Europe Austria the Habsburg Empire and the EU European Union

The UK United Kingdom and especially England, have had issues with the EU including ‘sovereignty’, federation, mobility and immigration, along with many other criticisms and dog whistles culminating in Brexit.

However, while the EU is a work in progress, it does have features shared with the Habsburg Monarchy based from Austria in how to manage a diverse grouping of nations and trading needs, which have been forfeited by the British including the Schengen Zone leading to post Brexit border delays.

Following are excerpts from an article by Caroline de Gruyter published in The New European which posits that critics are ignoring the benefits of the EU European Union for individual and smaller nation states, while there are lessons to be learnt from the reign or rule of the Habsburgs. 

‘What Europe can learn from the Habsburgs

Caroline de Gruyter 

Published: 12:00 PM March 24, 2021 

They may have not been history’s most dynamic dynasty, but their knack for ‘muddling along’ might just be the safest policy for the European Union….

….As a Europe watcher, having lived and worked in Brussels and in Vienna in recent years, I am struck by the parallels between the Habsburg empire and the European Union. The most important similarity between the two is precisely this curse of always doing things half, of being ‘half-baked’ – a curse that in some ways is a blessing, too.

The Habsburg empire was a state, with an army and a foreign policy. The EU is not a state, but it has competences and procedures that make it look like a federation. Both are multi-ethnic entities, functioning in a similar way – by procrastinating and muddling through, because they always unfailingly go for compromise. The result is per definition imperfect, always.

When you try to please everyone, you will never get it completely right. All those criticising the EU for always being late and kicking the can down the road have a point – but they should realise: this is the nature of the beast. And it is probably all we’re going to get.

A multinational state or supranational structure with a weak army (the empire) or no army at all (the EU) wishing to keep several nations safe and peaceful under one roof have something else in common: they must constantly prove their added value.

If these nations become dissatisfied, they will rebel and leave eventually – as the British did with the EU. The Habsburg empire was by no means a modern democracy. But compared to the surrounding regimes at the time its rule was remarkably benign.

Most emperors genuinely did their best to ensure peace, prosperity and justice based on equality. As a result, they focussed entirely on domestic issues. Habsburgs were navel-gazers, just like we modern Europeans are: obsessed with ourselves, and with keeping the peace within. “Better a mediocre peace than a successful war,” Empress Maria Theresia used to say. This could be the motto of the European Council.

Maria Theresa (1717-1780) went to great lengths to achieve this. She established the first real bureaucracy in Europe, introducing independent courts, health care, and primary education for all….

……For the rulers in Vienna, it was impossible to please everyone at the same time. They were forever modifying and adapting internal political arrangements to keep the show on the road, just like the EU does nowadays by often revising and changing European treaties.

It was a constant, time-consuming process, often complicated by challenges and threats from outside the empire. For this reason, solutions were almost always, as Grillparzer wrote, half-baked and half-finished….

In this constellation Hungary’s position was particularly interesting. The headstrong Hungarians constantly resisted “Viennese rule”, which they considered a “foreign occupation” – but most did not wish to leave the empire and become prey to Russia or the Ottoman empire.

They preferred a better deal inside. In fact, the arrangement they got after 1867 was so much better than anyone else’s in the empire that they were the last to leave when it imploded in 1918. That today Hungary behaves no less capriciously in the EU today perhaps tells us something about the country. But it tells us even more about the similarity between Vienna then and Brussels now: the zeitgeist is different, but the nature of the political games is not…..

….If there is one thing Europeans can learn from the Habsburg empire, it is probably that they should accept the EU more as it is. Too often, European debate is hijacked by federalists and nationalists.

Federalists are constantly disappointed that the EU is not powerful enough. Nationalists, by contrast, portray it as a superstate that is too powerful. Both camps are permanently disappointed and impossible to please. Instead of dreaming of an EU they will never get, Europeans should learn to accept that fortwursteln (‘muddling through’) is in the European DNA. It has helped them to become peaceful and prosperous.

The fact that the EU is a half-way house is probably part of the reason it is still there – not threatening powerful European states but complementing them, protecting the small states against the big ones, not just taking sovereignty but also giving it back to them. All the nations under the big roof give their input, never getting all they want, but enough to stay inside.

The British were the one exception. I, for one, hope that it will stay that way.’

For more related blogs and articles on EU European Union, Global Trade, Nationalism,  Political Strategy, Populist Politics and the WTO  click through

Population Decline and Effects on Taxation, Benefits, Economy and Society

While Australian media, politicians and commentators obsess, through an inflated and nativist Malthusian view, about undefined immigration, NOM net overseas migration and population growth, the ‘elephant in the room’ is ignored.  The misdefined  ‘immigration’ that media obsesses about is mostly ‘churn over’ of temporary residents e.g. international students,  caught up in the NOM net overseas migration, as ‘net financial contributors’ to budgets through taxes paid to support increasing numbers of retirees; backgrounded by a commensurate decline in the permanent population’s working age cohort. 

Warning is that as baby boomers and oldies dominate electoral rolls, governments especially conservative, cater to the same cohorts at the expense of younger generations following which in future could include higher future taxes and lower public services.

Following are excerpts or summary based upon two articles from MorningStar’s FirstLinks newsletter focusing upon the demographic, economic and social effects of past baby booms, retirement, ageing, longevity and social services in a future with fewer working age tax-payers.

‘The populations of key countries are shrinking 

Michael Collins  17 June 2020

Released by US film producer Mike Moore, the documentary Planet of the Humans tells how renewable sources of energy are flawed solutions to mitigate the dangers of climate change.

