Monday, October 30, 2017

Nationalism as an infantile disease

I was a young economist at the International Monetary Fund in the mid-1980s, working on the IMF’s Spanish economic team. A group of us would travel to Madrid periodically to consult with the government on their economic policies and to issue reports that identified the main economic challenges facing the authorities and to take a thorough look at what was being done to address them. The early part of that decade had not been an easy period for Spain. Major sectors of the economy (e.g. steel, shipbuilding) were in crisis due to the emergence of lower cost producers in other parts of the world. Economic growth had been anemic and the rate of unemployment was one of the highest in Europe. By the time I joined the Spanish team in 1985 there was a serious program of economic reforms underway that sought to prepare the Spanish economy for its forthcoming entry into the European Community, as it was then called. What impressed me the most during these visits was the extent to which the prospect of entry into the EU was forcing the government to extend the focus of economic policies well beyond issues of macroeconomic stability to the entire range of sectoral and institutional reforms, the aim of which seemed to be the wholesale modernization of the Spanish economy. I remember, in particular, reforms aimed at liberalizing the inflow of foreign direct investment to facilitate the integration of the Spanish economy with the rest of Europe and, indeed, the world. I understood that, done well, this would lead not only to massive inflows of non-debt capital, but also to the arrival of know-how that would transform the country’s ageing productive apparatus. Coming from Latin America, then in the middle of a fearsome external debt crisis which led to a lost decade of virtually no economic growth, I remember thinking how fortunate the Spanish were: they would join a rich-country club firmly committed to democratic principles and willing to help them make that transition successfully.

Spain joined the EU on January 1, 1986 and over the next two decades it was one of the best performing economies in Europe. In the years following entry into the EU Spain not only received massive inflows of foreign capital as foreign firms sought to benefit from Spain’s lower labor costs and free access to the large European market, but was also the recipient of large and generous transfers from the EU budget, to finance regional development, including an upgrading of the country’s then decrepit physical infrastructure. Needless to say, these transformations affected, to a greater or lesser extent, all the regions of the country including, of course, Catalonia. Implicit in all of this was the exercise of an important principle embedded in EU law: the richer member states transfer resources to the poorer members as part of a process of narrowing the income divide among countries and as a result of which intra-country inequality in the EU was reduced in a significant way.   By the late 1990s I had left the IMF but continued to follow developments in Spain with keen interest and visited the country and its many beautiful regions on multiple occasions. For me the main lesson from joining Europe was more political and psychological than economic. It was the idea that Spain’s membership in the EU magnified its international influence, resulted in major gains in efficiency and was gradually leading to a change in people’s mental framework and psychological reflexes; the government in Madrid and major portions of the Spanish population seemed to be increasingly comfortable with the idea that their country was firmly embedded in the democratic traditions of its EU partners, including respect for the rule law and a fledging sense of European citizenship as a primary form of identification.

Albert Einstein, who had a visceral dislike for the deep-seated nationalisms that had caused such grievous damage during the 20th century, once said that nationalism was an “infantile disease”, the “measles of mankind.” It was undesirable and fundamentally a sign of immaturity. He agreed with Isaiah Berlin, who believed that it was “a passing phase due to the exacerbation of national consciousness held down and forcibly repressed by despotic leaders” and that like a “pathological inflammation” it would in time abate as the oppression that had induced it in the first place would itself disappear. On many visits to Barcelona over the years I often felt the fundamental incongruity of yearnings for “independence” in certain segments of the population, at a time when the region was very much part of the most ambitious and imaginative project of economic and political integration in the world: the European Union. Having benefitted from the generosity of German and Swedish and other wealthy member taxpayers which had helped turn Catalonia into a dynamic corner of the Spanish economy, these same people resented the fact that, in reflection of their new found prosperity, they were contributing budgetary resources to some of Spain’s poorer regions. But, more importantly, I had the sense that those who argued for leaving Spain and becoming an independent republic suffered from an unduly enhanced sense of victimhood, the idea that the interests of the region, to paraphrase Berlin, must rise to the supreme value “before which all other considerations must yield at all times.” I could not help thinking: in what century are these people living!
The psychologist Erich Fromm referred to nationalism as a form of incest, idolatry and insanity. Bertrand Russell, who thought of nationalism as the manifestation of herd instinct once wrote:

“It is rather odd that emphasis upon the merits of one’s own nation should be considered a virtue. What should we think of an individual who proclaimed: ‘I am morally and intellectually superior to all other individuals, and, because of this superiority I have a right to ignore all interests except my own?’ There are, no doubt, plenty of people who feel this way, but if they proclaim their feeling too openly, and act upon it too blatantly, they are thought ill of. When, however, a number of such individuals, constituting the population of some area, collectively make such a declaration about themselves, they are thought noble and splendid and spirited. They put up statues to each other and teach schoolchildren to admire the most blatant advocates of the national conceit.”

Nationalisms will gradually die because, faced with a range of serious global problems, from climate change to nuclear proliferation to poverty and inequality, in coming years we will be forced to strengthen our mechanisms of international cooperation and to learn to think, in an increasingly interdependent world, about the interests of the whole world, not this or that particular nation or region. Our ability to find solutions to these problems will be based on a growing acceptance of the oneness of mankind, of our coming together to act with a unity of purpose. We can choose to be part of this inevitable process of global economic and political integration, or to yearn in vain for a world of limited loyalties that is rapidly disappearing. Hopefully sooner rather than later our Catalan brothers and sisters will have to awaken to this fact.