In November of 2011, the General Court (i.e. the houses of the state legislature) of the Commonwealth of Massachusetts passed the Expanded Gaming Act, creating the Massachusetts Gaming Commission as an authority for granting licenses to and subsequently regulating the operations of three resort casino facilities (type-2 facilities including table games, one of which was to be located within Western Massachusetts/west of Worcester County) and a single slot parlor. The act was supported by and signed into law by Governor Deval Patrick. In 2013, a campaign began opposing the law and seeking, through ballot referendum, to formally repeal the Expanded Gaming Act (see "Repeal the casino deal," website: http://www.repealthecasinodeal.org/). The initial efforts to place the referendum on the November 2014 ballot for the Commonwealth hit an obstacle in September of 2013. Massachusetts Attorney General (and, now, prospective Democratic gubernatorial candidate) Martha Coakley ruled that the referendum could not be placed in the ballot because, if passed, the referendum would enact an unlawful taking of the private property of prospective casino operators without compensation by the Commonwealth. The group "Repeal the casino deal" appealed Coakley's decision to the Massachusetts Supreme Judicial Court (SJC) and, in the meantime, continued to accumulate the required number of signatures of registered Massachusetts voters (including mine, if memory serves!) for verification of threshold ballot requirements by the office of the Secretary of the Commonwealth. They apparently met a first threshold of 70,000 signatures by November of 2013, requiring the state legislature to take action on their request to include a gaming law repeal on the 2014 ballot. The legislature took no action, requiring that "Repeal the casino deal" collect an additional 11,500 valid signatures to secure a place on the ballot. The group has apparently collected more than 26,000 signatures, which are currently being validated by the Secretary of the Commonwealth. Today, the principal obstruction to a democratic resolution of the casino question in Massachusetts has been resolved. The SJC has ruled that a repeal of the Expanded Gaming Act by ballot referendum would not constitute an unlawful taking of private property by the Commonwealth under the terms of the Massachusetts constitution (see "Voters to decide fate of Massachusetts casino law," on Wall Street Journal (June 24, 2014), at: http://online.wsj.com/article/APb6d72362deb645829628278b1bce9687.html).
I have, in various instances, reflected on this blog about the nature and requirements of the democratic process, including whether or not democracy is strictly and solely limited to electoral processes and derivative outcomes (i.e. legislative processes through democratically elected bodies) or whether the democratic process extends beyond the formal limitations of electoral procedures to include direct action by citizens transcending legal/constitutionally assigned boundaries (e.g. demonstrations, revolutionary action). Again, in this instance, I do not really need to come up with a definitive statement on the limitations of what constitutes democracy (even if I lean toward a definition that includes the latter). It suffices to say, I think democracy won today - the electorate in Massachusetts (including me) deserves the chance to have its say on whether casino gaming is a valid and efficacious economic developmental strategy for the Commonwealth and for the individual communities that are under consideration for licensing of casino facilities. In the case of Western Massachusetts, this question fundamentally comes down to whether or not the placement of a casino in the south end neighborhood of Springfield would produce benefits for the Springfield metropolitan area as a whole greater than the costs it would inflict on the social and economic health of the city and of surrounding communities. As far as I am concerned, in my opinion as an educated economist, the answer to this question is that casino development is never a valid economic developmental strategy, and that the disproportionately distributed harm incurred by situating a casino in Springfield could never be counterbalanced by its meager possible benefits. In the next few months, I will have to articulate a more extensive argument here for why I oppose casino gaming. For now, I will simply say that I look forward to voting "Yes" (i.e. for repeal) in November.
Tuesday, June 24, 2014
Tuesday, June 10, 2014
Motown: A Study in Contrasts I
After my employer complained to me last November about taking my two weeks of paid vacation consecutively, I took my first week of vacation last week, finishing it off with a trip to Detroit, the Motor City/Motown, in part to catch a game between the Detroit Tigers and my Boston Red Sox at Comerica Park (new Tigers' stadium). In the aftermath of my trip, I had a few diverse, heterogeneous comments to make on the nature of vacation, road trips with friends (when you're driving a rental over 500 miles), the peculiarities of economic development in American cities, and the joy, confusion, and indispensability of everyday routines. I'll deal with each in the order in which it appears in my mind (in who else's order do you think I would be orienting things?!).
1. I love driving west along the New York State Thruway.
This point is extremely minor (all points on this blog probably are!). I can remember a trip that I took with my parents to Niagara Falls, Toronto, and the Thousand Islands when I was probably about 11 or 12 years old. It fixed the New York Thruway in my memory as this endlessly long expanse, longer than my everyday memory could comprehend. The Montezuma National Wildlife Refuge between Syracuse and Rochester seemed to extend to infinite distances. I have since traveled the Thruway to Buffalo and beyond three times (this time, once to go to a job interview with the New York State Department of Transportation for a job in Buffalo that I did not get (!), and once to ferry a group of Mexicano immigrant rights activists to Chicago, a trip which lasted another nine hours beyond Buffalo!). The feeling that I have when I am driving through, especially westbound, is peculiar, perhaps something close to the sensations that accompanied James Fenimore Cooper in his imagination of the travels of Natty Bumppo off into the prairie, if only because, with my post-modern sensibilities, I need to touch the soil of the earth and the leaves on trees and flowers to comprehend the physical reality of a place beyond Western Massachusetts. Having felt the mist off Niagara Falls and having enjoyed a good evening drinking in a very friendly pub in downtown Buffalo, I know that both are real, but I still have this surreal feeling traveling across the Thruway as if they might both become unreal for the fact of their sheer distance from home. At this very second, the water is still tumbling over the edge of the Canadian "Horseshoe" Falls and the pints are still pouring at pubs I visited on Delaware Ave. and West Chippewa Street in downtown Buffalo, but they are distinct from my day-to-day reality watching the water flow ever so slowly down the Connecticut at the Northampton Oxbow and sipping pints at the Northampton Brewery. Geography fascinates me - the fact that there are places that I just cannot access instantaneously. When I am driving to a place like Detroit, at sixty five miles per hour or somewhat over 100 kilometers per hour (on Canadian highways), I keep wishing that I could somehow bend space to get where I am going faster! Spatiality is a network, as in the imaginations of theorists like Bruno Latour and John Law - it is piecewise, connecting multifarious individual increments of physical ground at various speeds depending on the particular technological implements (automobiles on highways v. airplanes on predetermined aeronautical trajectories through airspace) grafted piecewise onto the process of traversing space in relation to time. I don't fly as a pilot, and I don't like to sit around in airports or pass through TSA metal detectors to get on an airplane (even if I appreciate that all of those security personnel are doing the best they can to keep air travel safe in the U.S.). I guess that I would get used to all of that if I traveled regularly over long distances, but I am generally stuck and stranded in Western Massachusetts, which is not a bad place in which to find oneself stuck! Having said all of this, I can appreciate the entire geographical connotations of vacation and getting away, at whatever velocity, from home. And, in that respect, I really like my trips through the Mohawk Valley drifting through the land of my imaginations of American history and the American present.
2. Driving is a network.
This reflection follows as an addendum from the previous reflection. I do not own a car, and I have not of late found myself driving along highways. For over a year after I sold off my last car, I drove a van owned by my employer until he figured out that my driving the van out to Boston for the weekend was not covered under his insurance! At that moment, my little victory over the American financial sector came to an abrupt close, although I am glad that it ended on such amicable terms! Now I just Zipcar, ride buses, or pedal my bike. This last weekend, however, I rented a car with Enterprise, which I found very reasonable. Under other circumstances in which mileage is not an issue, Zipcars are great, but you just cannot take a Zipcar 650 miles and expect that you are not going to have to sign off your firstborn in order to pay for it. Traditional rentals still have a place even if you can Zipcar over small distances (under 125 miles or so one way) for more finite spans of time. Having said all of this, my larger reflection has to do more strictly with the relationship between thoughtful introspection on the nature of driving on a highway (in a large, metal-framed object with another human being in the passenger seat and many other human beings in other vehicles sharing the same road(s)) and the instinctual process of driving. In this manner, I insist that driving is an instinctual relationship between an individual and the road, mediated through an automobile (and all of its individual, mechanical and automated systems). In conformity with Actor Network Theory, we could identify such an configuration of human being, automobile, and concrete pathway as an actant hybrid, and we could analyze the technology of the automobile as an immutable mobile, defining particular means/vehicle for transcending spatial or temporal distances for objects in a fixed configuration (e.g. human being traveling over long geographic distances or wide temporal expanses). In these terms, we must identify the process of driving across space (in relation to time) as a network - it constitutes a continuous relationship between physically defined agents (e.g. human being, automobiles as complex, non-living hybrids of mechanical and automated systems, roadways as complex expanses of relatively continuous surfaces, etc.) extending across spatial coordinates at diverse and divergent rates of time.
Having suggest, thus, that the process of driving is a network and implying, therefore, that, in accordance with the principles of Actor Network Theory, it involves a perpetual negotiation and mediation between the agents involved in the process in order to achieve the desired results, the realization that driving is a network is perpetually frightening!! By this I mean that it is frightening to realize that a process, which at earlier moments in your life you regarded as instinctual, is not strictly instinctual (but a continuous negotiation!). Every inch of highway that you drive is an experiment in maintaining the configuration of the network of which you are simply a single participant, along with many, many other drivers using the same roads. It can be very difficult to drive under such circumstances, if only because you realize how consequential your own involvement in the maintenance of the network actual is, especially when you have a friend asleep in the passenger seat alongside, it is 10:30 at night, still thirty minutes drive at 65 miles per hour from your destination, and you are getting drowsy! A cultivated appreciation of ontology is not always a gift - it is occasionally a dire curse. Such drives never used to bother me, which simply reflects the fact that I am out of practice, not having owned a car and driven one daily in some time. I wish that I could just (instinctively) drive across the Thruway, through the southern Ontario peninsula, or, perhaps (even though it was not in any way involved in this trip), along the TransCanada (route 20) from Drummondville to Montréal without some knowledge that everything I did behind the wheel was a mediation or, otherwise (and even worse!), an overdetermined (!) outcome.
3. On Motown (the record company as opposed to the place).
This section really doesn't belong within the larger structure of this post, but I am putting it here anyway. Reflecting back on my trip to Detroit, my friend Kirk and I, oddly enough, didn't bring any Motown to listen to on the way. Aside from my MP3 player (for which I didn't have the appropriate jack to use the rental car's auxiliary audio input), Kirk had brought a cd of an old Western Mass hardcore punk band, the Outpatients (from 1983-85 time range, a time before I ever had any appreciation of punk rock) who sounded amazingly like DC hardcore band Minor Threat (with or without straight edge commitments) and, even more oddly, a greatest hits collection of Buck Owen (who I primarily remember from the tv show Hee Haw, a sad relegation of a gifted musician to a gaudy prime time tv-land caricature of country life) - Kirk is blessed with some rather eclectic musical tastes!
Motown apparently exists again as a record label, but I would have to confess that I do not know any of the artists listed on Wikipedia as currently under contract with the label. My understanding of Motown is framed by the music produced in its heyday during the 1960s and early 1970s. A few names immediately stand out - the Supremes, the Temptations, the Four Tops, Marvin Gaye, and, later (early 1970s), the Jackson Five. I am not qualified in any sense as a musical historian, but these artists and the many others that made Motown iconic symbolize a period in which American pop music was rapidly integrating African-American music artists into the mainstream cultural milieu in ways that previous generations of Black artists never experienced, even to the extent that the influence of Black music (especially Blues) is everywhere implicated in the evolution of "White Pop"/Rock-and-Roll and Country emerging from the 1950s (although, for that matter, in previous generations, Black artists associated with the Harlem Renaissance were instrumental to the transformation of Twentieth century Jazz music). Moreover, this broader crossing over of Black artists in mainstream pop facilitated, in part, by the success of Motown from the beginning of the 1960s spurred efforts by other record labels to cash in. Atlantic Records (originally in collaboration with Stax Records of Memphis and, after 1968, by itself), as a principal competitor of Motown in the late 1960s and 1970s, created a platform for such artists as Aretha Franklin and the numerous bands categorized under the broader rubric of the "Philadelphia sound" (e.g. the O'Jays, the Stylistics, the Spinners, etc.).
Musical styles and musical tastes obviously evolve. In theoretical terms, we might characterize such evolutions within the broader framework of the overdetermination of cultural processes. In this respect, in order to come to terms with how and why music changes over time, we would have to investigate not only the particular ways in which the technologies of instrumentation change but also changes in patterns of everyday life, living standards, religion and expressive spirtuality, political enfranchisement and/or struggle, and, approaching from a Marxist perspective, the lived experience of the class process (production, extraction/appropriation, and distribution of surplus labor). Simply stated, music is transformed over time, in complex ways, through its interaction with myriad other social processes against which it is shaped even as it simultaneously shapes the cultural, political, and economic processes that constitute it. It seems clear that many good historians of the American music and, more specifically, African-American music have undertaken analyses to situate the integration of Black music into mainstream pop against the larger evolving context of Black economic enfranchisement/dis-enfranchisement in the U.S (see, for example, Norman Kelley (2002), "Notes on the Political Economy of Black Music," in Norman Kelley (ed.), Rhythm & Business: The Political Economy of Black Music, 6-23, New York: Akashic Books, available at: http://www.lipscomb.umn.edu/rock/docs/Kelley2002_politicalEconomy.pdf). The continuing history of the struggle for Civil Rights is critical, in this respect, to the development of African-American music and to its evolving relationship with "White Pop."
