Can Europe Make It?

At the roots of the nationalism of the rich

If we take the cases of Catalonia, Flanders and northern Italy, the formation of the nationalism of the rich generally coincided with periods of prolonged fiscal strain.

Emmanuel Dalle Mulle
13 March 2018

Antwerp. Flickr/ Fred Romero. Some rights reserved.In recent years many commentators have pointed out the rise of separatist parties in much of Europe. This is clear in Catalonia where, after having organised an unrecognised independence referendum in October last year, pro-independence forces have again won a majority of seats in the regional Parliament at the December 2017 elections.

But this phenomenon is not limited to Catalonia. In Scotland, the Scottish National Party (SNP) has been in power for the last decade and in September 2014 managed to organise an independence referendum. Although the Unionist side won that vote, the possibility of an ‘indyref2’ has been revived by Brexit and, while a wait and see attitude concerning the result of the negotiations with the EU seems so far to prevail, it remains an option on the table.

In Belgium, the most voted for party at the last two elections (2010 and 2014) has been the Flemish nationalist Nieuw-Vlaamse Alliantie (New Flemish Alliance), which officially strives for the independence of Flanders and currently leads the federal coalition in government in Brussels.

Finally, last October, two northern Italian regions, Veneto and Lombardy, held constitutional referenda calling for more regional autonomy, especially with regard to fiscal revenues, that obtained massive popular support.

For a long time, there has been a certain tendency within and without academia to consider minority nationalism as a backward force thriving in less developed contexts and doomed to disappear in complex, economically advanced and highly educated societies. Yet, the examples just mentioned above contradict this persistent assumption. They not only show that minority nationalism has lingered on and even grown in post-industrial countries, but, when looking at western Europe at large, it has even tended to be stronger in relatively rich regions.

When looking at the discourse of nationalist forces in places such as Catalonia, Flanders and northern Italy one finds an important common discursive element, i.e. the idea that the community they claim to represent contributes too much to the system of national solidarity of the parent state. In other words, they lament a condition of ‘excessive solidarity’ imposed by the central state that leaves contributory regions worse off.

They therefore call for fiscal autonomy and/or independence as ways to improve the welfare of the local population. I refer to this phenomenon as the ‘nationalism of the rich’, i.e. a type of nationalist discourse that seeks to end the economic 'exploitation' suffered by a group of people represented as a wealthy nation and supposedly carried out by the populations of poorer regions and/or by inefficient state administrations. 

Such ‘nationalism of the rich’ is a relative novelty in the history of nationalism, tracing back to the period between the late 1970s and late 1980s. When looking at the formation of nations and states in western european authors such as Charles Tilly and Stein Rokkan have pointed out the tendency of core regions capable of combining economic and military power to expand their reach to adjacent areas and form a strong territorial nation-state. Tilly refers to this process as the success of a ‘capitalised coercion’ strategy best embodied by France and England (and the role played respectively by the Ile-de-France and the London area in their formation), but also applicable to a certain extent to Portugal (and the dominance of Lisbon), the Dutch Republic (and the primacy of Holland) and Italy (where Piedmont, the engine of unification, was both economically and militarily dominant).

Such a claim is confirmed by a brief look at minority nationalism in the Austro-Hungarian Empire where political and economic power was concentrated in the area around Vienna. Some might argue that Czech nationalism went along with formidable economic development in the region, but before the First World War per capita income in the Austro-German lands was still 25% higher than in the Czech areas.

Exceptions to the rule

Two exceptions to this rule can however be found and they consist of the early nationalist movements in Catalonia and the Basque Country. In the nineteenth century, the industrial take-off of these two areas coupled with the presence of territorial identities that slowly converted into modern national ones ensured that the political power of Castile became increasingly disconnected from economic primacy.

Yet, the claims of the then nationalist movements in those two regions did not concern national solidarity and contributions to the common purse – except for episodic protests such as the tancaiment des caixes in Catalonia in 1898-99 – but rather trade tariffs.

The difference is key because while contemporary Catalan nationalism portrays the Spanish state as a heavy weight saddling the region’s welfare and productivity, back then mainstream Catalan nationalism called for the protection of that very state against foreign competition.  

