A new “revolt of the rich”?

Back in the 1970s when journalists and others were looking for an explanation for the upsurge of national minority activism, the phrase “revolt of the rich” was coined. In sum, it was supposed to provide insight into why better off regions wanted greater autonomy from the centre or, it may be, independence. It was always somewhat suspect since some of these autonomy movements were characterised as the response to internal colonialism, albeit in the material sense, as the transfer of resources from the poorer to better off parts of the country, but this evident contradiction never troubled those who were looking for economic explanations for non-economic phenomena. Slovenia, Flanders, Catalonia, the Basque Country were placed in the first category; Wales, Scotland, Brittany were in the second. What few wanted to admit was that those behind these autonomy movements might actually have wanted more power for political and cultural reasons.

Never mind. It may be that one, and only one, of the explanations for the manifest reluctance of the wealthier, less indebted northern tier of the EU is their clearly expressed opposition to the EU being or becoming a “transfer union”. Actually, from the outset the EU was about transfers from the better off to the poorer regions of the Union. These subsidies were carefully policed and while they resulted in the excesses of the Common Agricultural Policy (“butter mountains”, “wine lakes”), they were also successful in ensuring that the surplus agricultural population of some regions would be integrated into the market as fully equal citizens, in overall sociological terms at least.

The pattern emerging today is somewhat different, but certainly deserves the description of a “revolt of the rich”. In sum, public opinion in the wealthier north European members of the EU is saying that they have no obligation to help the poorer (and arguably more profligate) member states of the south. In other words, there is no commonality – no solidarity –  that could form the basis of such transfers. It is not our affair, they are saying, there is no question of nostra causa agitur.

This is a singularly knotty problem. Within the bounds of the state, such transfers take place constantly. German opinion, which is so opposed to transfers to Greece, readily accepts the redistributive mechanism that keeps indigent Länder like Bremen afloat, but will not accept this for Germany’s EU partners. And Germans are not alone, of course; the net contributors to the EU budget are united in their efforts to cut these contributions.

Note that the transferred funds do not solely benefit the recipients. Infrastructure investment in the poorer EU states, Hungary included, results in better market conditions and the net contributors are not exactly tardy in taking advantage – look at the spread of Western-owned hypermarkets in the former communist world, for one. They certainly do well out of better roads, by way of example. Not all the money has been spent wisely, true. While the corruption, profligacy and waste argument has some traction, there is something deeper at work here and this has to be the problem of whether there is such thing at all as EU solidarity beyond the elites and if not, why not.

My sense of it is that in the early years in the much smaller predecessor of the EU, elites were able to take societies with them in the European endeavour, but somewhere along the line, this ceased or was abandoned or was overtaken. Certainly, in the last few years – definitely during the seven-plus years that I have been in Brussels – there has been a palpable intensification of national sentiment, lightly disguised as the “national interest”. The United Kingdom has been at the forefront of this, but others have followed. What has been lost above all is a sense of an overall European interest that would transcend the national and provide a legitimate basis for Europe-wide redistribution.

The whole process of European integration was designed to ensure that there would be no irresoluble conflicts within Europe and the economic development of poorer states and poorer regions was an important, though not the only, contributory factor. If we are to take the single market concept seriously, then the relative strength of different market actors has to be a part of that concept; transfers are a step in that direction of empowerment.

The deeper problem of how to make redistribution acceptable is, then, both a Europe-wide and a member state problem and if it is not addressed, the rich could readily construct narratives to block further transfers and to do this domestically, not just internationally. And that could have repercussions for the domestic cohesion of states. The Barnett formula, on the basis of which England subsidises Scotland, is already the target of questioning. The Lega Nord in Italy builds support on similar grounds, that of subsidising the south. Catalonia grumbles at having to subsidise other parts of Spain. And so on. Aid to the Third World is broadly argued on grounds of obligation by the wealthy West to the poor south, but what if the revolt of the rich is extended to these transfers too? The same argument of waste, corruption and profligacy can be and has been made with respect to Africa. But does the German taxpayer owe more to Africa than to Greece and if yes, what does EU membership mean?

The fundamental question, then, would appear to be this: the modern European nation state generated sufficient social, cultural and political cohesion, with a commitment to equality among citizens and members of the nation, to provide a basis for substantial redistribution. This cohesion is not there in the European context and, it would seem, the remaining economic and political arguments in favour of such redistribution are too weak to sustain it. This augurs badly for Europe, not only in the cultural sense, but in terms of security and conflict resolution.

If national egoism – sorry, the national interest - is on the rise, then friction between different nation states is bound to intensify. What are the European elites to do in this new situation? And what, actually, are they doing? In this connection, the current concentration on the right-extremist danger as the source of opposition to transfers really does confuse symptom with cause. The core of the problem is to be found elsewhere, in the decline of a commitment to a European ideal, the failure to identify and remedy this and in the growing reluctance on the part of member state elites to make the case for Europe.

Sch. Gy.