Europe's Collective Action Problem  | Wed May. 2, 2012 10:27 AM
GMT  Matt Yglesias disagrees with my previous post suggesting
that Europe faces a gigantic collective action problem:
Collective action is difficult, but I don't really think that's
the issue here....If you look at a big place like the United
States or China what you see are huge place-to-place divergences
in economic vitality paired with large open-ended transfer
programs. Even in smaller economies, the old West Germany has
been subsidizing the old East Germany for a long time and will
continue to do so for a long time.  ....The Euro was meant to be
a step in a project of "ever closer union" in which Europe's
nationalisms would be overcome and replaced by a pan-European
identity. That's because the only way to make it workable would
be for European voters and European politicians to act in a
spirit of continental solidarity and think on a continental
scale. It was, from the beginning, a fairly utopian project. But
now that the crisis is upon us