As mentioned above, the propaganda of these parties gives exceptional attention to the quality and sustainability of the welfare state. Such attention is key to understanding the origin of the nationalism of the rich. The welfare state is a relatively recent invention. Although tracing back to innovations introduced already during the interwar years, most modern European welfare states were built in the post-Second World War period, notably in the 25-30 years following the conflict. During this time, automatic systems of redistribution between rich and poor citizens of the same state of unprecedented magnitude were set in place.

Where there were major economic imbalances between territorial areas of a given country, such automatic redistribution generated territorial fiscal flows offering the possibility of contestation in the regions where they were collected. However, this potential for contestation was not exploited politically until the late 1970s, because the 30 years between 1945 and 1975, which not accidentally are known as the Glorious Thirties, were years of extraordinary economic growth.

After the first oil crisis, however, the engine of European growth slowed down considerably and what Paul Pierson has called the ‘age of permanent austerity’ began. This meant that, while the growth rates realised during the Glorious Thirties afforded a fiscal dividend that allowed states to multiply services without substantially increasing taxation, the lower rates of the following years forced them to substantially augment the fiscal burden weighing on citizens. In such a context, the automatic territorial fiscal flows mentioned above, which until then had remained ‘invisible’ and ‘uncontested’, suddenly became problematic.  

If we take the cases of Catalonia, Flanders and northern Italy, the formation of the nationalism of the rich generally coincided with periods of prolonged fiscal strain. In Belgium the territorial transfers between Flanders and Wallonia began being contested between the late 1970s and the mid-1980s, at a time when the country was going through what was probably the most severe fiscal crisis in its entire history.

In northern Italy and Catalonia, claims about the illegitimacy of territorial fiscal flows began appearing in mainstream politics towards the end of the 1980s and the beginning of the 1990s, once Spain and Italy had recorded the quickest and second-quickest pace of growth in public spending among advanced economies.

In Spain this translated into the highest growth in tax revenues (as a percentage of GDP) among western European countries in the 1980s, while Italy topped the European ranking in the 1990s and, at the same time, recorded the third-highest debt/GDP ratio among advanced economies in the early part of that decade (Belgium was number one in the list).

Not a sufficient explanation

However, in the last quarter of the twentieth century, fiscal strain has been a condition common to several European countries, without for this reason leading to fiscal contestation along sub-state national lines in all of them. For this reason, the economic explanation outlined above is not sufficient and must be accompanied by identity considerations. As shown by several studies on welfare deservingness, sharing a common identity plays a key role in justifying economic solidarity.

The welfare state was conceived of as a nation-building tool through a process of internal bonding by means of external bounding. In many European countries, the opening up of social security to foreign residents has led to contestation along the lines of a ‘welfare chauvinism’ nowadays often voiced by populist and radical right parties.

For similar reasons, the presence of a cultural/national cleavage within a specific state can undermine the legitimacy of territorial flows between different areas of that state, particularly in net contributor regions.

This is what has generally happened in the areas mentioned above. However, given the presence of strong dual identities (equally national and regional) in those territories, nationalist parties there have called for more fiscal autonomy or independence (hence less solidarity with the rest of the parent state), not only on the basis of identity considerations, but also (and rather) on grounds of efficiency, i.e. arguing that the resources transferred from richer to poorer areas have been mismanaged.

Cultural determinism

Some of these parties, notably right-wing ones such as the Flemish Vlaams Belang and Nieuw-Vlaamse Alliantie, as well as the Northern Italian Lega Nord, have also formulated a cultural-determinist argument about the socio-economic development of different areas of their parent state.

In other words, they have claimed that if Wallonia or Southern Italy are poorer than Flanders and northern Italy this is because cultural values of entrepreneurship and work ethic are weaker there, which means that state solidarity is not true solidarity and poorer areas take advantage of territorial transfers.

Such a narrative is very effective at rejecting solidarity on the basis of widely held principles of meritocracy and deservingness as it suggests, more or less explicitly, that if poorer regions are poor it is their own fault.

Several opinion polls in different European countries show that employment and welfare concerns are usually at the top of citizens’ priorities, while issues relating to state reform are generally ranked farther down. The advantage of the nationalism of the rich is that it portrays more autonomy or independence as a means to increase the resources available to improve welfare and stimulate the economy to the advantage of the regional population. It therefore allows nationalist parties there to expand their appeal beyond hard-core nationalist supporters and to tap into a more moderate and pragmatic electorate.

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