08.03.2009
The Logic of European History
№1 2009 January/March

Sometimes, one can see history in the making, but one cannot yet
see its direction. The generally unconstructive attitude of the
Saakashvili regime towards Russia and its military attack on the
breakaway province of South Ossetia, followed by an unnecessarily
harsh Russian military response, brought a chill in the
relationship between Russia and the European Union (EU), just at
the moment that progress appeared possible on a new, comprehensive
agreement. It was soon followed by a major crisis in financial
markets, which started at and was largely caused by Wall Street,
the center of the U.S. financial system, and which spread to
Europe, causing much economic havoc.

As the British political economist John Gray has written, this
financial crisis marks the end of one particular model of the
market economy (the Anglo-American model of ‘free’ market
capitalism) and the end of the U.S. unilateral dominance of global
affairs. Great powers mostly end by a combination of war and
financial debt, as shown in the previous century by the end of the
British Empire and the Soviet Union. In the future, the U.S. too
will be no more than one power among several others. Both events
require thus careful thinking about the new opportunities arising
worldwide and for future cooperation between Russia and the EU.

In order to avoid giving prominence to those with Cold War
reflexes or an economic interest in a new arms race, one should
take some distance from daily events and try a historic
perspective. By innovative thinking about a future constructive
relationship between Russia and the EU, based on trust and mutually
beneficial cooperation, these crises can be turned into political
and economic opportunities for both. It can also help to strengthen
the position in global affairs for both.

It requires for the Europeans to accept that Russia, this great
ancient civilization, will never be like themselves, just as they
are learning that America is going a different way from theirs.
However, some key features of the EU, such as its rule of law or
its welfare system, will undoubtedly benefit the Russian people and
the further growth of its economy. It requires for the Russians to
realize that Europe, in the framework of the EU, has undergone
fundamental changes which they should properly learn to appreciate.
Rapprochement with the EU is possible without Russia giving up
vital economic or security interests, because the EU is not what
many in Russia seem to think it is. 

THE OLD, DANGEROUS BALANCE OF POWER

Throughout the past four centuries, various powers have sought
domination of the economically and culturally rich European
mainland, while one power with a special geographic position, Great
Britain, usually tried to prevent it. The old Russia of Moscovia,
still pre-occupied with controlling the Mongol threats, only in the
17th century could start building a modern state. Peter the Great
turned to Europe for inspiration.

The permanent shifts in the balance of power were an indirect
result of the Westphalian Peace Treaty (1648), which introduced the
concept of the modern state, making every ruler sovereign within
his realm. It succeeded to pacify Europe after the devastations of
the religious wars, but it led the basis for new conflicts, because
the relations between the new states were based purely on power,
without the moral constraints of a superior authority, a role the
Church had sought to play before, or the civilizing restrictions of
the rule of law.

Political and economic systems are closely intertwined. Just
like the feudal organization of society corresponded to the
agricultural economy of the times, so the modern state, with its
bureaucratic organization, provides the political frame for the
emerging industrialization and increased trade. The interactions
with technological innovation, made possible by science, and
growing competition in open but regulated markets, brought more
welfare for their populations as well as the emergence of a new,
professional and industrial middle class.

The modernizations of Russia in the 17th and 18th centuries
nevertheless left it with a primarily agricultural civilization
until the late 19th century when industrialization and the
emergence of a middle class took off, a bit later than in Western
Europe, confronted as it was to the vicissitudes of the tsarist
regime.

This middle class in Western Europe soon demanded to become
involved in political decisions which affected its interests,
leading first in Holland and England, then elsewhere in (Central,
Northern and Western) Europe to the strengthening of parliaments.
From advising the ruler, they achieved co-decision (over the annual
budget and laws) until in the 19th century parliaments came to
represent the sovereign people and they became the ultimate
decision makers about all state affairs. In the early 20th century,
the introduction of universal voting rights, involving farmers and
workers, and later women, completed liberal democracy.

