Is that all there is?

Photographer: Michal Fludra/nurphot/getty images

The EU Never Made Hearts Beat Fast in Europe

Noah Smith is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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Financial markets are still trying to make sense of Britain’s vote to leave the European Union, and almost everyone is wringing their hands over what it all means -- popular anger at elites, an eruption of racism and xenophobia, the collapse of the liberal world order, the resurgence of English nationalism.

The uncomfortable truth is that it’s probably all of the above, and more. Like swings in the stock market, big events such as Brexit rarely have just one dominant cause -- people had many reasons for voting to leave. But I’d like to add one more explanation to the mix, one that I think is being under-emphasized: Europe’s failure to build a pan-European nationalism.

I’ve been a skeptic of the EU since 2005. That was the year that French voters rejected the EU draft constitution in a referendum. Dutch voters followed suit in their own referendum just days later.

That constitution was an incremental step -- it wouldn’t have given the EU a chief executive or a unified military, but it would have moved the union toward greater military cooperation and centralized policy-making. That France and the Netherlands -- traditionally two of the most pro-integration countries -- rebelled at this mild, incremental step seemed to me like a strong indication that the union was in big trouble. As in the recent Brexit vote, politicians and the media urged the populace to accept the constitution, but the people didn’t listen.

The elites went ahead and implemented most of the constitution’s provisions anyway, without popular approval, with the Treaty of Lisbon. But from that point on, it seemed to me that the writing was on the wall -- the people of European nations weren't comfortable merging into one large nation-state.

That seemed to contrast clearly with the U.S. experience. The U.S. began its life as a much looser entity under the old Articles of Confederation, but the ratification of the U.S. Constitution in 1788 created a much more centralized nation, with a strong executive, a supreme court and expanded powers for the federal government. The events of 2005 showed that EU nations were clearly refusing to follow in the footsteps of the American states. Centuries of history as independent entities, language differences, cultural disagreements -- whatever the barriers to Europe becoming a nation, they seemed insurmountable.

So the EU continued to exist as a sort of hybrid entity -- not a collection of fully independent countries, but not a single nation either. That represented a dramatic experiment in political science. It was a test of whether this new form of quasi-nation could supplant the old nation-state as a viable unit of political economy.

So far, the experiment doesn't seem to be working very well. The economic crisis that began in 2008 exposed deep rifts between EU member states -- Germany was pitted against Greece, and there was no strong federal EU government to sort things out. Russia began courting individual EU nations, making it harder for the EU to adopt a unified front against the invasion of eastern Ukraine. Again and again, the EU failed to be more than the sum of its parts.

Now, with Brexit, the EU has another big blot on its record. The real problems are not the new ones that Brexit will create -- Britain is unlikely to go protectionist, and there won’t be new European continent-wide wars anytime soon. The real problems are the underlying dysfunctions of the EU, which Brexit serves to highlight, but which were already present before the vote. If financial markets have a good reason for crashing, it’s that Brexit is a sign that the days of the EU itself are numbered.

To me, there’s a lesson to be drawn from the many flaws of the EU: Like it or not, it seems like the nation-state is still the most stable, effective unit of political organization that the world has yet discovered. The federal government needs supreme authority -- a strong executive branch, a unified military and foreign policy, a single fiscal policy. And for people to be willing to permanently surrender so much power to a single ultimate authority, you need a large degree of popular support for the nation-state.

That popular support is what we call “nationalism.” It can come from many sources -- flags and other symbols that inspire patriotism, shared values, a single language, a shared culture and religion, a sense of ethnic solidarity, and other unifying forces. Different nations each have their own versions and flavors of nationalism. The problem with the EU is that it doesn’t have enough of any flavor.

Nationalism is often vilified, especially in Europe. It gets blamed for wars, and it gets identified with racism, xenophobia and parochial small-mindedness. But it seems to me that nationalism is something that society just can’t do without. If people don’t have emotional attachment to a big entity like the U.S., China or the EU, they’ll have allegiance to a smaller entity like Texas, Guangdong or France. In the extreme, when people have no allegiance to any political unit, we go back to the Middle Ages -- a chaotic jumble of overlapping allegiances to religions, local authorities and loose confederations.

Without nationalism, it becomes very hard to provide the public goods that countries need to get rich -- courts and police, national defense, infrastructure and education. Without broad popular buy-in, institutions decay or never form.

So that’s my take -- add it to the pile.  Brexit is just one manifestation of a bigger problem -- not too much English nationalism, but too little pan-Europeanism. I will not be surprised if more countries follow suit and depart the union in the years to come.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Noah Smith at nsmith150@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net