The EU as (imperial) substitute for empire

Colonising upwards instead of outwards.

This is based on a comment I made here. Regular readers will notice continuing themes, but I do not want to assume any reader of this post—still less what started as a comment on another Substack—has read my past posts. Moreover, my thinking remains a work in progress, so I tease out further implications of previously made points. Being explicit also provides reminders for returning readers.

Historian Timothy Snyder makes an argument in various lectures and on his Substack that what became the EU was a replacement for empire. I think he is right, but not in the way he suggests. Prof. Snyder holds that what became the EU is an economic replacement because he appears to believe that empire was economically beneficial to their metropole economies.

This seems clearly wrong. Every maritime imperial metropole got richer after it lost its empire. This is true whether they were part of what became the EU or not: the obvious example of the latter being Japan and its dramatic postwar economic success after being stripped of its empire and devastated by American bombing. For the economies of all the former maritime-empire states, access to the US market, and the US-led maritime order, was much more valuable, and way cheaper, than empire.

It is not clear that even Britain made a “profit” from its Empire, once you consider military and administrative costs. Portugal had the largest maritime empire—relative to the size of its metropole—for longest and is the poorest country in Western Europe. Compare that to rather wealthier land-locked Switzerland, which never had an empire.

Empires are what states do.¹ It is foolish to presume that any particular state action is beneficial to those that a state rules. Having an empire increases the power of state, and the opportunities within the state apparat. That is more than enough to motivate territorial imperialism, whether by land or by sea.

Conspicuous absences

A conspicuous absence from Prof. Snyder’s analysis of what-became-the-EU is NATO. There are a lot of regional economic cooperation organisations around the word. None of them are remotely as integrated as the EU because none of them have the equivalent of NATO.

In order to pool sovereignty within the EU, states first have to have their territorial sovereignty guaranteed. This guarantee is precisely what NATO provides.

The post-Versailles European order of 1919-1939 was unstable because it interspersed between Germany and the Soviet Union a series of small states that the victors of 1914-1918 could not readily reach. NATO has two huge advantages that the nation-states of Eastern Europe did not have in the 1919-1939 period—NATO is a geographically contiguous alliance and it includes the United States. The purpose of NATO, in the famous words of its first Secretary-General, being:

to keep the Soviet Union out, the Americans in, and the Germans down.

In other words, the purpose of NATO was to provide a comprehensive solution to the structural weakness of the 1919-1939 Versailles order. A solution that the countries of Eastern Europe availed themselves of as soon as they could.²

The other conspicuous absence from Prof. Snyder’s analysis of the EU as a substitute to empire is Oceania. His analysis is deeply “(North) Atlantic”. It looks much less impressive from a Pacific perspective.

Japan was a maritime empire which lost the Second World War. It did not join anything like the EU. Australia gave up its (small) maritime empire. It also did not join anything like the EU. Both are very much postwar economic success stories. Participating in the maritime order with good internal institutional structures was enough: no other substitute for empire was needed for economic success.

The nature of states

The basic incentive of states is to impose enough order to reliably extract revenue. Anything beyond that is highly dependent on context.

The dominant mode of states, historically, has been to be predatory. An ordering predation to be sure—which is typically far better than the lack of the such order—but still predation.

It is easy for empire to be beneficial to the state apparat without being such to those ruled by the imperial state, beyond the—potentially very beneficial—imposing of order. Indeed, empire can even impose considerable costs on its core society, on its imperial metropole.

The flows of bullion to the Portuguese and Spanish Crowns from their American empires were good for said Crowns. They were not good for the local economies of Iberia, as it meant that the Crowns had much weaker incentive to negotiate with their subjects—or attend to the concerns of local commerce—while local manufactures were rendered “silver dear”, so uncompetitive. (If you are where the flow of the main monetary metal—silver—first hits Europe, when transport costs are still relatively high, then your manufactures will sell for higher silver prices than those further away.)

