the coal mining sector down in the south of the country. Joan Muysken, a sometime co-author of mine, was the founding father of Department of Economics at the University and one of my long-standing friends.
I delivered the 3rd Annual edition of this series, on Monday, March 6, 2017 at the University in Maastricht. It was a public event so the style of presentation reflects that.
In the lecture, I essentially discussed the thesis outlined in my recent book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale – that the Eurozone was built on flawed foundations and was always destined to fail.
The video includes the Q&A that followed. I wasn’t surprised by the tone and content of the questions.
The blog will return to normal tomorrow.
That is enough for today!
(c) Copyright 2017 William Mitchell. All Rights Reserved.
This Post Has 18 Comments
Thank you Bill. I am surprised you didn’t cause a riot. To many Europeans ‘Europe’ is still primarily about avoiding war and it has been largely successful so far. Your apparent complacency about not only a collapse of the EU but further fragmentation (explicitly Belgium, Spain, Italy, Germany) sounds massively provocative. Macro economists in my view owe us much greater clarity on how to make a ‘United States of Europe’ work, rather than telling us how to ‘return to Go’. Hopefully that might be easier with the ever wrecking Brits out. Interesting you saying the standard of living is the same in Sydney as in Hobart. Doesn’t feel like that if you are trying to buy a house….
I know and respect that you are keen to mobilise public policy to assist the poor rather than further benefit the rich. Tolerating fragmentation frequently benefits the rich who need little encouragement to wall off their rich ghettos and cast the poor adrift into a micro-state. At least in Europe don’t we need to do all we can to dismantle hard national borders (which provoke wars) and promote greater European collectivism? Yes, better governance and making European democracy work are crucial ( and hard). I believe reversing track on European integration would be a major tragedy.
Thanks very much for posting the video and for the interesting exposition.
Given the reaction of some (who knows how many) to your talk you were either very brave or very foolhardy taking the forthright stand that you did. 🙂
It is clear to see how much the idea of Europe is embedded in the psyche. This makes one wonder what it would take for Europeans to let go of the EZ and to disconnect the Euro from the idea of Europe. It seems the Euro will hang on and may survive until the next economic/financial crisis, particularly if European economic performance picks up, which it is doing. However, only Heaven knows why the Greeks haven’t quit the EZ.
Regarding the putative strength of the Drachma if Greece left the EZ, who would accept Drachma as payment for Greek imports on a 1:1 Drachma to Euro basis? I can’t see it. However, what might support the Drachma at some level is the return of funds which fled Greece after 2010 – this could be around E100 billion. It seems to me this would be the Drachma’s only hope for some stability.
You said: “At least in Europe don’t we need to do all we can to dismantle hard national borders (which provoke wars) and promote greater European collectivism? ”
I don’t think Bill is arguing for this. He only wants the currency union gone.
I would agree that some form of European scale “collectivism” to deal with the big issues (climate change, immigration, a resurgent Russia, market access) is necessary. But beyond that, I can’t see it. The interests of small groups need to find political expression and be recognized, not be crushed in a stampede of the herd.
One of the interesting questions was about at what level should currency (and presumably political) fragmentation occur, with some suggestion of states based on regional factors.
“At least in Europe don’t we need to do all we can to dismantle hard national borders (which provoke wars) and promote greater European collectivism?”
No we don’t.
We have to accept that there are different tribes in Europe and they have to learn to get on in their own areas.
One worldlism is a dead end. It is the ideology of the intellectual jetset elite. Ordinary people wish to live where they are and belong to a tribe.
There will be no United States of Europe. It’s time to come up with a distributed model that works for all.
I’ve just read about the ‘Spinelli Group’ (?). Apparently Delors now supports the idea of a federalised Europe – I know Bill attributes the neo-liberal ‘infestation’ of the EU to what Delors did in the 1980’s and onward -does Delors in anyway ‘redeem’ himself by supporting the federalist appraoch and is it based on any real Macroeconomic insights akin to MMT ( I assume not!).
Good stuff Bill! Am wondering if you think it will all turn out like the cover image on your book? All of those well stuffed well heeled european elite, driving their project and the people off a cliff. What kind of awareness would it take in the people, to turn that all around? Across the other side of the world, the US might ‘save’ the place by turning it into a missile base. They do seem preoccupied at the moment though …
“Be afraid of ignorance, not change” ….
‘We have to accept that there are different tribes in Europe and they have to learn to get on in their own areas.’
That sounds a bit like dollar-book fashionable evolutionary biology speak -once you look at it it all becomes dodgy:
1) You speak as if people have discreet tribal areas -they don’t, think of Syria/Yugoslavia/Iraq.
