The problem of the democracy deficit in the EU: between the political entity and the market utopia

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National Technical University of Ukraine «Igor Sikorsky Kyiv Polytechnic Institute»

The problem of the democracy deficit in the eu: between the political entity and the market utopia

Volskiy O.M.,

PhD Student at the Department of Sociology

Abstract

The paper examines the problem of the relationship between the practices of the ordoliberal market, electoral democracy, and the sovereignty of the EU and its member states in the conditions of the decline of American hegemony and the beginning of the Chinese accumulation cycle.

The first part analyzes the functioning of the EU at the political-institutional and economic levels. Based on the works of Karl Polanyi, Carl Schmitt, and their followers, it was demonstrated that at the institutional level, the neoliberal practices of the pan-European market conflict with the democratic institutions of the EU member states. Limiting national sovereignty in favor of supranational structures leads to limiting the influence of democratic institutions on the decision-making process, which makes European societies vulnerable both to adverse market dynamics and the selfish interests of elite groups.

At the economic level, it was demonstrated that the decay of the economic foundations of American hegemony leads to a slowdown in economic growth. The result is both progressive property inequality within the Core of the capitalist world-system, which undermines the functionality of democratic institutions, and a narrowing of the gap between the Core and the Semi-Periphery. As a result, the rise of semi-peripheral states is taking place, undermining the international liberal order with their activity.

In the second part, the scenarios of the functioning of the EU in the conditions of the transition of the capitalist world-system from an anarchic to a chaotic functioning state were considered. Based on the works of Aristotle, Charles Tilly and Samuel Huntington, political and institutional solutions were proposed, potentially capable of stabilizing the functioning of the EU and preserving it as a space of liberal practices of a good life.

Key words: IR, EU, world-system, semi-periphery, Arrighi, Polanyi, Wallerstein, hegemony, USA, developmental state.

Анотація

Вольський О. Проблема дефіциту демократії у ЄС: між політичною спільнотою та ринковою утопією

У статті розглянуто проблему співвідношення практик ордоліберального ринку, електоральної демократії та суверенітету ЄС і його держав-членів в умовах занепаду американської гегемонії та початку китайського циклу накопичення.

Для цього у першому розділі проаналізовано функціонування ЄС на політико-інституціональному та економічному рівнях. З опорою на праці К. Поланьї, К. Шмітта та їх послідовників було продемонстровано, що на інституціональному рівні неоліберальні практики загальноєвропейського ринку входять у конфлікт з демократичними механізмами держав-членів ЄС. Обмеження державного суверенітету на користь наднаціональних структур призводить до обмеження впливу демократичних інституцій на процес прийняття рішень, що робить європейські суспільства вразливими перед несприятливою ринковою динамікою та егоїстичними інтересами елітарних груп.

Також на рівні аналізу економіки було продемонстровано, що занепад економічних підвалин американської гегемонії призводить до сповільнення темпів економічного зростання. А наслідком цього є прогресуюча майнова нерівність у межах Ядра капіталістичної світ-системи, що загрожує функціональності демократичних інституцій, та скорочення розриву між Ядром та Напівпериферією. Все це призводить до підйому напівпериферійних держав, котрі своєю активністю підривають міжнародний ліберальний порядок.

У другому розділі були розглянуті сценарії функціонування ЄС в умовах переходу капіталістичної світ-системі від анархічного до хаотичного стану функціонування. З опорою на праці Аристотеля, Ч. Тіллі та С. Гантінгтона були запропоновані політико-інституційні рішення, потенційно здатні стабілізувати функціонування ЄС та зберегти його як простір ліберальних практик благого життя.

Ключові слова: ТМВ, ЄС, світ-система, напівпериферія, Аррігі, Поланьї, Валлерстайн, гегемонія, США, держава, що сприяє розвитку.

The last fifteen years were considered the time that is referred to as the `crisis of democracy': when populists came to power, the confrontation between the rich and the poor returned to the political arena, as well as ethnic strife, interstate wars, etc. This study is a preliminary attempt to draw a line between the crisis of democracy as a political mechanism for protected mutual consultation between the rulers and the citizens. It is considered as a crisis of the neoliberal regime of accumulation or, more precisely, the international division of labor that underlies it.

In this paper, democracy is distinguished as an imperfect political mechanism suffering from numerous shortcomings known since the time of the ancient Greeks, and an `economic' market utopia that tries to reduce social interaction to the level of methodological individualism.