Motown, in its heyday, no doubt expressed a certain innocence in its expressions on love and sexuality, characteristic of the moral compass embodied by its audience, both Black and White. On the other hand, America at the time was engaged in radical transformations both with respect to sexuality (i.e. the sexual "revolution," expansions of availability of reliable birth control, alternately increasing and diminishing freedom of women in sexuality and reproductive choice) and to race (i.e. Civil Rights, Black Power). The transformations of these two critical axes of American life invariably shaped the music produced by Black America, transforming it in ways that are still emerging at this time. Important treatments of themes, engaging in various facets of social change and social crises, indisputably arise with Motown artists by the end of the 1960s (e.g. the Temptations' "Ball of Confusion(That's what the world is today)" (1970), Marvin Gaye's "What's Going On" (1971), Stevie Wonder's "Living for the City"(1973)). Evolving manifestations of rap and hip-hop, from the 1980s to the present, reflects, in certain respects, the continuing struggles of urban African-American communities against poverty and economic marginalization and the continuing negotiations of sexuality by Black men and women. Critically, like every previous generation of Black music, the generation that first produced hip-hop had to emerge from a kind of cultural marginalization/suppression to become one of the dominant strains in contemporary American music. Moreover, like previous generations, contemporary artists in hip-hop reflect a long process through which clandestine Black music has gone mainstream, to the benefit of record company executives, strip-mining the talents of young men and women from poor African-American communities.
The themes introduced in this section raise concerns demanding much more detailed research and a book-length synopsis of the relationship between diverse economic, political, and cultural processes in the constitution of African-American music and the further relationship between African-American music and "White Pop," a relationship that, as an amateur in music history, I would characterize through recurring patterns of convergence (especially in the heyday of Motown and at the present time) and divergence (with the introduction of rap and hip-hop in the early 1980s, as a clandestine and marginalized/marginalizing expression of the lived experience of urban African-American community). With this in mind, I probably won't be writing any book-length accounts on Motown any time soon, but the social existence of Motown and of music in general is something that continues to capture my imagination.
4. Detroit: Another Casino Gaming Economic Developmental Miracle
This month, the MGM Resorts International, a Las Vegas (Paradise, NV)-based corporate casino operator, has been granted the right to operate a casino in the south end of Springfield, Massachusetts, an urban municipality across the Connecticut River from the town in which I grew up (West Springfield). Like many Frost-belt urban communities with under-utilized and deteriorating downtowns and a decaying, whithering industrial base, Springfield has been looking for some time for some magical economic developmental formula that would elevate it from its persistent problems of poverty, crime (especially violent crime associated with the drug trade), and lack of indigenous entrepreneurial activity and innovation. When the General Court of the Commonwealth of Massachusetts passed the Expanded Gaming Act of 2011, the city seized the opportunity to solicit proposals from multiple casino operators for what would be, under the terms of the enabling legislation, a single casino resort to be situated in Western Massachusetts (west of Worcestor County). Three casino operators (MGM Resorts/MGM Grand, Penn National Gaming, and Ameristar Casinos) developed formal proposals for which they anted up the $400,000 fee to the Massachusetts Gaming Commission for initial consideration for a casino license. In the end, after Ameristar aborted its ill-conceived plans to locate a casino at a rehabilitated Westinghouse factory space in East Springfield, city officials excluded Penn National in its plans to build a casino in conjunction with a broader multi-modal transportation rehabilitation project in the city's north end to deal exclusively with MGM, and voters, in a rushed referendum process that solicited poor voter turnout, approved in principle the locating of an MGM casino in the city's south end, the Massachusetts Gaming Commission has granted MGM the exclusive right to operate a casino in Western Massachusetts.
At various points in the past, I have thought to develop a detailed, Marxian class-analytic analysis of casino gaming as an urban economic developmental strategy, a document that I would tentatively entitle "The Political Economy of the Sewer: Casino Gaming as Urban Economic Development." Pointedly, I hold a distinct quantity of contempt for the idea of casino gaming as economic develop, in principle, and I hold contempt for the idea of situating a casino gaming facility in Springfield or anywhere else in Western Massachusetts, in particular. I may still write such a document in the near future. For now, the backstory of Springfield, seeking an economic miracle at the hands of a casino corporation that also, to my knowledge, owns the Mirage Casino (a fitting metaphor), fits ever so perfectly in a parallel to the story of casino gaming and urban decline in Detroit. Reiterating an obviously pertinent background story, the municipal government of Detroit is bankrupt and in receivership/emergency management through the state of Michigan. The reasons for Detroit's bankruptcy are multifold. To a substantial extent, pension liabilities/"legacy costs" constitute the instrument through which Detroit's municipal government faced an increasing and insurmountable accumulation of debt, for which it was facing downgrades in municipal bond ratings translating into higher borrowing costs to finance pension obligations. Behind the story of pension liabilities, however, lies the economic decline of Detroit, as the increasingly hollow urban core of an agglomeration in which economic growth was increasingly concentrated in peripheral communities. Succinctly, as numerous other economists associated with my particular brand of post-structuralist Marxian theory would be apt to observe, the decline of Detroit as an urban economy was overdetermined by a range of economic, political, and cultural processes.
Accounting for the wide range of processes culminating in the contemporary economic geography of metropolitan Detroit/Wayne County would require a book-length narrative. My sole intention here is to argue that, as an economic developmental strategy pledging to arrest the decline of areas of downtown Detroit, casinos have not lived up to their promises. Wandering on vacation through the streets of downtown Detroit (my friend Kirk and I did not venture on foot beyond the northwestern boundary of Temple Street out of interest to view the Masonic Temple Theater up close), I could attest to the substantial care afforded in the maintenance of Detroit's three downtown casinos. I can also attest, in some measure, to the appauling state of certain other structures downtown or on its immediate peripheries. In particular, one building on Temple Street just east of the Masonic Temple stood out. It was apparently a high-rise residential complex of two towers at one time, both of which are now unoccupied. On the top floor of one of the towers, over the open spaces, where windows once existed to keep out the cold of Michigan winters, is inscribed in spray paint the word "Zombieland." Of course, when we saw this, we had to take a closer look. It certainly is a metaphor for the current state of a once proud industrial center, the Motor City, where there are now in excess of 80,000 abandoned properties, many under possession of the city from which it no longer enjoys a penny of property tax revenue. As such, the tale of Detroit, at this moment in its history, intertwines strands of anti-labor/anti-pensioner, pro-financial sector politics in the articulation of a post-bankruptcy municipal restructuring with the lingering effects of economic developmental formulaic gimics, like gaming, and the overall decline of residential and commercial infrastructure to accompany an exodus of populations that might have contributed to an entrepreneurial renaissance. Maybe such populations will return in the future, when the political powers that be are more interested and committed to making the redevelopment of Detroit, as a meaningful and important central place at the heart of the larger metropolitan region, a critical goal.
The original conception of this section aimed to advance a graphic juxtaposition of photography, showing abandoned buildings in Detroit alongside images of Detroit casinos. After an appropriate second thought and some examination of copyright law regarding the "fair use" doctrine, I decided, I think wisely in view of my desire to avoid litigation in which I might stand a fair chance of losing a significant quantity of money, that it would not be prudent to construct a work of photojournalism with copyrighted images of casinos to denegrate casino gaming. I neither have the time nor the financial resources to wager my First Amendment privileges of free speech against the privileges of casino operators to maintain images of their own production for use according to their permission. In this regard, I think I have articulated one more reason why I need to purchase a camera in order to take my own images for which I might be able to exercise a copyright for partisan political purposes.
1. I love driving west along the New York State Thruway.
This point is extremely minor (all points on this blog probably are!). I can remember a trip that I took with my parents to Niagara Falls, Toronto, and the Thousand Islands when I was probably about 11 or 12 years old. It fixed the New York Thruway in my memory as this endlessly long expanse, longer than my everyday memory could comprehend. The Montezuma National Wildlife Refuge between Syracuse and Rochester seemed to extend to infinite distances. I have since traveled the Thruway to Buffalo and beyond three times (this time, once to go to a job interview with the New York State Department of Transportation for a job in Buffalo that I did not get (!), and once to ferry a group of Mexicano immigrant rights activists to Chicago, a trip which lasted another nine hours beyond Buffalo!). The feeling that I have when I am driving through, especially westbound, is peculiar, perhaps something close to the sensations that accompanied James Fenimore Cooper in his imagination of the travels of Natty Bumppo off into the prairie, if only because, with my post-modern sensibilities, I need to touch the soil of the earth and the leaves on trees and flowers to comprehend the physical reality of a place beyond Western Massachusetts. Having felt the mist off Niagara Falls and having enjoyed a good evening drinking in a very friendly pub in downtown Buffalo, I know that both are real, but I still have this surreal feeling traveling across the Thruway as if they might both become unreal for the fact of their sheer distance from home. At this very second, the water is still tumbling over the edge of the Canadian "Horseshoe" Falls and the pints are still pouring at pubs I visited on Delaware Ave. and West Chippewa Street in downtown Buffalo, but they are distinct from my day-to-day reality watching the water flow ever so slowly down the Connecticut at the Northampton Oxbow and sipping pints at the Northampton Brewery. Geography fascinates me - the fact that there are places that I just cannot access instantaneously. When I am driving to a place like Detroit, at sixty five miles per hour or somewhat over 100 kilometers per hour (on Canadian highways), I keep wishing that I could somehow bend space to get where I am going faster! Spatiality is a network, as in the imaginations of theorists like Bruno Latour and John Law - it is piecewise, connecting multifarious individual increments of physical ground at various speeds depending on the particular technological implements (automobiles on highways v. airplanes on predetermined aeronautical trajectories through airspace) grafted piecewise onto the process of traversing space in relation to time. I don't fly as a pilot, and I don't like to sit around in airports or pass through TSA metal detectors to get on an airplane (even if I appreciate that all of those security personnel are doing the best they can to keep air travel safe in the U.S.). I guess that I would get used to all of that if I traveled regularly over long distances, but I am generally stuck and stranded in Western Massachusetts, which is not a bad place in which to find oneself stuck! Having said all of this, I can appreciate the entire geographical connotations of vacation and getting away, at whatever velocity, from home. And, in that respect, I really like my trips through the Mohawk Valley drifting through the land of my imaginations of American history and the American present.
2. Driving is a network.
This reflection follows as an addendum from the previous reflection. I do not own a car, and I have not of late found myself driving along highways. For over a year after I sold off my last car, I drove a van owned by my employer until he figured out that my driving the van out to Boston for the weekend was not covered under his insurance! At that moment, my little victory over the American financial sector came to an abrupt close, although I am glad that it ended on such amicable terms! Now I just Zipcar, ride buses, or pedal my bike. This last weekend, however, I rented a car with Enterprise, which I found very reasonable. Under other circumstances in which mileage is not an issue, Zipcars are great, but you just cannot take a Zipcar 650 miles and expect that you are not going to have to sign off your firstborn in order to pay for it. Traditional rentals still have a place even if you can Zipcar over small distances (under 125 miles or so one way) for more finite spans of time. Having said all of this, my larger reflection has to do more strictly with the relationship between thoughtful introspection on the nature of driving on a highway (in a large, metal-framed object with another human being in the passenger seat and many other human beings in other vehicles sharing the same road(s)) and the instinctual process of driving. In this manner, I insist that driving is an instinctual relationship between an individual and the road, mediated through an automobile (and all of its individual, mechanical and automated systems). In conformity with Actor Network Theory, we could identify such an configuration of human being, automobile, and concrete pathway as an actant hybrid, and we could analyze the technology of the automobile as an immutable mobile, defining particular means/vehicle for transcending spatial or temporal distances for objects in a fixed configuration (e.g. human being traveling over long geographic distances or wide temporal expanses). In these terms, we must identify the process of driving across space (in relation to time) as a network - it constitutes a continuous relationship between physically defined agents (e.g. human being, automobiles as complex, non-living hybrids of mechanical and automated systems, roadways as complex expanses of relatively continuous surfaces, etc.) extending across spatial coordinates at diverse and divergent rates of time.
Having suggest, thus, that the process of driving is a network and implying, therefore, that, in accordance with the principles of Actor Network Theory, it involves a perpetual negotiation and mediation between the agents involved in the process in order to achieve the desired results, the realization that driving is a network is perpetually frightening!! By this I mean that it is frightening to realize that a process, which at earlier moments in your life you regarded as instinctual, is not strictly instinctual (but a continuous negotiation!). Every inch of highway that you drive is an experiment in maintaining the configuration of the network of which you are simply a single participant, along with many, many other drivers using the same roads. It can be very difficult to drive under such circumstances, if only because you realize how consequential your own involvement in the maintenance of the network actual is, especially when you have a friend asleep in the passenger seat alongside, it is 10:30 at night, still thirty minutes drive at 65 miles per hour from your destination, and you are getting drowsy! A cultivated appreciation of ontology is not always a gift - it is occasionally a dire curse. Such drives never used to bother me, which simply reflects the fact that I am out of practice, not having owned a car and driven one daily in some time. I wish that I could just (instinctively) drive across the Thruway, through the southern Ontario peninsula, or, perhaps (even though it was not in any way involved in this trip), along the TransCanada (route 20) from Drummondville to Montréal without some knowledge that everything I did behind the wheel was a mediation or, otherwise (and even worse!), an overdetermined (!) outcome.
