Speech by Dr Carl-Johan Westholm at the European Constitution Symposium in Barcelona on April 29, 1996

A Construction or a Constitution for Europe

The world of today is not the same as it was 50 years ago. This self evident statement has a meaning which sometimes is overlooked. EEC - the European Economic Community - was founded in order ease the rebuilding of business and industry in continental Europe after the Second World War and to give a safer ground for peace and security for the people of Europe. The European Economic Community, EEC, which later was called the European Community, EC, and still later the European Union, EU, was a child of its age. Keynesianism dominated economic thinking; there was a widespread belief in the potential of central planning. Europe of 1950 was a continent - sometimes including the British isles, though Winston Churchill excluded them in his famous lecture on the future of Europe. Europe of 1950 was a continent full of hopes and fears, the citizens paid low taxes. Today the degree of hopes and fears is reduced and the tax level more than doubled. You had the Iron Curtain and from August 13, 1961 the Berlin Wall. Europe was divided. There was a totalitarian East and a mostly liberal West.

Can really anything new be said about the situation in Europe today? Can any recommendation be made and be of some refreshing character? Can some arguments or analysis be presented which can shed some further light on what we think or ought to think about our own hemisphere in the world?

Thank you for your kind invitation to give me the opportunity to summarise my own thoughts about this. Coming from a country in the Northern periphery of Europe, it is a pleasure for me to begin by saying that this does not depend on where in Europe you stay or live. The kind of analysis you make and how you describe the reality, however, is important; decisive for the conclusions is your general perspective - if problems are problems for politicians or individuals and if possibilities are possibilities for politicians or for individuals. If you look upon politics in Europe as a problem of power, then the solution will deliver more power in Europe. But if you look at Europe as a problem of freedom, then the solution will give more freedom in Europe.

In the British magazine The Economist of March 13, 1996 you can find an article with the title "Europe - Ever more complicated Union". The article is about the Inter Governmental Conference, IGC, which started in Turin on March 29 and, as The Economist explained it, is meant to tidy up the European Union conceived in 1991 at Maastricht and prepare for a future dub with more members.

To quote The Economist: "Consider the following indigestion-provoking items

on the conference menu:

  1. Voting powers
  2. Qualified majority voting
  3. The big countries
  4. The small countries
  5. The veto
  6. The defence
  7. The commission
  8. The presidency
  9. The European Parliament
  10. The European Court of Justice

I will not go into details in any of these items. That has already been done from so many parties and groups. And will be done further later on. But did you observe that there was something lacking in the items? The individual.

Obviously, for ordinary European politicians, constitutional questions seem to regulate voting powers, qualified majority voting etc. But, if you have an ordinary classical liberal insight, you know that a constitution is not made in the first instance to guarantee power to the politicians. A constitution is primarily made to ensure liberty for each individual - and therefore it is necessary that the constitution restricts the power of the politicians.

In the preparations of the Inter Governmental Conference you observe a fundamental misconception of what a constitution is. Sometimes Europe is compared with - or made equal to - the constitution of the United States of America. United States of America was founded as a republic. Republic means that the public is getting power back. Re public. United States of America in 1776 did not praise itself of being a democracy even if it was. It had countervailing powers and division of power as its philosophical root. If you look back on the European so called integration since the Treaty of Rome in the 1950s, you find that what has been going on is not predominantly a creation of a constitution of Europe but instead a construction of Europe.

Of course, you are acquainted with Friedrich Hayeks warnings against constructivism in economics and politics. He made the distinction between an "order by design" and "the spontaneous order". A society can develop either by centralised decision making, i.e. order by design. Or by the spontaneous order, i.e. the market. The order by design is what Hayek called constructivism. He wrote most of his thoughts about this in the book The Constitution of Liberty (1959) and later in the three volumes Law, Legislation and Liberty.

It is evidently so that the integration process in Europe of today is dominated by men of power and will, who consciously or unconsciously belong to "the design camp". For them, it is not a question of giving a constitution to Europe, but to construct Europe. They have a vision, and you must have a vision if you want to have something done. But their vision for Europe is not primarily individualistic, but have a collectivistic bias.

Let me at this stage just for some seconds make some remarks about the adjective "European". Sometimes you can hear people talking about the need of a European vision or a European constitution. As I am fond of constitutions, I should perhaps be expected to be fond of a European constitution. But a constitution cannot be good by itself being European. As we all know, we have had democratic as well as totalitarian constitutions and practices in Europe this century. A European constitution can therefore - sadly to say - mean nearly everything. And mean nothing. One of the better constitutions in Europe was in fact the one that Stalin enacted in the former Soviet Union, with property rights etc. But as the British know by experience for many centuries, it is possible to have liberty without a written constitution.

But is not this distinction of Hayek between constitution and construction an overstatement? Can it really mean so much? Let us see what the words really tell us. Constitution is composed by the two words con and stitution which means that something is put together. And when you put something together in society you must do it by in stitutions. A construction means that you put something together in a structure, you build something, and when you do it you need in struction. A constitution is a set of formal rules which leaves every individual whether being a king, president, producer or consumer, a specific area of action in his institution. That guarantees also a procedure within the institutional framework. To obtain and preserve these institutions, you need a consensus. The consensus about institutions is called the constitution.

