European Integration 1950-2003: Superstate or New Market Economy?

European Integration 1950–2003 offers a sweeping reinterpretation of the history of European integration from the early postwar years to the present. It is based on a primarily normative and secondarily positive argument about the superiority of negative integration (the removal and prohibition of national-level barriers to a common free market) over positive integration (the harmonization of regulations and creation of common market rules at the European level). Attempts to create political structures at the European level to carry out positive integration are, according to Gillingham, undesirable and have either failed outright or been unable to deliver promises such as improved economic performance. By contrast, negative integration is desirable, has yielded spectacular successes, and constitutes the only way forward. The book thus makes an interesting contribution to the scholarly debate over the nature and future of the European Union (EU), though it might require the reader to have prior familiarity with post–World War II European history.

Part I begins with a juxtaposition of the "classical liberal" ideas of Friedrich von Hayek and the Ordo-liberal ideas of the Freiburger Schule with the ideas of Jean Monnet and his followers. Gillingham argues that these competing ideologies gave rise to a contest between a Hayekian "liberal project for an integrated Europe" and a Monnetist blueprint for a fundamentally undemocratic European superstate. The remainder of part I offers an interpretive overview of the various proposals for the institutionalization of interstate, transgovernmental, and supranational cooperation among the West European countries, from the Marshall Plan-induced Organization for European Economic Co-operation and the European Payments Union to the Hallstein-led first Commission of the European Economic Community, and the Luxembourg Compromise of 1966. In a laudable move, Gillingham then, in part II, examines rather than skips the "eurosclerosis" of the 1970s. He depicts it as a period of Schumpeterian creative destruction—albeit here primarily destruction of normative commitments to Keynesianism and of excess governmental capacity for neomercantilism. Institutional innovations like the European Council, the monetary snake and European Monetary System (EMS), as well as the consolidation of the European Court of Justice's doctrines of supremacy and direct effect for European law are treated in only a few pages each. Yet, Gillingham suggests that this forgotten decade of European integration might in fact have been "the most decisive decade in [its] history" (p. 144), from which Margaret Thatcher emerges as the new heroine of pro-market negative integration, sparking the momentum toward the Single European Act of 1985 (SEA) and beyond.

From this perspective, with a nod to historical institutionalism, Gillingham then discusses in part III the reforms of the 1980s, both the domestic reforms in response to the crisis of the welfare state in Europe and beyond (he briefly lauds New Zealand's radical liberalization) and the reforms of European regional institutions. The liberalizing SEA is, by Gillingham's account, the shining example of negative integration, but the Monnetist legacy comes back to haunt the European Union in the aftermath of the Maastricht treaty (covered in part IV of the book) in the form of acrimonious summits, treaty revisions that offer no lasting solutions, and political scandals. Economic reforms at the national level, recounted in some detail for six EU member states, illustrate the continuing diversity in national political economies—a diversity that has been increased further by the enlargement of 2004. In light of the lack of a European demos (or just closely aligned economic interests?), attempts to proceed with positive integration have been doomed to failure, Gillingham suggests, and have little chance of success in the foreseeable future. Even the European Monetary Union—more rigid and less market-conforming than the EMS—fails at least in providing any economic benefit, although liberalization continues in other issue areas. Gillingham closes on an optimistic note because he sees market forces as ultimately ensuring that Europe will choose classical economic liberalism. For this reason, as well as because of...