The New Old World by Perry Anderson Page B

of the epoch before Keynes.
    The new element—namely, the supranational character of the future monetary authority—would serve to reinforce such a historical reversion: elevated higher above national electorates than its predecessors, it will be more immune, and not only by statute, from popular pressures. Put simply, a federal Europe in this sense would not mean—as Conservatives in Britain fear—a super-state, but
less
state. Hayek was the lucid prophet of this vision. In his 1939 essay ‘The Economic Conditions of Interstate Federalism’ he set out the current logic of European monetary union with inspired force and clarity. After arguing that states within such a union could not pursue an independent monetary policy, he noted that macro-economic interventions always require some common agreement over values and objectives, and went on:
It is clear that such agreement will be limited in inverse proportion to the homogeneity and the similarity of outlook and tradition possessed by the inhabitants of an area. Although, in the national state, the submission to the will of a majority will be facilitated by the myth of nationality, it must be clear that people will be reluctant to submit to any interference in their daily affairs when the majority which directs the government is composed of people of different nationalities and different traditions. It is, after all, only common sense that the central government in a federation composed of many different people will have to be restricted in scope if it is to avoid meeting an increasing resistance on the part of the various groups which it includes. But what could interfere more thoroughly with the intimate life of the people than the central direction of economic life, with its inevitable discrimination between groups? There seems to be little possible doubt that the scope for the regulation of economic life will be much narrower for the central government of a federation than for national states. And since, as we have seen, the power of the states which comprise the federation will be yet more limited, much of theinterference with economic life to which we have become accustomed will be altogether impracticable under a federal organization. 31
    Maastricht, in this account, leads to an obliteration of what is left of the Keynesian legacy that Hayek deplored, and most of the distinctive gains of the West European labour movement associated with it. Precisely the extremity of this prospect, however, poses the question of whether in practice it might not unleash the contrary logic. Confronted with the drastic consequences of dismantling previous social controls over economic transactions at the national level, would there not soon—or even beforehand—be overwhelming pressure to reinstitute them at supranational level, to avoid an otherwise seemingly inevitable polarization of regions and classes within the Union? That is, to create a European political authority capable of re-regulating what the single currency and single-minded bank have deregulated? Could this have been the hidden gamble of Jacques Delors, author of the Plan for monetary union, yet a politician whose whole previous career suggests commitment to a Catholic version of social-democratic values, and suspicion of economic liberalism?
    On this reading, Hayek’s scenario could well reverse out into its opposite—let us say, the prospect drawn by Wynne Godley. As the Treaty neared ratification, he observed:
The incredible lacuna in the Maastricht programme is that while it contains a blueprint for the establishment and modus operandi of an independent central bank, there is no blueprint whatever of the analogue, in Community terms, of a central government. Yet there would simply
have
to be a system of institutions which fulfils all those functions at a Community level which are at present exercised by the central governments of the individual member countries. 32
    Perhaps because