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Europe Entrapped. By ClausOffe (Cambridge: Polity Press, 2014)

2015; Wiley; Volume: 22; Issue: 2 Linguagem: Inglês

10.1111/1467-8675.12164

1467-8675

Juri Viehoff,

Sociopolitical Dynamics in Russia

Claus Offe's book is proof that age and standing do not inevitably lead to moral complacency. Offe has been an eminent figure in political science and sociology for decades but his extended essay on the Eurozone economic crisis is a zealous condemnation of the political status quo and the powers that be. Europe is not merely undergoing an economic and political crisis, Offe suggests, but it is entrapped because there is no realistically accessible escape route. More unsettling, there is not even an obvious political agent who could stir Europe in the direction of sustainable recovery. The larger part of this short book consists of a sobering empirical and theoretical diagnosis of Europe's predicament that skillfully merges sociology and political economy. In the first part of the book (chapter one to five), Offe explains the multilayered origins of the crisis. In the second part (chapters six to nine), he surveys — but ultimately rejects — a number of possible agents and policies that could liberate the EU from its impasse. Only in the last chapter does he provide a glimpse of how Europe may break out of its suffocating deadlock. The first chapter sets the theoretical stage by sketching the interaction between democratic states and the capitalist market economy. Offe squarely rejects the neoliberal assumption that free market processes are in some sense prior to and more natural than public authority and state regulation. Three observations are particularly important to his argument. First, if markets are to reap general benefits they need constant policing from the outside to prevent monopolies and deal with externalities. Second, there is a strong tendency among employers and investors to seek to undercut and restrict market regulation and taxation that allegedly distort the free enterprise system. Third, while the democratic welfare state managed to control these tendencies relatively well after 1945, European integration has recently opened more effective avenues for owners of capital to evade political supervision: integration has depoliticized regulatory questions and has simplified corporate opportunities to move (or threaten to move) to more favorable tax and regulatory environments. Chapters two and three offer the core of the book's empirical analysis. According to Offe, European political and economic institutions are functionally inadequate to respond to the economic crisis, either individually or jointly. After sketching the general fiscal and economic backdrop against which the financial crisis in advanced OECD economies occurred — notably a secular decline in economic growth paired with a general trend towards higher debt levels incurred by both governments and households as well as low interest rates — he points towards some of the hopes that were attached to monetary unification. However, the better part of the chapter dissects why monetary unions between vastly different economic areas are unlikely to succeed, and, consequently, why the Eurozone is struggling economically. Moreover, and perhaps more disastrously, the Eurozone has institutionalized a political core–periphery fragmentation that pits the more prosperous exporting Northern economies against the less prosperous, import-oriented Southern ones. The third chapter describes several ‘doom loops’, that is, unresolved and seemingly unresolvable conflicts of interests between key actors in the political economy of the EU. The first conflict is the one between participants in the real economy and banks once an economic crisis has hit: banks, seeking to shore up their balance sheet, will scrutinize more diligently applicants for credit, and consider debtors less capable of repaying loans, given the deteriorating economic prospects. Yet the banks’ unwillingness to extend credit itself deepens the economic crisis. Second, in response to low growth rates and the corresponding lack of investment opportunities in the real economy, banks have relied excessively on buying sovereign debt. But this creates a conflict between creditors and the sovereign state: banks, fully aware of their systemic importance, have engaged in risky behavior; and states have had no option other than bailing them out when the music stopped. This is, of course, what happened after 2007, with the consequence that government spending increased dramatically. Thus, sovereign debt levels ballooned and states paradoxically ended up being even more dependent on the very same banks they had just rescued. The problem is now that the debtor state must serve two constituencies. Creditors care first and foremost about getting their money back. By contrast, voting citizens care about the long-term capacity of the state to provide essential services and enable economic growth, which frequently requires massive investments (for example, in infrastructure, education, child support, and so forth). The final doom loop that Offe notices is not so much economic as political and motivational: it is the tension between, on the one hand, European states’ incapacity to individually overcome their structural disadvantage vis-à-vis markets and capital and, on the other hand, the voting citizens’ reluctance to transfer authority over policy issues to a supranational level where any real solution would need to originate. live in an ideal world where pleasure is not followed by regret, meaning that an export surplus is not followed, and its continuation thus limited, by the appreciation of the currency of the country (p. 46). Yet part of the conundrum of the Eurozone crisis is that even under these conditions of structural disadvantage for some, nobody has an interest in its dissolution. All moralistic lamentations aside, the core states certainly have no interest in a breakup because it would make their export products less competitive, may bankrupt a good number of their banks, and would require writing down all the Euro-denominated debt and guarantees on which ex-Eurozone members would immediately default. And even the periphery states presently suffering the most (like Greece) have no interest in a breakup because the consequences are likely to result in even more economic