3. On Motown (the record company as opposed to the place).
This section really doesn't belong within the larger structure of this post, but I am putting it here anyway. Reflecting back on my trip to Detroit, my friend Kirk and I, oddly enough, didn't bring any Motown to listen to on the way. Aside from my MP3 player (for which I didn't have the appropriate jack to use the rental car's auxiliary audio input), Kirk had brought a cd of an old Western Mass hardcore punk band, the Outpatients (from 1983-85 time range, a time before I ever had any appreciation of punk rock) who sounded amazingly like DC hardcore band Minor Threat (with or without straight edge commitments) and, even more oddly, a greatest hits collection of Buck Owen (who I primarily remember from the tv show Hee Haw, a sad relegation of a gifted musician to a gaudy prime time tv-land caricature of country life) - Kirk is blessed with some rather eclectic musical tastes!
Motown apparently exists again as a record label, but I would have to confess that I do not know any of the artists listed on Wikipedia as currently under contract with the label. My understanding of Motown is framed by the music produced in its heyday during the 1960s and early 1970s. A few names immediately stand out - the Supremes, the Temptations, the Four Tops, Marvin Gaye, and, later (early 1970s), the Jackson Five. I am not qualified in any sense as a musical historian, but these artists and the many others that made Motown iconic symbolize a period in which American pop music was rapidly integrating African-American music artists into the mainstream cultural milieu in ways that previous generations of Black artists never experienced, even to the extent that the influence of Black music (especially Blues) is everywhere implicated in the evolution of "White Pop"/Rock-and-Roll and Country emerging from the 1950s (although, for that matter, in previous generations, Black artists associated with the Harlem Renaissance were instrumental to the transformation of Twentieth century Jazz music). Moreover, this broader crossing over of Black artists in mainstream pop facilitated, in part, by the success of Motown from the beginning of the 1960s spurred efforts by other record labels to cash in. Atlantic Records (originally in collaboration with Stax Records of Memphis and, after 1968, by itself), as a principal competitor of Motown in the late 1960s and 1970s, created a platform for such artists as Aretha Franklin and the numerous bands categorized under the broader rubric of the "Philadelphia sound" (e.g. the O'Jays, the Stylistics, the Spinners, etc.).
Musical styles and musical tastes obviously evolve. In theoretical terms, we might characterize such evolutions within the broader framework of the overdetermination of cultural processes. In this respect, in order to come to terms with how and why music changes over time, we would have to investigate not only the particular ways in which the technologies of instrumentation change but also changes in patterns of everyday life, living standards, religion and expressive spirtuality, political enfranchisement and/or struggle, and, approaching from a Marxist perspective, the lived experience of the class process (production, extraction/appropriation, and distribution of surplus labor). Simply stated, music is transformed over time, in complex ways, through its interaction with myriad other social processes against which it is shaped even as it simultaneously shapes the cultural, political, and economic processes that constitute it. It seems clear that many good historians of the American music and, more specifically, African-American music have undertaken analyses to situate the integration of Black music into mainstream pop against the larger evolving context of Black economic enfranchisement/dis-enfranchisement in the U.S (see, for example, Norman Kelley (2002), "Notes on the Political Economy of Black Music," in Norman Kelley (ed.), Rhythm & Business: The Political Economy of Black Music, 6-23, New York: Akashic Books, available at: http://www.lipscomb.umn.edu/rock/docs/Kelley2002_politicalEconomy.pdf). The continuing history of the struggle for Civil Rights is critical, in this respect, to the development of African-American music and to its evolving relationship with "White Pop."
Motown, in its heyday, no doubt expressed a certain innocence in its expressions on love and sexuality, characteristic of the moral compass embodied by its audience, both Black and White. On the other hand, America at the time was engaged in radical transformations both with respect to sexuality (i.e. the sexual "revolution," expansions of availability of reliable birth control, alternately increasing and diminishing freedom of women in sexuality and reproductive choice) and to race (i.e. Civil Rights, Black Power). The transformations of these two critical axes of American life invariably shaped the music produced by Black America, transforming it in ways that are still emerging at this time. Important treatments of themes, engaging in various facets of social change and social crises, indisputably arise with Motown artists by the end of the 1960s (e.g. the Temptations' "Ball of Confusion(That's what the world is today)" (1970), Marvin Gaye's "What's Going On" (1971), Stevie Wonder's "Living for the City"(1973)). Evolving manifestations of rap and hip-hop, from the 1980s to the present, reflects, in certain respects, the continuing struggles of urban African-American communities against poverty and economic marginalization and the continuing negotiations of sexuality by Black men and women. Critically, like every previous generation of Black music, the generation that first produced hip-hop had to emerge from a kind of cultural marginalization/suppression to become one of the dominant strains in contemporary American music. Moreover, like previous generations, contemporary artists in hip-hop reflect a long process through which clandestine Black music has gone mainstream, to the benefit of record company executives, strip-mining the talents of young men and women from poor African-American communities.
The themes introduced in this section raise concerns demanding much more detailed research and a book-length synopsis of the relationship between diverse economic, political, and cultural processes in the constitution of African-American music and the further relationship between African-American music and "White Pop," a relationship that, as an amateur in music history, I would characterize through recurring patterns of convergence (especially in the heyday of Motown and at the present time) and divergence (with the introduction of rap and hip-hop in the early 1980s, as a clandestine and marginalized/marginalizing expression of the lived experience of urban African-American community). With this in mind, I probably won't be writing any book-length accounts on Motown any time soon, but the social existence of Motown and of music in general is something that continues to capture my imagination.
4. Detroit: Another Casino Gaming Economic Developmental Miracle
This month, the MGM Resorts International, a Las Vegas (Paradise, NV)-based corporate casino operator, has been granted the right to operate a casino in the south end of Springfield, Massachusetts, an urban municipality across the Connecticut River from the town in which I grew up (West Springfield). Like many Frost-belt urban communities with under-utilized and deteriorating downtowns and a decaying, whithering industrial base, Springfield has been looking for some time for some magical economic developmental formula that would elevate it from its persistent problems of poverty, crime (especially violent crime associated with the drug trade), and lack of indigenous entrepreneurial activity and innovation. When the General Court of the Commonwealth of Massachusetts passed the Expanded Gaming Act of 2011, the city seized the opportunity to solicit proposals from multiple casino operators for what would be, under the terms of the enabling legislation, a single casino resort to be situated in Western Massachusetts (west of Worcestor County). Three casino operators (MGM Resorts/MGM Grand, Penn National Gaming, and Ameristar Casinos) developed formal proposals for which they anted up the $400,000 fee to the Massachusetts Gaming Commission for initial consideration for a casino license. In the end, after Ameristar aborted its ill-conceived plans to locate a casino at a rehabilitated Westinghouse factory space in East Springfield, city officials excluded Penn National in its plans to build a casino in conjunction with a broader multi-modal transportation rehabilitation project in the city's north end to deal exclusively with MGM, and voters, in a rushed referendum process that solicited poor voter turnout, approved in principle the locating of an MGM casino in the city's south end, the Massachusetts Gaming Commission has granted MGM the exclusive right to operate a casino in Western Massachusetts.
At various points in the past, I have thought to develop a detailed, Marxian class-analytic analysis of casino gaming as an urban economic developmental strategy, a document that I would tentatively entitle "The Political Economy of the Sewer: Casino Gaming as Urban Economic Development." Pointedly, I hold a distinct quantity of contempt for the idea of casino gaming as economic develop, in principle, and I hold contempt for the idea of situating a casino gaming facility in Springfield or anywhere else in Western Massachusetts, in particular. I may still write such a document in the near future. For now, the backstory of Springfield, seeking an economic miracle at the hands of a casino corporation that also, to my knowledge, owns the Mirage Casino (a fitting metaphor), fits ever so perfectly in a parallel to the story of casino gaming and urban decline in Detroit. Reiterating an obviously pertinent background story, the municipal government of Detroit is bankrupt and in receivership/emergency management through the state of Michigan. The reasons for Detroit's bankruptcy are multifold. To a substantial extent, pension liabilities/"legacy costs" constitute the instrument through which Detroit's municipal government faced an increasing and insurmountable accumulation of debt, for which it was facing downgrades in municipal bond ratings translating into higher borrowing costs to finance pension obligations. Behind the story of pension liabilities, however, lies the economic decline of Detroit, as the increasingly hollow urban core of an agglomeration in which economic growth was increasingly concentrated in peripheral communities. Succinctly, as numerous other economists associated with my particular brand of post-structuralist Marxian theory would be apt to observe, the decline of Detroit as an urban economy was overdetermined by a range of economic, political, and cultural processes.
Accounting for the wide range of processes culminating in the contemporary economic geography of metropolitan Detroit/Wayne County would require a book-length narrative. My sole intention here is to argue that, as an economic developmental strategy pledging to arrest the decline of areas of downtown Detroit, casinos have not lived up to their promises. Wandering on vacation through the streets of downtown Detroit (my friend Kirk and I did not venture on foot beyond the northwestern boundary of Temple Street out of interest to view the Masonic Temple Theater up close), I could attest to the substantial care afforded in the maintenance of Detroit's three downtown casinos. I can also attest, in some measure, to the appauling state of certain other structures downtown or on its immediate peripheries. In particular, one building on Temple Street just east of the Masonic Temple stood out. It was apparently a high-rise residential complex of two towers at one time, both of which are now unoccupied. On the top floor of one of the towers, over the open spaces, where windows once existed to keep out the cold of Michigan winters, is inscribed in spray paint the word "Zombieland." Of course, when we saw this, we had to take a closer look. It certainly is a metaphor for the current state of a once proud industrial center, the Motor City, where there are now in excess of 80,000 abandoned properties, many under possession of the city from which it no longer enjoys a penny of property tax revenue. As such, the tale of Detroit, at this moment in its history, intertwines strands of anti-labor/anti-pensioner, pro-financial sector politics in the articulation of a post-bankruptcy municipal restructuring with the lingering effects of economic developmental formulaic gimics, like gaming, and the overall decline of residential and commercial infrastructure to accompany an exodus of populations that might have contributed to an entrepreneurial renaissance. Maybe such populations will return in the future, when the political powers that be are more interested and committed to making the redevelopment of Detroit, as a meaningful and important central place at the heart of the larger metropolitan region, a critical goal.
The original conception of this section aimed to advance a graphic juxtaposition of photography, showing abandoned buildings in Detroit alongside images of Detroit casinos. After an appropriate second thought and some examination of copyright law regarding the "fair use" doctrine, I decided, I think wisely in view of my desire to avoid litigation in which I might stand a fair chance of losing a significant quantity of money, that it would not be prudent to construct a work of photojournalism with copyrighted images of casinos to denegrate casino gaming. I neither have the time nor the financial resources to wager my First Amendment privileges of free speech against the privileges of casino operators to maintain images of their own production for use according to their permission. In this regard, I think I have articulated one more reason why I need to purchase a camera in order to take my own images for which I might be able to exercise a copyright for partisan political purposes.
Monday, June 2, 2014
Eurosceptic Parliamentary Victories and Risks of Deflation: A Jacobsean Perspective on the Monetary Roots to the EU's Troubles
Two separate sets of articles on the EU caught my eye in the past two weeks. Most noteworthy, the results of EU Parliamentary elections a week ago show significant gains for both far-right (anti-EU, populist, ultra-nationalist, anti-immigration) and far-left (anti-austerity) parties in various EU states (see "Vote 2014" coverage/multiple articles on BBC, at: http://www.bbc.com/news/events/vote2014). As such, the European Parliament will be increasingly filled with members whose partisan position supports, at least, the functional impotence of the EU as a collective, interstate body, if not its outright abolition. In this manner, the collective legislative function of Europe will endure the equivalent of a U.S. House of Representatives filled with Tea Party supporters, committed to continuous fiscal inaction. Acknowledging that there are important differences between the structural roles and constitutional limitations on the European Parliament and the U.S. Congress, it seems likely that a significant growth in the strength of the Europe of Freedom and Democracy (EFD) group, including members elected from the fascistic French Front National, will not bode well for the capacity of this body to exercise any meaningful role in promoting and strengthening collective action between EU member states, especially in response to continued high rates of unemployment, anemic economic growth rates, and recurring problems with management of sovereign debt by member states.