The new involvement of people in state affairs led to an
important change in attitude. Until the 19th century, people had
thought of themselves in religious, class or local terms. In just a
couple of generations, their identity became now dominated by the
new state, which was the source of their newly achieved economic
welfare and personal freedoms. An emerging welfare state aimed to
distribute the benefits from economic progress more equally.
Germany and Sweden were among the countries leading the way towards
social democracy. The governing and business elites thus could bind
the population into loyalty through implementing both liberal and
social democratic objectives. They promoted a new national identity
feeling among the people through the universal education system and
the new communication media (newspaper, radio and, much later,
television).

Rational balance of power games, with limited warfare, became
impossible now. It still remains beyond understanding how this
civilized, well faring Europe, in August 1914, suddenly went to
war. People had in mind a limited war, being home by Christmas,
victorious. But technology had changed the paradigm of warfare at
the same time as loyalty to the new nation state allowed mass
mobilization. Europe and Russia suffered their first great economic
and social-cultural devastation of modern times.

The revolutionary climate after the war, the collapse of the
many a traditional regime, the successful coup d’état of the
Communists in Russia, the growing strength of Communist parties in
other countries, the spread of the American financial crisis of the
1930s to Europe, the resulting social misery, the Spanish civil
war, all led to great fear among the middle and working classes for
their future welfare. Economic and social instability provided a
fertile ground for fascist and nazi regimes in several
countries.

Another generation of Europeans was to suffer the calamities of
war, made worse again by the advance of technology. Never before in
history were so many citizens victimized, and never before were
they so acutely aware of it, being brought up in the culture of
Enlightenment and the belief in continuous economic and social
progress and an ever better life for their families.

The time was ripe to seek to remedy the basic flaws which the
Westphalian state organization had brought with it, inadvertedly
because of the impossibility to foresee all economic, technological
and political consequences of systemic
changes.       

INNOVATIVE COOPERATION AMONG STATES

The process of West-European integration was a direct result of
the devastations of the First and Second World Wars. There was a
pressing need to create lasting peace between Germany and France
and to rebuild the economy. It was now recognized that the modern,
capitalist economy was driven by science and technology, as much as
by capital and labor, and that it needed open markets to flourish.
It was equally well understood that social stability is an
essential prerequisite for business investments and economic growth
and for preventing political adventurers coming to power. Business,
trade union and political elites (from six countries to start with)
united behind the idea of a new organization of politics and
economy in Western Europe.

These twin objectives (peace and welfare) could only be achieved
if two conditions would be fulfilled: there needed to be economic
interdependence as never before in order to give companies the
competitive markets which capital-intensive science and
technology-based production required; and the absolute sovereignty
of the nation states needed to be relativated by integrating them
in a new system of joint governance and by imposing a rule of law
on the member states. A new form of cooperation among states was
designed by Jean Monnet, the French government official who
initiated it: no longer based on international law, it became a
supra-national organization in which the governments cooperated
within the self-imposed rule of law. The EU has some
characteristics of a federal system, but its originality is
certainly that it leaves a greater role to the nation states.

The establishment of the predecessor organizations (ECSC and
EEC) of the present European Union became a rapid political and
economical success, based on the twin concepts of liberal and
social democracy. Business confidence and social stability returned
despite the necessary restructuring of whole economic sectors. This
was achieved first in agriculture, then in the industrial sectors
through the Single Market and finally by the creation of the
Economic and Monetary Union (with a common currency, the euro). It
is still ongoing in some sectors (such as services or energy).

Economic growth and technological innovation created the highest
and most equally distributed welfare Europeans ever enjoyed. Above
all, the possibility of another war between Germany and France, or
any other of the member countries, has become today unthinkable.
The success was such that an ever increasing group of countries
sought to join, to begin with the country which saw itself apart
for centuries, Great Britain. By 1995, there were fifteen countries
in the EU.

