'Capitalism renews itself incessantly: it has survived wars and revolutions, booms and busts, depressions and inflations. As long as the West does not renounce capitalism, its long-term prosperity is secure'
If, as the Austrian economist Joseph Schumpeter famously argued, the essence of capitalism is “creative destruction”, then Europe should be living through one of the most creative periods in its history. All around us, currencies are collapsing, debtors are defaulting, banks are bankrupt and the governed are ungovernable. We are witnessing nothing less than the last days of Leviathan: the end of the epoch that began with the rise of the modern state four centuries ago. Today’s global crises transcend the capacity of governmental machines even to grasp what is happening, let alone to steer the course of history. The implosion of the eurozone, for example, reflects the impotence of the chancelleries, overwhelmed by events and forces beyond their control. Europe’s political class is stretched on a Procrustean bed of its own making.
Whitehall civil servants were once known as “mandarins” — like their Chinese models, they were confident of their ability to administer vast empires. Today, coalition ministers privately complain that when they pull the levers, nothing happens. The civil service is not merely uncivil but positively mutinous. The elementary functions of government broke down during last summer’s urban riots; the same institutional malaise has almost provoked a fuel crisis and a loss of control of our borders. Nor is Britain unique: political incompetence and financial incontinence still vitiate the West’s faltering recovery; and, without warning, the enemies of civilisation (such as al-Qaeda, North Korea or Iran) may suddenly loose anarchy upon the world.
Amid the gathering gloom, however, we still have much to be grateful for. The resources, material and spiritual, of Western civilisation are by no means exhausted. In particular, we may take heart from the resilience of institutions which embody that civilisation: the British monarchy and the US presidency, Parliament and Congress, the great universities on both sides of the Atlantic, Roman law and common law, the Académie Française and the Royal Society — the list goes on.
Coeval with that civilisation are the Church, which in its various manifestations has endured for almost 2,000 years, and the Jews, who have preserved their religion and their identity intact throughout recorded history. The miraculous synthesis of Graeco-Roman and Judaeo-Christian thought has bequeathed us liberty and equality before the law, deriving from the Biblical postulate that each individual is created by God in His own image. This exaltation of the individual, refined by the Renaissance and expanded by the Enlightenment, has transformed the world so completely that other civilisations have been more or less eager to emulate the West. Until a century ago, only the West took other civilisations seriously enough to study them in great depth. Now the curiosity is mutual, with the difference that the Chinese, say, have no equivalent of the self-loathing that afflicts Western intellectuals when confronted with their own history, economy or culture. The West may be best, but only for the rest.
Will the West emerge stronger and invigorated from the present crisis, or will it lapse into terminal decline? History and first principles both suggest that the most likely outcome is comeback rather than downfall. Capitalism renews itself incessantly: it has survived wars and revolutions, booms and busts, depressions and inflations. As long as the West does not renounce capitalism, its long-term prosperity is secure. Similarly, democracy under the rule of law has stood the test of time as the system most likely to preserve our liberties. But the West must be prepared to defend itself and its values against internal subversion as well as external attack. And the best bulwark against both has proved to be the nation state.
The lesson that the European Union will have to learn from its experiment with the single currency is that we cannot do without De Gaulle’s “Europe des patries“. The musketeers’ motto — “All for one and one for all” — only works as long as the team is composed of autonomous individuals, united by mutual respect, a common purpose and enlightened self-interest. Without all that, loyalty expires.
Far away from the unedifying spectacle of European states falling out over money, off the coast of Somalia they have worked in perfect harmony. An EU naval task force under a British admiral has attacked pirate bases, setting a precedent for dealing with a menace to trade on the high seas. In close proximity to this display of European solidarity, however, lies a far greater threat to peace: the imminent prospect of an Iranian nuclear bomb. Israel cannot and will not tolerate this. Just as they did before the Six Day War in 1967, Israel’s main parties have formed a grand coalition, clearing the decks for a pre-emptive strike against Iran, probably before the US election in November.
War between Israel and Iran could be a decisive test for the West. Even under Obama, there is no doubt about the allegiance of the United States, but Europe’s is much less certain. Yet if the EU is now ready to project naval power to keep sea lanes open in the Indian Ocean, why should it not do the same in the Gulf, to which Iran has threatened to cut off access in the event of war? If Israel were to come under retaliatory attack from Iran and its Islamist allies, would the EU offer military or political assistance, as the US surely would? Or would Europeans abandon the Jewish people once again?