To accompany the grief arising from news on Europe's Parliamentary elections, European Central Bank (ECB) President Mario Draghi warned Monday that the Euro-zone economies need to be watchful of the possibility that the zone may enter a price deflationary spiral, undermining expectations on price inflation/financial stability and, thus, hindering growth in demand for credit to finance investment expenditures (see Eva Taylor, "ECB watching deflationary risks and ready to act, says Draghi," on Reuters (May 26, 2014), at: http://www.reuters.com/article/2014/05/26/us-ecb-policy-idUSBREA4M0IV20140526). Draghi pointed to the problem of constraints on bank lending in peripheral EU economies as a source disrupting ECB annual inflation rate targets of just under 2 percent (inflation across the EU is currently in the vicinity of .7 percent annually). Evaluated against the political context of a right-wing populist backlash against economic integration and its consequences for member states (e.g. bailouts for peripheral states with sovereign debt issues), the potentiality for deflation across the Euro-zone appears to be real and, paradoxically, it would stand to reinforce the political stature of the enemies of economic integration whose own actions will, in turn, contribute to the potential for deflation.
With these considerations in mind, it is worth inquiring into the political health of the project of a unified Europe. What, after all, was the point of integrating the western European and, then, the central and eastern European economies into a customs unions and, subsequently, a monetary union? In view of the financial crises, bailouts, and political consequences befalling the Euro-zone of the last decade, are these ends still adequately served or, conversely, are the very institutions constructed to harmonize the economic interests of member states to promote an overarching political stability destabilizing the internal politics of the union? Is it possible that by striving to achieve economic unity and integration between the states of Europe, the member states of the EU institutionalized an alignment of monetary mechanisms guaranteed to privilege certain stronger national economies at the expense of weaker economies? This post seeks to offer a particular response to these issues, shaped and informed by the economic theories of Jane Jacobs and, in particular, her conceptions on the feedback mechanisms associated with monetary fluctuations. In this respect, my intention is to elaborate on Jacobs' basic monetary theoretic perspective and, thenceforth, to apply these conceptions to an analysis of Europe's burgeoning political difficulties, reflected in the rise of the Eurosceptics.
Fundamentals of Jacobs' Monetary Perspective
In Cities and the Wealth of Nations (1985)(New York: Vintage Books), Jacobs advances a chapter length treatment of monetary economy under the theme of "Faulty Feedback to Cities." In this theorization, she conceives of foreign exchange market mechanisms as a feedback system operating as a critical regulator of capital investment at a macroeconomic level against internally integrated monetary economies. Appreciation in the value of a given currency used by a particular monetary economy relative to other currencies makes imports from economies using other relatively lower valued currencies less expensive. In this manner, the strong currency economy can afford to purchase a range of imports in exchange for its own relatively expensive exports (expensive because they must be purchased with the economy's highly valued currency).
This much of the theory is consistent with standard international monetary economics. However, refracted in relation to Jacobs' theories on "new work" and "import replacement systems" (see Jane Jacobs (1970), The Economy of Cities. New York: Vintage Books), momentary currency appreciations of this kind cannot be viewed as static events. They punctuate cycles in which currency values appreciate and depreciate in response to a variety of economic processes rooted in international commodities exchange. The development and evolution of production processes in urban economies constitute a singular dimension shaping this cycle of monetary valuation. Jacobs specifically views the accumulation of imports as grist for the mill of urban economic dynamism insofar as such imports are capable of being copied by local firms. In doing so, local copiers engage in a learning process, developing an understanding of how to both reproduce imports, improve on their design, improvise in the production process to develop greater efficiencies, and discover potential byproducts, spinning off new networks of innovation. All of these processes are critical to enabling urban economies to remain dynamic, to transform their mixes of both imports and exports over time, and to avoid being locked into particular patterns of international/interregional comparative advantage. To the extent that monetary fluctuations tend to speed up or slow down the accumulation of imports by an urban economy, it stands to reason that the subject of international monetary economy would take on a particular significance in Jacobsean urban economics.
The larger point of Jacobs' specific intervention into international monetary theory is to argue that disproportionalities arise in the effects of monetary fluctuations across monetary systems when such systems incorporate diverse, heterogeneous sub-system economies. That is to say, a monetary system incorporating a range of different city-regional economies and adjacent rural economic supply regions will experience currency fluctuations emanating from a composite of economic activities across all of its urban/city-regional and rural economies. In this respect, it is improbable that these influences will combine to shift currency values in ways that effectively regulate the economic development of all of these different sub-system regional economies. In fact, composite influencing of fluctuations may produce a mix of feedback signals that entirely undermine economic development across the entire monetary system, generating long run stagnation against which urban economies may be incapable of responding innovatively.
For Jacobs, the lesson here is that the smaller a unified currency zone is, the more likely economic agents within the zone will be capable of receiving the appropriate feedback signals from monetary fluctuations to enable them to begin aggressive import replacement. The larger a currency zone is, the more likely it will be that feedback signals get misread by economic agents, especially in urban economies. Thus, for a national economy with a unified currency bolstered by rural-based extractive resources (e.g. an economy with substantial petroleum resources), consumers in cities with fundamentally uncompetitive domestic industries will be able to accumulate substantial quantities of imports as a feedback from international demand for extractive products. Jacobs argues that this is precisely the wrong sort of feedback for such cities because it will inhibit the sort of import replacement processes that such cities need in order to make their industries competitive and innovative. Such cities need to experience monetary depreciation, making their imports relatively expensive and their exports relatively cheap for trading partners, stimulating the development of domestic import replacements and the search for new sources of comparative advantage that will spur an eventual urban-based (i.e. manufacturing and/or services-based) currency appreciation. The potentiality, moreover, exists to counteract such a currency appreciation and stimulate import replacement by enacting tariff protection or other barriers on imports, but such actions punish consumers associated with the same extractive sector that stimulated the currency appreciation in the first place. The best possible solution emerging from this scenario would be to develop separate monetary systems/separate currencies for regions associated with the extractive sectors and for urban regions, whereby each set of regions would receive appropriate monetary feedback signals.
Moving beyond this basic lesson in the impact of monetary feedback on urban economies, Jacobs' theory implies that, as a pure matter of macroeconomic organization, any large nation state, incorporating multiple distinct urban and rural macroeconomic sub-systems, will suffer either from ineffective feedback systems or from coercive, redistributive policy mechanisms (e.g. protective tariffs) if all of its regions are tied together under a common currency. By this reasoning, the United Kingdom, united under the monetary pound sterling, must have regions suffering from diminished economic development by virtue of their inability to receive the appropriate feedback on their economic activities. For city-regions in the English Midlands or Wales, for example, the impact of extractive activities in the Scottish economy and the behemoth influence of the English Southeast and, most critically, the financial activities of the City of London, driving the strength of the pound sterling in international exchange, must make it difficult for exporting firms to develop new sources of comparative advantage for international/interregional commerce to replace dying/extinct industries like the British textile sector. This was precisely the point made by Jacobs in regard to the failures of cities like Manchester to develop true city-regional economies and by the city-region of Birmingham to maintain self-sustaining import replacement. These cities are fighting against the force of monetary appreciation, strangling their abilities to transform their regional economies around new export sectors.
If the logic of Jacobs' theories on monetary feedback systems can help explain the lingering economic stagnation of peripheral regions in the contemporary economy of the UK under the pound sterling, they are equally relevant in explaining the suffering of entire national economies in the Euro-zone. If city-regions like Lyon and Naples faced an up hill struggle to develop self-sustaining import replacing dynamics to generate robust export sectors under the old French franc and Italian lira, they suffer no less under the unified Euro insofar as they are now confronting not only the influence of dominant city-regional economies (e.g. Paris and Milan) in their own national economies but now suffer the weight of financial activities in Frankfurt and German manufacturing regions as influences boosting the relative value of their currency. Beyond this, the entire Greek economy has suffered from the appreciated value of its currency under the Euro relative to the value of the old Greek drachma. Greece is not developing new robust export sectors, in part, because Greek investors are not receiving the appropriate feedback signals from exchange markets. From the beginnings of the unifed Euro-zone, relatively inexpensive imports could flow into the Greek economy, not because the Greeks were generating a strong base of export demand but because the high demand for export commodities produced in other Euro-zone economies, especially Germany, led to an explosion in the purchasing power of the currency relative to that of the old drachma. Predictably, this led to a crisis in international debt accumulation to pay for Greek domestic consumption that could not be supported by Greek domestic economic activity.
No single theory can illuminate all of the effects on material existence arising from one particular process, like monetary integration. When the European Economic Community began contemplating the possibility of eliminating national currencies and replacing them with a single multi-national currency, it seems certain that policy makers were approaching with a given understanding on transactions-oriented frictions in exchange markets as impediments to increased flows of goods and services between European national economies. In prioritizing this framework, they correctly deduced that a single currency would stimulate the growth of trade volumes between member economies. However, integration has also performed the reality predicted by the sort of Jacobsean approach that I introduce here. Regional economies that performed poorly in mid-range Euro-zone economies like France continue to lag in performance under the Euro. On the other hand, regions that performed relatively well in the Greek economy under the drachma have been hobbled by currency appreciation. At the opposite end, German manufacturing regions that performed relatively well before integration, paying for importation of large quantities of commodities for German consumers, enjoyed new inducements to import replacement evident in an effective currency depreciation when the old West German Mark was replaced by the Euro. In return, German consumers suffered higher prices for imports, again stimulating domestic import replacement. In short, regional economies that did not need to be stimulated obtained a stimulus, and regional economies that needed a stimulus to undertake import replacement in order to develop vigorous export sectors faced irremediable obstacles against import replacement. The point here is that, even to the extent that arguments in favor of European monetary integration posited valid benefits from a single currency, a Jacobsean critique might have illuminated the problems latent in monetary integrations.
Political Corollaries to Jacobsean Monetary Analysis
The generation of theorists and policy makers that first contemplated the potential for a unified, free-trading Europe (among them no less a giant than John Maynard Keynes) understood the political stakes implicated in the establishment of an organizational framework to promote stable long term economic growth and development on the continent. In place of the winner take all scenario of military conflict that had obtained for more than three centuries, from the start of the Thirty Years War to the end of World War II, the states of Western Europe would be tied together under the motivation of mutual economic benefit from trade. The establishment of the Euro under the Maastricht Treaty embodied similar motivations, recognizing that any increase in trade volumes among member states to the European Economic Community/European Union emanating from reductions in the transactional frictions under a common currency would be apt to bolster the economic interdependence of member states and diminish potential sources of political conflict.
Approaching the contemporary political problems of the EU with the same hopes for peaceful development and mutual gain enshrined in the long history of modern liberal, pro-market economic thought from Adam Smith's Wealth of Nations to the present, I nonetheless have to acknowledge the logic of Jacobs' larger critique on the heterogeneous nature of economic space and its implications for macroeconomic policy management. Granted, as a wide range of Keynesian-oriented theorists and policy makers have argued, the EU may be fundamentally flawed by the presence of a monetary union without a complementary fiscal union capable of exercising countercyclical policy initiatives that might have avoided the potential threat of systemic deflation arising, in part, from the effects of austerity measures in debt-ridden peripheral member states. However, the larger point is that the presence of a monetary union necessitates the creation of institutional mechanisms and organizational (fiscal) capacities to regulate economic dynamics and to prevent economically and politically destabilizing reactions to consequent developmental unevenness. At a time in which the federal government of my own country is being strangled by partisan gridlock and driven into irresponsible inaction in fiscal policy management to stabilize, among other things, the participation of middle income Americans in markets for real estate purchases, I have, perhaps, developed a bias against macroeconomic organizational arrangements that require active policy initiatives by fiscal and/or monetary policy agents.
It is, of course, open to question whether a European Union operating under substantially free trade and a multiplication of currencies, not merely revived national currencies but even sub-national regional currencies developed to amplify appropriate feedback signals for diverse regional economies, would alleviate the need for active fiscal policies to harmonize developing inequalities. To imagine such an outcome would amount to an instance of extreme naiveté on my part. On the other hand, it makes sense to question both the theoretic basis on which monetary integration was forged and to ask what political consequences have arisen, at least in part, as a result of monetary integration. Thus, how can we make sense of the European parliamentary electoral results of last week in light of a Jacobsean analysis on the influence of monetary feedback mechanisms?
It is my contention, in following from my reflections on faulty monetary feedback mechanisms, that the weak national economies, which experienced significant currency appreciations after integration, should demonstrate the strongest support for Eurosceptic EFD candidates and/or far-left anti-austerity/anti-globalization/anti-capitalist candidates. Conversely, the strong national economies, which experienced some measure of currency depreciation with monetary integration, should demonstrate the most emphatic support for the EU, measured in support for center-right European Peoples' Party (EPP), centrist Alliance of Liberals and Democrats (ALD), and center-left Progressive Alliance of Socialists and Democrats (S&D) candidates. This singular focus on the effects of monetary feedback mechanisms on electoral patterns emphatically cannot explain all of the variations in national voting patterns. For that matter, in the manner that I have framed this proposition I cannot clearly explain why particular national electorates in the weaker economies would select far-right as opposed to far-left candidates in protest of EU policies. The point is not to posit the effects of adverse feedback mechanisms as an all-encompassing explanation for European parliamentary elections but to show that the theory can at least partly illuminate the nature of this year's partial electoral setback for moderate, liberal, pro-European unity partisan forces.
