The EU: A Love-Hate Relationship

by Heike Lehner

The United States of Europe – it’s a controversial idea where classical liberals tend to split. If you are a Continental liberal, you are generally in favor of a big, united European Union with a central government. Other sorts of libertarianism, however, argue in favor of the right to secession and small states such as Liechtenstein.

“The liberty of the European citizen is supported by the fundamental freedoms and free trade agreements,” vs. “Even more centralization will undermine the rights of the individual. This amount of centralization is not part of the fundamental idea of the European Union.” Both statements could be valid.

When it comes to more integration, it is indeed true that trade barriers can be abolished thanks to free trade agreements. Thus, such agreements – and also the single market of the EU – can be supported as long as the regulations don’t trump the lowering of barriers (though it needs to be asked if the rights of citizens can be established with ever more contracts by states). Of course, fundamental rights are essential since who knows how many regulations the different nation states would implement if there wasn’t a European Union. In the end, it is a voluntary commitment to become a part of the EU anyway.

But is a central government in Brussels the right way to go? The bigger the state, the more people live in it, hence the individual won’t have as much of a say in the decisions made about his life. Of course, the individual himself still knows best what he wants. Furthermore, it is completely wrong to compare the EU with the US all the time as many federalists do, since the differences between regions in the US aren’t as distinctive as they are in Europe. Sure, there are differences between people living in Texas and Minnesota, but nowhere near as close as between Swedish and Portuguese for example – just take the language barrier as an example, which adds a lot to cultural differences.

A good reason to instead argue for small states such as Liechtenstein is the added competition by having the possibility to secede, which gives smaller regions, communities, or even an individual the right to establish their own state. In a world of small states, governments are forced to compete and trade with each other, since almost no small state would be able to have high living standards otherwise. They wouldn’t be able to provide everything on their own. Despite the process of secession not always having to be peaceful (see Catalonia) – which might become a bigger problem going forward – the fundamental freedoms of the individual are much more secure and safe in smaller states.

The question also needs to be put forward what would be next after the United States of Europe? An even bigger country including even more member states with an even more centralized government? A world government? A government which can increase taxes and regulations ever more because it is almost impossible to move to another country? Isn’t that just another form of the “benevolent dictator” since nobody can escape?

In that sense, small states would be a better solution – at least theoretically. Despite there being a lot of historical examples of small states, a world consisting only of small states is still a theoretical construct. There might arise quite a few problems in reality.

To conclude, there doesn’t seem to be a perfect solution. As always, it’s best not to see the world as only black and white – there are pros and cons to either side of the story. The EU is just another example for that.

Heike Lehner is an International Business student from Vienna and holds a Bachelor’s degree in Economics.

Find the German version here: oeconomiarationalis


The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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