How far should people be protected from the consequences of their own stupidity? Is learning the hard way the best chance of achieving long-run better behaviour?

The trouble with you is that you reduce everything to first principles.

Remember that one, said to me by a senior former FCO colleague and fervent Europhile? Thus:

Trust grows in subtle unexpected ways, usually slowly and through doses of unhappy trial and error. It can not be created by European elites telling us all what is good for us. Especially when some of them look to be cheating on their expenses which our taxes have paid for.

Another former colleague recently said to me, "the trouble with you is that you reduce everything to first principles!"

He’s right. I do. 

The risk for someone who does that lies in sounding like the wily but annoying Irishman who tells a lost traveller trying to get to Dublin that it is "no good starting from here".

The key advantage in looking hard and regularly at First Principles is that one is less likely to build a tall edifice on wobbly foundations. And perhaps more likely to be a better source of advice as to when something tall and imposing is in fact risking collapse.

Over in Brussels this week I was talking to a senior retired German diplomat, as one does in Brussels. He said that whereas the German intellectual and chattering classes were stoutly defending the Eurozone in public and refusing to contemplate its Failure  In one shape or form), German public opinion was a lot more volatile:

  • many German households recalled not only the ruinous inflation of the 1920s but also the post-WW2 demolition of people’s savings
  • Germany (eployers and unions alike) had been exercising long years of disciplined belt-tightening – salaries for many people had hardly increaded if at all for some fifteen years
  • plus now there was a stern political consensus behind the new German constitutional norms imposing a tight cap on public debt – more iron discipline

All of which and more combined (he said) to make it very difficult if not politically impossible for Germany to take the lead in saving other EU member states from the consequences of their own fecklessness.

Thus Mrs Merkel back in March this year:

"Germany is the only country which has written into its constitution during the difficult economic and financial crisis a debt cap rule … This means we know solid budgets are indispensable for the future the sustainability of our country."

All of which leads us to this excellent piece by Ian Traynor in the Guardian as the latest EU Summit begins:

Last week Helmut Schmidt, the former chancellor and German elder statesman, said Merkel did not understand modern economics. He also attacked the central bank in Frankfurt, the Bundesbank. "In their innermost heart they are reactionaries. They are against European integration."

His successor, Helmut Kohl, admitted he had to force the euro on his country. "I knew I could never win a vote in Germany. We would have lost a referendum on introducing the euro. That’s absolutely clear," he told the author of a new book on the currency…

So there it is. A vast political and arguably undemocratic German/European power-play has not worked, although it has taken some time for the chronic weaknesses in the towering structure built on faulty first principles to start seriously wobbling:

"I can’t see the light at the end of the tunnel for Greece. You can’t make Greece competitive," a senior EC official said. "Where is growth supposed to come from in these peripheral countries when you have extreme deflation imposed on them, essentially by Germany. It’s a policy cul de sac."

Part of the wailing from the unhappier parts of the Eurozone is in effect an existential cry: "Why should we all behave more like the Germans?"

Well, good question. But the grim answer is clear.

If you want the benefit of German discipline (ie money), you need to be disciplined yourselves. Why should the Germans work hard to pay for your profligacy?

Putting it another way, the Germans have taken the Eurozone’s rules and sisciplines to heart, other than when they ignored them essentially for short-term political reasons.

The nub of the current Eurzone crisis lies here. Do Rules matter or not? And if a country can’t or won’t live up to rules it has accepted, then what?

This really is all about the very first principles of modern civilisation and the way we discourage bad behaviour and reward virtue.

Which is why our leaders are in such a tight spot – it’s bad enough grasping that these issues can be presented so starkly, even worse trying to find a reliable and reasonable way forward which does not incentivise more stupidity down the road and/or create a calamitous crash now.

Angela Merkel faces her own Ayn Rand moment. Does Germany continue to supply the wealth for others’ weakness? The Sanction of the Victim (again):

I saw that there comes a point, in the defeat of any man of virtue, when his own consent is needed for evil to win—and that no manner of injury done to him by others can succeed if he chooses to withhold his consent.

I saw that I could put an end to your outrages by pronouncing a single word in my mind. I pronounced it. The word was “No."