Mr. Marquart, Mr. Bagus, you have released your new book „Wir schaffen das – alleine!” (“We can do it – alone!”) this spring. The subtitle says: “Why small states are just better.” To begin: Why are small states generally better than larger ones?
Andreas Marquart (AM): In small states the government is closer to its citizens and by that better observable and controllable by the populace. Small states are more flexible and are better at reacting and adapting to challenges. Furthermore, there is a tendency that small states are more peaceful, because they can’t produce all goods and services by themselves and are thereby dependent on undisturbed trade.
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Would it be possible in your model that small states still cooperate with each other in supranational organizations? Or are the EU, NATO, UN etc. all obsolete in the end?
PB: Of course small states could or even have to cooperate with one another, especially on defense – at least as long as larger states still exist, which have a tendency to be more aggressive. Forms of cooperation like free-trade zones or also organizations which contribute to the harmonization of standards would exist. The EU in its current form is pointless, it has outgrown its original purpose of a pure cooperation.
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.Followers of the realist school of thought would probably argue that the idea of small states is surely nice, but that in the world we live in not everyone thinks that way. To give examples: Wouldn’t it be possible that assuming the US breaks apart, Russia would quickly invade Eastern Europe? Especially at the end of World War II, the Soviet Union would have had the chance to conquer the entire continent, but there was the US and Great Britain who restored the balance of power. Aren’t major powers on the global stage in this sense necessary to prevent the not-so-friendly states – who would never be pleased by the idea of small states – from taking over?
PB: Clearly we have to stay realistic. The Soviet Union would also have had the chance to subdue entire Europe at the beginning of World War II, when a Greater Germany was opposed to them. The Soviet Union possibly would have conquered the entire continent if the many small German states of the early nineteenth century had continued to exist. But maybe the German small states would also have implemented a common defense, we don’t know. To guarantee to win a war is impossible. Going back to today: Even if the US would break apart they could still forge a common defense alliance and the Baltic states could also search for allies and make a Russian attack as expensive as possible – for example by arming the populace. Maybe the separated US wouldn’t be as aggressive anymore abroad which would lead to fewer wars. We should also keep in mind that since World War II we are in a nuclear age which deters aggressors. Even after a split by the US this deterrence would remain. Moreover – as mentioned already – because of globalization the costs of war would increase constantly between mutually connected economies.
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On a final note the everlasting question that libertarians get to hear sooner or later: Only theory or also imaginable in reality? Do you think we will ever see a world of small states, a world in which those states live next to each other peacefully and a world in which free trade over borders is possible without any problems (or where borders become even completely irrelevant)?
AM: It sounds as if you are asking if it isn’t utopian to imagine a world of small states – but utopian is only what is not working in practice. A world of small states can work. And the path to that point? Brexit could be the beginning of the end for the EU. If Britain is smart, it will lower taxes and embrace truly free trade. By that, they could trigger an economic boom in Britain, encourage other countries to imitate them and put pressure on the individual EU members to follow. Another possibility is the collapse of the paper money system which unavoidably would lead to distribution battles. Distribution battles in the sense that wealthier regions, having their own problems, will refuse to co-finance others – northern Italy, Bavaria, Baden-Wuerttemberg for example. Borders can only become irrelevant concerning free trade, though. Otherwise they are needed. Only through borders can bad governments, which will exist, be challenged.
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