Economic Theories of Social Order and the Origins of the Euro

Abstract

This paper explores how the Euro project became a reality as a result of conflicting political and economic forces. The idea was born in the interwar period in France, among a circle of Traditionalist elites and conservative intellectuals, politicians, and businessmen. They dreamed of restoring an allegedly genuine social order that would guarantee social stability and the rule of reason against what they considered to be the abomination of the American lawless society. Since then, the Euro project has never ceased to reflect such conservative and inherently anti-Keynesian impulses, which are now perfectly expressed in the Stability and Growth Pact. But if the design of European integration was inspired by a desire for an “ordered society,” it resulted in generalized instability, as we witness today. This paradox is at the root of the inability of European elites to understand the causes of the euro’s crisis and of their stubborn reliance on the same deadly provisions that contradict their intentions of strengthening Europe, in what appears increasingly to be a collective denial of reality.