The Analogy of the EU to the pre-Federal United States

One example Europhiles cite in support of increased EU integration is that of the early United States. The US, the argument goes, offers an example of debt successfully pushing a country from a confederal to a federal system. Earlier this week, in his exhortative speech in Berlin, Polish foreign minister Radek Sikorski had this to say:

We are not unique in facing the fundamental question of the future of our federation over the issue of debt… Americans passed the point of no return in creating a United States when the federal government assumed responsibility for debts that states incurred in the War of Independence. Solvent Virginia bargained with more indebted Massachusetts, which is why the capital was fixed on the banks of the Potomac. Alexander Hamilton fathered a compromise under which everybody’s debts were jointly guaranteed and a revenue stream created to service them.

How the analogy works

Like Europe today, US states faced growing piles of unserviceable debt. In order to help poorer states ward off bankruptcy, richer states (meaning Virginia) agreed (however reluctantly) to establish a national bank that would assume all the states’ individual debts. A national mint was created and an excise tax, among other taxes, helped finance payments. This is the shortest and most reductive version of the confederal to federal turn in US history that I know of. Books are written about this stuff.

Certain similarities are indeed apparent in the debt-ridden pre-federal US and the current debt-ridden European Union. In both cases, debt spiraled out of control. Also, differences in local economies left some states drowning in obligations while others waded around relatively unconcerned. Finally, solvent states generally felt that they shouldn’t be held accountable for the impecuniousness of others.

Things start to derail

But that seems to me where the analogy ends. In most other ways, the two cases are very different. In the pre-federal US, debt accumulated because the states were fighting a war for independence.* In Europe, the story of debt accumulation isn’t so easy to describe. Some states and their banks fell in love with complicated financial instruments, didn’t take the time to research them and felt secure enough to loan to anyone (Germany). Other states speculated barns into castles (Ireland). Others decided to reach full employment through borrowing and a single industry (Spain). And still others have just always acted incomprehensibly (Italy). I’ve obviously resorted to hyperbole here, but the central point remains: Europe did not run up its debt in order to finance a war for independence against a common enemy.** Unless you consider frugality an enemy.

The next point of difference is the most obvious one, and the one that most precludes the formation of a United States of Europe. “European” is not a coherent and stable identity with a commonly understood and accepted meaning. (Just look at how differently European states responded to the growth of credit in last decade.) And perhaps most importantly, European is not a language. When the Continental Congress met to decide the fate of the now-independent colonies, the Congress’ members neither brought legions of interpreters nor held grudges over who could or couldn’t speak certain languages. I can imagine Jefferson recoiling at Adams’ pronunciation of certain words, but they shared a common intellectual heritage acquired through a common language. And while there’s more to an identity than language it certainly seems pretty important. English might be the de facto language of the EU, but I’m not sure anyone’s gotten around to telling the French this yet.***

A weak analogy doesn’t necessarily undermine the larger point

Regardless of how the pre-federal US and the current EU cases diverge, however, that doesn’t mean more European convergence cannot or will not happen. Identities can bleed into one another and political institutions can accumulate more legitimacy and authority. Stuff like this happens a lot.

And another thing that Europe has going for it, which the US also had, is the fact that there isn’t a member state right now that doesn’t feel like it has an important stake in the success of the whole. This might not bode well for reducing the EU’s democratic deficit, but that’s another story.

One final note, if Sikorsky is in fact prescient and the EU follows the US to federalism, I hope Europeans are okay with the capital moving to Frankfurt.

* Not only were individual states indebted, but the Continental Congress, which financed the Continental Army, was also massively indebted. This is an important point and another example of divergence: the US had a respected federal army and its veterans were hungry.

** It could be argued that the 20th century wars are a better backdrop to the current European predicament than the early 21st century financial bubble. But even if this is the case, the argument about a common enemy still holds. Are Europeans ready to get in line behind Germany? Germany might be the country most capable of leading, but that doesn’t mean they’re the most prepared to lead; and it certainly doesn’t mean everyone else is more comfortable with them actually leading.

*** More seriously, the resources the EU devotes to interpreting and translating are ridiculous and would be better served, I don’t know, building highways in Poland. In no way can the amount of jobs created trying to coordinate all this linguistic mayhem make up for the fact that in any interpretation and any translation, meaning is inevitably shifted, dispersed and sometimes lost altogether. Perhaps Eurospeak, in all its stiltedness, is more immune to such problems, but I doubt it.

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