The huge divide in the recent EU Referendum in the UK reflects a deep divide in politics and economics. The political divide stems from the huge divide in the discipline of economics between Microeconomics and Macroeconomics.
Most modern economics that hits the headlines is Macroeconomics. Macroeconomics deals with whole economic blocs such as the EU and the world. Microeconomics deals with specific industries and markets, often in specific places.
"The macro/micro split is institutionalized in economics, from beginning courses in “principles of economics” through to postgraduate studies. Economists commonly consider themselves microeconomists or macroeconomists."
IMF: Micro and Macro: The Economic Divide
The effect of this split is most obvious when the economies of individual EU countries are compared with the EU as a whole. A Macroeconomist would imagine that it was fine that people from Greece might have jobs in Germany because this would increase the average wage over the entire EU. A microeconomist would point out that the Greek workers might lower German wage rates and so undermine the confidence of German people in the German economic system.
Here we have the crux of the macro-micro divide. A successful economy requires many successful parts that have all been fostered by local people and governments. This fostering of the local industry often involves deferred gratification - the local people must go to college and incur debt, the local taxes might be high for a period to finance infrastructure changes etc. A group of people in a defined region have worked together to produce prosperity. The Macroeconomist then tells them that they must export this prosperity to places that have not been careful, have not avoided corruption or paid for policing and tax collection etc.
This divide between macro and micro economics can create conflict and in the case of the UK was sufficient to drive them out of the EU: the British wanted to continue to run their own affairs without net contributions elsewhere, large-scale movements of people into their economy and land etc. and all the other accoutrements of macro-economic governance.
In the long run those who favour the internationalist, macroeconomic approach imagine that large entities such as the EU, or even the whole world, will use the best economic policies from what were once its member nations (now member states). This is where the fantasy begins. A large state such as the EU is just another nation muddling along like any other, it has its own, unique policies and does not necessarily employ the best of anything. However, large nations do remove economic diversity, replacing many policies with one.
The next part of the macroeconomic fantasy is to imagine that economic policies will suit all cultures. In fact large land empires such as the USA and China deliberately change their populations to ensure the acceptance of central commands. The simplest way to accomplish this change is through migration. The USA had a massive campaign in the nineteenth century of giving newly conquered Mexican lands in the West to American settlers and China is implementing the same policy in non-Han areas. The EU is using "freedom of movement" and mass migration to accomplish similar changes. This technique of conditioning the population of a Nation so that macroeconomics is acceptable causes a loss of cultural diversity and has many other undesirable effects.
So who benefits from Internationalist Macroeconomics? Large corporations are always under threat from smaller competitors and can extend their lifetime by suppressing competition. Separate national units may foster local business and have laws against monopolies that permit smaller domestic and foreign enterprises to grow. It is in the interests of large corporations to have a single body of commercial law and convergent economic practices over as wide an area as possible so that they can guarantee an advantage over competitors.
The other big beneficiary of Internationalist Macroeconomics are land empires such as Russia, China and the USA. These are always on the look out for more acquisitions. The principle motivation of these empires is to obtain a buffer between themselves and neighbouring empires. The Common Market was originally created by the Marshall Plan as a buffer between the USA and USSR. The buffer states can be used as protagonists and proxies in conflicts and can absorb any shocks.
None of this is new. The Romans and Chinese practised these techniques millennia ago. The Romans had a very similar system to the "West", with a floating population of "Roman Citizens" from all parts of the Empire who believed that they were creating a New World Order and could be relied upon to support the Empire. It is a similar, self interested, floating population who supported the "Remain" faction in the recent EU Referendum in the UK. It is the Floateurs, the highly educated and/or rich, who favour empires because empires allow them to move freely for career advantage. Floateurs have two agendas: to foster their own free movement and to reduce economics and government to macroeconomics. These are summed up by slogans that declare local affairs to be nationalist and racist. It is ironic that Floateurs cannot see the racism implicit in a desire for a homogenized world.
Caring for the land and the people is ultimately a local activity. Microeconomics must take precedence over macroeconomics, moderating economics so that diverse societies can exist. It is microeconomics that creates the safe retreats that make Floating possible. The world missed a golden opportunity at the turn of century, it could have moved towards a system of cooperating but independent nations governed by international law but instead the "West" reacted to 9/11 by perceiving its safety in terms of expanding its power and control.
It is the hubris of our time that so many people imagine that they are not simply repeating the mistakes of the past. Eventually even "security" becomes the enemy of Empires. If there are no external threats or competitors then eventually the centre will become corrupt. All Empires will end, even global empires. We should never be tempted to build them in the first place.
