Issue 2, 2016

Whither Europe?

Pieter Pekelharing

From the perspective of social theory Brunkhorst’s approach is based on the assumption that in history there are two cosmic forces at work, forever battling it out with one another. On the one hand there is the good force of reason and emancipation, informed by the ideal of egalitarian freedom. On the other hand there is the bad force of domination. Christina Lafont (2014) aptly visualizes the battle between these cosmic forces as a fight between David and Goliath. David stands for reason and emancipation, Goliath for domination and subjection.

Once you get this point you can see the struggle taking place in all spheres and at all levels of society. Here is a description of how it goes: all of a sudden, amidst blind change, a new insight, an inspiring ‘idea of freedom’ erupts. In the wake of this idea, a battle ensues between the opposing forces of emancipation and of domination, with one party attempting to steer the idea of freedom in the direction of further emancipation, and the other trying to bend it towards the goal of domination.

Cristina Lafont, rightly I think, points out that it’s difficult to see the struggle, as Brunkhorst sometimes does, in terms of an opposition between a blind evolutionary force, on the one hand, and an emancipatory agent on the other. To be able to visualize the struggle as a class struggle, you have to posit not forces but opposing collective agents, involved in what Lafont calls a ‘clash of ideologies’. In such a clash both parties are trying to figure out which direction society should take in order to meet their opposing goals. 

One may feel uneasy with this idea of a cosmic battle between good and bad. But I believe that, as philosophers, it’s quite natural for us to visualize the world in this way. It’s part of our business to separate what’s good from what’s bad, and to find out which side we should be on. Philosophy is about making wise choices, and sometimes it helps to see the world in terms of opposing agents or forces. As Einstein said, “everything should be made as simple as possible. But not simpler”.

This is certainly the case when we are dealing with an issue that is so conflict-ridden as the ‘idea of Europe’. Who stands for David here and who for Goliath? And what are their chances of winning or losing? What role can or will Europe play in the attempt to achieve smart, sustainable, inclusive, forms of economic growth which respect human dignity?

Interestingly, Brunkhorst often describes the struggle over Europe in terms of two opposing mindsets. On the one hand there are those who defend the ‘Kantian mindset’, and on the other those who defend the ‘managerial mindset’. The Kantian mindset is usually ‘good’, the managerial mindset usually ‘bad’. Sometimes Brunkhorst rephrases this opposition as one between ‘democracy’ and ‘capitalism’. Overlapping with the other two, Brunkhorst also refers to a third opposition between ‘embedded’ and ‘disembedded’ forms of capitalism.  

In what follows I will take my lead from this last opposition. The distinction between embedded and disembedded forms of capitalism stems from Karl Polanyi. In his classic The Great Transformation, originally published in 1944, Polanyi described the rise of capitalism against a background in which he assumed that the work provided by the laboring classes had always been embedded in social relationships that made the construction of market institutions and impersonal exchange extremely difficult. This remained so until the advance of capitalism and the commodification of labor finally led to the creation of “disembedded” markets, thus inaugurating what Polanyi called the ‘great transformation’.

In reaction to the rise of ‘disembedded’ markets and the commodification of labor, workers mobilized and demanded protection from the state against the strictures of the market. This was Polanyi’s great insight, the ‘double movement’. By this he meant that those dislocated by the market will make use of the state to protect themselves, the consequence of which is large-scale institutional change.

However, Polanyi concluded that the new institutions which states developed in response to the double movement of his time – welfare states within an institutional order that heavily regulated the movement of capital and scope of markets – marked a permanent change in the institutional make-up of capitalism. In other words, the great transformation was seen by Polanyi to be a one-way process. We had arrived at the end of history.

Which of course we haven’t.  As Mark Blyth (2002) recently pointed out, there isn’t one, there are many ‘great transformations’. If disembedding the market led to a double movement where labor demanded protection through an institutional re-embedding, then wasn’t it reasonable to expect, in turn, a reaction against these “embedding” institutions by those most affected, namely capitalists? What one sees after Polanyi’s Great Transformation took place is a constant political struggle, a series of repeated contests to disembed and re-embed the market, a battle which continues until this day, even though its contours have dramatically shifted since the first transformation. The contemporary neoliberal economic order can be seen as merely the latest iteration of Polanyi’s double movement.

The neoliberal disembedding of embedded markets began in the 1970s and early 1980s. It was triggered by the oil crisis during which states in the Western world started to experience problems such as stagflation, which neither of the contending parties seemed able to address. Existing ideas and institutions were simply not prepared for this new phenomenon, in which both prices and unemployment rose to unsustainable heights.

In the wake of these developments institutions that had once served as the basis of the embedded liberal order themselves became objects of critique and contestation. Institutions and instruments such as dependent central banks and active fiscal policies were now diagnosed as “part of the problem” rather than as “part of the solution”. The existing policies lost their legitimacy and the old central banks were systematically dismantled.

In contrast to the previous double movement, organized business groups and their political allies displaced states as the principal actors responding to economic dislocation. Such business groups used a variety of monetarist and other “neoclassical” ideas to redefine the boundaries of political economy away from the Keynesian emphasis on redistribution and growth and toward the neoliberal emphasis on inflation control and monetary stability.

Just as labor and the state reacted to the collapse of the classical liberal order during the 1930s and 1940s by re-embedding the market, so business reacted against this embedded liberal order during the 1970s and 1980s and once more sought to “disembed” liberalism.