About halfway through the documentary, a scientist laments that the environment’s biggest problem is that “there are too many human beings using too much, too fast”. The warning here and elsewhere in the documentary is that only a reduction in the world’s population can save the planet.

Declining birth rates

Well, in that case, the battle against climate change is winnable because the populations of many countries are shrinking. The OECD says that only three (Israel, Mexico and Turkey) of its 37 members have fertility rates above the replacement rate of 2.1 children per woman.

The UN reports the reproduction rates of all European countries are below replenishment levels. The EU forecasts that the populations of 12 of its 27 member countries will shrink in coming decades as only immigration props up numbers in the others. The World Bank predicts China’s population will decline by 100 million people by 2050, that East Asia’s will shrink from the 2030s and Brazil’s will contract from the late 2040s by when India’s population growth will be static.

Already dwindling are the populations of Russia (since 1992), Japan (first in 2008 and uninterrupted since 2010, see below) and Italy (since 2014). But for immigration, many Anglo countries with declining birth rates including Australia and the US would be shrinking population-wise too.

Many demographers say, if anything, the global bodies are underestimating the declines in population numbers. Social and economic forces that lowered birth rates in advanced countries are now universal across the emerging world. These factors include expectations of low infant mortality, rising female education, better career prospects for women, and urbanisation.

Fewer births in the emerging world, these demographers say, will see the world’s population diminish from a peak of between eight and nine billion people from around the middle of this century, whereas the UN forecasts the world’s population to increase another three billion to 10.9 billion by 2100.

The economic impact

The consequences of declining populations could be significant and mostly grim, any environmental benefits aside. Fewer births reduce what is probably the biggest motivational force in society; young parents seeking a better life for their children. In economic terms, declining populations are a bigger challenge than ageing populations because the former herald a lasting shortfall in private demand that points to lower output, even if GDP per capita might rise. Businesses will invest less if fewer people are consuming less. Such outcomes hint at the ‘Japanification’ of economies; deflation and almost permanent recessions for economies that prove impervious to stimulus.

Government finances face difficulties as the shrinking and ageing of populations accelerates because a smaller working-age cohort must support more elderly people who cost more health-wise. A stretched bunch of fewer workers could lead to reduced innovation and productivity gains. Government policy, especially with regards to taxation and social-security spending, could become skewed towards the elderly rather than productivity should older voters form a voting bloc.

Turning point: the 2020s baby boom retirement surge

Bernard Salt   24 March 2021

And so, what can we expect of the balance of the 2020s beyond the coronavirus?

It is likely for example that there will be greater use of technology and a lesser engagement with China. It is also possible that the community will take a renewed interest in hand washing, in appreciating family, in having the freedom to travel beyond Australia. These ‘reactions’ to events triggered by the pandemic are logical enough, I suppose, but there is something else sitting out there, lurking (with intent) in the middle of the decade.

Baby boom must lead to a baby bust

It is something demographers have known about for decades. Indeed, there have been books written (by demographers) about its impact. This menace goes by the name of the baby bust. If you accept there was a baby boom in the 1950s then 70 years later the limitations of human life dictate that there will be, there must be, a baby bust.

In a crude sense, the baby bust takes effect when baby boomers press into their 70s and – how shall I put this? – then they die off. But the baby bust is more than this. It will trigger workforce and funding issues that will need to be managed. More baby boomers aged 65 exiting the workforce than 15-year-olds entering the workforce leads to a diminution of workers and, some would say, also of taxpayers.

The number of people entering the so-called ‘retirement age’ of 65+ has ramped up over time. In the 1990s, for example, Australia’s 65-and-over population increased by an average of around 40,000 per year (see graphic). Retirees in this decade were born in the 1920s.

But 30 years later in the 2020s it’s a different story. The number of Australians being added to the 65+ cohort every year will rise during this post-pandemic decade passing 126,000 in 2021, peaking at 137,000 in 2026, before subsiding to 105,000 in 2030. This surge in the retiree population is caused, of course, by the great baby boom of the 1950s.

Impact of surge into retirement towards five million

The transitioning of the baby boom population from working age to retirement stage will ‘play out’ in the post-covid 2020s. The retirement cohort will continue to expand for another five years creating a community culture that is hyper-sensitive to retirement issues.

It could be argued that the social impact of ‘retired Australians’, based on underlying demography, will not begin to subside until later in the decade.

In this context the period 2021-2027 will represent the peak years of the Australian baby-boom retirement surge. Not only is this an issue of the retirement cohort’s collective voice (now close to five million) but this will also translate into an elevation of retirement issues such as concerns about health care and aged care and access to various aged-based financial concessions.

Baby boomers will not age as past generations did

Baby boomers in retirement, peaking in the middle of the 2020s, but extending in progressively fewer numbers into the 2030s and 2040s, will be determined not to age as their parents aged. They are already railing against ageism. Many are remaining in the workforce. Some are re-partnering later in life. Some are choosing to remain single (but not lonely) in life’s later years.

The concept of a large proportion of the population living beyond the age of 65, being dependent upon the goodwill of younger cohorts, and the reliability of governments to uphold the social contract implicit in the idea of ‘ageing with dignity’ are all new to humanity.

What to do with the aged wasn’t a problem for previous generations in history.

It could be argued that the 2020s really is a turning point and not just because of the new world that is likely to emerge from the post-pandemic ashes, but because of the longevity of life for perhaps one-fifth or one-sixth of the Australian population.’

For more articles and blogs about Ageing Democracy, Australian Politics, Demography, Economics, GDP Growth, Government Budgets, Immigration, NOM Net Overseas Migration, Population Growth,  Populist Politics, Statistical Analysis, Superannuation, Taxation and Younger Generations.