Political merit sounds like a simple principle on which to base the legitimacy and, hence, the stability of a polity. Those who rule such an arrangement should deserve (“merit”) the position they have attained. I doubt if there has ever been a ruler who did not make such a claim: “I deserve to govern you because I am better (at something) than you are” – even if that something is just because he or she has more resources and a greater capacity for exercising coercion than you do.

What makes a difference is not just the criterion for making this self-assertion, but also whether it is shared by both the ruler and the ruled. Only when the notion of merit is mutually acceptable is it likely to induce voluntary compliance and serve to legitimate the position of the ruler or rulers. In a democratic regime, the justification rests on the expressed opinions and actions of citizens (who may be wrong in their judgment about merit and elect quite incompetent and corrupt leaders). In an autocratic one, the rulers are likely to claim to be more worthy in absolute terms regardless of the “shortsighted” or “ill-informed” opinions of their subjects (who may even agree with this judgment, at least for a while).

The question of whether and, if so, when to constitutionalise the European Union (EU) entered serious public debate with the speech of Joschka Fischer at Humboldt University in 2000. In virtually all member states, prominent politicians subsequently felt compelled to express their opinion on this issue. Not surprisingly, they came up with very different versions of what such a European constitution should contain. Some wanted it in order to limit any further expansion of the competences of the EU; others wanted it in order to provide the EU with sufficient authority to cope with a wider agenda and a large number of members. But on two things there seemed to be general agreement: (1) the EU could not continue solely on the basis of treaties that have to be revised periodically and ratified by each member state – if only because this had already become much more difficult to do with fifteen members and even more so with twenty-five; and (2) this change in the fundamental institutional basis of European integration should happen sooner rather than later.

I remain convinced that both of these assumptions were (and still are) wrong. The EU does not need a constitution, not only because it has not done badly with a quasi-constitution based on successive treaties, but also because the flexibility provided by the lack of an agreed distribution of competences between it and its member states and, especially, the absence of a common definition of its political end-state (the so-called finalité politique) are precisely what the EU will need in the coming years when it will have to face the dual challenges of governing the effects of monetary unification and coping with the dislocations generated by enlargement.

The celebrations that have accompanied the wave of transitions from autocracy to democracy since 1974 have tended to obscure two serious dangers. Together, they presage a political future that, instead of embodying “the end of history,” promises to be tumultuous and uncertain. Far from being secure in its foundations and practices, modern democracy will have to face unprecedented challenges in the 1990s and beyond.

First, with regard to established liberal democracies (ELDs), the very absence in the present context of a credible “systemic” alternative is bound to generate new strains. The apologists for ELDs have long argued and their citizens have generally agreed that, whatever the defaults, this mode of political domination was clearly preferable to any of several forms of autocracy. Now, these external criteria for comparison have (largely) disappeared and, in any case, are no longer supported by the propaganda and military might of a great power. All that remains are the internal standards for evaluation, embedded in the pages of a vast corpus of normative democratic theory and in the expectations of a vast majority of normal democratic citizens. What will happen when the rulers of ELDs are held accountable in their well-entrenched practices to these long subordinated ideals of justice and equality – not to mention those of participation, accountability, responsiveness, and self-realization?

Second, with regard to fragile neo-democracies (FNDs), the widespread desire to imitate the basic norms and institutions of ELDs does not guarantee that these efforts will be successful. Nothing demonstrates that democracy is inevitable or irrevocable. It is not a necessity. It neither fills some indispensable functional requisite of capitalism, nor does it correspond to some ineluctable ethical imperative in social evolution.

“Capitalism is a moving target” could well be the leitmotif tot this entire volume. In Part I, not only did every essay stress the variety of capitalist institutions and the importance of explicit arrangements for coordinating exchanges and governing behavior, but they were all sensitive to changes in the mix of markets, hierarchies, associations, networks, state agencies, and corporatist arrangements over time. In Part II, an effort was made to aggregate these mixes into distinctive “social systems of production” and to specify the conditions for their emergence and subsequent evolution – again, with the objective of explaining persistent diversity across units and periods, not their imminent convergence.

Part III explores the significance of yet another potential source of variation within capitalism: space. In Parts I and II, as well as in Governing Capitalist Economies, the dominant technique of analysis involved comparisons according to function (or, more specifically, sectors of production and distribution) and time (or, more specifically, historical periods during which some relative equilibrium in the mix of governance mechanisms has set in).

The authors, implicitly or explicitly, limited their attention almost exclusively to the national level of spatial aggregation. Following a well-worn tradition in the social sciences, they seem to have assumed either that each nation tended to develop a culturally distinctive “style of capitalism” based on its peculiar human and material endowment, as well as historical experience, or that each state embodied a unique configuration of power and authority that was reflected in the creation and operation of its intermediary institutions.

The Single European Act (SEA), as signed and quickly ratified by twelve sovereign national governments, and the Maastricht Accord (MAA), as signed and ratified with great difficulty by these same governments, have greatly accelerated European integration. There seems little doubt that they are going to change the pace and even the direction of that process, but what will be their joint impact upon the way in which capitalism is practiced in this part of the world?

The central theme of this chapter can be put quite simply – and dramatically: Can the distinctive institutions that have long governed national capitalisms within Europe and that are currently being jeopardized by the rising tide of global liberalization and interdependence, be regrouped and revitalized at the regional level, i.e., at the level of the European Community (EC)? As the SEA and the MAA are sequentially implemented over the next decade, will Europe enter the twenty-first century with a relatively unified (“convergent”) set of norms and practices regulating the production of goods and services and the exploitation of labor and capital? Or will its twelve or more members fail in this unprecedented endeavor – and either retreat to protecting their distinctive (if costly) institutions behind existing national boundaries, or resign themselves to playing a less distinctive (if still prosperous) role in an evolving global economy?