I want to approach this question with comparisons of voting patterns on two levels: between EU states and between individual regions in individual states. On the first level, I want to situate the electoral results from a diverse selection of EU member states. I am not going to posit any scientific methodology for this selection. Rather, it is based solely on my offhand reflections on the relative strength of these economies before and since the introduction of the Euro as the everyday currency in commercial transactions for the Euro-zone states in 2002. The national economies selected should provide a broad portrait of the larger political effects of monetary integration manifest through parliamentary results. Table 1 provides a finite introductory macroeconomic portrait of six national economies in the Euro-zone and their relationship to the Euro-zone as a whole. The information reported here is derived from OECD real per capita GDP statistics in constant 2005 U.S. dollars, used to calculate an index of per capita GDP with the 17 economy Euro-zone per capita GDP statistic in 2001 set equal to 100. The years I selected here might give us some sense of the differences in the relative performance of individual economies from before the introduction of everyday Euro currency (coins and banknotes) (2001), five years in and prior to the onset of global financial crises in 2007-2008 (2006), and during the course of the European sovereign debt crisis (2011).
Again, differences in the relative national economic performance cannot be limited to differences in per capita GDP and differences in per capita GDP of each of these national economies cannot be reduced to the effects of monetary integration - each index value tells a much larger story about how the real economies of these countries have changed since the turn of the century, how each has adjusted to liberalized trade across the EU and multilaterally with the rest of the world over time, and how urban and rural sub-national economies have specialized and/or reconfigured their specialization in order to remain competitive in export markets. On the other hand, differences in the relative strength of individual national currencies prior to integration reflect the capacities for each of these economies to adjust once all of them operated under a single currency. Before integration, the Italian lira registered a composite of real economic signals, reflecting the continued strength of manufacturing and advanced producer service industries in the northern provinces and the continued stagnation of the south. The relative weakness of the lira in comparison to the Euro in international exchange places an additional weight upon the southern Italian economy making it difficult from low-wage, low-skilled export processing operations from which it might otherwise benefit. By contrast, the Austrian economy was never characterized by such a vast disparity in economic development prior monetary integration. Its limited range of export-oriented manufacturing industries, advanced producer service sector in the Viennese city-region, the continued strength of its tourism sector meant that the schilling be replaced as a strong currency that might exert upward pressure on the value of the Euro.
It is precisely the point that, under a unified currency, certain monetary fluctuations become pro-cyclical, reinforcing the uncompetitive nature of particular regional economies rather than supporting their emergence in new export sectors, and these fluctuations promote nefarious political developments. With this in mind, let us look at the 2009 and 2014 electoral results in these countries for various EU parliamentary groups/parties in Tables 2A and 2B.
To provide a synopsis of what I take out of these results, reflecting my initial hypothesis, the stronger performing economies that had stronger currencies entering into monetary integration appear to demonstrate the strongest support for centrist (ALD), center-left (S&D), and center-right (EPP/Christian Democrat) parties, all of whom represent supporters of the monetary union and progressive integration (including, perhaps, fiscal union) for the EU member states. Austria most emphatically demonstrates this pattern for both years. To a lesser extent, Netherlands also shows such a pattern of support for pro-European candidates, however balanced by strains of support for the far-left (GUE/NGL), center-right Eurosceptic (EFD), and unaffiliated (NI) far-right Eurosceptics (Party for Freedom/Partij voor de vrijheid). Finland, likewise, shows a strong tendency to support pro-European centrist parties. On the other hand, more recent declines and/or reversals of GDP growth here appear to induce a minor reaction, supporting a growth in support for GUE/NGL (Vasemistoliitto) and conservative/reformist (Perussuomalaiset) parties.
This multinational comparison of electoral results advances a particular set of conclusions. Notably, as suggested in my initial hypothesis, the stronger national economies that had the most to gain from the implicit currency devaluation constituted by monetary integration are the strongest supporters of the EU in its current form or with slight modifications in multinational fiscal policy coordination (not a full-blown fiscal union). The weaker national economies, on the other hand, support political perspectives further to the left (either S&D or GUO/NGL affiliates), supportive of either a robust fiscal union or, in stark contrast, greater autonomy for national and/or regional economies. Some rightist Eurosceptics, especially far-right anti-immigration partisans, emerge from these economies but they are overwhelmed, as a reaction against austerity measures, by leftist anti-austerity and anti-capitalist partisans. In this sense, we need to ask where the bulk of the rightist Eurosceptics are coming from. The answer, emphatically, seems to be from the strong non-Euro-zone outliers, notably Britain, and from the mid-range Euro-zone economies, notably France, where fear of falling among the ranks of economies ravaged by austerity measures has gripped the electorate. A regional analysis of these, large, mutli-regional economies is revealing with regard to the economic processes driving anti-EU and anti-Euro reaction.
Britain's European Parliamentary vote mirrors, in significant ways, the Jacobsean prediction that weak regional economies should (and do) have reasons to strenuously oppose economic integration, even to the extent that Britain has been spared the monetary forces attendant to joining the Euro-zone. The ultra-conservative/libertarian Eurosceptic United Kingdom Independence Party (UKIP) (EFD) took the largest share (27.5 percent) of the European Parliamentary vote across Britain, claiming 24 of 70 seats. The partisan ideology embodied by this party initially focused entirely on removing Britain from the EU and preventing closer integration with the continent (e.g. joining the Euro-zone), but it has branched out advocate a range of other pro-capitalist, libertarian positions. The party's anti-EU perspective is most noteworthy in this context. It will constitute three-fourths of the EFD group (claiming 32 seats across the EU) in the incoming European Parliament and will, thus, highlight a British anti-European forefront.
Figure 1: United Kingdom Independence Party Vote in European Parliamentary Elections 2014. Source: "Farage: UKIP has 'momentum' and is targeting more victories," on BBC (26 May 2014), at: http://www.bbc.com/news/uk-politics-27567744.
Combining seats claimed Labour (S&D) (20 seats), the Conservatives (ECR) (19 seats), the Liberal-Democratic Party (ALD) (1 seat), the Green Party (Greens/EFA) (2 seats), the Scottish National Party (SNP)(Greens/EFA) (2 seats), and Plaid Cymru/Party of Wales (Greens/EFA) (1 seat), the majority of Britain's European Parliamentary delegation will remain in pro-EU and relatively conservative, by virtue of the confluence of economic perspectives between the Conservatives and UKIP. Nonetheless, as suggested in figure 1, the election demonstrates the pointedly regional nature of opposition for the EU in Britain. If, in certain respects, UKIP has made inroads into Wales and Scotland, the continued dominance of pro-EU national parties in these national jurisdictions demonstrates that they remained at least partly successful in making the case that the long term interests of these nations remains with European integration, more so than with continued union with England. By contrast, the Midland counties, the Southwest, Yorkshire, and even the counties of the Southeast provided the strongest bases of support for UKIP. Moreover, it appears that support for UKIP in London was so weak because of the continuing strength of Labour in outlying "working class" districts, not because of strong support for either the Conservatives or the Liberal Democrats, who appear to have been the biggest losers in the election. In sum, it seems to suggest that, notwithstanding the continued commitments of certain British Labour constituencies to European unity with enhanced fiscal coordination, the majority of England outside London has not been convinced that it stands to gain from the present weaker ties of the UK to Europe, let alone more aggressive fiscal policy integration or entry into the Euro-zone. Again, by virtue of the strength of the pound sterling and the influence of both peripheral extractive economies and the London financial sector in maintaining the pound's strength in foreign exchange, most of the areas that supported UKIP have little reason to imagine that they have something to gain from greater integration with Europe when they have seen their own role within the UK economy's engagement with the rest of the world erode. The Eurosceptic right is the prime beneficiary of economic stagnation outside of the London financial sector.
If UKIP's victory in Britain represents most prominently success in sowing doubt in the economic benefits of a unified Europe, then the victory of Front National (FN) in France most emphatically reflects the failure of cultural cosmopolitanism as a motivation for creation of a borderless Europe and the failure of mainstream French parties to convince Frenchmen and French women in cities like Lille and Toulouse and in the countrysides of Burgendy, Provence and many other rural areas that their economic fortunes were tied inseparably to those of Germans, Poles, Croatians, and Swedes. It is, likewise, a victory for the mythic unity of blood and soil that constitutes French nationalism, paraded before an electorate caught in the embrace of fear in a declining French standard of living and poisoned by Gallic chauvinism and Eurocentric racism.
The French Socialist Party of François Hollande deserves at least part of the blame for this catastrophe for failing since its 2012 electoral victory to produce any tangible, principled transformation of domestic taxation and reform of state bureaucracies in the interest restoring domestic private sector growth and reducing unemployment, particularly among younger workers. Again, however, I want to emphasize adverse monetary feedback mechanisms in the French economy as a relevant component in generating the rise of the FN's political fortunes. Economically speaking, the Paris city-regional economy has led France in European integration and globalization, more broadly. Other urban economies in France are dwarfed by Paris and, as such, the economic strength of Paris previously drove the monetary strength of the franc in foreign exchange, hindering self-sustaining development of export sectors in peripheral urban economies. This effect has in no way been reduced by monetary integration - now entrepreneurs in Toulouse, Lyon, and Rouen have to contend with the strength of a currency driven both by the economic strength of the Paris regional economy and that of German, Swedish, and Dutch city-regional economies. If we combine the adverse effects of monetary integration with other, politically pernicious effects of European unity, like the reduction of constraints on free movement of labor between EU states and perceptions about the increase of non-French citizens in French labor markets (noting that the perceptions of French citizens are a more relevant causal force than the actual statistical reality of EU and non-EU migration into France), then we have conditions under which economic stagnation can amplify the voice of racist bigots above those of the defenders of the unified European project.
Reinforcing my larger argument on regional variations in support/opposition to the European project in France, francetvinfo lists European Parliamentary results for each regional electoral jurisdiction (circonscription) as well as general electoral results for the entire country (see "Résultats européennes 2014," on francetvinfo, at: http://www.francetvinfo.fr/elections/resultats/). These results are listed in Table 3.
The regional divergence in voting and electoral success of the Front National relative to the pro-European parties is most abundantly evident in a comparison of the results from Ile de France (Paris) and the aging industrial region of Nord Ouest (Picardie, Basse-Normandie, Haut-Normandie, Nord-Pas-de-Calais). Again, in this respect, the contribution of Paris to total French gross domestic product (GDP) dwarfs the combined contribution of the Nord Ouest region (235.092 billion Euros for all the regions of Nord Ouest in 2012 against 612.323 billion Euros for Ile de France), and per capita GDP for Ile de France is more than double that of any of the Nord Ouest regions, except for Haut-Normandie (51,250 Euros per capita for Ile de France in 2012 against 25,487 for Nord-Pas-de Calais, 26,984 for Haut-Normandie, 23,751 for Picardie, and 24,597 for Bas-Normandie) (see "Régions françaises classées par produit intérieur
brut," on Wikipédia (Français), at: http://fr.wikipedia.org/wiki/R%C3%A9gions_fran%C3%A7aises_class%C3%A9es_par_produit_int%C3%A9rieur_brut). Discounting the personal appeal of Marine Le Pen, as the top candidate on the electoral list of Front National in Nord Ouest, the difference in the economic strength of the Nord Ouest regions relative to Paris and the enhanced Parisian stake in European integration, including monetary union, at least potentially provides the beginnings of an explanation for why the pro-European parties in Paris win 8 seats against 3 for Front National, while in Nord Ouest Front National quashes the pro-European parties, 5 seats to a combined 4 for UMP, UC, and PS/UG. If Front National's appeal has a great deal to do with racist fears of immigrants and a more general ethno-centric French nationalism against the transnational appeal of Brussels, it also has to do with the economic stagnation of regions like Nord Ouest, their inabilities to restructure and develop new robust export sectors under monetary integration, and fear of falling economically into the ranks of Italy, Greece, and Portugal as one of the weak junior members of the EU, bullied and lectured on austerity by Germany. The latter have been reinforced and strengthed by monetary feedbacks from the introduction of the Euro to the present.
What we have here is the genesis of potentially self-sustaining anti-integration reactionary in one of the EU's foundational members, without which the principle of a unified Europe would be undermined entirely. To reiterate the precautionary note, we absolutely cannot reduce the production of such a reaction to monetary integration. On the other hand, we have to recognize that monetary integration has played a role in creating anti-EU sentiment in France, as in other EU member states. The pronounced victory of Front National (with its resounding "Non à Bruxelles, Oui à la France"), will make it much more difficult for the EU to enact the sorts of changes to its internal organization and to the fiscal capacity of EU-level policy makers that might begin to redress the negative, pro-cyclical effects of monetary integration on the peripheral national economies and the peripheral regions, enabling the EU to transition from a counter-productive emphasis on the same austerity measures that are promoting deflation to permanent redistribution of the gains from integration. If France keeps sliding toxically to the far right, perhaps the German Christian Democrats and Chancellor Merkel will bear the blame for not having conceded that monetary union cannot work without the willingness of the stronger economies to bear the burden of stagnation by the weaker economies. As such, it is worth briefly evaluating the alternatives and asking what might be feasible as a future for the project of European unity.
Whither European Unity?
