By Adam Posen Two hundred and thirty-one years ago on Wednesday, the Continental Congress declared American independence. While the US constitution was in place 13 years later, much of the subsequent two centuries have been spent fighting over the locus of economic policymaking. The initial battles between the states and the federal government were of course driven by slavery, but the economic aspects of the dispute over federalism went on independently and far outlasted the civil war. Having a constitution settled nothing in this area. So Wednesday is a good opportunity to take a longer view on the implications of the recent European Union summit agreement for economic decision-making. Often, eurocrats use historical comparisons of European integration with the early years of the US as an excuse: “Look how far we have come in so few decades. What more could you expect?” Yet what the US experience demonstrates is that the question of whether or not the recent agreement leads to something that resembles a constitution matters far less than many think. In the US, the power of the centre relative to local politics in economic policy has varied for more than 200 years, even though there have been few constitutional amendments. The EU’s new agreement leaves the European Commission much too weak vis a vis the member states. The remainder of this column can be read here (FT.com subscription required). Discussion from our guest economists is free.
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