19 September 2014

Charlie’s Diary: “The referendum question”

I have a postal vote. I already voted yes.

[…]

In making my mind up, I looked at the long term prospects.

In the long term I favour a Europe—indeed, a world—of much smaller states. I don't just favour breaking up the UK; I favour breaking up the United States, India, and China. Break up the Westphalian system. We live today in a world dominated by two types of group entity; the nation-states with defined borders and treaty obligations that emerged after the end of the 30 Years War, and the transnational corporate entities which thrive atop the free trade framework provided by the treaty organizations binding those Westphalian states together.

Charlie Stross

I agree with Charles Stross on one point: he’s an utopian. I saw this link as someone shared it yesterday evening on and jokingly replied something like: “that would just make it easier for Russia to invade them”. The problem with this king of ‘long term’ thinking is that it completely ignores the process to reach that final, ‘better’ world, all the problems needing solutions, the obstacles that need to be overcome. An inspiring vision will fail utterly without a strong strategy and clever tactics to get to the goal.

I largely agree with the underlying concept of more autonomy for smaller communities, and that’s something the EU has encouraged in the member states. But there are other issues that need a strong centralized governing body, for example security and defense, monetary policies, climate change, research and human rights. I’m pretty sure anyone would name Switzerland as the perfect example of a well-functioning small democracy. But in most cases ‘stable’ also means ‘stagnant’: will Switzerland ever launch a mission to the Moon or fund large-scale research projects? Localized administrations tend to think in the short term and focus exclusively on their own citizens – remember how Switzerland recently voted in a referendum to impose quotas on immigration?

Consensus among peers is a nice concept to throw around, but in practice it rarely works as good as on paper. I distinctly remember a story about building the first viable fusion reactor: it was supposed to work by consensus, but it got side-tracked by national egos. Another example comes from a couple of years ago, when the EU was pushing for institutional reform to streamline the decision process, to allow for faster reforms and better integration inside the union. Back then, it was the smaller states that opposed the change, for fear of losing their ‘independence’; they were in fact holding on to their old national identities. The Scotland referendum itself is less about ideals and improving the society and more about catering to their renewed nationalistic pride.

In short, everything that has happened in Europe since 2009 or so has demonstrated that sharing a currency without sharing a government is very dangerous. In economics jargon, fiscal and banking integration are essential elements of an optimum currency area. And an independent Scotland using Britain’s pound would be in even worse shape than euro countries, which at least have some say in how the European Central Bank is run.

Paul Krugman

I just don’t see any evidence that ‘small’ states are in any way better at governance than big ones. There’s nothing in their size that prevents them from turning into authoritarian or corrupt regimes, from amassing massive amounts of debt and struggling with inflation, from terrorizing the weak and going to war with their neighbors. A better world doesn’t need smaller states, it needs better management and leadership in the existing structures.

Scottish independence referendum results
In the mean time, the results are in! source: The Guardian

noticed how Stross conveniently leaves out Russia from the groups of large countries he wants to see broken up? Hmm…

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