Adam Posen: Central power is a force for economic liberalism (04/07/07)

Adam Posen (source Bank of England)

“The alternative to a strong Brussels is not a centralised free market and minimal government interference. It is greater political capture of economic policymaking and abuse of authority by member states and sub-national governments. Politicisation is more likely and more obstructive to market competition when done by local or member governments than when the federal authority has competence. Subsidiarity is in many cases an invitation to corruption, entrenchment of incumbents and horse-trading of handouts. Too many political veto points equals too many opportunities for extortion.”

“Thus, the real message from both US and EU historical experience is a warning about the costs of a lack of sufficient central decision-making authority in economic matters. The absence of a strong central state to standardise and enforce the rules of commerce is harmful for liberal values and economic performance.”

In the Financial Times, 4 July 2007

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