In a rapidly changing world, societies and institutions choose between evolution and revolution. If there is too little evolution, there will be revolution. (Just as surely, if there is too much evolution, there will also be revolution.)
But, what happens when decision-making becomes constipated? Evolution ends, and revolution begins, violent or otherwise. It can happen in nations, like the United States, or in confederations, like the EU. Perhaps, the E.U. was doomed from the beginning, with no formal institutional linkage between monetary policy and fiscal policy. It is like charging the Fed with U.S. monetary policy, while leaving fiscal policy to each of the fifty states. That would be insane! A difficult concept to imagine, Brussels is even more constipated than Washington, A noble ideal, the European Union was thought to be the first step toward a United States of Europe, but making no decision on that lack of linkage between monetary and fiscal policies was the fatal flaw.
The BREXIT election next week is making worldwide stock markets breathless with anxiety and uncertainty. If the U.K. votes to leave, markets will drop and reset their trading ranges at some lower levels until the short-term impacts are clear — such as how painful will be the “pound of flesh” that the EU extracts when the exit begins.
After much thought, I would vote for LEAVE — but with tears in my eyes. I have no desire to agree with the anti-immigrant bigots who lead the LEAVE campaign, but I’m afraid the U.K. is moored to a sinking ship. The European Union is such a noble ideal. I wanted it to work but believe it is fatally flawed. It is like learning a childhood hero is merely another actor, likely with feet of clay. It is hard to let go of such a wonderful ideal!
Maybe, BREXIT will be a signal to all the capitols of Europe — to allow the E.U. to evolve, by shifting fiscal authority to Brussels, which is actually giving away some degree of sovereignty. The United States of America was born in a revolution, and I’m afraid the United States of Europe will have to be born the same way.
The short-term issue is whether the U.K. stays or leaves. The long-term issue is whether the E.U. evolves or . .. que sera sera!