Is small still beautiful?
Back in December 2007, I engaged in a friendly debate with Gideon Rachman of the Financial Times, both online and on air, about his thesis that small states were often the happiest states. As Kosovo was preparing to declare its independence from Serbia, and with many commentators doubting if it would have a much of a future, Gideon confidently wrote: "This is the age of the small state."
Then, just a few days ago, he wrote, apropos Switzerland's current travails: "Most of the European countries that seem to be suffering in the new political and economic climate seem to be small states: Iceland, Ireland, the Balts, the Swiss. Why?"
So here's a question for you, Gideon: has the banking melt-down caused you to change your mind?
UPDATE: With his usual elegance and style, Gideon has recanted in today's column. He concludes: "Big is beautiful again."
© MMIX~RS~q~RS~~RS~z~RS~34~RS~)
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Swiss problems? Just wish they were ours.
No big problem in the big bad UK? What about that 200 billion annual fiscal deficit. How about biggish Spain?
Haven't heard much about problems in Luxembourg, Finland, Denmark.
What of Norway. Read they don't have a National Debt but a sovereign wealth fund worth hundreds of millions of dollars.
Don't think this comment stands up. Size does not matter.
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This is an interesting question that I have been giving some thought to recently. Agree with rochcarlie above that many people living in bigger states would love to be given a chance to live in the "miserable" small state of Switzerland. There are of course many pros and cons to a broad question like this. Iceland's recent financial/banking catastrophe shows the tight conditions and parameters that small states must recognize they face. Mini-states that recognize these limitations can still thrive if they devise and stick to a plan of development that can avoid the pitfalls of competing in a world dominated by "800 pound gorillas" such as the US or EU. Hong Kong which has thrived as an alternative international financial entrepot for several decades is a case in point. Mid-level states such as Japan or Argentina are also in a unique position to either exploit or sink in the "shark infested" waters of international commerce and trade. They must also adopt realistic foreign policies that allow them to avoid the dangerous shoals of international rivalry. Big powers of which the US is the pre-eminent case can ignore many of the cautionary principles that smaller states live by, but as the recent international financial crisis shows, the US is not immune from making big mistakes despite the protection that size and weight bestows on it.
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The bankers failed to distinguish about the size of states they would rob. Of course, the smaller states did not have the resources to give to the banks after the banks had stolen, self-enriched and mismanaged, so they were ignored while the larger states were given the opportunity to act as the non-contractual insurer of the banking industry. In better days they would have been lined against a wall and shot. Civilization has its shortcomings.
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