2) Plenty of people don’t really know what ‘tribe’ they belong to: I’m from a jewish/Lithuanian/English/Working Class/Mancunian backround-make sense of that one in tribal terms.
3)_ Thanks for the hyper-condescension of ‘telling us’ what ‘ordinary’ people are like, you’ve obviously set yourself up as the elite ‘decision-maker’ here.
4) Universlism is NOT the province of jet-setting financilaised elites-there is a long tradition of it in Buddhism/Sufism/Atheism/Vedic Scriptures -yet you define it as purely the domain of globalised capital.’
5) Climate change and resource limitation demands a ‘one world’ coordinated, rational sense of connection, tribalism won’t help with that.
6) We need to go a bit deeper than the Dawkins/Dennet/Pinker approach of saying ‘that’s the way we are’ which encourages a feedback loop ( So that’s the way I am they tell me – then I’ll act as if I’m that – Oh, quelle surprise, reality feeds back to me I’m like that!)
If you are going to back up your assertion that we are fundamentally tribal by using iffy evolutionary biology then you’ll have to explain why (in evolutionary biological terms) there is a long spiritual tradition of Universalism that predates globalisation.
I’m surprised you support tribalism; there is a very long history of conflict that seems to be almost a natural consequence of such human differentiation.
Since Capitalism is very much based on the exploitation of tribalism (ie. brand tribalism) it suggests that you accept too that Capitalism is part of the natural order; and that all that is needed is a suitable model of distributing the benefits. If that is the case I guess you can point to a workable scheme that could achieve this aim; that should be given additional governmental and commercial consideration .
I doubt anyone on the left particularly wants tribalism based on ethnic origin in the modern world, i’s about community and communities working together to solve the bigger problems rather than, one size fits all, huge governments with huge currency spaces necessitating rules which disadvantage some more than others, remote from the communities and which people in those communities have no real control over.
You might try looking at The green party policy for Europe, in favour of a European Union but a very different one made up of overlapping, co-operative, democratic, decentralised groupings of nations and regions rather than creating a super-state. Though some Greens seem to have forgotten their own policy
People operate in groups and we switch groups as required.
People live in countries and the polling shows most people want to continue to live in countries – certainly in Europe, with the trend in Europe returning to the nation over the global intellectualism. And of course that is with somewhat dodgy polling restricted to cities and urban areas where the networked elite tend to congregate so the data from the rest of the world is very suspect.
Out here in the sticks the world view of the poorer and less intellectual people we talk to extends to a few streets. Even a trip down the hill into ‘town’ is an expedition. They have no desire to travel or to read anything other than the Koran. They are here because the UK is safer and they are looking forward to applying for UK citizenship – hence why they are improving their English with us.
That’s an anecdote, but we get no indication that it is an unusual belief. It is simply a village worldview for a community that operates around a local religious centre.
The evidence, Brexit and Trump being the key votes so far, is that people have had enough of the one world theory and are looking for a new distributed solution. That may mean the remaking of borders once more as the groups form and reform but that is nothing new. It’s what humans have been doing for thousands of years. There are even a few YouTube videos on the way country borders change very regularly.
One worldlism is a dead end. We are heading back to nation states and currency areas within those nation states and a more distributed solution to international issues.
“If that is the case I guess you can point to a workable scheme”
What do you think we’re doing here? We’re coming up with a workable mixed economy scheme – which is based upon distributed international entities operating their own currency zone moving freely against each other. Entities that are highly internally cohesive and loosely coupled between them.
There is no workable bug hug club solution – as the European Union demonstrates in spades. Even the existing federations are creaking quite a bit and I doubt any of them are prepared to go to the Chinese model to retain cohesion. The Chinese see themselves as Chinese first and foremost and there are an awful lot of them.
I don’t buy the global citizen arguments and I see no evidence that it has any chance of taking root. Therefore I design systems to work with how people are, not as some would like them to be.
Simon, in your list you could have included Americans. At the beginning of the Republic, in order to get individual states to sign the Bill of Confederation, the fledgling national government had to grant them what were known as States Rights. New York state was one of the bigger holdouts. These rights are sometimes universal and apply to all states equally, while others vary from state to state. These Rights go from things like state control of education to certain kinds of crimes. In some of these, the national government never gets involved; it is illegal for it to and would provoke. In others, like kidnapping, the national state only gets involved when “asked”, but if the victim is taken across a state line, the FBI automatically gets involved as the kidnapping which was before a state crime has become a national one. In terrorism cases, the national police force is almost always involved. (Yes, I know, under Comey, the FBI has become more politically involved than usual, possibly more so than J Edgar did.)
