Saturday, April 19, 2014

The model for the European Union versus the Europe of 1500

I am really enjoying Paul Kennedy's 1987 book The Rise and Fall of the Great Powers.  It focuses on the shift in powers in Europe starting in 1500.

Libertarians will be confirmed and central planners dismayed by a fundamental premise of the book: Centralized power over the long run stunts economic progress and wealth.  The author does not state it quite so succinctly but here is the longer version in his own words:

"The story of 'the rise and fall of the Great Powers' which is presented in these chapters may be briefly summarized here. The first chapter sets the scene for that follows by examining the world around 1500 and by analyzing the strengths and weaknesses of each of the 'power centers' of that time-Ming China; the Ottoman Empire and its Muslin offshoot in India, the Mogul Empire; Muscovy; Tokugawa Japan; and the cluster of states in west-central Europe. At the beginning of the sixteenth century it was by no means apparent that the last-named region was destined to rise above all the rest. But however imposing and organized some of those oriental empires appeared by comparison with Europe, they all suffered from the consequences of having a centralized authority which insisted upon a uniformity of belief and practice, not only in official state religion but also in such area as commercial activities and weapons development. The lack of any such supreme authority in Europe and the warlike rivalries among its various kingdoms and city-states stimulated a constant search for military improvement, which interacted fruitfully with the newer technological and commercial advances that were also being thrown up in this competitive, entrepreneurial environment. Possessing fewer obstacles to change, European societies entered into a constantly upward spiral of economic growth and enhanced military effectiveness which, over time, was to carry them ahead of all other regions of the globe."  

Ironically, the rules and regulations of the European Union are generally about creating uniformity, broad legal standardization and more and more centralization of power in Brussels.  What will historians be writing about its long term economic impacts in another 600 years?

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