This was an early version of what became known as “Dutch disease”. In this case, it benefited the Dutch, whose manufactures became much more competitive, doing so from a polity whose rulers paid careful attention to commerce. We need to be attentive to what the feedback and incentive structures are, not our preconceptions thereof.

What became the EU was an administrative replacement for empire. State apparats can colonise outwards (a territorial empire, whether maritime or land empire), inwards (the welfare state), or upwards (internationalisation: notably, the EU, the UN). Of the three, the (democratic) welfare state has by far the best accountability. It still has serious problems of accountability—especially the bigger it gets, as accountability mechanisms are neither infinitely flexible nor infinitely scalable—but it is much more accountable than are territorial empires or internationalisation.

The UN has become a completely unaccountable way to launder—typically terrible—ideas and give them a false patina of authority. The EU has somewhat better accountability than the UN—a very low benchmark—but it is still not great. There has been a longstanding critique of the EU’s democratic deficit while the European Parliament is much less powerful than elected legislatures usually are.

Parliaments emerged in medieval Europe because they provided three advantages to rulers:

1. Taxes that the powerful folk had given consent to were easier to raise;

2. Parliaments provided a venue to find out what was bothering the folk who had their own military forces (both lords in castles and merchant elites in self-governing cities with militias); and

3. Parliaments provided feedback on the performance of the ruler’s officials.

The European Parliament is far more about providing a patina of legitimacy than doing the functions Parliaments originally evolved to do.

Medieval Parliaments were not about holding taxes down, they made it easier to raise taxes, hence their appeal to rulers. From the late C15th onwards, whichever was the most stably and geo-politically significant Parliamentary state was also the highest taxing state—the Serene Republic of Venice, then the Dutch Republic, then Great Britain—and the state with the highest provision of public goods (aka state capacity).

The European Parliament provides a legitimating mechanism for the EU but its feedback value is attenuated. Where the EU does improve feedback is at the national level for states trying to rise out of their Soviet bloc legacies by its rule-of-law, democracy and other institutional requirements for EU membership. Having local rule of law means that EU regulations have more purchase, while improving one’s institutional performance, and getting access to the EU’s internal market, has clear domestic benefits, so there is some congruence in incentives there.³

Nevertheless, the EU—including as originally conceived as a bulwark against nationalism—is a complete misdiagnosis of the central problem of European history. The key problem of European history is not nationalism—who cares about Danish nationalism?

Yes, nationalism was mobilised to kill lots of people, but so was religion, so were various ideologies. Europeans have never lacked ideas used to mobilise them to kill each other.

The central problem of European history has been unaccountable power. Hence the two catastrophes of the Dynast’s War of 1914-1918 and the Dictator’s War of 1939-45. This is a problem that the EU does not solve; it replicates it in a new, internationalised, form.

If the EU is upward colonisation, you would expect it to be an “imperial bureaucracy” that becomes an economic drag on its member countries, with the bureaucratic-drag effect tending to get worse over time. This effect can be expected to get worse the EU’s role became more grandiose (such as by seeking Ever Closer Union). The way it (and member states) has attempted to be Censor-in-Chief of the online world—possibly aided by US security agencies using European regulation as part of a more general pattern of making end-runs around the US First Amendment—seems rather, well, imperial.

You might also expect an imperial bureaucracy with weak or narrow feedback mechanisms to increasingly alienate the least well-connected folk. That would be the working class, which increasingly votes national populist.

The working class tends to be socially conservative and economically interventionist because they want social and economic stability and protection. (In the US, Trump has taken the Republicans back to where they started in the 1850s: a protectionist Party suspicious of foreign intervention relying on working-class votes.)

A Graveyard of Bad Election Narratives

Immigration done badly

Europe does immigration badly. It does immigration somewhat differently so in different countries, but still badly. In the UK, immigration has imported sectarianism and immiserated its working class by driving up rents, as importing lots of not-yet-citizens maximises the tax revenue, and wealth-to-incumbents benefits, of restricting the supply of land for housing. (An immiseration process aggravated by ‘Net Zero’ driving up energy costs.)