Following the implosion of the Soviet Union, this system of
political and economic organization was rapidly extended to the
countries of Central and Eastern Europe, with the purpose of
consolidating liberal democracies there too, re-structuring the
economies and building social democracies for their citizens, by
fully integrating them into the European Economic and Monetary
Union. Thus the system of peace and social market economies could
be extended from Northern, Western and Southern Europe to these
Central and East European countries, stabilizing them politically
and social-culturally. For these reasons too, the unstable
countries of the Balkans are now brought gradually within the EU
orbit, though not (yet) as full members.

This historic process is driven by a desire of stabilizing state
relations, bringing lasting peace, and by stabilizing societies by
providing extensive and high quality welfare systems, such as
public health, unemployment benefit, retirement pension, and
education for all. The average income of (Western, Northern and
Southern) Europeans has never been as high in history. No wonder
that other (Central and Eastern) Europeans, faced with difficult
economic re-structuring, were eager to join. No surprise that the
vast majorities of EU citizens do not want a return to earlier,
purely power-based politics and look bewildered at nationalist
adventurers in the Balkans or in Georgia.

The overall success of the EU, achieved through many ups and
downs, is based on the original division of the competences of the
modern state: security and welfare of citizens are handled
nationally, but macro-economic and monetary policies are decided at
supra-national EU level. The decision making system is such that no
single country can impose its will on the others (through qualified
majority voting among governments). Two institutions (Commission,
appointed, and Parliament, elected) normally represent the general
European views and interests, one institution (Councils of
Ministers) represents individual member state views and interests.
A European Council of Heads of State (France) and Prime Ministers
sets the long term policy direction.

The great challenge for the 21st century now seems to use the
experiences with building peace and prosperity in Europe to achieve
similar results between Europe and Russia.  

QUALITY OF LIFE AS NEW POLITICAL PRIORITY

As the American author Jeremy Rifkin has rightly remarked,
Europe has moved towards innovation of the social-cultural paradigm
of its peoples. He claims that Europe is showing the direction of
societal and economic development of modern societies, not his home
country. This, too, may be another late effect of the Westphalian
Peace and the developments which it set in motion; it is certainly
also an effect of the results achieved by the EU.

Political systems are interdependent with the functioning of the
economy, and both influence, and in turn are influenced by,
invisible trends in a society, by the way people see their place in
it and by their aspirations for their personal life. The near
disappearance of the farmers class in the 20th century, demographic
change, the prominence of the professional and middle class and the
extension of the middle class quality of life to the workers class,
the more than half-century of peace and economic progress shared by
nearly all citizens through the welfare distribution systems,
public education, free communications and access to information,
the decline of religions too, have all led to a different European
outlook on life and society. Philosophers have spoken of a post- or
trans-modern culture, one which is still influenced by the
fundamental ideas of the 18th century Enlightenment, but which is
moving on to applying them differently.

Having achieved to establish the rule of law among their nation
states, it seems that the present historic objective of Europeans
is to also tame the capitalist industrial economy. It has deep
roots in German and Scandinavian social democracy and their
successful management of the market economy coupled with a welfare
state system. It is the basic model of every EU member state,
though with different elaboration.

The new overriding goal is sustainable economic development.
Just as before limitations on the working of the capitalist economy
were introduced in order to protect workers, now limitations are
sought for the benefit of the environment and for public health
reasons. Even if some measures (for example, in the agrifood
sector) may also have a protectionist side-effect, they
nevertheless are driven primarily by a strong new social-cultural
paradigm which no longer believes in economic progress for its own
sake.

It is not just soft thinking: the cost of environmental
degradation is usually much higher than the measures to avoid it.
Moreover, it forces companies to invest in research and innovation
and thus creates new competitive advantages in global markets. A
growing part of Europe’s GDP comes from eco-friendly businesses.
Rising costs of public health systems, coupled with demographic
change, make disease prevention a budgetary necessity for
governments, hence the growing link between public health and
environmental policy objectives. People enjoying a rather good life
want to continue as long as possible to do so, which is the
cultural basis for the widespread support for such policies.