Prior to the European Parliamentary elections, former French President Nicolas Sarkozy made the relevant suggestion that the Schengen Agreement, mandating the elimination of border controls among a range of EU and non-EU signatories, should be scrapped in favor of more restrictive policies on immigration and the larger organization of the EU should be replaced with a structure that would amplify Franco-German direction over the larger economic bloc (see Henry Samuel, "France is 'dumping' ground for EU migration and visa-free Schengen area must be scrapped, says Nicolas Sarkozy," in The Telegraph (22 May 2014), at: http://www.telegraph.co.uk/news/worldnews/nicolas-sarkozy/10848895/France-is-dumping-ground-for-EU-migration-and-visa-free-Schengen-area-must-be-scrapped-says-Nicolas-Sarkozy.html). It seems clear that Sarkozy's statements need to be read in the context of French domestic politics, concerning Sarkozy's ambitions to supplant François Hollande in the next national electoral cycle. On the other hand, it might also be read as a measured concession to the far right/Front National that immigration policies tied to the Schengen agreement have been detrimental to France. Such posturing obviously contributed, in part, to the rightward shift in French politics in the European parliamentary elections by validating polemical attacks on open borders by Front National within the framework of the French political mainstream. If the project of European unity means anything, then it must include the free movement of human beings across the political artifice of national boundaries. No mainstream politician, supportive of the European project, can seriously engage with the notion of scrapping Schengen without simultaneously supporting a much broader retraction of economic integration, including monetary integration, not to mention conceding that there is something to the racist, ethno-centric fears of nationalist extremists who categorically oppose any measure of transnational unity! In this respect, Sarkozy deserves to be called out by his political opponents in his own party and to its left for flirting with the devil.
Noting Sarkozy's politically motivated Eurosceptic moment, it seems clear that, at least within France, the enthusiasm of mainstream politicians for the European project is degenerating as the electorate in peripheral regions linger, failing to see any tangible benefit and perceiving abject economic and cultural costs from economic integration. The most direct way to address such a degeneration of support for European unity would involve the construction of fiscally redistributive institutions within the EU, counteracting the procyclical influence of monetary forces. Such redistributions might also tend to counteract deflation, driven, in large part, by austerity measures in the peripheral national economies. On the other hand, it seems unlikely that a capacity for fiscal redistribution is going to arise at the level of the EU. Rather, given the current alignment of political forces in the European Parliament and the desire of multiple EU member states to reduce the authority of the European Commission, it would seem more likely that the central governing apparatus of the EU is bound for five years of political deadlock as defenders of the European project in the European Parliament struggle to keep the EU from disintegrating altogther.
The overriding problem presented by European unity is the fact that severe disproportionalities exist in the performance of diverse regions, both within individual member national economies and in relation to other regions of other states. The continued absence of correcting fiscal mechanisms to repair such disproportionalities constructs doubts regarding the potential benefits of economic integration. As I have argued in this post, procyclical monetary feedbacks introduced by monetary integration are making this situation worse. In my view, the defenders a unified Europe need to seriously consider the consequences of taking a step back, even if it is a step backward in stages to reduce the frictions inherent in reintroducing national currencies if such a step would reduce the procyclical stress for weak regional economies in the EU. My central argument is, thus, that the Euro has caused more problems for European unity than it solved. The European Union, as a customs union, a continuous, borderless political geography, and an organizational entity capable of framing and harmonizing policies among member states to deal with, among other things, a shared response to ecological transformations, does not need a single currency to cement the interdependence of its member regional economies, and, at present, the existence of such a common currency is contributing to the political forces that risk the destruction of the EU, per se.
The reintroduction of national currencies, at this point, might not be entirely impossible. It seemed likely, at the height of the sovereign debt crisis in 2012, that such a fate would ultimately arise for Greece if it could not come to terms with a deal for relief from the EU, ECB, and IMF. Such a withdrawal from the common currency zone would have, invariably, been messy, painful, and uncertain, especially for investors in Greek debt. If a slow drawing down of the Euro was effected with the mutual consent of all Eurozone member economies, to replace the single currency with multiple currencies, then, perhaps, an orderly transition might be exercised within international financial markets, with negotiation of the terms of Euro-denominated securities to ensure that investors do not bear an excessive burden from the end of the common currency. On the other hand, I do not think a return to national currencies might necessarily provide an adequate solution to the larger problem, because they would not maximize the communication of appropriate monetary feedbacks to regional economies, particularly in the larger EU national economies.
Rather, the introduction of multiple regional or interregional currencies, linked, perhaps, discontinuously through networks of comparable and complementary regional economies in multiple EU states, might promote the sort of positive monetary feedbacks across the network to generate, sustain, or transform existing geographically extensive supply chains, linking multiple city-regional and rural supply regions under a common currency. The point of linking together such interregional networks would be to, as ideally as possible, ensure that monetary fluctuations within a currency union would have a countercyclical effect. In a Jacobsean logic, a depreciation of currency values would, thus, make imports more expensive, encouraging import replacement with local equivalents where possible. Appreciations, generated by robust demand for exports generated within the network would, by contrast, make imports cheaper, providing materials to feed future import replacement and the transformation of export sector specializations over time. In this manner, the particular interdependencies of members to given transnational networks of regions might cut through the parochial appeals of nationalist political movements to demonstrate to economic stakeholders (entrepreneurs and workers alike) the benefits to particular forms of monetary integration, even if the constellation of regions in a network remains open transformations over time, reflecting the ever evolving geographical logic of economic development, pulling regions together and flinging them apart.
This image of network currencies appears, in my view, to most closely reflect the resolution to the monetary feedback problem introduced by Jacobs that I find so useful in analyzing the problems faced by the EU and, in particular, the Eurozone economies. It raises a range of questions regarding the needs for positive monetary policy and the need for complementary fiscal policy regimes within network economic systems under a common currency. That said, while it is tempting to posit network currencies as a possible resolution for the economic ills facing the EU, I am also quite certain that the fate of EU and Euro will not so quintessentially reflect the pristine logic of theory. We can only hope that whatever emerges from Europe over the next decade will continue to embody the aspirations of those thinkers that constructed the European Economic Community as the economic counterweight against rampant, ethno-centric nationalism and armed conflict.
To accompany the grief arising from news on Europe's Parliamentary elections, European Central Bank (ECB) President Mario Draghi warned Monday that the Euro-zone economies need to be watchful of the possibility that the zone may enter a price deflationary spiral, undermining expectations on price inflation/financial stability and, thus, hindering growth in demand for credit to finance investment expenditures (see Eva Taylor, "ECB watching deflationary risks and ready to act, says Draghi," on Reuters (May 26, 2014), at: http://www.reuters.com/article/2014/05/26/us-ecb-policy-idUSBREA4M0IV20140526). Draghi pointed to the problem of constraints on bank lending in peripheral EU economies as a source disrupting ECB annual inflation rate targets of just under 2 percent (inflation across the EU is currently in the vicinity of .7 percent annually). Evaluated against the political context of a right-wing populist backlash against economic integration and its consequences for member states (e.g. bailouts for peripheral states with sovereign debt issues), the potentiality for deflation across the Euro-zone appears to be real and, paradoxically, it would stand to reinforce the political stature of the enemies of economic integration whose own actions will, in turn, contribute to the potential for deflation.
With these considerations in mind, it is worth inquiring into the political health of the project of a unified Europe. What, after all, was the point of integrating the western European and, then, the central and eastern European economies into a customs unions and, subsequently, a monetary union? In view of the financial crises, bailouts, and political consequences befalling the Euro-zone of the last decade, are these ends still adequately served or, conversely, are the very institutions constructed to harmonize the economic interests of member states to promote an overarching political stability destabilizing the internal politics of the union? Is it possible that by striving to achieve economic unity and integration between the states of Europe, the member states of the EU institutionalized an alignment of monetary mechanisms guaranteed to privilege certain stronger national economies at the expense of weaker economies? This post seeks to offer a particular response to these issues, shaped and informed by the economic theories of Jane Jacobs and, in particular, her conceptions on the feedback mechanisms associated with monetary fluctuations. In this respect, my intention is to elaborate on Jacobs' basic monetary theoretic perspective and, thenceforth, to apply these conceptions to an analysis of Europe's burgeoning political difficulties, reflected in the rise of the Eurosceptics.
Fundamentals of Jacobs' Monetary Perspective
In Cities and the Wealth of Nations (1985)(New York: Vintage Books), Jacobs advances a chapter length treatment of monetary economy under the theme of "Faulty Feedback to Cities." In this theorization, she conceives of foreign exchange market mechanisms as a feedback system operating as a critical regulator of capital investment at a macroeconomic level against internally integrated monetary economies. Appreciation in the value of a given currency used by a particular monetary economy relative to other currencies makes imports from economies using other relatively lower valued currencies less expensive. In this manner, the strong currency economy can afford to purchase a range of imports in exchange for its own relatively expensive exports (expensive because they must be purchased with the economy's highly valued currency).
This much of the theory is consistent with standard international monetary economics. However, refracted in relation to Jacobs' theories on "new work" and "import replacement systems" (see Jane Jacobs (1970), The Economy of Cities. New York: Vintage Books), momentary currency appreciations of this kind cannot be viewed as static events. They punctuate cycles in which currency values appreciate and depreciate in response to a variety of economic processes rooted in international commodities exchange. The development and evolution of production processes in urban economies constitute a singular dimension shaping this cycle of monetary valuation. Jacobs specifically views the accumulation of imports as grist for the mill of urban economic dynamism insofar as such imports are capable of being copied by local firms. In doing so, local copiers engage in a learning process, developing an understanding of how to both reproduce imports, improve on their design, improvise in the production process to develop greater efficiencies, and discover potential byproducts, spinning off new networks of innovation. All of these processes are critical to enabling urban economies to remain dynamic, to transform their mixes of both imports and exports over time, and to avoid being locked into particular patterns of international/interregional comparative advantage. To the extent that monetary fluctuations tend to speed up or slow down the accumulation of imports by an urban economy, it stands to reason that the subject of international monetary economy would take on a particular significance in Jacobsean urban economics.
The larger point of Jacobs' specific intervention into international monetary theory is to argue that disproportionalities arise in the effects of monetary fluctuations across monetary systems when such systems incorporate diverse, heterogeneous sub-system economies. That is to say, a monetary system incorporating a range of different city-regional economies and adjacent rural economic supply regions will experience currency fluctuations emanating from a composite of economic activities across all of its urban/city-regional and rural economies. In this respect, it is improbable that these influences will combine to shift currency values in ways that effectively regulate the economic development of all of these different sub-system regional economies. In fact, composite influencing of fluctuations may produce a mix of feedback signals that entirely undermine economic development across the entire monetary system, generating long run stagnation against which urban economies may be incapable of responding innovatively.
For Jacobs, the lesson here is that the smaller a unified currency zone is, the more likely economic agents within the zone will be capable of receiving the appropriate feedback signals from monetary fluctuations to enable them to begin aggressive import replacement. The larger a currency zone is, the more likely it will be that feedback signals get misread by economic agents, especially in urban economies. Thus, for a national economy with a unified currency bolstered by rural-based extractive resources (e.g. an economy with substantial petroleum resources), consumers in cities with fundamentally uncompetitive domestic industries will be able to accumulate substantial quantities of imports as a feedback from international demand for extractive products. Jacobs argues that this is precisely the wrong sort of feedback for such cities because it will inhibit the sort of import replacement processes that such cities need in order to make their industries competitive and innovative. Such cities need to experience monetary depreciation, making their imports relatively expensive and their exports relatively cheap for trading partners, stimulating the development of domestic import replacements and the search for new sources of comparative advantage that will spur an eventual urban-based (i.e. manufacturing and/or services-based) currency appreciation. The potentiality, moreover, exists to counteract such a currency appreciation and stimulate import replacement by enacting tariff protection or other barriers on imports, but such actions punish consumers associated with the same extractive sector that stimulated the currency appreciation in the first place. The best possible solution emerging from this scenario would be to develop separate monetary systems/separate currencies for regions associated with the extractive sectors and for urban regions, whereby each set of regions would receive appropriate monetary feedback signals.
Moving beyond this basic lesson in the impact of monetary feedback on urban economies, Jacobs' theory implies that, as a pure matter of macroeconomic organization, any large nation state, incorporating multiple distinct urban and rural macroeconomic sub-systems, will suffer either from ineffective feedback systems or from coercive, redistributive policy mechanisms (e.g. protective tariffs) if all of its regions are tied together under a common currency. By this reasoning, the United Kingdom, united under the monetary pound sterling, must have regions suffering from diminished economic development by virtue of their inability to receive the appropriate feedback on their economic activities. For city-regions in the English Midlands or Wales, for example, the impact of extractive activities in the Scottish economy and the behemoth influence of the English Southeast and, most critically, the financial activities of the City of London, driving the strength of the pound sterling in international exchange, must make it difficult for exporting firms to develop new sources of comparative advantage for international/interregional commerce to replace dying/extinct industries like the British textile sector. This was precisely the point made by Jacobs in regard to the failures of cities like Manchester to develop true city-regional economies and by the city-region of Birmingham to maintain self-sustaining import replacement. These cities are fighting against the force of monetary appreciation, strangling their abilities to transform their regional economies around new export sectors.
