The world, in many ways, is growing increasingly closer together.

World trade has grown up beyond earlier expectations. World financial markets are now tied very closely together. Information travels almost instantaneously throughout the world; and world cultures permeate everywhere, often to the discomfort of local residents.

An attempt to solidify this growing togetherness can be seen the European community's efforts to mold together an economic market, the European Union. The point, of course, is to capture the benefits of greater unity and greater cooperation.

One thing missing in the European Union is some kind of a political union. This was expected to occur after the community had grown together and experienced the benefits of a single economic consolidation. That hasn't come to pass.

The current debate over Brexit, the decision about whether or not the United Kingdom would stay in the economic union, is causing some real concerns over the possibility that a country might want to leave the community.

The question then expands to the possibility that if one member decides to leave the community, other countries might also opt-out of the EU. If the UK, why not Greece? And, if Greece, why not, say, Italy?

Whereas the world appears to be growing together in many ways, there is one thing that keeps popping up, getting in the way of this increased inter-connectivity: national sovereignty.

Nations, and their people, like to be able to make decisions that relate just to their countries, economically, as well as politically.

This is not new. The whole post-World War II system of international finance, the Bretton Woods system, was based upon the assumption that the countries that were members of this international community would have the right to plan and execute their own economic policies.

Even though the Bretton Woods system was undermined when the United States eliminated the gold backing of the U.S. dollar and started to float the value of the dollar in 1971, this action was undertaken because the United States wanted to run its economic policy independently of the those of everyone else.

In viewing the evolving world where global trading is even more pervasive and global financial markets are more inclusive and tied together electronically, some economists are arguing for less emphasis upon national sovereignty and independently created economic policies.

For example, Benn Steil and Manuel Hinds, in their book Money, Markets, and Sovereignty, argue for reducing or eliminating the independence created by economic sovereignty and moving to fewer national currencies and greater reliance on the integration of national markets. I have supported this approach in several articles.

Breaking down the barriers of national sovereignty is proving very difficult to do. But, there are more reasons why nations might want to band together in an economic community, even a political community, than just the conduct of economic policies orientated to independent nations.

Wolfgang Münchau writes in The Financial Times that the whole argument for members of the economic union to stay together goes beyond just trade: "The bloc's entire raison d' être is for its members to exploit common opportunities and to defend themselves against common threats. Many of the most important policy challenges of our time are of this sort-notably security and the environment. The main economic argument in favor of the EU looking forward is not trade, but policy on research, science, and innovation."

But, how is the issue of national sovereignty to be overcome?

One of the major arguments coming out of Europe after the first World War was that due to the Bolshevik threat to Western Europe following the conclusion of the Russian Revolution. Famed British economist John Maynard Keynes developed much of his policy to fight unemployment as a response to this threat. He supported national sovereignty in creating economic policies to combat unemployment. This effort is well described in Donald Markwell's book, John Maynard Keynes and International Relations.

Maybe one century later the current immigration problem in Western Europe will have the opposite effect of bringing nations together to deal with the migrants from the Middle East. Especially given the recent disruptions in Brussels have given call for officials in Europe to better work together, talk with each other and coordinate with each other in order to battle current threats to the peace and security of the area.

It seems that there are many reasons at this time for countries to pull together, not separate from one another. But, can people really give up their national sovereignty?

 

 

  This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.