#ebbfgovernance annual conference in May Augusto Lopez-Claros.
“I was a young economist working on the IMF’s Spanish economic team. A challenging time for Spain as it was preparing for entry into the European Union at a time of internal crisis with very high unemployment and major sectors of the economy (e.g. steel, shipbuilding) in crisis due to the emergence of lower cost producers in other parts of the world.
What impressed me the most was the extent to which the prospect of entry into the EU was forcing the government to extend the focus of economic policies beyond issues of macroeconomic stability to the fundamental institutional reforms. I remember, in particular, reforms aimed at liberalizing the inflow of foreign direct investment to facilitate the integration of the Spanish economy with the rest of Europe and, indeed, the world. With massive inflows of non-debt capital would also come know-how that would transform the country’s ageing productive apparatus.
Spain joined the EU on January 1, 1986 and over the next two decades it was one of the best performing economies in Europe. In the years following entry into the EU Spain not only received massive inflows of foreign capital as foreign firms sought to benefit from Spain’s lower labor costs and free access to the large European market, but was also the recipient of large and generous transfers from the EU budget, to finance regional development, including an upgrading of the country’s then decrepit physical infrastructure.
. Implicit in all of this was the exercise of an important principle embedded in EU law: the richer member states transfer resources to the poorer members as part of a process of narrowing the income divide among countries and as a result of which intra-country inequality in the EU was reduced in a significant way.
Albert Einstein, who had a visceral dislike for the deep-seated nationalisms that had caused such grievous damage during the 20th century, once said that nationalism was an “infantile disease”, the “measles of mankind.” It was undesirable and fundamentally a sign of immaturity. He agreed with Isaiah Berlin, who believed that it was “a passing phase due to the exacerbation of national consciousness held down and forcibly repressed by despotic leaders” and that like a “pathological inflammation” it would in time abate as the oppression that had induced it in the first place would itself disappear.
The psychologist Erich Fromm referred to nationalism as a form of incest, idolatry and insanity. Bertrand Russell, who thought of nationalism as the manifestation of herd instinct once wrote:
“It is rather odd that emphasis upon the merits of one’s own nation should be considered a virtue. What should we think of an individual who proclaimed: ‘I am morally and intellectually superior to all other individuals, and, because of this superiority I have a right to ignore all interests except my own?’ There are, no doubt, plenty of people who feel this way, but if they proclaim their feeling too openly, and act upon it too blatantly, they are thought ill of. When, however, a number of such individuals, constituting the population of some area, collectively make such a declaration about themselves, they are thought noble and splendid and spirited. They put up statues to each other and teach schoolchildren to admire the most blatant advocates of the national conceit.”
Nationalisms will gradually die because, faced with a range of serious global problems, from climate change to nuclear proliferation to poverty and inequality, in coming years we will be forced to strengthen our mechanisms of international cooperation and to learn to think, in an increasingly interdependent world, about the interests of the whole world, not this or that particular nation or region. Our ability to find solutions to these problems will be based on a growing acceptance of the oneness of mankind, of our coming together to act with a unity of purpose. We can choose to be part of this inevitable process of global economic and political integration, or to yearn in vain for a world of limited loyalties that is rapidly disappearing.”
At ebbf’s 28th annual conference you can join Augusto and a global audience keen to explore the right forms of governance from companies, for sectors and for society that will allow us to create a more prosperous, just and sustainable civilization.