Table Of ContentPOLITICAL ECONOMY
OF EUROPE
The development of European unification has reached a critical stage. Despite
75 years of peace, increases in welfare, and growth since World War 2, there is
now a growing scepticism of the European agenda from various quarters, most
notably embodied in the exit of the United Kingdom from the European Union.
To fully understand the dynamics at work, this book presents an introduction to
the development of the political economy of Europe from 1900 to 2020.
The first part of the book provides an overview of European economic and
political history from 1900 to the present. It is clear from this history that Europe’s
population, and most notably its leaders, have been deeply influenced by ideol-
ogy during this time. This sets the context for the second part of the book, which
takes a closer look at some major paradigms framing European dynamics: (1) the
market-oriented paradigm, (2) Marx’s paradigm, and (3) the fascist paradigm. In
this part, the essential core of each of these paradigms is presented and critiqued.
In the third part, the current bottlenecks of European evolution (the migration
crisis, Brexit, rise of new Fascism, the climate crisis, the COVID-19 pandemic)
are investigated in the light of a possible emergence of a new scientific paradigm.
Europe’s role in the global division of labour – its possibility to serve as a role
model for the advantages of democratically governing a highly diverse set of
populations – is also explained.
This book is an ideal text for students undertaking courses on the political
economy of Europe in either economics or politics departments.
Hardy Hanappi is ad personam chair for Political Economy at the European
Commission and director of the Vienna Institute for Political Economy Research
(VIPER), Austria. He is the author of South-East Europe in Evolution (Routledge
2015) and co-editor of Theory and Method of Evolutionary Political Economy
(Routledge 2017) and Evolutionary Political Economy in Action (Routledge 2017).
POLITICAL ECONOMY
OF EUROPE
History, Ideologies and
Contemporary Challenges
Hardy Hanappi
First published 2022
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2022 Hardy Hanappi
The right of Hardy Hanappi to be identified as author of this work
has been asserted by him in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced
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means, now known or hereafter invented, including photocopying and
recording, or in any information storage or retrieval system, without
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or registered trademarks, and are used only for identification and
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Hanappi, Gerhard, 1951- author.
Title: Political economy of Europe: history, ideologies and
contemporary | challenges/Hardy Hanappi.
Description: Milton Park, Abingdon, Oxon; New York, NY:
Routledge, 2022. | Includes bibliographical references and index.
Identifiers: LCCN 2021015070 (print) | LCCN 2021015071 (ebook) |
ISBN 9780367641894 (hardback) | ISBN 9780367641887 (paperback) |
ISBN 9781003123378 (ebook)
Subjects: LCSH: Europe–Economic conditions–20th century. |
Europe–Economic conditions–21st century. | Europe–Politics and
government–20th century. | Europe–Politics and government–21st
century. | Europe–Economic policy–20th century. | Europe–
Economic policy–21st century.
Classification: LCC HC240.H3158 2022 (print) | LCC HC240 (ebook) |
DDC 330.94–dc23
LC record available at https://lccn.loc.gov/2021015070
LC ebook record available at https://lccn.loc.gov/2021015071
ISBN: 978-0-367-64189-4 (hbk)
ISBN: 978-0-367-64188-7 (pbk)
ISBN: 978-1-003-12337-8 (ebk)
DOI: 10.4324/9781003123378
Typeset in Bembo
by KnowledgeWorks Global Ltd.
CONTENTS
About the Author vii
Introduction 1
What is political economy 1
Diachronic and synchronic approaches–and their formalization 9
1 History 16
Introduction: Periodization of European history 16
1.1 From 1900 to 1945 18
1.2 From 1945 to 1990 26
1.3 From 1991 to 2008 34
1.4 From 2008 to 2020 42
2 Ideology 52
Introduction: The impact of paradigms 52
2.1 The market-oriented paradigm 56
Welfare: From feudalism to integrated capitalism 58
2.2 Marx’ paradigm 67
Class struggle: From factories to the New Left 70
2.3 The fascist paradigm 76
Hierarchy: From racism to planned extinction 86
2.4 Newly emerging paradigms 88
Movements: From progressive political parties
to worldwide insurrection 91
vi Contents
3 Structure and Challenges 96
3.1 Economic structure of Europe 97
3.2 Political structure of Europe 104
3.3 Challenges 111
3.3.1 The social coherence challenge 111
3.3.2 The migration challenge 117
3.3.3 The environmental challenge 119
3.3.4 The Corona virus challenge 121
3.3.5 Europe’s place in the global division of labour 124
4 Afterthoughts on Europe’s Future 128
4.1 Global value chains and continental political units 129
4.2 The EURO as the world’s currency? 130
4.3 Europe’s role in global finance 131
References 134
Index 140
ABOUT THE AUTHOR
Hardy Hanappi was born in Vienna and studied economics and informatics.
He became university professor and researcher at the University of Technology
of Vienna, Austria, and concentrated on macroeconomics, political economy,
simulation methods, and game theory. He was deputy director of socioeconomics
at the Austrian Academy of Sciences, and director of the Institute for Monetary
Economics (Ludwig Boltzmann-Institute). From 2011 to 2015, he was a
professorial research associate at SOAS (University of London) also. He currently
is ad personam chair for Political Economy at the European Commission and
director of the Vienna Institute for Political Economy Research (VIPER),
Austria. Besides global political economy, his most recent research interests
concern the development of quantum political economy. He is married to
Professor Edeltraud Hanappi-Egger, has three children, and now lives in Vienna.
INTRODUCTION
What is political economy
The concept of ‘political economy’ has been introduced as an object of scientific
investigation in the aftermath of the revolution in the natural sciences, which
in turn was spearheaded by Isaac Newton (1643–1726) and Gottfried Wilhelm
Leibniz (1646–1716). The end of the Middle Ages marked a turning point for
the understanding of the development of human knowledge. What happened in
nature was not just following the plan of a superior being, of a god, that only
could be interpreted by specially trained priests. No, there were ways to under-
stand the observed dynamics, to describe them with the help of adequate laws,
to predict what these laws implied for the future, and – finally – to interfere
with this knowledge to shape the future. In short, mankind took a large step to
emancipate itself from being only an object of a God’s will, of blind fate. The
success of Newton’s and Leibniz’s classical theory of physics was enormous1. With
the help of repeated laboratory experiments, their laws could be perceived and
checked by any human individual interested in them. This, of course, implied a
heavy blow for all kinds of religious attitudes. But why should this success story
of understanding the mechanics of non-living matter not be extended to the
understanding of the dynamics of human societies?
In 1758, the French scientist François Quesnay (1694–1774) published his
famous ‘Tableau économique’, a description of the dynamic working of a social
production and reproduction system2. Quesnay can be considered as the found-
ing father of the French school of Physiocrats. This school held that all wealth in
a society in the end derives from agriculture, so it has to be studied how what
is harvested is distributed to the different classes that exist in a society. As a
politically conservative member of the French nobility, Quesnay evidently was
interested in a political regulatory form that could maintain the existing class
DOI: 10.4324/9781003123378-1
