The European Union is nothing more than a cartel of governments that tries to gain power by harmonizing the fiscal and regulatory legislation in every member State. Article 99 of the Treaty of Rome (1957) clearly states that indirect taxation “can be harmonized in the interest of the Common Market” by the European Commission. As for Article 101 of the same Treaty, it explicitly restrains regulatory competition “where the Commission finds that a disparity existing between the legislative or administrative provisions of the Member States distorts the conditions of competition in the Common Market.”
Since the very beginning, with the creation of the European Coal and Steel Community (ECSC) in 1951, the European institutions were more planning agencies than anything else. Indeed, the coal and steel industries at the time were mostly nationalized and the goal of the ECSC was to coordinate governments’ activities in these two sectors, not to liberalize activity.
The fact that the ECSC was not about free trade but about government planning was known by everybody at the time. It was Robert Schuman, the French minister of foreign affairs, who proposed in his declaration of 9 May 1950, that the Franco-German coal and steel production be placed under a common High Authority within the framework of an organization in which other European countries could participate.
Also, the ECSC created for the first time European anti-trust legislation, which as Austrians know, is nothing less than government planning in the name of an erroneous vision of what competition is. Even the Treaty of Rome (1957), the basis of the EU as we know it, despite enacting the free movement of goods, capital, and persons, remains a highly statist treaty.
Indeed, it is often forgotten that among other things, the Treaty of Rome created a “European Investment Bank,” a “European Social Fund,” the highly protectionist “common agricultural policy,” the “common transport policy,” and reinforced European anti-trust legislation. Therefore, if in the short and medium run, the Treaty of Rome, by breaking the neck of protectionism, was a boon for the European economy, it created institutions that could easily expand their regulatory power in the future, and that is exactly what they did.
Many free marketers support the European Union on the ground that even if their regulations are bad, they are still far better than those produced by our very prolific national governments. Such a line of argument, often used in more socialist countries such as France, is sheer nonsense. It is the equivalent of saying: “I don’t mind being robbed twice because the second thief will be much nicer to me.” The question is not how to make “better” regulations but how to expand free trade.
In 1946, F.A. Hayek wrote a pathbreaking article named “Individualism: True and False” where he distinguished two different individualist intellectual traditions. One, as Hayek calls it, is “true individualism,” based on evolutionism, the idea that institutions and individuals’ behaviors are not planned consciously but are rather the result of a spontaneous process. True individualism follows the tradition of the Scottish Enlightenment. False individualism, on the contrary, is based on extreme rationalism and solipsism. False individualism is based on the idea that society, freedom, and markets, can be planned and should be planned. This false individualism is the heir of the 1789 and — even more clearly — of the 1793 French Revolutionaries.