THE EVER WIDER ATLANTIC

All these developments inevitably influence also Europeans’ view
of the external world. They seek to export their own model of
stabilizing state relations through the rule of law by promoting
regional cooperation in other continents or by stimulating the
growing role of global organizations. Welfare for all citizens
requires economic growth, which today is driven by trade and
technological innovation, all of which require stability. Therefore
European political and economic elites unite in these goals which
drive increasingly the emerging EU foreign policy. It is a far cry
from traditional state relations based on naked economic
exploitation and military power. The latter of course still has a
role to play in maintaining peace and stability among states,
though in a different way than before in history (instead of going
to war, Europeans by far prefer peace keeping).

One can see the shift most clearly in the EU’s strong support
for international cooperation on climate change and other
environmental issues, seeking to bind other countries through
negotiated treaties under the auspices of the UN. One notices also
prudent changes in its trade relations with developing countries,
or in its support for people stricken by wars or natural
catastrophe, or its promotion of human rights (even though often
inconsistently).

Another American author, Robert Kagan, has said that “Americans
come from Mars, and Europeans from Venus.” Most Europeans regard
this as a compliment (though most Americans do not). Despite the
fact that the EU is driven by new societal and governance concepts,
it is not becoming a giant Switzerland. It cannot afford this,
because its economic and geopolitical interests and its historic
and cultural links stretch across the globe and require sometimes a
military capability. Therefore, the EU now starts to seek its own
military structure, or rather to streamline those existing in the
member states. There is no support for building a new military
power, but the present waste of resources must be reduced, if only
for budgetary reasons. It will take a couple of decades to get
there.

Therefore, Europeans give lukewarm support to the NATO Alliance,
dominated still by the U.S. Inevitably however, the two sides of
the Atlantic will disagree more and more over what to do and how,
simply because their social basis has grown apart already and will
continue to diverge. The U.S. is still driven by a messianic
capitalist and political ideology. The democracy concept which it
promotes worldwide is a purely liberal one, without the social
democratic (welfare distribution) component. Its capitalist market
views are much less tempered by regulation and government
intervention.

Europeans have long lost such ideological beliefs (which in fact
hide hard American economic interests). They have recently been
strengthened in their views by the war in Iraq and the collapse of
the American-style financial system. They have culturally moved on
towards seeking a balance between the goals of liberal and social
democracy. They are now going further by introducing new political
concepts, such as sustainable economic development. Although many
of these ideas also exist in the U.S., they are by far not as
dominant and widespread as in the EU.

While Europe and North America thus share a number of societal
beliefs (liberal democracy, human rights, etc), and while they are
still cooperating militarily within the NATO alliance, their
societies are drifting apart. Social democracy is not taking root
in the U.S. Even after the present financial crisis, it is likely
that systemic change will not happen as it did in Europe over the
past decades.

The NATO Alliance thus is likely to see in the future ever
weaker support. There is already widespread unease or clear
opposition against NATO military actions outside Europe, or its
expansion into areas which were never in Europe’s sphere of
influence. This is particularly so in the countries of Western,
Northern and Southern Europe. These are already more advanced into
new thinking about European and international relations, having
experienced the benefits of peace based on reconciliation and
economic growth far longer than those who joined the EU only
recently and who often look more in the rear-mirror of history than
to future opportunities. The new roles of NATO are driven by the
traditional U.S. political views and the interests of its
military-industrial complex. Obviously, one should not overlook
also the role of the industrial-military complex in some European
countries (Britain, France) in helping to promote Cold War
reflexes. But the reluctant support among Europeans will be waning
rapidly as soon as they understand that the new Russia is no threat
for them as the Soviet Union was.

A NEW RAPPROCHEMENT

From the late 18th till the early 20th century, Russian
intellectuals and artists played a prominent role in Russia and in
Europe; they were both Russian and European. The re-discovery of
the culture of rural Russia could not have occurred without the new
insights acquired by intellectuals and officers in Europe. In turn,
key elements of European modernism came from Russia. This great
exchange ended abruptly in 1917, when the victory of Communism
stopped Russia’s own liberal and social democratic developments and
sealed the country off from the rest of the world. Having suffered
three invasions (from Napoleon and Hitler and from Western
consultants in the 1990s), Russians are understandably a bit
apprehensive now about renewing the old link and exchanges.