Higher land-for-housing costs also tends to depress infrastructure supply. In the UK and France, immigration has aggravated the domestic provincial/metro splits.

According to a Dutch study and Danish figures, Middle Eastern immigrants are a net drain on the fisc overall and in every—or almost every—age group. There is no way reason to think that is not also true in Sweden, France, the UK … given that a European Commission study found that immigrants from outside the EU were a net drain on the fisc. If your welfare state transfers income from high-income to low-income people, of course importing lots of low-skill workers is going to increase the fiscal pressure on your welfare state.

It takes considerable general-welfare incompetence to import migrants who make your welfare state less sustainable: such a policy does, however, benefit the welfare apparat itself by increasing demand for its services. As a recent Dutch study found:

Only 20% of all immigrants [to the Netherlands] make a positive lifetime net contribution to the public budget. Groups with large contributions come from Scandinavia, the Anglo-Saxon world and a few other countries like France and Japan.

Economists have not dealt well with immigration. As a review article on the role of culture in the happenstance of human affairs tells us:

Although using very different methodologies, the studies all provide evidence leading to the same general conclusion: individuals from different cultural backgrounds make systematically different choices even when faced with the same decision in the same environment.

Often folk do so because cultural differences lead them to frame incentives differently. Such response-diversity is not how economists generally analyse human behaviour. They often fall prey to the liberal illusion that the normal human behaviour of treating out-groups badly will be overcome by the magic of trade, of economic exchange.

Migrants—especially those who are very culturally different—tend to swamp/break up local social connections. This matters to working-class folk whose social capital is based on locality—friends, relatives, acquaintances is persistently the most important labour market intermediary, for instance. Breaking up local networks also makes it harder to impose accountability on local politicians.

The failure of economists...

Importing low-skill migrants discourages investing in productivity. It tends to suppress—not cut, but suppress—wages by suppressing the Baumol effect whereby rising productivity in various industries pushes up wages generally via competition for labour: low-skill immigration disperses this effect across the incomers.

There is a lot more to immigration than adding labour, including how it affects the labour/capital ratio in a society. Bringing in high-skill migrants adds human capital, and can even make labour more scarce compared to capital, so more valuable. Bringing in low-skill migrants makes labour more plentiful compared to capital, so less valuable.

False, simplistic models of economic growth make it regrettably easy to engage in far too narrow consideration of migration, its effects and problems.

Cultural diversity makes it harder to coordinate to do things like provide infrastructure. It increases competition for attention, both in policy and public discourse. Immigration-induced ethno-cultural diversity makes it easier to play elite-imperial favour-divide-and-dominate games—aka identity politics.

With the systematic progressivist attack on Western societies and culture as “racist, colonialist, imperialist, etc.” immigrants become a “purifying” force, acceptance of whom makes such deplorable societies and cultures morally “better”. A process that only deplorables could possibly complain about. That mass low-skill immigration provides elites with cheap domestic services, nannies, gardeners, and so on is, of course, just superior morality getting its “just” rewards.

The shift of African-American men and Hispanics towards voting for Trump in the 2024 US Presidential election represents the US working class breaking out of such favour-divide-and-dominate divisions. It represents the politics of class winning over elite-imperial identity politics.

On the matter of Trump returning the GOP to where it started in the 1850s. What was happening in the US in the 1850s? Mass immigration via railways and steamships—see economic historian Robert Fogel’s Without Consent or Contract for the political effects of that within an American Republic that had free and slave States. Keri Leigh Merritt’s The Masterless Men is also revealing.

Scholars make a distinction between more groupish and conservative “survival values” and more liberal and open “emancipative values”:

Our research is consistent with Welzel’s characterization of the general shift from “survival values” that increase dependence on close others, to “emancipative values” that downplay local ties and loyalties—and lead people to look farther afield for social relationships.