In this effort, business and its political allies were quite successful, and by the 1990s a new neoliberal institutional order had been established in many advanced capitalist states with remarkable similarities to the regime discredited in the crisis of the 1930s. That is, both ‘classical liberalism’ and ‘neoliberalism’ are characterized by high capital mobility, large private capital flows, market-conforming tools of macroeconomic management, a willingness to ride out balance of payments and other disequilibria by deflation, and a view of the rate of employment as dependent upon the market-clearing price of labor. During the 1980s and 1990s Polanyi’s double movement was put into reverse gear.

All went well for business until the outbreak of the Great Depression of 2008. Since then everything is up for grabs again. It is now 2016, and we still do not know how to get out of this crisis. David and Goliath are not only battling it out, they are also becoming more deeply divided within. We are again in one of those periods when nobody really knows what direction society ought to take. The contending forces find themselves in a situation in which they must constantly argue over, diagnose, proselytize, and impose on others their views of what the crisis is actually about. There is no clear definition of the situation, making the clash of ideas all the more poignant.

Brunkhorst’s view seems to be that the only way to fight big business, re-embed markets and achieve sustainable and inclusive forms of growth, is through developing a new and inspiring idea of Europe. He may be right about this. But where does his appeal to Europe leave the state, which for so long has been one of labor’s most important allies? And who or which collective agent or coalition of collective agents is going to fight big business? I wish Brunkhorst would be more clear about this, because Europe, at the moment, is not a very inspiring idea. It is in the hands of big business. Europe as it now exists is their idea.  

To rephrase this problematic in Brunkhorst’s terms: if you have your doubts – which Brunkhorst evidently has – about the managerial mindset, then there is much reason to be worried about Europe, where this mindset reigns unopposed, and where democratic opposition is weak -much weaker than democratic opposition on the level of the nation-state. Europa is not an institution that has done well in re-embedding markets, quite the reverse.

The European market, in its present form:

  • Has not brought sustainable and inclusive forms of growth. Individual states like Denmark or Sweden have done better in that respect.
  • Contains differences in wage levels which are much more extreme than wage inequalities on national markets, which make it all the more difficult for labor to organize on a European level.
  • Has not enhanced the powers of the welfare state but has tended to undermine them.
  • And has, through the obsessive concerns with sound finance and budget balancing of the managerial-mindset-gang (monetarists, supply-siders, rational expectations theorists, and public choice theorists), pushed us into an ever-deepening recession, with only now slight signs of growth.

In sum, it is not clear what the advantages will be of Brunkhorst’s appeal to Europe. ‘The idea of Europe’ has been captured by the managerial mindset, and Brunkhorst doesn’t make clear how he thinks this idea can be recaptured by those sympathetic to the Kantian mindset.  

Let me conclude by spelling out my worries about Brunkhorst’s appeal to the idea of Europe by means of a trilemma derived from the development economist Dani Rodrik (2012). Instead of a choice, an ‘ideological clash’ between either Europe or barbarism, we face a much more difficult choice between different kinds of Europe:  

  1. We can choose for the ‘advantages’ of the European market in combination with strong (authoritarian) states, but with little democracy: the technocratic solution based on the managerial mindset.
  2. We can choose for the ‘advantages’ of the European market in combination with democratized European institutions, but with states which have lost much of their sovereignty (and hence run the risk of having to conform to one-size-fits-all solutions set by Europe): this seems to be Brunkhorst’s solution based on what he summarizes as the ‘Kantian mindset’.
  3. We can choose for the ‘advantages’ of the European market, but only on the condition that European nation-states, each, preferably, with strong democracies, and with a currency of their own, can, within internationally coordinated limits, decide when and how to integrate: a solution, which might be bad for big business and for consumers, but is good for citizens. This solution, though different, is also based on what you could call the ‘Kantian mindset’.  

In the first case you get disembedded markets. Although the second and third cases exclude each another, they are both versions of the attempt to embed markets, which is why you could present them as expressions of what Brunkhorst calls the ‘Kantian mindset’. 

Seen in this way we face a three-way choice. Moreover each choice has unavoidable trade-offs. I think it is difficult to reconcile this idea of a three-way choice with Brunkhorst’s picture of a stark choice between two opposing forces with no alternative solutions.

David and Goliath may still have to battle it out, but winning the peace, for each of them, will unavoidably be a matter of accepting trade-offs, seeing alternatives and convincing the losers. For the choice is not between either freedom or domination, but between different freedoms, with different benefits and costs.

To sum up, I have four questions for Brunkhorst:

  1. What to make of the difference between the Kantian and managerial mindsets and how to accommodate complexity into this starkly dual framework?
  2. How and to what extent do the notions of (a) different mindsets, (b) embedded and disembedded markets, and (c) the opposition between capitalism and democracy overlap?
  3. How to reconcile the story of blind societal evolution with Brunkhorst’s other idea that much of history is determined by ‘ideological clashes’ between two or more collective agents?
  4. Finally, what to make of Europe given the fact that (a) the idea of Europe is now governed by the managerial mindset, and (b) we face a trilemma with unavoidable trade-offs?


Blyth, M. (2002). Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century. Cambridge: Cambridge University Press.

Lafont, C. (2014). “The Cunning of Law: Remarks on Brunkhorst’s Critical Theory of Legal Revolutions” in: Social & Legal Studies, 23, 565-575.

Polanyi, K. (2001) [1944] The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press.

Rodrik, D. (2012). The Globalization Paradox: Democracy and the Future of the World Economy. New York: W. W. Norton & Company.


Pieter Pekelharing

Pieter Pekelharing used to teach at the University of Amsterdam. He has just retired. With two co-authors he recently published a book on the power of the megacorporation, De macht van de megaonderneming, Van Gennep, 2016, which is currently being translated into Spanish and Portuguese. An English translation is in the making. His current interests are focused on the politics of higher education and the relationship between science and democracy. He is also working on a publication of his lectures on the history of philosophy.