Comey now seems to working so Congress will consider him more favorably. Some were previously calling for him to be removed as Director.
I would tend to agree with Neil’s argument that by and large globalism or one-worldism is on the nose. But I wonder, and I pose this as a question; could it be that globalism or even federalism has not been popular because it has been pushed largely by the corporate elite or the so-called one percent, for the one-percent? Is it because the EU was never designed to benefit the broader population, but rather the elite, that the concept is now under threat? Is it possible that an EU designed by a Bill Mitchell would have been an entirely different creature and hence engendered more support from the population?
To many Europeans ‘Europe’ is still primarily about avoiding war and it has been largely successful so far. This is partly revisionism, propaganda about the EU. The international organization & treaty that was more important in avoiding war was not the EU in various guises, but very establishment of the UN & its charter, coupled with the many postwar programs and the US-SU cold war and division of Europe.
Macro economists in my view owe us much greater clarity on how to make a ‘United States of Europe’ work.
The question below is very relevant.
Anthony Zappia: could it be that globalism or even federalism has not been popular because it has been pushed largely by the corporate elite or the so-called one percent, for the one-percent? Is it because the EU was never designed to benefit the broader population, but rather the elite, that the concept is now under threat? Is it possible that an EU designed by a Bill Mitchell would have been an entirely different creature and hence engendered more support from the population?
Excellent question. Contrary to some debate above, the Eurozone is not endangered and suffering because of any dialectic between federalism, globalism or universalism and tribalism or nationalism. It is in trouble because of the EZ is designed for the short-term, short-sighted “benefit” of a corporate, financial “elite”. And the design is recklessly self-destructive. Especially if you look back at their earlier writings MMT thinkers like Bill did not support the fragmentation as much, and supported less drastic and more EU-wide solutions. It has only been with the obdurate refusal of the Eurocracy to allow any thought or realism enter their cult that most MMT writers have reluctantly supported fragmentation as the only probable realistic solution.
A better plan would be a sanely run monetary system, that is more like – every other monetary system that has existed for more than a couple decades any where. In one phrase, substantial central fiscal spending. Spending that does not make it inevitable that various regions will become ever more and more impoverished, that will stabilize regionally and across time. And this needs some degree of recognition that this is NOT, NOT, NOT a “transfer” from one region to another – but the absence of this understanding is a major, decisive obstacle.
But to dream – A Euro-wide Job Guarantee would most certainly do the trick. Probably even just centrally financed pensions &/or health care systems would be enough to make a workable EU. IIRC Wray wryly notes somewhere that the USA isn’t falling apart, although its various regional / tribal subcultures are if anything more variegated than Europe, land of the welfare states. The reason is the federal government and federal government money.
Wanting your own currency zone doesn’t make you tribal, I don’t think. From an environmental and resource point of view staying where you are and not flying is a good thing. We can still be universalist ( as opposed to global capitalist free-trade) in terms of balancing resource use and employment issues with other countries and getting out of the balance of trade beggar thy neighbour approach. Tribalism is seen as inward looking, perhaps Neil did not use the best word there.
I’m not sure Neil’s example of his local Asian community is representative of the UK where people are nipping off for holidays in the sun as if they were jumping on and off buses – I know the Muslim community well having grown up in Manchester, they tend to be focused on local economic activity and family interests and often regard going on holiday as a waste of money. This may not apply to those enculturated into a more middle class Western life-style. 1,4000 flights a day from Heathrow alone.
We need one-world thinking but just not the globalised capitalist version -as the Greens used to say-think locally act globally.
Simon, wasn’t it “think globally, act locally”? 😀
Neil Wilson said:
“We have to accept that there are different tribes in Europe and they have to learn to get on in their own areas. ”
It is interesting to note that prior to the Bonaparte ascendancy there were 300 sovereign states in the Holy Roman Empire. Napoleon redrew the map. The Treaty of Vienna (1815) and Metternich’s “Concert of Europe” shuffled the cards again.
Ask a Bavarian whether he sees himself apart from the rest of Germany. Switzerland is made up of German, French and Italian speaking cantons. The enmity between the northern and southern Italians is palpable. Catalonia, Andalusia and the Basques see themselves as culturally distinct from other Spaniards.
It seems Europe could divide in a multitude of ways. Are the current boundaries sustainable? What keeps the current agglomerations intact? The Slovaks and the Czechs parted company, seemingly successfully. Yugoslavia has been dismembered. Sweden and Norway were once part of one Kingdom (albeit, at the time of Metternich). Scottish independence is on the agenda again. How far can it go?
If Europe was to fragment regionally, what kind of political and economic/financial arrangements would be feasible, sustainable and optimal?