If you systematically attack and degrade people’s cultural identity and heritage, break-up their communities, degrade their economic prospects through suppressing wages, raising rents and energy costs, and increase their experience of violent crime, of course their values will shift (back) towards survival values.

Imperial arrogance

There is a certain imperial arrogance to the EU across a range of issues. Consider the recent (temporary) annulling of the Romanian Presidential election because Russians might have been propagandising. This was formally by the local Romanian court but still looks rather elite-imperial. EU networking likely reinforces such elite arrogance: there is apparently a public statement that this is so.

Prof. Snyder draws a distinction between the politics of inevitability—a politics of progress—and the politics of eternity—a cyclical history of endless struggle. He points out that the notion of a known, proper direction to history is antipathetic to the contingency of democratic choice. What he does not point out is that the EU project of Ever Closer Union is precisely such politics. Election results get judged by whether they conform to this over-arching trajectory or not. In other words, the EU generates a self-directed moral legitimacy that trumps inconvenient democratic choices.

It is not surprising that talk about the democratic deficit seems to have dwindled somewhat in recent years as the extra-democratic legitimacy of Ever Closer Union has risen in official discourse. If you talk about the democratic deficit, then the imposed, anti-democratic nature of Ever Greater Union is much more starkly revealed. The European Parliament becomes an instrument of, and within, the Ever Greater Union political project—the Project that judges the choices of voters—rather than a democratic mechanism of control and accountability.

The EU has been engaging in its own astroturfed activism, whereby the EU funds NGOs/non-profits to, among other things, build public support for the EU itself and EU policies. Along with the DOGE revelations from the US about how much activism the US taxpayer has been funding, it is increasingly a serious question how large taxpayer-funded astroturfed activism is. Some of this funding is direct and some of it indirect—body X (say, the East-West Management Institute) gets, say, US$260m of taxpayer funds, which allows other money to fund various causes.

Forty years in the EU reduced UK state capacity by de-skilling the UK civil service and increasing the civil service’s institutional arrogance, its sense of separation from—and so undermining any ethic of service to—the wider British citizenry; especially from its working class. The UK civil service spent 40 years being the local agents of imperial EU policy decided in Brussels, bringing enlightenment to a benighted citizenry: becoming more and more a comprador, rather than a national, civil-service. It also encouraged the British political class to engage in theatrical, performative politics rather than actually governing.

That the Blair-Brown Governments (1997-2010) in the UK quite systematically broke existing feedback mechanisms by transferring decisions to Quangoes (quasi-government entities) and to judges via human rights legislation, which the Tories then did nothing about (or even doubled-down on), This aggravated the EU-effect. The “fast-tracking” of graduates within the civil service has almost certainly aggravated the undermining of a sense of service to the wider citizenry, given the tendency of modern academe to impart to its graduates a sense of contempt about the “erroneous” choices and views of fellow citizens.

The Starmer Government in the UK has been complaining bitterly behind the scenes that they can’t get the civil service to do anything. They have been telling journalists (and others) that Dominic Cummings is correct in his critique of the incompetent inertia of Whitehall.

PMs Tony Blair and George Brown handing so much state activity to Quangoes (quasi-government entities) has degraded connections of the British state apparat to Parliament and so to voters. As NZ Treasury Secretary Murray J. Horn explained in the book of his PhD dissertation, the functional point of setting up a semi-autonomous Government Agency is to provide on-going services to a constituency insulated from the vagaries of Parliamentary (or Congressional) majorities.

If one gets institutional capture, then even the putative constituency may not be being served well. (One of the many reasons to be sceptical of political advocacy by non-profits/NGOs is that their incentive is to directly target institutions, by-passing voters.) Forty years in the EU added to the state-capacity/democratic feedback-degrading effects of Quangoes and human rights law.

