In the absence of any meaningful economic data or market changes, Europe holds the stage.
If this were burlesque — and of course it is — the audience would be yelling, "The hook! The hook!" The impresario with the shepherd’s crook would long since have yanked Europe by the neck off-stage and dumped it in the alley.
Why, oh why, is this dragging on, the euro such an obvious and total failure? Three reasons.
First, somebody who has kicked a can for years cannot be convinced that one day he will meet his wall.
Second, this elaborate denial is a European specialty, with less fatal consequences today than 1900-1914 and 1933-1939, but the same show.
Third: culture (not that No. 1 and No. 2 are not).
A lot of people from academia to commerce today are trying to understand changes in national and global leadership. The comfortable and predictable post-World War II, Cold War and post-Cold War structures have weakened and shifted greatly since 2000. It is not at all clear what form of stability will replace the old — or even if stability will return.
Culture is a dangerous thing to talk about. The concept is easily twisted into racism, or the notion of "cultural Darwinism" (since I am superior, I can and should do to you as I please).
Yet, any understanding of government and civilization must begin with who we are — our "nature." Modern biology and genetics roil in nurture-versus-nature argument and discovery. Although those hardest of sciences can see the durable interplay of genes and environment, they and all of us are still just guessing at the rules and full impact on societies.
Ian Morris’ new "Why the West Rules — For Now" is a great read and starting place. It begins the human nature discussion a couple of hundred thousand years ago in a comparative history of East and West, and has a striking insight about Europe.
Gifted with physical riches, Europe has for as long as we can detect received massive and violent migrations from the East. Morris suggests that Europe has survived because of unique geography — a collection of defensible peninsulas — which has also led to several quite unique and durable cultures. However, in his conclusion he flinches from culture as determinant, and defaults to Jared Diamond’s insistence that we are all the same people everywhere, and nothing matters but geography.
Francis Fukuyama’s newest, volume one of "Origins of Political Order" is a great study, beating to death all of the various structures of government, but hardly touching the natures of the governed peoples, and how those different natures complicate government. When we talk about government, types and options, we are really talking about civilization and its progress, a thought lost on those who oppose government.
Steven Pinker’s newest, "Better Angels of Our Nature," describes the profound decline in violence in human society, perhaps the greatest achievement by our civilizations.
Fukuyama does get to "legitimacy" as central to government, but solely on a tidy line of thought. Robert Caro’s newest on LBJ gets to a center of human nature with which we are all uncomfortable: power. What individuals have power, what groups have it, how they got it, defend it, use it, lose it … that raw, elemental conflict is at the heart of civilization and attempts at government. And at the heart of culture. Durable and different in nation-states everywhere.
The euro has failed because to succeed would require three-quarters of Europe suddenly to behave as Germans for the first time in the industrial age. More: Each local, cultural power structure must surrender its authority, and while doing so must inflict a falling standard of living on its own people. Further: The new supranational power center in Brussels, enforced by Germany, would have to operate without any democratic legitimacy. Which leaves nothing but German enforcement.
Europe may stagger for quite a while longer, the euro "surviving" as abject failure solely because all fear worse if it were abandoned. The local economies will settle the fate of the local power structures. Beyond the global economics of the thing, the prospect of "failed states" and martial law is .. um … daunting.