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Saturday, April 27, 2013

Prof. Ralf Dahrendorf - a visionary?

One of the first books I had to read upon entering College in 1968 was "Society and Democracy in Germany" by Prof. Ralf Dahrendorf (later Lord Dahrendorf). Ever since then have I been an admirer of this outstanding proponent of true liberal thought. To me, in the same legion as Friedrich von Hayek and Karl Popper.

I came across this interview with Prof. Dahrendorf from 1995. I repeat: the interview was made in 1995! Below are some of the more fascinating paragraphs:

The common currency project drills the countries to German behavior, but not all countries want to behave like Germans do. For Italy, periodic devaluations are much more useful than a fixed exchange rate and for France, higher government expenditures are more meaningful than a rigid adherence to stability criteria (which are, above all, an advantage for Germany).

Yes, France and Italy go along with German demands if for no other reason than national pride. However, the price for that is very high and it could soon become apparent that it is too high - psychologically, politically and economically.

Is Germany tempted to exercise some form of benevolent hegemony? Well, that is a good expression. Naturally, it can be considered as progress if Germany does that through the Bundesbank and not through military might.

The idea of a common currency union is a big mistake, an adventurous, reckless and mistaken goal which will will not unite Europe but, instead, divide it.

Prof. Dahrendorf also says in the interview that "I am sometimes tempted to form a private group which devotes its thinking to a Europe without a common currency union".  I wish he had done that!

Did they really know what they were doing?

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