The way the Blair-Brown constitutional vandalism broke feedback—and so accountability—mechanisms, thereby generating an increasingly dysfunctional British state, and an increasingly alienated citizenry, very likely had much to do with why the Brexit vote succeeded in 2016. Especially after German Chancellor Angela Merkel throwing open the borders to waves of migrants in 2015 rubbed voter’s faces in how being in the EU stripped them of a say.

Western countries copying Chinese meritocratic entry by exam bureaucracy seemed a great idea. Perhaps they needed to look more at the patterns of such in Chinese history? Developed democracies have—to varying degrees—moved from early-in-Chinese-dynasty administrative competence in public administration to late-in-dynasty bureaucratic pathologies.

A persistent and fundamental problem is that key decision-makers—Prime Ministers, Ministers, Vice-Chancellors, University Presidents, etc—are surrounded by people who are themselves the problem. They parade as the boss-person’s agents, they dominate the flow of information to them, and all “solutions” that emerge from or through them either leave them in play or expand the resources flowing through (and to) them.

In reality, they bleed off resources; impose their spurious expertise on folk actually delivering the services; sop-up expenditure that could be used to increase the pay of the service-deliverers; make their lives worse by interfering busy-work; and often actively get in the way of what is actually needed. Their institutional politics of being the “superior deciders” is profoundly and pervasively the politics of contempt for others, and their choices. “Wokery” got so far in part because its tick-box moralising activism has been a boon to managerial self-aggrandizement. The EU is all this on steroids.

Through a close friend, I am tapped into how a prominent Australian university is falling apart. It is very clear that the disastrous, yet ever more grandiose, incompetence of the university’s ever-larger central administration bureaucracy—and its ever-greater bureaucratic pathologies—is central to the downward spiral of the institution.

The EU’s adverse effects on Europe’s comparative economic performance seems to be more of the same. This is especially as the EU bureaucracy itself—as social analyst Samo Burja points out (1:04:24)—mainly has the power of no, the power to forbid.

Samo Burja Transcript

Regulation IS the EU’s mode of operation (that, plus subsidies). Regulation has lots of problems due to poor feedback effects at the best of times. Add that to the poor accountability of the EU itself, not only is it not a surprise that the EU has evolved into a drag on the economic performance of its member countries, that is what one would expect.

Given that contemporary politics is so much the struggle between the accountable classes (those who income depends on their performance) and the unaccountable classes (those who are paid to turn up), it is no surprise that the EU seems to be so systematically on the side of the imperial Progressivism of the unaccountable classes. It is those unaccountable classes at their most grandly imperial (apart from the UN, of course).

The EU’s Ever Closer Union is a mechanism for the unaccountable classes to judge, trump and de-legitimise any inconvenient preferences, or even electoral decisions, by voters. This feeds into the pattern whereby politicians across Europe quite systematically fail to represent the views of voters on cultural issues—such as crime and immigration—in a way that is not true of economic issues.

Disadvantages of scale

It also seems likely that smaller countries can course correct better than larger ones, likely due to better—both broader (as it is harder to sort into cognitive “bubbles”) and shorter—feedback mechanisms. Denmark and Sweden have both managed to shift migration policy dramatically, for example. The UK, not so much. The EU is even less policy nimble.

That the EU persistently performs worse than the US across almost every comparable policy area⁴ is likely because the EU both has much weaker accountability and—precisely because of accountability-avoiding diffuse decision-making—much weaker ability to course correct. Weaker accountability is a plus for Eurocrats while political coordination problems provides them with a comforting bureaucratic inertia.

An EU dominated by an imperial bureaucracy has proved to be an unfortunate substitute for empire.

(Why does an Australian get to point and laugh at the EU? Many reasons, but this is a biggie.)

References

Jan van den Beek, Hans Roodenburg, Joop Hartog, Gerrit Kreffer, ‘Borderless Welfare State - The Consequences of Immigration for Public Finances, 2023. https://www.researchgate.net/publication/371951423_Borderless_Welfare_State_-_The_Consequences_of_Immigration_for_Public_Finances

Jan van de Beek, Joop Hartog, Gerrit Kreffer, Hans Roodenburg, The Long-Term Fiscal Impact of Immigrants in the Netherlands, Differentiated by Motive, Source Region and Generation, IZA DP No. 17569, December 2024. https://docs.iza.org/dp17569

George J. Borjas, We Wanted Workers: Unraveling the Immigration Narrative, W.W.Norton, 2016.

