December 8, 2023 | Rome, Italy

Days of future past

By |2018-03-21T20:02:30+01:00August 21st, 2016|"Foreign Affairs"|
Alexander Hamilton, left, and Thomas Jefferson disagreed over a national army and a national bank.

reoccupied as we are with the apparently insoluble problems of our times — immigration, wars, changing international power balances, economic recession, world poverty and what in the grander scheme of things may appear as individual issues such as women’s and LGBT rights, as well as apparently marginal problems such as the defense of purchasing power, the cost of raising our children, how to apportion our spending — we often assume that the uncertainties and tensions of our times are unprecedented.

It’s not true. Humanity has always been plagued by upheavals that threatened the survival of entire peoples, ethnic groups, nations and political systems. Many times we have overcome crises and continued to progress. Very often this progress has been painful and come at a high cost both in human and economic terms.

Right now we’re in the midst of a huge transformation, a long and contradictory process toward the demise of the national state and its gradual metamorphosis into a supranational entity.

Giambattista Vico, an 18th-century Neapolitan historian, developed an influential theory that defined history as a series of constantly repeated cycles. He was writing at a time when Europe’s once-flourishing absolute monarchies were entering a period of terminal crisis. The alliance between crowns, feudal aristocracies and churches, the backbone of so-called absolutist states, was buckling under the pressure from new and rapidly emerging forces. Industrialization and trade, the rise of the cities, and the emergence of an ever-growing professional middle class — a new force claiming a larger share of power — were changing the shape of the world. The first large European country to undergo this process was Britain. After the 1707 Act of Union with Scotland, it became, in a somewhat erratic process, a national state, ruled by a government, a parliament and an independent legal system. The power of the crown and of large landowners remained substantial, but their decline into semi-irrelevancy had begun.

In 1748, French political philosopher Charles Montesquieu wrote a fundamental study of existing political systems. He foresaw a new governmental equilibrium based on a balance between the executive branch, parliament, and the legislative branch, and the legal system, or the judiciary branch. That balance, or separation of power, said Montesquieu, would guarantee stability and welfare better than the inefficient autocratic rule built into absolutist system.

But Britain, France and Spain became imperial powers despite their stages of political development, staking out a significant colonial presence in the Americas, Africa, and elsewhere.

This is where Thomas Jefferson, and the other American Federalists enter the picture. Britain’s American colonies were autocratically managed by the Board Of Trade, which aimed to apply the same rules and taxes imposed on its other dominions and world interests to the American colonies. But the large American colonist population rejected this one-size-fits-all approach. Britain’s refusal to relax these centralized policies produced the resentments that triggered the American Revolution.

Jefferson was a leading member of the revolutionary elite and played a huge role in framing both the Declaration of Independence and the Constitution. To him, the threat of despotism was paramount. The need to defend the interests of liberty and states’ rights ultimately superseded the role of the new Federal Government. Alexander Hamilton, Jefferson’s nemesis, instead favored the creation of a strong Federal Government, the only institution he saw as able to hold the new country together. He favored the creation of a National Bank to guarantee debts that had accumulated during the revolutionary period, as well as the creation of a National Army.

The new republic’s first few years were characterized by the conflict between advocates of states’ rights and centralizers, wisely mediated by George Washington. These sometimes-contradictory clashes continued into the next century, which saw the exponential territorial growth of the U.S. and produced tensions between a rapidly industrializing North and a commodity producing South —tensions that would escalate and culminate with the Civil War. Postwar Reconstruction led to a sort of equilibrium between states’ rights and federal power. The two positions survive to this day, albeit showing ever-growing strains.

Something similar happened in France. The Ançien Regime had been unable to reform itself and by 1789 was in tatters. The revolution that led to the demise of the French monarchy began among the peasantry before spreading to cities, where lawyers carried the torch. It is they who would eventually write the constitution and create the First Republic. The centralizing Jacobins (curiously liked by Jefferson) were the real creators of the modern French state.

The same issues — focused on the how’s and why’s of reform —have resurfaced in the present debate in now-united if fractured Europe. Some national states now appear deeply divided on a regional basis; the United Kingdom, Spain and Belgium risk breaking apart. The rest are almost as troubled.

The demise of European nation states under the pressures of globalization and a changing international equilibrium — China’s economy is almost the size of America’s, for example — seems increasingly likely. Yet no one has any definite idea what form a transformed Europe will or should take. It may take quite a while to evolve. After all, it took the U.S. well over a century to create the Federal Reserve Board, the American equivalent of a Central Bank. Europe has created a common currency, tariffs, and an extensive regulatory system, but so far it has been unable to centralize government activities or create the equivalent of a central government with, say, a European finance ministry. In fact, much of what is happening in Europe bears an uncanny resemblance to the struggled for identity the American Republic faced in its first few years, when Washington and Hamilton squared off.

This age, like many before it, bears Vico’s cyclical stamp. A new and transformative crisis is in the making, but knowing it’s on the way doesn’t make its shape any clearer.

About the Author:

Vittorio Jucker was the author of the column "The Economist" from its creation in 2012 to mid-2017.