Sometimes you can hear the European Union described as a dynamic process. That is in itself a tautological expression, because every process by definition must be dynamic, in other case it is not a process. Further more, a dynamic process is considered as something by definition positive. That is a view that only can be held by people with some lack of historical understanding. One of the most 'dynamic" processes in Europe this century took place in Germany in the 1930s. Few Europeans of today would describe these events as positive.

But it is true that when you construct something, you must be active all the time. That means that instead of a constitution which is based on institutions, a construction is based on instructions. Institutions give a framework and then you have freedom within those rules. Instructions are a state of rules where you need to obey more in detail what you should do or not do. The politicians will be instructors for the population. It is interesting to see that the classical liberal concept of division of power in a constitution has its parallel in a construction in the principle of subsidiarity. A division is something already made. Subsidiarity is a recipe when making.

Subsidiarity is from the beginning stemming from the Catholic church. Personally, I find if to be a wise rule in ordinary political life. But ordinary political life needs extraordinary rules for extraordinary situations. Then there is room for a constitution and a formal division of power. Subsidiarity means that every decision should be taken at the lowest possible level in society. By definition, society is supposed to be differentiated into levels and the highest level is the king, the president etc down to the individual citizens. The principle of subsidiarity is a principle to use in an ungoing process. The moot point is who is interpreting the principle. If the interpreters have centralisation in their minds the subsidiarity rhetoric will have anti-subsidiarity results. Is that EU of today? On the other hand, imagine an anti-subsidiarity principle, namely that all decisions should be taken at the highest possible level, and that the interpreters of the principles would have decentralism in their minds. Then we would have a centralised rhetoric with a decentralised result. I am aware that decentralisation cannot be equalised with subsidiarity, but I think it is fair to make this comparison.

In politics and sometimes even in life outside politics it is useful to know some tricks to prevent oneself from being a victim of them. One such famous trick is when aggressive nations claim that they are peace-loving. By definition, anyone opposing their proposals are not peace-loving.

When discussing the future of Europe the outcome will probably be influenced by what will be counted as "European", because that term has a positive connotation to Europeans. This "European" terminology can make victims not only of the man on the street. It has struck me that there are politicians in Europe - often non-socialist at home - who in their own nation by principle oppose increased taxes and centralised solutions, but when they move from their own capital to Brussels, they change their attitude to at least accept sometimes even applaud, higher taxes and more regulations. A wrong principle in a nation state, on a local level or a regional level cannot rarely be better when applied on a whole continent. And a good principle on a national area must likely be as good applied on an international area.

There is only one rational explanation to this enigma in the behaviour of some politicians. Such a conservative or liberal politician has a specific priority of ideas: priority number one is Europe and priority number two is freedom and liberty for the Europeans. For me this is an impossible position. Top priority must always be given freedom and liberty for the individual. To have top priority for a national entity be it a continent, a nation state or a local area seems to be absurd. I love my own country Sweden. You love your country and your wonderful region Catalonia. But I am convinced that we all agree upon that it is better to be free in a foreign country, than to be a prisoner in one's own homeland.

The European Union exists. That is a part of reality. We must all try to influence it to enrich the life of every individual in Europe, which means that liberty and freedom must prevail and increase.

Is there any room for ideas? Yes, I think so. In fact, that is why I am giving this speech. For the moment, you see less clear ideas but instead three divergent forces on the European political scene. One is the trend of competition, which is a good force. That means that a country with lower taxes attracts labour and capital more than a country with higher taxes. A negative force is a political will to harmonise economic politics. Common financial policy of Europe will mean common taxes, probably coming tax increases. This tendency will be strengthened by the third force, the public-choice mechanism, which is a formidable dynamic factor in European political integration; the personal ambition of national politicians to make further advancements in their political career and go to Brussels will mean a press upwards on the political power and the taxes to Brussels. On the other hand, Europe is not the whole world, which is good for Europe.

Let us be absolutely clear on this point: the creation of a world government and a world union and a common currency for all countries could be a deadly threat for individual freedom and mobility in the world. If a common policy and a common currency for all countries would mean e.g. that the world government prohibited local governments or individual companies or persons to create their own currency, then we witness the birth of a totalitarian world regime - a monster of political modernity.

The work of individuals and companies, as employees and employers, by individuals and their families, is an ungoing process. That is the way wealth is created. But the process must be protected by institutions, guaranteed by a constitution. But in a country, or a continent where you describe politics as itself primarily as a process, then dynamism will be more and more concentrated in political decision-making, not in the every-day life of individuals. That will make the political superstate possible. In the long run, you will find all men becoming dwarfs.

But, great societies can only exist with great individuals. To confirm this conviction, you need a consensus that this, exactly this, and nothing else, is the core in a constitution of liberty. And a constitution of liberty is our idea for Europe.

Europe's future is shaped on the battlefield of ideas.



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