The logic of history, however, points to extending the
innovative ideas for realizing peace, economic progress and social
stabilization to Russia, as well as to Turkey. For centuries, both
powers have been Europe’s key neighbors. Both have taken from
European civilization, and given to it. What could be achieved
between France and Germany and other European countries should now
be achieved with them, though using of course different
technocratic arrangements (realism does not permit EU membership
dreams, unless one seeks to derail the whole European political
stabilization process).

Despite its enormous energy resources, Russia still has a long
way to go towards modernizing its economy, rebuilding its
scientific and technological capacities and providing social
stabilization through distributing the newly acquired welfare
across the population. Despite the misery and suffering which
Communism caused, it did move the Russian farmers and workers into
modern views of life and society; their social and cultural
paradigms now look closer than ever to those of people in Europe.
Communism has failed in its economic policy, but it does leave a
country behind with the aspirations of the late 20th-early 21st
century.

Russians have irreversibly been modernized now, like Europeans,
but Russia has the task of (re-) building the structures of a
modern society, which Europe could start doing several decades
earlier. Only the twin concepts of liberal and social democracy
correspond to the aspirations of modern people and only these allow
to build a respected and stable modern country. This is the common
interest which political and business elites in Europe discovered
in the 1950s and which still drives deep in popular beliefs the
present EU policy processes, despite all short-term technocratic or
political difficulties and the ups and downs of the process.

This does not imply that European models can simply be
transposed to Russia. There are no two identical liberal and social
democracies in Europe; each country has developed its own version
taking into account specific historic, demographic and economic
conditions, and political and social-cultural circumstances. There
are equally various forms of the market economy in Europe, with
more or less state intervention, more or less consensus building
between business and trade unions, leading to highly developed
welfare state models with a high degree of equality but also of
citizen tutelage, or to more limited provisions with more personal
responsibility of citizens in other countries. None of these
systems is rigid and they are all in constant evolution,
experimenting with new ideas or benchmarking with other EU
countries. No doubt Russia will develop its own version, which may
well see a stronger executive and a weaker parliament, and a more
interventionist government in economic affairs, perhaps a smaller
welfare state to start with.

Provided the direction is clear, convergence between the EU and
Russia will appear ever clearer on the horizon and cooperation
between both will be facilitated ever more. It is in the EU’s self
interest to cooperate with Russia in its move towards its own forms
of liberal and social democracy. The first step is to gradually
open markets to trade and investment, so that Russians can
experience first hand the ways in which contemporary European
societies and economies function, and that Europeans can achieve
better understanding of the characteristics of Russia. Since times
immemorial, business has been a great transmitter of innovation, in
all areas, from ideas and art to organization and technologies.
Indeed, businesspeople, through their support of think tanks and
other activities to stimulate creative thinking, played a leading
role in the EU’s own developments.

Therefore, in addition to increased economic cooperation, more
extensive exchanges should be promoted, in particular among the
young and the cultural elites, which have a great multiplying
capacity. The methods of the French-German reconciliation can serve
as useful examples. European exchange programs (such as ERASMUS
among university students) should be developed with Russia too.
While politicians have to remain careful in day-to-day
policymaking, others should be able to speak frankly and to develop
new ideas and new consensus, which can become later the basis of
new policies. We must lay the basis for a new relationship at the
same time as tensions from the old still exist.

Of course, a strengthening of liberal democracy in Russia is
needed, to start with the so-called material part of it (civic and
human rights, press freedom, etc), which is quite compatible with a
strong central government, as General de Gaulle showed in France.
After President Putin focused on strengthening the economic
framework of the state, a task not sufficiently appreciated in
Europe, Europeans hope that President Medvedev will focus now on
modernizing society itself, in line with the economic modernization
already achieved.