Roger Eatwell and Matthew Goodwin, National Populism: The Revolt Against Liberal Democracy, Pelican, 2018.

European Commission, Projecting The Net Fiscal Impact Of Immigration In The EU, EU Science Hub, 2020. https://migrant-integration.ec.europa.eu/library-document/projecting-net-fiscal-impact-immigration-eu_en

Robert William Fogel, Without Consent or Contract: The Rise and Fall of American Slavery, W.W.Norton, [1989], 1994.

David Goodhart, The Road to Somewhere: The New Tribes Shaping British Politics, Penguin, 2017.

M.F. Hansen, M.L. Schultz-Nielsen,& T. Tranæs, ‘The fiscal impact of immigration to welfare states of the Scandinavian type,’ Journal of Population Economics 30, 925–952 (2017), https://link.springer.com/article/10.1007/s00148-017-0636-1

Murray J. Horn, The Political Economy of Public Administration: Institutional Choice in the Public Sector, Cambridge University Press, 1995.

Andrew Lambert, SeaPower States: Maritime Culture, Continental Empires and the Conflict That Made the Modern World, Yale University Press, 2018.

Keri Leigh Merritt, Masterless Men: Poor Whites and Slavery in the Antebellum South, Cambridge University Press, 2017.

Tommaso Nannicini, Andrea Stella, Guido Tabellini, and Ugo Troiano, ‘Social Capital and Political Accountability,’ American Economic Journal: Economic Policy, 2013, 5 (2): 222–50. https://www.aeaweb.org/articles?id=10.1257/pol.5.2.222

Kristian Niemietz, Imperial Measurement: A Cost–Benefit Analysis of Western Colonialism, The Institute of Economic Affairs, 2024. https://iea.org.uk/wp-content/uploads/2024/04/Colonialism-Interactive.pdf

Zhiling Wang, ‘The incompatibility of local economic prosperity and migrants’ social integration: evidence from the Netherlands,’ The Annals of Regional Science, (2020) 64:57–78. https://repub.eur.nl/pub/121612

Adam Waytz, Ravi Iyer, Liane Young, Jonathan Haidt & Jesse Graham, ‘Ideological differences in the expanse of the moral circle,’ Nature Communications, 10, 4389 (2019). https://www.nature.com/articles/s41467-019-12227-0

Tian Chen Zeng, Alan J. Aw & Marcus W. Feldman, ‘Cultural hitchhiking and competition between patrilineal kin groups explain the post-Neolithic Y-chromosome bottleneck,’ Nature Communications, 2018, 9:2077. https://www.nature.com/articles/s41467-018-04375-6

1. The Conquistadors were a mixture of private adventurers and state agents, but their conquests were incorporated by the imperial Spanish state. The use of corporations as instruments of imperial expansion—most famously the Dutch and British East India Companies—was an unusual feature of European imperialism, but such companies were licensed by their state and their territorial holdings were eventually fully incorporated as state possessions.

2. For all sorts of reasons, we should distinguish between the postwar order of 1945-1991 and the post Cold War order of after 1991. So much of contemporary madness only really got underway in the 1990s.

3. This dynamic is central to the struggles within Ukraine over its relationship with the EU. It is also why Putin’s regime clearly found Ukraine moving towards the EU much more threatening than any connection to NATO. Indeed, Sweden and Finland joining NATO was treated with striking calm by the Kremlin.

4. Not, of course, in health care. But that is not an EU matter and almost every developed democracy does better than the US on health care. The US is also worse at city government, but that is also not an EU matter and developed democracies do generally better at that too than the US, though the gap has been narrowing (and not for good reasons).