The EU as a Component Part of the Global Economy or Sovereign Economic Entity

  • Abstract:

    The world is changing rapidly. Many distinguished economists were convinced that the international Pareto optimum, particularly relevant for the EU enlargement, was quite a realistic achievement only if EU follows the dictate of a strong radical free market reform. “Laissez-faire” was considered as a magic solution for every issue. However, the EU is becoming a perfect case in point to illustrate the labyrinth of transition from a “territorial” (nation) state into a “market” state on the basis of profound globalization process and functional integration of the global economy. The dialectic of globalization suggests that extant economic theory becomes a virtual and unsuitable to the process of globalization. We raise the following questions we are not able to answer by extant theory and policy: whose BDP should be optimized in a global economy? Whose employment levels should be addressed, that of territorial or market state? Who is the main economic subject in the upcoming market state: corporations or states deprived of economic resources? What is going to look like a new stage in world (capitalist) development? We propose the term mega-capitalism for the next stage in the capitalist development that we have partly stepped in. Mega-capitalism totally differs from Friedman’s (1982) and the neoliberal understandings of the economic processes and Fukuyama’s end of history. Should the EU join the mega capitalism as a unique ‘state’ or as bunch of integrated national states? Should the EU maximize its BDP, or BDP of individual states should be maximized? The same questions are pertinent for the level of employment, social justice… Does the EU become a region of a unified global state? These are questions to be answered in the interest of citizens of the EU ASAP. These are questions we try to tackle within the paper.