Cultural Political Economy and Crisis in Europe
This sabbatical project promotes a novel explanation of the rift between Northern and Southern member states of the European Union on economic governance. The project argues that the divisions that surface in crisis situations like the Eurozone or the Covid-19 crisis, are rooted in different economic theories which are historically anchored in the economic ethics of the different branches of Christianity. Economic theory prevalent in Northern Europe is grounded in Protestant ethics. The ideas that serve as blueprint for the political economies of Southern Europe are built on Catholic and Orthodox social thinking. The assumptions about human nature that ground these economic theories are at odds with one another. By approaching the cultural embedding of economic theory, the project generates new insights into how economic ideas are legitimized by using ethics that are culturally embedded. For this purpose the project develops the neo-Weberian framework of Cultural Political Economy. By carving out the ethics embodied in economic theory and showing their connection to specific cultural background, phenomena like the coalition of the so called “frugal four” during the covid-19 crisis become more intelligible. It also helps to make sense of the portraying of debtor countries during the Eurozone crisis as PIIGS and the stylizing of the Eurozone crisis as a ‘morality tale’ of Northern Saints and Southern Sinners.
Final report
This sabbatical project promoted a novel explanation of the rift between Northern and Southern member states of the European Union on economic governance. The project argues that the divisions that surface in crisis situations like the Eurozone or the Covid-19 crisis, are rooted in different economic theories which are historically anchored in the economic ethics of the different branches of Christianity. Economic theory prevalent in Northern Europe is grounded in Protestant ethics. The ideas that serve as blueprint for the political economies of Southern Europe are built on Catholic and Orthodox social thinking. The assumptions about human nature that ground these economic theories are at odds with one another. By approaching the cultural embedding of economic theory, the project generates new insights into how economic ideas are legitimized by using ethics that are culturally embedded. For this purpose the project develops the neo-Weberian framework of Cultural Political Economy. By carving out the ethics embodied in economic theory and showing their connection to specific cultural background, phenomena like the coalition of the so called “frugal four” during the covid-19 crisis become more intelligible. It also helps to make sense of the portraying of debtor countries during the Eurozone crisis as PIIGS and the stylizing of the Eurozone crisis as a ‘morality tale’ of Northern Saints and Southern Sinners.
The most important result was the completion of a book manuscript to be published by a major Anglo-Saxon university press. The book has been completed and the manuscript is at the moment under review. There have also been published two articles during that time. One in the Socio Economic Review called “The rise and fall of ordoliberalism” . The second one was a collaboration with C. Welzel and P. Akaliyski “A community of shared values? Dimensions and dynamics of cultural integration in the European Union” in the Journal of European Integration. The project has also been presented three times at the European University Institute in different presentation forums and after returning from Florence, it has been presented here in Stockholm at the Institute for Future Studies.
This sabbatical project promotes a novel explanation of the rift between Northern and Southern European Union member states on economic governance. The cleavage that has surfaced in crises like the Eurozone or the Covid-19 crisis is rooted in different economic theories that, in turn, are anchored in the ethics of the different branches of Christianity. Economic theory prevalent in Northern Europe is grounded in Protestant ethics. The ideational blueprint for political economies in Southern Europe follows Catholic and Orthodox social thinking. The ethical prescriptions and assumptions about human nature that ground these economic theories are at odds. To exemplify: protestant ordoliberal prescriptions on frugality, sober finances, and moral hazard advocated by the German government during the Euro crisis clashed with Keynesian, state-corporatist political positions echoing with catholic and orthodox concepts of solidarity and economy in Italy and Greece. This clash led the European Union in the 2010s to the brink of collapse. Similar fault lines emerged again during the Covid-19 crisis.
Investigating how the cultural embedding of economic theories shapes crisis response breaks new ground in political economy. Influential established explanations argue that economic divisions in Europe reflect a divide between economies driven by export and by internal demand, between coordinated and uncoordinated wage bargaining regimes, or between creditors and debtors. By focusing on the cultural anchoring of economic ideas, the project dovetails with the emerging literature on the impact of ideology on European economic integration. Whereas much has been written on the influence of economic ideas on elites and policymaking, we know little about how these ideas are received in the broader public. The project generates new insights of how economic ideas are legitimized through reference to ethics that are culturally embedded. For this purpose, the project develops and puts at empirical use the neo-Weberian framework of Cultural Political Economy.
By carving out the historically derived ethics embodied in economic theory, phenomena like the coalition of the so-called “frugal four” during the covid-19 crisis become more intelligible. It also illuminates why the Eurozone crisis became a ‘morality tale’ of ‘“Northern Saints” and “Southern Sinners”’, portraying debtor countries as “PIIGS”.
