Friday, October 07, 2011

Federations, the EU and lessons for Australia

I enjoyed reading A misbegotten Union – Guest post by Lorenzo on problems faced by the EU and especially the euro. I thought that there was some interesting material there, although I may not agree on all points. As sometimes (always?) happens, my thoughts went onto a bit of a tangent linked to the issues.

Please read the post and comments. The relatively brief thoughts that follow parallel but do not substitute. Their genesis lies in the references to Australia in the discussion.

Managing Difference

In a comment, I made the point that in any entity – club, country or supra-national body – the critical issue to survival and effectiveness is recognition of and management of difference.

In our thinking whether it be at social, community, management, political or public policy levels, we focus on objectives, commonalities, the need to win over opposition. We generally don't think of the management of difference as a long term process; difference is something to be overcome now.

A Federal system with its division of powers is one way of handling difference because it allows different things to be done in different ways using different decision processes: sometimes it works; sometimes it doesn't; sometimes it works then doesn't; sometimes it doesn't and then does work. There is no single result.

In Australia, most national organisations were federations because the country was a federation. As the power of the Commonwealth grew, national organisations moved towards centralised unitary models. Sometimes this worked, but in other cases it failed because the centralised structures could not accommodate the differences that had been reflected in the previous federal structures. The final result was a proliferation of bodies.

Group Think

On the euro, Lorenzo wrote:

In the way supporting the Euro was treated as what the “good people” did, with only fools and cranks opposed, we can see starkly the problems of cognitive conformity. There is considerable social science support for the proposition that cognitive conformity leads to bad decision-making. The conformity acts to limit the information available, or used, and the questions asked. If the conformity becomes a matter of mutually supporting status based on marker-opinions (“good and clever people believe x, stupid and wicked people believe y”) then the effect is magnified. Supporting the “European project”, in all its harmonising glory, has long since become what “good people” support and only mad folk and cranks (or worse) oppose or seriously criticise; so even the questions, let alone facts, that the “wicked” opponents cite are to be dismissed.

The dominant group in any group or club or country has its own way of thinking that it regards as right. Those who challenge that way of thinking may be regarded as insane (the history of the concept of insanity is instructive here), immoral, simply idiotic, dangerous or just misled. The labels are always imposed by the dominant group.

This is as true in Australia today as it is in Europe. It creates a myopia that is very hard to break through.

In case you think that I am totally opposed to group think, I am not. It's actually necessary for social functioning. My problem lies in the way it can blind us.

EU as federation

The EU calls itself a political and economic union. That's group think. The EU is to my mind a federation in just the same way that Australia is a federation. It may be a federation that, at least among some, yearns for an utopian union, yet it's still a federation! The confusion in thinking between union and thinking bedevils EU life including the euro.


  I actually think that Australia can offer a lot of lessons to Europe. Does this sound extreme?

  • Australia is an operating federation that has been wrestling with many of the same problems as Europe for far longer than the EU has existed.
  • Australia has been in a Free Trade Agreement with New Zealand since 1965, in a fuller agreement with NZ since 1983. The levels of formal constitutional integration between the two countries may not be as great as the EU, but actual integration is arguably greater
  • Many of the issues are the same.

Europe can offer lessons to Australia.

I have real problems with some aspects of current Australian group think. For example, while I expect the Australian Federation to survive, I don't expect it to survive in its current form. Again, I expect the relationships that Australia is involved in to change quite significantly. 

Let me try to illustrate.

At present, landing in Australia you will see signs for Australian and New Zealand passport holders. This is the Australian equivalent of the EU. Tracking forward:

  • Within ten years, fifteen at the most, the Pacific islands will be added to this list
  • Within fifteen years, twenty at the most, ASEAN countries and especially Indonesia will be added.

This is why I say Europe can offer lessons to Australia, for Europe's experience is relevant to the path Australia is likely to follow as we broaden economic and political integration in Australia's region. I am not suggesting an Oceanic version of the EU, although that is possible. Rather, I think that we are going to see a growing version of the current ANZ CER.


I have wandered a little in this post. I guess that my key points are the need to:

  • focus on principles
  • recognise difference
  • break through barriers imposed by current thinking
  • not assume that what seems fixed and immutable now is in fact either.  


Anonymous said...

Very clear post Jim - thank you. I assume you'll drop a link over at SL?

Some part of that discussion started because of my own small thought that federation per se was not a bad thing; after all that is what we in Aus did over 100 years ago. Yet the thrust now sometimes seems to be that this is a root cause of present woes, rather than just one more factor to consider in any resolution.

Also, your views on where we ourselves might be headed are very interesting, quite intriguing in fact. Thanks!


Jim Belshaw said...

Hi kvd. At your prompting, I put up a link at SL.

I agree with the point in your second para. I know that I can get a tad boring on some of these things, but I really do think it important to try to articulate principles and issues. A bit of history helps too!

Thanks on your last point.

Lorenzo said...

Nice post. The refusal of the EU to learn from the experience of other federations (and I agree entirely: Australia, Canada, the US, India, Malaysia, all provide useful lessons) is one of its striking features.

Said refusal was particularly noticeable in the EU Constitution-drafting exercise. The attempt to “lock in” a whole set of policies (PART III: THE POLICIES AND FUNCTIONING OF THE UNION of the draft Constitution was 247 pages!) was so utterly antithetical to how the constitutions of functioning federations worked but also so utterly typical of what is wrong with the “actually existing” European project.

Jim Belshaw said...

Interesting comment, Lorenzo. Really a constitution designed by a camel!