hardship (chapter four). the stakes involved have grown too high [. . .], and, instead, of the neofunctionalist auto-pilot, real agency needs to step in and to engage in political (i.e., strategic, resourceful and contested rather than adaptive) action (p. 57). But who could these real agents be, and on what political resources might they draw in aiming for genuine institutional and political change? Chapters six to nine survey different answers to this fundamental question. Chapter six investigates the possibility that EU citizens as a group might come to take a shared position in favor of progressive integration and reform. But this would require agreement on some ideés fixes about the EU's meaning and purpose and the union's legitimate future goals and aspirations. Perhaps Europeans could unite under the idea of Europe as a motor of international peace, or a counterweight against Anglo-American capitalism and culture, or a safeguard against domestic tyranny? Offe concludes, plausibly I think, that no such common vision of the EU's purpose exists or is likely to emerge soon. European publics are too fragmented and the EU has lost too much goodwill through its recent failures. Who, after all, could fault a Portuguese or Greek worker's cynical reaction when asked to rally behind the idea that the EU is the savior of democracy, cultural diversity, and the welfare state? Worse still, the loss of support that the EU has suffered is not limited to citizens of crisis-prone states who suffer economically and dread the erosion of their political autonomy. Among citizens of the prosperous core there is now a lingering fear that European integration will lead to a transnational redistribution of wealth that threatens their prosperity. As Offe says, “the crisis erodes exactly those attitudes and motivations that matter as prerequisites for its solution” (p. 77). Chapter seven shifts to the analysis of major political forces and ideologies and how they connect to further integration. The key finding here is that the Left versus Right ideological divide in EU member states corresponds only loosely to the intellectual divide between pro- and anti-Europeans. Against the neoliberal ideology of negative integration that is dominant in policy circles and among economic elites, there exists the predictable nationalist right-wing opposition. But today there are also left-wing solidarist critics of further supranational integration, so that progressive (left-wing) supra-nationalism that favors positive economic and social integration at the EU level is under attack from several quarters. The upshot of this messy ideological landscape is a further fragmentation of political agency. Chapter eight turn to the question whether German leadership could help Europe to overcome the current crisis. The answer is, again, negative. For sound historical reasons, few states are prepared to accept German predominance. But even if they did, Germany under Angela Merkel has set itself on a destructive policy trajectory. To justify the severity of austerity measures in the periphery, Germany's economic and political elites have moralized the public discourse about sovereign debt through ‘nationalization’ (by assuming that nations as collectives should bear the cost of debt choices) and ‘up-streaming’ (that is, claiming that what matters for policy is whose actions caused the crisis, not who might be in a position to resolve it). This has had the effect of both distracting attention from the underlying institutional and systemic causes of the monetary and fiscal crisis and of pitting different national citizenries against each other, thereby severely damaging the European political project. Chapter nine explores the weakness of Europe's existing supranational agents and institutions, which Offe characterizes in terms of several distorted principal–agent relationships. One obvious shortcoming is the existence of agents over whom principals (or those morally entitled to act as principals) have little or no control. The most notorious case here, Offe contends, is the unaccountable Troika of the International Monetary Fund, the European Union Commission and the European Central Bank, and its imposition of severe economic hardship on Southern European states. Another imminent problem in the EU is the fact that the European Parliament as the agent structurally most directly accountable to European citizens has no influence over any important decisions. Paradoxically then, “it is precisely those EU institutions that have the greatest impact on the daily life of people which are the farthest removed from democratic accountability” (p. 114). And the crisis, with its focus on rapid responses and emergencies, has further tilted decision-making power in favor of these technocratic agencies. The book's main achievement up to this point has been to demolish even the faintest hope for a swift recovery from Europe's economic and political quagmire. But is there really no hope after all? Throughout the essay, Offe makes no secret of the course of action he considers both economically necessary and morally desirable. What Europe needs is positive integration, including supranational taxation and redistribution. This is the only realistic possibility for controlling and perhaps reversing some of the neoliberal excesses that created the current crisis. But how might this be achieved? Any proposed solution must pass the triple test of (i) fitting into the EU's “responsibilities and promises”, (ii) having the potential to mobilize transnational political agency, and (iii) helping to alleviate the economic and social crisis. The only proposal that meets all three desiderata would be an EU-wide social policy executed by “a supranational authority sufficiently legitimated to make decisions which involve significant redistributive effects” (p. 41). But “democratizing” the EU's institutions does not seem to resonate sufficiently with national audiences; so the solution proposed in the last chapter is to focus less on the seemingly insurmountable procedural questions of decision-making at the European level, and more on the substantive issue of social justice within and between member states. If we tear down the nationalistic lenses through which the German or the Dutch taxpayers are seen to foot the bill for the Greeks or the Portuguese and instead emphasize the promise of an EU-wide policy of social protection