If the logic of Jacobs' theories on monetary feedback systems can help explain the lingering economic stagnation of peripheral regions in the contemporary economy of the UK under the pound sterling, they are equally relevant in explaining the suffering of entire national economies in the Euro-zone. If city-regions like Lyon and Naples faced an up hill struggle to develop self-sustaining import replacing dynamics to generate robust export sectors under the old French franc and Italian lira, they suffer no less under the unified Euro insofar as they are now confronting not only the influence of dominant city-regional economies (e.g. Paris and Milan) in their own national economies but now suffer the weight of financial activities in Frankfurt and German manufacturing regions as influences boosting the relative value of their currency. Beyond this, the entire Greek economy has suffered from the appreciated value of its currency under the Euro relative to the value of the old Greek drachma. Greece is not developing new robust export sectors, in part, because Greek investors are not receiving the appropriate feedback signals from exchange markets. From the beginnings of the unifed Euro-zone, relatively inexpensive imports could flow into the Greek economy, not because the Greeks were generating a strong base of export demand but because the high demand for export commodities produced in other Euro-zone economies, especially Germany, led to an explosion in the purchasing power of the currency relative to that of the old drachma. Predictably, this led to a crisis in international debt accumulation to pay for Greek domestic consumption that could not be supported by Greek domestic economic activity.
No single theory can illuminate all of the effects on material existence arising from one particular process, like monetary integration. When the European Economic Community began contemplating the possibility of eliminating national currencies and replacing them with a single multi-national currency, it seems certain that policy makers were approaching with a given understanding on transactions-oriented frictions in exchange markets as impediments to increased flows of goods and services between European national economies. In prioritizing this framework, they correctly deduced that a single currency would stimulate the growth of trade volumes between member economies. However, integration has also performed the reality predicted by the sort of Jacobsean approach that I introduce here. Regional economies that performed poorly in mid-range Euro-zone economies like France continue to lag in performance under the Euro. On the other hand, regions that performed relatively well in the Greek economy under the drachma have been hobbled by currency appreciation. At the opposite end, German manufacturing regions that performed relatively well before integration, paying for importation of large quantities of commodities for German consumers, enjoyed new inducements to import replacement evident in an effective currency depreciation when the old West German Mark was replaced by the Euro. In return, German consumers suffered higher prices for imports, again stimulating domestic import replacement. In short, regional economies that did not need to be stimulated obtained a stimulus, and regional economies that needed a stimulus to undertake import replacement in order to develop vigorous export sectors faced irremediable obstacles against import replacement. The point here is that, even to the extent that arguments in favor of European monetary integration posited valid benefits from a single currency, a Jacobsean critique might have illuminated the problems latent in monetary integrations.
Political Corollaries to Jacobsean Monetary Analysis
The generation of theorists and policy makers that first contemplated the potential for a unified, free-trading Europe (among them no less a giant than John Maynard Keynes) understood the political stakes implicated in the establishment of an organizational framework to promote stable long term economic growth and development on the continent. In place of the winner take all scenario of military conflict that had obtained for more than three centuries, from the start of the Thirty Years War to the end of World War II, the states of Western Europe would be tied together under the motivation of mutual economic benefit from trade. The establishment of the Euro under the Maastricht Treaty embodied similar motivations, recognizing that any increase in trade volumes among member states to the European Economic Community/European Union emanating from reductions in the transactional frictions under a common currency would be apt to bolster the economic interdependence of member states and diminish potential sources of political conflict.
Approaching the contemporary political problems of the EU with the same hopes for peaceful development and mutual gain enshrined in the long history of modern liberal, pro-market economic thought from Adam Smith's Wealth of Nations to the present, I nonetheless have to acknowledge the logic of Jacobs' larger critique on the heterogeneous nature of economic space and its implications for macroeconomic policy management. Granted, as a wide range of Keynesian-oriented theorists and policy makers have argued, the EU may be fundamentally flawed by the presence of a monetary union without a complementary fiscal union capable of exercising countercyclical policy initiatives that might have avoided the potential threat of systemic deflation arising, in part, from the effects of austerity measures in debt-ridden peripheral member states. However, the larger point is that the presence of a monetary union necessitates the creation of institutional mechanisms and organizational (fiscal) capacities to regulate economic dynamics and to prevent economically and politically destabilizing reactions to consequent developmental unevenness. At a time in which the federal government of my own country is being strangled by partisan gridlock and driven into irresponsible inaction in fiscal policy management to stabilize, among other things, the participation of middle income Americans in markets for real estate purchases, I have, perhaps, developed a bias against macroeconomic organizational arrangements that require active policy initiatives by fiscal and/or monetary policy agents.
It is, of course, open to question whether a European Union operating under substantially free trade and a multiplication of currencies, not merely revived national currencies but even sub-national regional currencies developed to amplify appropriate feedback signals for diverse regional economies, would alleviate the need for active fiscal policies to harmonize developing inequalities. To imagine such an outcome would amount to an instance of extreme naiveté on my part. On the other hand, it makes sense to question both the theoretic basis on which monetary integration was forged and to ask what political consequences have arisen, at least in part, as a result of monetary integration. Thus, how can we make sense of the European parliamentary electoral results of last week in light of a Jacobsean analysis on the influence of monetary feedback mechanisms?
It is my contention, in following from my reflections on faulty monetary feedback mechanisms, that the weak national economies, which experienced significant currency appreciations after integration, should demonstrate the strongest support for Eurosceptic EFD candidates and/or far-left anti-austerity/anti-globalization/anti-capitalist candidates. Conversely, the strong national economies, which experienced some measure of currency depreciation with monetary integration, should demonstrate the most emphatic support for the EU, measured in support for center-right European Peoples' Party (EPP), centrist Alliance of Liberals and Democrats (ALD), and center-left Progressive Alliance of Socialists and Democrats (S&D) candidates. This singular focus on the effects of monetary feedback mechanisms on electoral patterns emphatically cannot explain all of the variations in national voting patterns. For that matter, in the manner that I have framed this proposition I cannot clearly explain why particular national electorates in the weaker economies would select far-right as opposed to far-left candidates in protest of EU policies. The point is not to posit the effects of adverse feedback mechanisms as an all-encompassing explanation for European parliamentary elections but to show that the theory can at least partly illuminate the nature of this year's partial electoral setback for moderate, liberal, pro-European unity partisan forces.
I want to approach this question with comparisons of voting patterns on two levels: between EU states and between individual regions in individual states. On the first level, I want to situate the electoral results from a diverse selection of EU member states. I am not going to posit any scientific methodology for this selection. Rather, it is based solely on my offhand reflections on the relative strength of these economies before and since the introduction of the Euro as the everyday currency in commercial transactions for the Euro-zone states in 2002. The national economies selected should provide a broad portrait of the larger political effects of monetary integration manifest through parliamentary results. Table 1 provides a finite introductory macroeconomic portrait of six national economies in the Euro-zone and their relationship to the Euro-zone as a whole. The information reported here is derived from OECD real per capita GDP statistics in constant 2005 U.S. dollars, used to calculate an index of per capita GDP with the 17 economy Euro-zone per capita GDP statistic in 2001 set equal to 100. The years I selected here might give us some sense of the differences in the relative performance of individual economies from before the introduction of everyday Euro currency (coins and banknotes) (2001), five years in and prior to the onset of global financial crises in 2007-2008 (2006), and during the course of the European sovereign debt crisis (2011).
Again, differences in the relative national economic performance cannot be limited to differences in per capita GDP and differences in per capita GDP of each of these national economies cannot be reduced to the effects of monetary integration - each index value tells a much larger story about how the real economies of these countries have changed since the turn of the century, how each has adjusted to liberalized trade across the EU and multilaterally with the rest of the world over time, and how urban and rural sub-national economies have specialized and/or reconfigured their specialization in order to remain competitive in export markets. On the other hand, differences in the relative strength of individual national currencies prior to integration reflect the capacities for each of these economies to adjust once all of them operated under a single currency. Before integration, the Italian lira registered a composite of real economic signals, reflecting the continued strength of manufacturing and advanced producer service industries in the northern provinces and the continued stagnation of the south. The relative weakness of the lira in comparison to the Euro in international exchange places an additional weight upon the southern Italian economy making it difficult from low-wage, low-skilled export processing operations from which it might otherwise benefit. By contrast, the Austrian economy was never characterized by such a vast disparity in economic development prior monetary integration. Its limited range of export-oriented manufacturing industries, advanced producer service sector in the Viennese city-region, the continued strength of its tourism sector meant that the schilling be replaced as a strong currency that might exert upward pressure on the value of the Euro.
It is precisely the point that, under a unified currency, certain monetary fluctuations become pro-cyclical, reinforcing the uncompetitive nature of particular regional economies rather than supporting their emergence in new export sectors, and these fluctuations promote nefarious political developments. With this in mind, let us look at the 2009 and 2014 electoral results in these countries for various EU parliamentary groups/parties in Tables 2A and 2B.
To provide a synopsis of what I take out of these results, reflecting my initial hypothesis, the stronger performing economies that had stronger currencies entering into monetary integration appear to demonstrate the strongest support for centrist (ALD), center-left (S&D), and center-right (EPP/Christian Democrat) parties, all of whom represent supporters of the monetary union and progressive integration (including, perhaps, fiscal union) for the EU member states. Austria most emphatically demonstrates this pattern for both years. To a lesser extent, Netherlands also shows such a pattern of support for pro-European candidates, however balanced by strains of support for the far-left (GUE/NGL), center-right Eurosceptic (EFD), and unaffiliated (NI) far-right Eurosceptics (Party for Freedom/Partij voor de vrijheid). Finland, likewise, shows a strong tendency to support pro-European centrist parties. On the other hand, more recent declines and/or reversals of GDP growth here appear to induce a minor reaction, supporting a growth in support for GUE/NGL (Vasemistoliitto) and conservative/reformist (Perussuomalaiset) parties.
By contrast, the weaker economies that came into monetary integration with weaker currencies demonstrate stronger support for far-left (GUE/NGL and unaffiliated NI communist or other radical party). Greece, Ireland, and Italy have all been affected to different degrees by the financial crises of the last seven years, with Greece constituting one of the epicenters for Europe's crisis in sovereign debt. While Greece has consistently shown no support for parties affiliated with the centrist ALD group, it demonstrated fairly strong support for EPP and S&D parties in 2009. This support declines sharply in 2014, with the strongest electoral support given to the anti-capitalist/anti-austerity Coalition of the Radical Left (SYRIZA, GUO/NGL) (taking 6 of 21 European Parliament seats). Likewise, Greek voters gave adequate support to the anti-EU neo-fascist Golden Dawn Party to secure 3 seats. In Ireland, conversely, support for center-right Fine Gael (EPP) remains constant for 2009 and 2014, but the remaining electorate appears to shift to the left, giving 17 percent of the vote to Sinn Féin (GUE/NGL) and reducing support for both Fianna Fáil (ALD) and Labour (S&D).
Italy, with the largest European Parliamentary delegation and the largest national economy of any of the countries considered here is, likewise, noteworthy for the leftward shift in its voting in 2014. The center-left Partito Democratico (PD)(S&D) gained ten seats over its performance in 2009. In some regard, this shift reflects continued acquiescence in a vision of European unity by the larger Italian polity, perhaps with a reinvigorated conception of the need for fiscal union and redistribution of the burdens of securing fiscal solvency for all states within the EU, something that remains important for Italy. Moreover, the disintegration of Italia dei Valori, nominally a constituent of the ALD centrist group notwithstanding its left-wing populist tendencies, has bolstered a shift of pro-European support toward the left, from which the PD has been the primary beneficiary. Likewise, the pro-European center-right EPP affiliated parties suffered a noteworthy decline, losing 18 seats. Further, the Eurosceptic right (EFD), represented in certain ways by the EFD affiliated federalist, libertarian Lega Nord, lost 4 seats. Conversely, the radical-democratic, centrist, ecologist unaffiliated Five-Star Movement made huge gains, grabbing 17 seats. In general, these electoral results suggest to me that Italy, as the weakest big European national economy, straddled with its significant regional economic differentials, the continued and intensified stagnation of the south, and simultaneous contending strong commitments by broad and entrenched shares of the national polity, on the one hand, to social-democratic policies at home and fiscally redistributive policies across Europe, and, on the other hand, to progressive economic liberalization/libertarianism, manifests an increasingly regional divide in support for the EU, reflecting differences in regional economic performance. If the entire national polity is moving toward the left, in opposition to the retraction of social-democratic policies demanded by right wing supporters of economic integration and in support of progressive ecologism, there remain significant Eurosceptic regionalist holdovers who realize that integration implies surrendering local autonomy, first with respect to monetary policy and perhaps, in the future, on fiscal matters. The Five-Star Movement has, to a significant extent, cashed in on the sentiments of groups seeking to slow down the momentum of European integration who do not necessarily sit comfortably with more rightist nationalist parties.This multinational comparison of electoral results advances a particular set of conclusions. Notably, as suggested in my initial hypothesis, the stronger national economies that had the most to gain from the implicit currency devaluation constituted by monetary integration are the strongest supporters of the EU in its current form or with slight modifications in multinational fiscal policy coordination (not a full-blown fiscal union). The weaker national economies, on the other hand, support political perspectives further to the left (either S&D or GUO/NGL affiliates), supportive of either a robust fiscal union or, in stark contrast, greater autonomy for national and/or regional economies. Some rightist Eurosceptics, especially far-right anti-immigration partisans, emerge from these economies but they are overwhelmed, as a reaction against austerity measures, by leftist anti-austerity and anti-capitalist partisans. In this sense, we need to ask where the bulk of the rightist Eurosceptics are coming from. The answer, emphatically, seems to be from the strong non-Euro-zone outliers, notably Britain, and from the mid-range Euro-zone economies, notably France, where fear of falling among the ranks of economies ravaged by austerity measures has gripped the electorate. A regional analysis of these, large, mutli-regional economies is revealing with regard to the economic processes driving anti-EU and anti-Euro reaction.