Most modern economics that hits the headlines is Macroeconomics. Macroeconomics deals with whole economic blocs such as the EU and the world. Microeconomics deals with specific industries and markets, often in specific places.
"The macro/micro split is institutionalized in economics, from beginning courses in “principles of economics” through to postgraduate studies. Economists commonly consider themselves microeconomists or macroeconomists."
IMF: Micro and Macro: The Economic Divide
The effect of this split is most obvious when the economies of individual EU countries are compared with the EU as a whole. A Macroeconomist would imagine that it was fine that people from Greece might have jobs in Germany because this would increase the average wage over the entire EU. A microeconomist would point out that the Greek workers might lower German wage rates and so undermine the confidence of German people in the German economic system.
Here we have the crux of the macro-micro divide. A successful economy requires many successful parts that have all been fostered by local people and governments. This fostering of the local industry often involves deferred gratification - the local people must go to college and incur debt, the local taxes might be high for a period to finance infrastructure changes etc. A group of people in a defined region have worked together to produce prosperity. The Macroeconomist then tells them that they must export this prosperity to places that have not been careful, have not avoided corruption or paid for policing and tax collection etc.
This divide between macro and micro economics can create conflict and in the case of the UK was sufficient to drive them out of the EU: the British wanted to continue to run their own affairs without net contributions elsewhere, large-scale movements of people into their economy and land etc. and all the other accoutrements of macro-economic governance.
In the long run those who favour the internationalist, macroeconomic approach imagine that large entities such as the EU, or even the whole world, will use the best economic policies from what were once its member nations (now member states). This is where the fantasy begins. A large state such as the EU is just another nation muddling along like any other, it has its own, unique policies and does not necessarily employ the best of anything. However, large nations do remove economic diversity, replacing many policies with one.
The next part of the macroeconomic fantasy is to imagine that economic policies will suit all cultures. In fact large land empires such as the USA and China deliberately change their populations to ensure the acceptance of central commands. The simplest way to accomplish this change is through migration. The USA had a massive campaign in the nineteenth century of giving newly conquered Mexican lands in the West to American settlers and China is implementing the same policy in non-Han areas. The EU is using "freedom of movement" and mass migration to accomplish similar changes. This technique of conditioning the population of a Nation so that macroeconomics is acceptable causes a loss of cultural diversity and has many other undesirable effects.
So who benefits from Internationalist Macroeconomics? Large corporations are always under threat from smaller competitors and can extend their lifetime by suppressing competition. Separate national units may foster local business and have laws against monopolies that permit smaller domestic and foreign enterprises to grow. It is in the interests of large corporations to have a single body of commercial law and convergent economic practices over as wide an area as possible so that they can guarantee an advantage over competitors.
The other big beneficiary of Internationalist Macroeconomics are land empires such as Russia, China and the USA. These are always on the look out for more acquisitions. The principle motivation of these empires is to obtain a buffer between themselves and neighbouring empires. The Common Market was originally created by the Marshall Plan as a buffer between the USA and USSR. The buffer states can be used as protagonists and proxies in conflicts and can absorb any shocks.
None of this is new. The Romans and Chinese practised these techniques millennia ago. The Romans had a very similar system to the "West", with a floating population of "Roman Citizens" from all parts of the Empire who believed that they were creating a New World Order and could be relied upon to support the Empire. It is a similar, self interested, floating population who supported the "Remain" faction in the recent EU Referendum in the UK. It is the Floateurs, the highly educated and/or rich, who favour empires because empires allow them to move freely for career advantage. Floateurs have two agendas: to foster their own free movement and to reduce economics and government to macroeconomics. These are summed up by slogans that declare local affairs to be nationalist and racist. It is ironic that Floateurs cannot see the racism implicit in a desire for a homogenized world.
Caring for the land and the people is ultimately a local activity. Microeconomics must take precedence over macroeconomics, moderating economics so that diverse societies can exist. It is microeconomics that creates the safe retreats that make Floating possible. The world missed a golden opportunity at the turn of century, it could have moved towards a system of cooperating but independent nations governed by international law but instead the "West" reacted to 9/11 by perceiving its safety in terms of expanding its power and control.
It is the hubris of our time that so many people imagine that they are not simply repeating the mistakes of the past. Eventually even "security" becomes the enemy of Empires. If there are no external threats or competitors then eventually the centre will become corrupt. All Empires will end, even global empires. We should never be tempted to build them in the first place.
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