and poverty alleviation, we may have the chance of creating real agency from the bottom up. After all, such a unified policy is in the interest of all those who are increasingly vulnerable to the vagrancies of de-territorialized markets. And a forceful plea for a European social policy and redistribution might not fall on deaf ears with some of the resourceful existing supranational agents – for example, the Commission – which have an institutional interest and a potential mandate to extend social protection to the EU level. Thus, the aim is to implement something like an EU social minimum that is not only functionally helpful in overcoming the economic crisis but would also symbolically strengthen the connection between the EU and its citizenry. Although I largely agree with the book's empirical assessment, I want to mention here two empirical difficulties that the view needs to accommodate. The first point that anyone more neoliberally inclined than Offe would raise is that the book's causal story cannot account for the fact that austerity seems to have worked, at least to some extent, in some of the EU's member states. Perhaps the best example here is Ireland, where initial bailouts were followed by harsh austerity measures, but growth has picked up recently and is predicted to exceed 4.5% for 2014 — the highest in the Eurozone. Some might respond that the Irish “austerity success story” is merely an aberration, or perhaps worse, that Irish growth is merely the result of corporate tax evasion that throws other European states deeper into recession. But some response would have been welcome. The second empirical problem concerns the feasibility of the proposed solution: quite obviously, an increase in transnational economic solidarity would run up against two very powerful ideological tenets, namely neoliberal defenders of austerity and nationalist Euroskeptics. So if we really care about feasibility in the sense of mobilizing social groups for action, then we should include in our calculus the potential strength of those ideologically and economically opposed to our preferred policy. And in this particular case, the united force of the expectable opposition will be nothing short of an insurmountable obstacle. But rather than dwell on the empirical likelihood of opposition to the book's proposed course of action, I want to turn to two more philosophical questions that relate to it. Offe observes that there is a lack of legitimate and resourceful actors who could move Europe into a post-crisis state of affairs. The focus on agency must be welcomed. But it may be that he overshoots the mark when he suggests that “it is not helpful to argue for desirable strategic objectives without being able to point to someone willing and able actually to follow it through” (p. 3). As Offe himself explains in latter sections of the book, convincing moral and political arguments themselves often have the potential to mobilize individuals into action and to create the kind of collective agency needed for change. So the connection between the questions of “what is to be done?” and “who can do it?” is more complex than what Offe at times recognizes. And perhaps there is a case to be made that political theorists are better trained in reflecting on the best arguments, as opposed to reflecting on what will fly best with certain parts of the voting public. The second connected point concerns the specific parameters of the substantive proposal for more social justice that Offe advances towards the end. One might wonder whether Offe does not concede too quickly that social justice at the European level should not be concerned with questions of material inequality. Offe believes that a focus on subsistence and sufficiency would make an EU-level social policy more attractive than one that focuses on egalitarian premises. The first worry here is empirical. Focusing on material inequality rather than merely subsistence and poverty alleviation at the EU level may, in fact, increase rather than decrease support. Many people worry not merely about the cutting of social provisions but about the small group of richer growing super-rich whose lives are increasingly disconnected from those of ordinary people, and who have the resources to shape and control political processes both at the national and the supranational level. But putting the 1% on a wealth diet is not about sufficiency but about good old-fashioned equality. So far as people care about it, strategic advances towards more social justice at the EU level should take it on board. The second reason is even more straightforward, and it stems from the stance taken towards questions of feasibility in the preceding paragraphs. If there are compelling moral arguments that interdependence in the EU economic system has grown beyond a certain threshold so that a concern with material equality (for example, as captured in Rawls’ difference principle) is required as a matter of justice, then this is what we should propose as political theorists, even if we subsequently settle for something less demanding in our capacity as politically active citizens. Offe provides a lucid explanation of the Eurozone crisis and how Europeans should reform their institutions. While assembling the intellectual tools to dissect this predicament, he paints a full picture of the challenges facing welfare states under globalization. Some side reflections, for example, the analogy between financial institutions and hostage takers, are little gems of critical reflection in themselves. Offe is unlikely to convince Euroskeptic nationalists or neoliberal central bankers. But perhaps this should be welcomed. He refers to sociologists’ findings that what integrates political communities is a second-order agreement about ideological fault lines. If paralysis continues because EU citizens do not know which side of the barricades they (should) stand on, then the best first step to create agency is to sharpen political contrasts. The silver lining of this book is that it is partisan in the best possible way: provocative but not distorting, critical but not irascible. Most of all: its political rallying cry to citizens, namely that the Europe we have is flawed and the one we stand to gain is worth fighting for, is both urgent and true. Juri Viehoff is research fellow in political philosophy and applied ethics at the Centre for Ethics, University of Zurich.