A second and more difficult step in the rapprochement should be
the recognition by Europe of Russia’s security fears. They have
historic roots, and while Europeans may perceive them as unfounded,
given their belief in their own new world views, they are real
enough for Russians. There is a proven method from the Cold War
days to do so. Between the EU and Russia, there should be as many
“Finlands” as possible, to start with Belarus and Ukraine. These
countries are free to determine their own political and economic
models, even to join the European Economic Area (an extension of
the EU market without membership), but they should remain neutral
and not join any military alliance. As the former German Chancellor
Helmut Schmidt wrote, Georgia has never been part of Europe.

The same approach thus could be tried in the unstable region of
the Caucasus, involving both Russia and Turkey. Both countries have
traditional interests there, but they can be dealt with in modern
ways, bypassing traditional power politics. It is in fact also a
European interest to assist and to cooperate with both countries in
preventing this whole region sliding backwards into a pre-modern
chaotic political and economic condition. The EU is well placed to
support the development of these countries in the same liberal and
social democratic direction as it has gone itself, respecting the
interests of Russia and Turkey and avoiding interference; the
peoples of this region must find their own ways into the modern
civilized world.

To set us on the road towards such an innovative future of
cooperation and shared interests, based on the twin concepts of
modern governance and market economies, one should not have, like
the Europeans of the 1950s, too many illusions. There are forces at
work still which pull in the opposite direction, both in Europe and
in Russia. Not to mention in the U.S., which has a vested interest
in preventing close Russian-European cooperation. Therefore, it is
urgent that Russia seek to improve its communications with
Europeans. This cannot be done by old style propaganda. It requires
again to recognize the fundamental changes in Europe and to respond
to them with openness.

Maybe, there is an obstacle in the minds of Russians who seek to
define themselves in the mirror of the U.S., instead of looking to
their own history and to Europe, the civilization which is closest
to their own. Europe and Russia have grown partly from the same
roots, and both have benefited from the past exchanges and
cooperation. Maybe it dates from the Cold War Communist-capitalist
dichotomy, but it is bypassed by events, by the divergent
political, economic and social-cultural evolution in Europe and the
U.S., the emergence of new political and economic powers in the
world, or by fundamental financial and technological shifts in the
economy.

Obviously, the Russian tendency to revert to methods of
policymaking, internally or externally, which the Europeans have
relegated to history, does not contribute to confidence-building.
Europeans like to see a friendlier and more at ease Russia.
However, if Russia continues to seek and find its own modern
economic and political organization, it is likely that it will find
it as beneficial as Europe to use less harsh methods of old style
power plays.

*  *  *

It will take more than a couple of years to get there, maybe a
generation, but it is worthwhile for Europe and Russia to seek to
move in that direction. It is the direction which matters, and the
process to go forward on many different aspects of
rapprochement.

The direction defended here requires to be examined first by
those groups which always and everywhere have been the vanguard of
new developments, intellectuals and artists, and businesspeople.
The intellectual father of supra-nationalism and of the EU, Jean
Monnet, was a brandy producer; many leading businesspeople have
played an influential goal setting role for politicians, and they
continue to do so in the EU, together with other stakeholders from
civic society. Russian and European businesspeople have a strategic
interest to contribute to innovative cooperation between Russia and
Europe; they need to do so by looking beyond short-term issues,
thus helping to relativate them. They must take account of the
governance realities at home, by focusing first on consensus
building among the elites, before offering new ideas for consensus
to the people at large, which is the responsibility of
politicians.

Rapprochement between Europe and Russia will not come
automatically; it needs to be nurtured and maintained as a final
goal during the vicissitudes of short-term political problem
solving. It requires to further spread the spirit of mutual
reconciliation and respect and the desire to build welfare for all
people, which has served Europe for sixty years. The method of Jean
Monnet, building this new vast space of peace and prosperity step
by step, will be helpful again. Politics will follow, but first we
must return to the great intellectual, artistic and business
exchanges of the past, for a better common future.