Visionary Works: The United States, EU, and the Importance of Being Federal

Editor’s Note: This blog is part of an ongoing series of contributions from participants in The German Marshall Fund’s flagship leadership development program, The Marshall Memorial Fellowship (MMF).

Yes, local governments do matter. You can see it almost everywhere as you travel through the United States and meet those who drive change at the grassroots. The best government, you might hear on the road, is the government that is closest to the people.

True? Well, only half of the truth.

In my travels throughout the United States as a Marshall Memorial Fellow, I found it suprising to discover how little the role of the federal level of government seems to understood today, to the point that security from external attacks is sometimes considered its sole duty. What, for example, would have supported Seattle’s industrial boom had the government not subsidized the aerospace industry during WWII? And what of Utah’s economic success from tourism had the government not created the National Parks that to this day contribute to the growth of its economy? And what, more recently, of Pittsburgh’s robotic future had the Department of Defense not granted expertise and initial funding?

All this stands as a stark counter to the “small government” preference of so many Americans, which assumes that what works at the household level must work at the federal level, too. Not only this view is false, it is also dangerous.

There was a time, after the great depression of 1929–1933, when the federal government showed to American citizens and to the whole world that only a federal government, and no other level of government, could successfully address systemic issues such as banking crises, socioeconomic inequality, infrastructure development and maintenance, employment, and development. After the war, Western Europe learned this lesson too, as the supranational foundations of the European integration process clearly show. What would have been the systemic impact of the Marshall Plan had it been administered at the national rather than at the embryonic supranational level of the Organization for European Economic Cooperation?  The lesson we learned in the mid-twentieth century, both from the Grest Depression and Europe’s reconstruction, is that the more wholistic and systemic a problem is, the more wholistic must be the solution.

Both the federal level in the United States and the supranational level in the EU are today more relevant than ever. In the United States, the proclaimed “deconstruction of the administrative  state” risks to aggravate rather than solve problems. In the EU, leaders and voters seem still far from fully realizing that defense, infrastructure, and migration policy all need to be handled supranationally, not nationally.

This is not a pledge for more power to unaccountable bureacrats either in Washington, DC or in Brussels (they both need to be more accountable). It is rather the recogntion of the systemic nature of the problems that we face, and of the different levels of government that need to be leveraged. So is for Europe. The sooner we abandon the rethoric of “small government” and  all that comes with it (balanced budget at any cost, no industrial policy, self-governing markets, etc.) the better we will be, not only Europe and the United States, but the world, whose problems also require pragmatism and different levels of government. We need strong local governments, yes. But we first and foremost need visionary projects on both sides of the Atlantic.

The “small government” view so popular in the United States neglects the past and hinders the future of countries and economies in the long run. Complex issues require both local and the supranational governments, especially for problems that cannot be tackled or solved by any individual country. Grand-scale projects are needed to address problems both the United States and Europe share. These projects can only be implemented by visionary governments. Visionary governments, which must be held more accountable at all levels, are key to the future prosperity and security of the world.  

Giovanni Farese, Associate Professor for Economic History and the History of Economic Thought at the European University in Rome, is a 2017 European Marshall Memorial Fellow.