Britain's European Parliamentary vote mirrors, in significant ways, the Jacobsean prediction that weak regional economies should (and do) have reasons to strenuously oppose economic integration, even to the extent that Britain has been spared the monetary forces attendant to joining the Euro-zone. The ultra-conservative/libertarian Eurosceptic United Kingdom Independence Party (UKIP) (EFD) took the largest share (27.5 percent) of the European Parliamentary vote across Britain, claiming 24 of 70 seats. The partisan ideology embodied by this party initially focused entirely on removing Britain from the EU and preventing closer integration with the continent (e.g. joining the Euro-zone), but it has branched out advocate a range of other pro-capitalist, libertarian positions. The party's anti-EU perspective is most noteworthy in this context. It will constitute three-fourths of the EFD group (claiming 32 seats across the EU) in the incoming European Parliament and will, thus, highlight a British anti-European forefront.
Combining seats claimed Labour (S&D) (20 seats), the Conservatives (ECR) (19 seats), the Liberal-Democratic Party (ALD) (1 seat), the Green Party (Greens/EFA) (2 seats), the Scottish National Party (SNP)(Greens/EFA) (2 seats), and Plaid Cymru/Party of Wales (Greens/EFA) (1 seat), the majority of Britain's European Parliamentary delegation will remain in pro-EU and relatively conservative, by virtue of the confluence of economic perspectives between the Conservatives and UKIP. Nonetheless, as suggested in figure 1, the election demonstrates the pointedly regional nature of opposition for the EU in Britain. If, in certain respects, UKIP has made inroads into Wales and Scotland, the continued dominance of pro-EU national parties in these national jurisdictions demonstrates that they remained at least partly successful in making the case that the long term interests of these nations remains with European integration, more so than with continued union with England. By contrast, the Midland counties, the Southwest, Yorkshire, and even the counties of the Southeast provided the strongest bases of support for UKIP. Moreover, it appears that support for UKIP in London was so weak because of the continuing strength of Labour in outlying "working class" districts, not because of strong support for either the Conservatives or the Liberal Democrats, who appear to have been the biggest losers in the election. In sum, it seems to suggest that, notwithstanding the continued commitments of certain British Labour constituencies to European unity with enhanced fiscal coordination, the majority of England outside London has not been convinced that it stands to gain from the present weaker ties of the UK to Europe, let alone more aggressive fiscal policy integration or entry into the Euro-zone. Again, by virtue of the strength of the pound sterling and the influence of both peripheral extractive economies and the London financial sector in maintaining the pound's strength in foreign exchange, most of the areas that supported UKIP have little reason to imagine that they have something to gain from greater integration with Europe when they have seen their own role within the UK economy's engagement with the rest of the world erode. The Eurosceptic right is the prime beneficiary of economic stagnation outside of the London financial sector.
If UKIP's victory in Britain represents most prominently success in sowing doubt in the economic benefits of a unified Europe, then the victory of Front National (FN) in France most emphatically reflects the failure of cultural cosmopolitanism as a motivation for creation of a borderless Europe and the failure of mainstream French parties to convince Frenchmen and French women in cities like Lille and Toulouse and in the countrysides of Burgendy, Provence and many other rural areas that their economic fortunes were tied inseparably to those of Germans, Poles, Croatians, and Swedes. It is, likewise, a victory for the mythic unity of blood and soil that constitutes French nationalism, paraded before an electorate caught in the embrace of fear in a declining French standard of living and poisoned by Gallic chauvinism and Eurocentric racism.
The French Socialist Party of François Hollande deserves at least part of the blame for this catastrophe for failing since its 2012 electoral victory to produce any tangible, principled transformation of domestic taxation and reform of state bureaucracies in the interest restoring domestic private sector growth and reducing unemployment, particularly among younger workers. Again, however, I want to emphasize adverse monetary feedback mechanisms in the French economy as a relevant component in generating the rise of the FN's political fortunes. Economically speaking, the Paris city-regional economy has led France in European integration and globalization, more broadly. Other urban economies in France are dwarfed by Paris and, as such, the economic strength of Paris previously drove the monetary strength of the franc in foreign exchange, hindering self-sustaining development of export sectors in peripheral urban economies. This effect has in no way been reduced by monetary integration - now entrepreneurs in Toulouse, Lyon, and Rouen have to contend with the strength of a currency driven both by the economic strength of the Paris regional economy and that of German, Swedish, and Dutch city-regional economies. If we combine the adverse effects of monetary integration with other, politically pernicious effects of European unity, like the reduction of constraints on free movement of labor between EU states and perceptions about the increase of non-French citizens in French labor markets (noting that the perceptions of French citizens are a more relevant causal force than the actual statistical reality of EU and non-EU migration into France), then we have conditions under which economic stagnation can amplify the voice of racist bigots above those of the defenders of the unified European project.
Reinforcing my larger argument on regional variations in support/opposition to the European project in France, francetvinfo lists European Parliamentary results for each regional electoral jurisdiction (circonscription) as well as general electoral results for the entire country (see "Résultats européennes 2014," on francetvinfo, at: http://www.francetvinfo.fr/elections/resultats/). These results are listed in Table 3.
What we have here is the genesis of potentially self-sustaining anti-integration reactionary in one of the EU's foundational members, without which the principle of a unified Europe would be undermined entirely. To reiterate the precautionary note, we absolutely cannot reduce the production of such a reaction to monetary integration. On the other hand, we have to recognize that monetary integration has played a role in creating anti-EU sentiment in France, as in other EU member states. The pronounced victory of Front National (with its resounding "Non à Bruxelles, Oui à la France"), will make it much more difficult for the EU to enact the sorts of changes to its internal organization and to the fiscal capacity of EU-level policy makers that might begin to redress the negative, pro-cyclical effects of monetary integration on the peripheral national economies and the peripheral regions, enabling the EU to transition from a counter-productive emphasis on the same austerity measures that are promoting deflation to permanent redistribution of the gains from integration. If France keeps sliding toxically to the far right, perhaps the German Christian Democrats and Chancellor Merkel will bear the blame for not having conceded that monetary union cannot work without the willingness of the stronger economies to bear the burden of stagnation by the weaker economies. As such, it is worth briefly evaluating the alternatives and asking what might be feasible as a future for the project of European unity.
Whither European Unity?
Prior to the European Parliamentary elections, former French President Nicolas Sarkozy made the relevant suggestion that the Schengen Agreement, mandating the elimination of border controls among a range of EU and non-EU signatories, should be scrapped in favor of more restrictive policies on immigration and the larger organization of the EU should be replaced with a structure that would amplify Franco-German direction over the larger economic bloc (see Henry Samuel, "France is 'dumping' ground for EU migration and visa-free Schengen area must be scrapped, says Nicolas Sarkozy," in The Telegraph (22 May 2014), at: http://www.telegraph.co.uk/news/worldnews/nicolas-sarkozy/10848895/France-is-dumping-ground-for-EU-migration-and-visa-free-Schengen-area-must-be-scrapped-says-Nicolas-Sarkozy.html). It seems clear that Sarkozy's statements need to be read in the context of French domestic politics, concerning Sarkozy's ambitions to supplant François Hollande in the next national electoral cycle. On the other hand, it might also be read as a measured concession to the far right/Front National that immigration policies tied to the Schengen agreement have been detrimental to France. Such posturing obviously contributed, in part, to the rightward shift in French politics in the European parliamentary elections by validating polemical attacks on open borders by Front National within the framework of the French political mainstream. If the project of European unity means anything, then it must include the free movement of human beings across the political artifice of national boundaries. No mainstream politician, supportive of the European project, can seriously engage with the notion of scrapping Schengen without simultaneously supporting a much broader retraction of economic integration, including monetary integration, not to mention conceding that there is something to the racist, ethno-centric fears of nationalist extremists who categorically oppose any measure of transnational unity! In this respect, Sarkozy deserves to be called out by his political opponents in his own party and to its left for flirting with the devil.
Noting Sarkozy's politically motivated Eurosceptic moment, it seems clear that, at least within France, the enthusiasm of mainstream politicians for the European project is degenerating as the electorate in peripheral regions linger, failing to see any tangible benefit and perceiving abject economic and cultural costs from economic integration. The most direct way to address such a degeneration of support for European unity would involve the construction of fiscally redistributive institutions within the EU, counteracting the procyclical influence of monetary forces. Such redistributions might also tend to counteract deflation, driven, in large part, by austerity measures in the peripheral national economies. On the other hand, it seems unlikely that a capacity for fiscal redistribution is going to arise at the level of the EU. Rather, given the current alignment of political forces in the European Parliament and the desire of multiple EU member states to reduce the authority of the European Commission, it would seem more likely that the central governing apparatus of the EU is bound for five years of political deadlock as defenders of the European project in the European Parliament struggle to keep the EU from disintegrating altogther.
The overriding problem presented by European unity is the fact that severe disproportionalities exist in the performance of diverse regions, both within individual member national economies and in relation to other regions of other states. The continued absence of correcting fiscal mechanisms to repair such disproportionalities constructs doubts regarding the potential benefits of economic integration. As I have argued in this post, procyclical monetary feedbacks introduced by monetary integration are making this situation worse. In my view, the defenders a unified Europe need to seriously consider the consequences of taking a step back, even if it is a step backward in stages to reduce the frictions inherent in reintroducing national currencies if such a step would reduce the procyclical stress for weak regional economies in the EU. My central argument is, thus, that the Euro has caused more problems for European unity than it solved. The European Union, as a customs union, a continuous, borderless political geography, and an organizational entity capable of framing and harmonizing policies among member states to deal with, among other things, a shared response to ecological transformations, does not need a single currency to cement the interdependence of its member regional economies, and, at present, the existence of such a common currency is contributing to the political forces that risk the destruction of the EU, per se.
The reintroduction of national currencies, at this point, might not be entirely impossible. It seemed likely, at the height of the sovereign debt crisis in 2012, that such a fate would ultimately arise for Greece if it could not come to terms with a deal for relief from the EU, ECB, and IMF. Such a withdrawal from the common currency zone would have, invariably, been messy, painful, and uncertain, especially for investors in Greek debt. If a slow drawing down of the Euro was effected with the mutual consent of all Eurozone member economies, to replace the single currency with multiple currencies, then, perhaps, an orderly transition might be exercised within international financial markets, with negotiation of the terms of Euro-denominated securities to ensure that investors do not bear an excessive burden from the end of the common currency. On the other hand, I do not think a return to national currencies might necessarily provide an adequate solution to the larger problem, because they would not maximize the communication of appropriate monetary feedbacks to regional economies, particularly in the larger EU national economies.
Rather, the introduction of multiple regional or interregional currencies, linked, perhaps, discontinuously through networks of comparable and complementary regional economies in multiple EU states, might promote the sort of positive monetary feedbacks across the network to generate, sustain, or transform existing geographically extensive supply chains, linking multiple city-regional and rural supply regions under a common currency. The point of linking together such interregional networks would be to, as ideally as possible, ensure that monetary fluctuations within a currency union would have a countercyclical effect. In a Jacobsean logic, a depreciation of currency values would, thus, make imports more expensive, encouraging import replacement with local equivalents where possible. Appreciations, generated by robust demand for exports generated within the network would, by contrast, make imports cheaper, providing materials to feed future import replacement and the transformation of export sector specializations over time. In this manner, the particular interdependencies of members to given transnational networks of regions might cut through the parochial appeals of nationalist political movements to demonstrate to economic stakeholders (entrepreneurs and workers alike) the benefits to particular forms of monetary integration, even if the constellation of regions in a network remains open transformations over time, reflecting the ever evolving geographical logic of economic development, pulling regions together and flinging them apart.
This image of network currencies appears, in my view, to most closely reflect the resolution to the monetary feedback problem introduced by Jacobs that I find so useful in analyzing the problems faced by the EU and, in particular, the Eurozone economies. It raises a range of questions regarding the needs for positive monetary policy and the need for complementary fiscal policy regimes within network economic systems under a common currency. That said, while it is tempting to posit network currencies as a possible resolution for the economic ills facing the EU, I am also quite certain that the fate of EU and Euro will not so quintessentially reflect the pristine logic of theory. We can only hope that whatever emerges from Europe over the next decade will continue to embody the aspirations of those thinkers that constructed the European Economic Community as the economic counterweight against rampant, ethno-centric nationalism and armed conflict.
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