monograph · Do Europeans Exist?
Building a European Identity: Obstacles and Opportunities
Philip T. Hoffman
Today there really is no such thing as a European identity. True, young people may view themselves as European, and so perhaps do some EU officials and members of the European Parliament. But they are the exceptions, because a European identity does not yet exist. In fact, a European identity has not existed for centuries: since at least the Reformation and the rise of the sovereign state, and perhaps ever since the schism between eastern and western Christianity or even since the collapse of the Roman Empire in the West.
Instead of embracing a European identity, Europeans cling to separate national identities, national identities forged by shared political history and anchored in language, ethnicity, and a common culture. Those national identities are deeply rooted and quite powerful. They can sway voters and even push them to turn against their economic interest. In the United Kingdom, for instance, they drove voters to opt for Brexit even though quitting the EU was expected to reduce British national income by closing off markets for goods, services, and labor.
National identities can do more, though, than driving voters to abandon open markets. They can also lead citizens—and hence elected officials in democracies—to oppose valuable policies that depend on cooperation across nations, from assistance for economies in crisis to cross country bank insurance. The cooperative policies they oppose would bring huge benefits. They would help lift Europe out of recessions and reduce the risk of financial crises. And in the long run they would help create a European identity and thereby ward off future votes to exit from the EU. But despite all the benefits, such policies are simply impossible politically, because people in general are usually reluctant to extend a helping hand beyond the borders of their own nation or their own ethnic group. Their cooperation, it turns out, is typically limited to people like themselves, or so research in anthropology and behavioral economics suggests. Although such a limit to cooperation may have paid off in the bellicose societies of the early Middle Ages and although it may do the same in certain anarchic societies in modern Africa and Asia, in Europe today it is a barrier to policies that could make everyone better off.
[pullquote]European leaders will have to take Europe’s ingrained national identities into account[/pullquote]But that grim conclusion does not mean abandoning hope. Cooperative policies can in fact be enacted in the future, but to do so, European leaders will have to take Europe’s ingrained national identities into account and begin the long task of building support for the EU among alienated groups. That will relax the hold that national identities have on voters and win them over in favor of cooperative European wide policies. Over time, the benefits they receive from the cooperative policies will then help fashion a European identity, and ultimately, that European identity will limit the damage that national identities can do.
The first step here is to continue policies that are already helping to form a European identity and gain support for the EU. They include the EU’s efforts that appeal to the young, such as university scholarships or initiatives to assist unemployed youths who are not in school or apprenticeship programs. The EU should also boost aid to areas that have that have suffered severe job losses, whether it is because of international trade or because of technical change. Offering the aid should be feasible despite the EU’s limited budget, since the areas affected would be small. The assistance would have the great advantage of getting the EU backing from voters who might otherwise blame it for their plight. Those voters might be unskilled workers whose jobs are threatened by immigrant labor or by imports of foreign manufactured goods. In theory, the EU’s open markets for goods and labor should of course generate gains large enough to compensate these workers for the threat and make them and everyone else better off. But in reality workers in such a situation rarely receive adequate compensation, and they then have all the more reason to reject immigration and open markets, beyond the influence that ethnocentric nationalism has on them. The aid from the EU will help stop that from happening.
[pullquote]European leaders should relax current rules governing labor market mobility[/pullquote]As a second step, European leaders should make a strategic retreat and relax current rules governing labor market mobility, by giving national governments some control over in migration of EU workers. The retreat here does not mean abandoning the goal of open labor markets. It is simply a temporary strategy to keep opposition to the EU from growing to such an extent that the EU itself could split apart. The economic costs of the strategy will not be large either, because mobility in Europe’s labor market is still limited by language and by the power of existing national identities. And the retreat will buy essential political good will from leaders who might otherwise sabotage cooperative policies.
The final step would be to enact-European wide bank insurance and supplementary wage insurance to compensate workers left unemployed (or underemployed) in middle age due to international trade or technical change. If combined with higher capital requirements for banks, the European wide bank insurance would not be costly, and it would prevent the sort of financial crises that have plagued Greece and other countries. As for the wage insurance, it would supplement existing national programs of unemployment compensation, which, despite their generosity, often fail workers who find themselves out of work in middle age, when they are too old to retrain or consider moving to another country. The wage insurance would then provide a bridge to existing national old age retirement programs, after unemployment compensation was exhausted.
This step would of course be the hardest politically, because it would demand far more resources and would spark resistance in countries that are thriving economically. Politically, is not yet feasible, and it will not be possible to take this step until European economies improve. But with the good will earned by a strategic retreat from labor market rules and by programs to aid the young or assist areas that have suffered severe job market losses, it should be possible to take this step too in the future.
[pullquote]with the political support and the benefits generated by cooperation, a European identity will take hold and thrive[/pullquote]Once these cooperative policies of wage and bank insurance are in place, they will gradually win the EU backing among growing numbers of voters. The backing will likely be strongest among the young, but over time the EU should gain the allegiance of a majority in all countries. And with the political support and the benefits generated by cooperation, a European identity will take hold and thrive.
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Philip T. Hoffman
Rea A. and Lela G. Axline Professor of Business Economics and Professor of History, California Institute of Technology
Author of Why did Europe conquer the world?