Similar attempts in the area of global finance brought more ambiguous results. First, Europeans succeeded in codifying the norm of capital mobility within the European Union and the Organization for Economic Cooperation and Development. But the attempt to do the same at the International Monetary Fund – to make this norm binding for the whole world – failed.
Capital flows are governed by the American model of ad hoc globalization according to so-called Thrasymachean justice – the advantage of the stronger. The common European currency could be interpreted in such a context as an attempt to immunize Europe from international currency fluctuations.
Managed globalization, when adequate, confers legitimacy upon the European Union because it is then perceived as being able to protect its citizens from the negative effects of globalization. When it fails, as with the recent financial crisis, legitimacy is undermined.
What can be done to help restore that waning legitimacy?
One approach is simply to solve the crisis and introduce measures preventing its recurrence. The number of proposals introduced into the public discourse during the last two years is already plentiful enough without adding proposals of my own.
However, most – if not all – of these proposals share the same weakness: They call for further strengthening of supranational coordination and stronger rules applied at the EU level. Yet, in many ways, the source of the crisis is the lack of trust in European institutions themselves because they lack the legitimacy of the elected governments of nation states.
Proposals aimed at moving the EU closer to fiscal union are often supported by drawing an analogy between the current EU situation and the American fiscal crisis of the 1780s, when the United States moved to a federal system as one way of coping with the Revolutionary War debts of the states.