Of special importance to the project is ordoliberalism, a German form of neo-liberalism developed in the 1930s in response to the Weimar crisis and which became a blueprint for German post-WWII reconstruction. Ordoliberalism is considered the most influential economic theory in the German post-war period. The ideology also shaped the formation of the single European market and the Euro. Ordoliberal thinkers of the first generation were all strongly believing Protestants and saw their creed as a fundamental building block for theorizing. These ordoliberal ethics played, as I have shown in a number of publications, a key role in the German and European discourse and politics during the Eurozone crisis and clashed with the ethical prescriptions of Southern European member states.
My research makes a strong case for supplementing the prevailing institutional and interest-based explanatory approaches to clashes within European economic governance with an ideational approach that takes historically evolving cultural differences between European nations seriously.
The book reconstructs in detail the historical interlinkages between economic theory and religion. It will trace how the ethics embodied in economic theory survived until today, as well as how these theories influenced and came to clash in different stages of European integration. The methods employed are inspired by the state-of-the-art in political theory (morphology of ideologies), political sociology (network analysis) and historical sociology (archival work and oral history approaches). The empirical material has been collected through extensive archival work in Germany and Italy and through over forty in-depth interviews with key economic thinkers, bureaucrats and politicians between 2016 and 2018.
The most important result was the completion of a book manuscript to be published by a major Anglo-Saxon university press. The book has been completed and the manuscript is at the moment under review. There have also been published two articles during that time. One in the Socio Economic Review called “The rise and fall of ordoliberalism” . The second one was a collaboration with C. Welzel and P. Akaliyski “A community of shared values? Dimensions and dynamics of cultural integration in the European Union” in the Journal of European Integration. The project has also been presented three times at the European University Institute in different presentation forums and after returning from Florence, it has been presented here in Stockholm at the Institute for Future Studies.
This sabbatical project promotes a novel explanation of the rift between Northern and Southern European Union member states on economic governance. The cleavage that has surfaced in crises like the Eurozone or the Covid-19 crisis is rooted in different economic theories that, in turn, are anchored in the ethics of the different branches of Christianity. Economic theory prevalent in Northern Europe is grounded in Protestant ethics. The ideational blueprint for political economies in Southern Europe follows Catholic and Orthodox social thinking. The ethical prescriptions and assumptions about human nature that ground these economic theories are at odds. To exemplify: protestant ordoliberal prescriptions on frugality, sober finances, and moral hazard advocated by the German government during the Euro crisis clashed with Keynesian, state-corporatist political positions echoing with catholic and orthodox concepts of solidarity and economy in Italy and Greece. This clash led the European Union in the 2010s to the brink of collapse. Similar fault lines emerged again during the Covid-19 crisis.
Investigating how the cultural embedding of economic theories shapes crisis response breaks new ground in political economy. Influential established explanations argue that economic divisions in Europe reflect a divide between economies driven by export and by internal demand, between coordinated and uncoordinated wage bargaining regimes, or between creditors and debtors. By focusing on the cultural anchoring of economic ideas, the project dovetails with the emerging literature on the impact of ideology on European economic integration. Whereas much has been written on the influence of economic ideas on elites and policymaking, we know little about how these ideas are received in the broader public. The project generates new insights of how economic ideas are legitimized through reference to ethics that are culturally embedded. For this purpose, the project develops and puts at empirical use the neo-Weberian framework of Cultural Political Economy.
By carving out the historically derived ethics embodied in economic theory, phenomena like the coalition of the so-called “frugal four” during the covid-19 crisis become more intelligible. It also illuminates why the Eurozone crisis became a ‘morality tale’ of ‘“Northern Saints” and “Southern Sinners”’, portraying debtor countries as “PIIGS”.
Of special importance to the project is ordoliberalism, a German form of neo-liberalism developed in the 1930s in response to the Weimar crisis and which became a blueprint for German post-WWII reconstruction. Ordoliberalism is considered the most influential economic theory in the German post-war period. The ideology also shaped the formation of the single European market and the Euro. Ordoliberal thinkers of the first generation were all strongly believing Protestants and saw their creed as a fundamental building block for theorizing. These ordoliberal ethics played, as I have shown in a number of publications, a key role in the German and European discourse and politics during the Eurozone crisis and clashed with the ethical prescriptions of Southern European member states.
My research makes a strong case for supplementing the prevailing institutional and interest-based explanatory approaches to clashes within European economic governance with an ideational approach that takes historically evolving cultural differences between European nations seriously.
The book reconstructs in detail the historical interlinkages between economic theory and religion. It will trace how the ethics embodied in economic theory survived until today, as well as how these theories influenced and came to clash in different stages of European integration. The methods employed are inspired by the state-of-the-art in political theory (morphology of ideologies), political sociology (network analysis) and historical sociology (archival work and oral history approaches). The empirical material has been collected through extensive archival work in Germany and Italy and through over forty in-depth interviews with key economic thinkers, bureaucrats and politicians between 2016 and 2018.