The American or Hobbesian Way? Preventing Chaos.

Over the past few months, Americans have been pushed to the edge with the financial meltdown and crisis that has stumped some of our greatest minds and innovators. Yet while we have all been discussing the plight of our near insurmountable deficit, constant economic turmoil, and partisan government, Europe has been on the verge of its own economic collapse. I got to witness these nations first hand this summer studying abroad in London, while also visiting Paris, Brussels, and Greece.

Since this summer and more recently, challenges abroad have intensified and differing plans have been concocted to no avail. After last week’s latest European rescue plan, nothing has been shown to address the economic weaknesses that have plagued the Euro Zone and has propelled it to a near catastrophic meltdown. The fact is this, however successful the package may prove in leveling out the turbulent markets, the members of the European Zone still face the problem that has infected America. That is, preventing a partisan division, however this time, with multiple European countries. It is undeniable the strain of European leaders having to deal with multiple nations under a common currency, especially given the lack of other critical policies, such as government borrowing and regulation. This issue allowed for differences in growth rates among the countries to expand during the cycle of the last half-decade or so in Europe.

Needless to say, similar to America’s situation, the writing was on the wall. Yet, by having a single fiscal policy and regulatory framework, the United States has experienced far fewer internal stresses and strains.

Our federal budget includes “automatic stabilizers” that, without further congressional action, shuttle money to hard-hit areas. We have a strong ability to reconcile our issues before an ultimate collapse, and I believe that is something that Hobbes would agree with as a protection of the “state of nature” in relation to the current economic situations both here and abroad. Hobbes approach stating, “during the time men live without a common power to keep them all in awe, they are in that condition which is called war; and such a war as is of every man against every man” would appreciate America’s ability to maintain their common power even in the face of recent adversity, while Europe’s common power through the seventeen nations could be abandoned any day due to the disparity of the economies. This to Hobbes would prove a chaotic mess.

Take Germany, for example, and witness a strong nation of business, drive, and resourceful energy. In part because of a “grand bargain” nearly seven years ago that ‘blended regulation, job security and wage restraint, German productivity and economic output both grew by almost 10 percent between 2000 and 2010.’ They have enjoyed a nice renaissance when compared with the other European nations who have been struggling of late. Italy and Spain have been overcome with massive unemployment, stuck above 20 percent thanks to its unyielding labor market. Like Greece, Portugal is struggling with an uncompetitive economy and inflated government payrolls.

If the seventeen European nations decided to get rid of their common currency, and allowed for the weaker countries to flounder and take the approach of devaluation, it would “entail unimaginable complexity and bring its own form of chaos.” It is my opinion that this would clearly prove Hobbes’ “state of nature” claim  that absolute authority is paramount for a successful society, and under a broken system, Europe would crumble.

Thus, has the American system of protecting their financial markets with higher authority from chaos proven to hold up despite recent years of adversity? If so, would Hobbes arguments for the necessity of absolute higher power to keep man in order apply? And finally, would he even go so far as to take credit for the American way? Who deserves the credit? Both?

Furthermore, what could Europe do to rectify their current crisis without disrupting their common peace and ignoring Hobbes? Should they look to America’s single fiscal policy as a springboard for reform, or continue to search for ways to patch up their political failings in the hopes of restoring absolute authority?



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4 Comments on “The American or Hobbesian Way? Preventing Chaos.”

  1. rschles92 Says:

    The economic crisis in Europe is similar to the United States’ situation in its conception. The private sector did what they were supposed to do: try to make as much money as possible no matter what. The key phrase being no matter what. This is the unfortunate state of nature of mankind. People look out for themselves and when everyone looks out for themselves this is what happens. Now people are coming to the government expecting a handout. The irony would be more humorous if it wasn’t so sad. Cutthroat businessmen who have wronged people with less fortunate financial situations are now asking for bailout.

  2. beaurh Says:

    In Europe, in order to prevent said “unimaginable complexities,” a central power is necessary to keep the struggling European countries such as Greece afloat. The European Union is highly ambiguous. The powerful nations such as Germany, with a growing labor force and a flourishing economy, outcompete the economically struggling countries and inhibit any growth. But again, without the European Union, these less fortunate countries would be dwindling without the Euro, and assistance from the other seventeen countries involved.
    If the European Union were to dissolve, a state of nature would still be an impossibility. There would be no chance of having a contract or covenant because there are already designated powers. Germany would have zero reason to live up to a promise with a lesser country unless it betters them sufficiently. Although in agreement with wjpetok24 that Europe would crumble if no EU existed, it would not be because of a lack of power or central control. The stronger nations would become this control, and without the restrictions the EU has, the new powers will take advantage and exploit the smaller nations.

  3. hoeylue Says:

    The situation of the Euro as currency and the EU isn’t as bad as it is portrayed by the media nowadays. Even if the PIIIGS face extraordinary debt and unemployment rates, it is going to be the support of countries like France, GB and Germany that will keep the EU together and the European economy working again. Especially Germany will do its best to keep the Euro as currency and the problematic countries in the EU.
    This is because Germany benefits from the Euro like no other country in the EU. As an highly export oriented country Germany has highly profited from the introduction of the Euro, as it artificially lowered the value of their currency relative to their former currency “Deutsche Mark”, and artificially increased the purchase power of the countries like Greece, whose former currency Drachmae used to be much weaker than the Euro. The consequence was that especially PIIGS states started to buy more and more German products, as these became comparatively cheaper for them. Germany on the other hand could more than double its exports from 426 billion to 1.1 trillion since the introduction of the euro.
    Furthermore, without trading barriers and currency differences, Germany is able to sell 2/3 of their export products to other European countries, which gives them another reason to make sure that these countries stay in the EU.

    • afadel Says:

      Watch this video. Does Germany need the Euro, or does the Euro need Germany? I think the latter is true.

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