For this purpose, the EU could be referred to for the case study. On the one hand, on the EU territory, the liberal utopia of market individualism has outgrown the borders of nation-states. That allows us to research the problems of practical implementation of liberal doctrine, which usually does not reach critical significance at the level of separate states. On the other hand, many EU member states occupy a strong position in the Core, which allows them to collectively support the functioning of democratic institutions without the participation of the United States. However, without American security guarantees, these states, primarily France and Germany, would be unable to defend their positions as this could stimulate the EU to disintegrate or undergo radical rethinking and deeper integration. The situation leads to the question of whether the relationship between the market and democracy is even more crucial.

In this study, we consistently reject neo-Weberian approaches as they, in a hidden or explicit form, profess the principle of methodological nationalism. Precisely, ideal cultural types tend to be located in time and space, resulting from which culture receives a decisive voice in determining the socio-political process.

From the neo-Weberian point of view, the main task in defense of liberal democracy is preserving a `straight' culture. And when we talk about the `straight' culture, we mean not only the right-wing fundamentalist movements but also the equally fanatical supporters of the Enlightenment project. In both cases, the construction of `tradition' aims to prove their worldview, which is helpful from the point of view of public rhetoric, but counterproductive as a strategy of scientific research, allowing to create ad hoc explanations for any social phenomena (Collins, 1999, p. 110-111).

Therefore, following Charles Tilly (2006), we shall use structuralism as the methodology for the study. It supposes that the structure determines the political process participants' behavior, and they are forced to coordinate their behavior due to it (p. 43).

Since the economy is the deepest structure covering all spheres of human life in the modern world, we shall also adopt the achievements of the world-systems analysis school. However, instead of focusing on the process of unequal exchange relations and the concentration of capital at the world-system level, we shall attempt to restore relative autonomy to the political sphere. This is the highest level where purposeful human activity is possible, including value-oriented one, which gives some autonomy from economic determinism (Arrighi et al, 2003, p. 22-28) and allows us to focus on the institutional problems of the functioning of `liberal democracy' in the situation of crisis of the global market economy.

It necessitates us to use a Kantian approach and analyze the possibility of conditions from the author's point of view, which we shall reflect in this article further. In this way, we tried to avoid the Spenglerian pseudomorphosis that characterized many `political' texts, when a set of concepts invented to describe one society is mechanically used to analyze another culture.

This study consistently uses the tripartite division of the political spectrum into right, left, and liberals - dating back to the time of the French Revolution. On the one hand, this is determined by the object of study, namely the political traditions of continental Europe, which imply a tripartite division in contrast to the Anglo- American bipartisan political system.

The cleavage between neoconservatives and new `left' liberals that characterizes the modern Anglo- American political system makes sense only on the territory of a hegemonic state with its characteristic primacy of liberalism and oversupply of resources. In such conditions, discussions about citizens' rights, taxes, and big or small government are relevant.

An idiolect created under such conditions is poorly adapted to reflect on the `limiting' political situations characteristic of the Semi-Periphery, which constitutes most of the EU. It is challenging to argue under what conditions people must sacrifice their selfish interests to benefit their community, defined by class, nation, or other characteristics.

Historically in continental Europe, especially in its semi-peripheral part, the first task of any government is to resist external geopolitical pressure, including war, and maintain internal political order. Such prioritization is not someone's desire but an inevitable necessity (Huntington, 1973, p. 93-190). States/ regimes that have failed to succeed in such tasks have inevitably collapsed. This situation is reflected in the political culture and the ideological concepts generated by it.

On the other hand, although we are familiar with the Anglo-American political language, we are still the natives of a semi-peripheral country. Therefore, we perfectly understand that in semiperipheral conditions such political language is nothing more than a part of the habitus of an `educated' person, designed to demonstrate involvement in the `high' Western culture and allowing one to establish transnational relationships with its carriers from other countries. It does not reflect our semi-peripheral realities; it is just a salon toy. In the 18th and 19th centuries, the nobility spoke French, quoted Voltaire, and copied Parisian fashions (Woolf, 1994). Nowadays, we speak English, copy American `progressivism' and use feminine forms of words, but the essence is approximately the same.

In considering the meaningful use of a particular approach, J. L. Borges' story "Averroes's Search" comes to mind, in which an Islamic commentator seeks to understand Aristotle's Poetics without any experience of theatrical performances. As such, all practical recommendations offered in this article are to be regarded as an attempt to solve semi-peripheral problems with semi-peripheral methods.

Structure of the paper. The article comprises an introduction, two main sections, and a conclusion. The first part will attempt to contextualize the European Union (EU) within the current crisis in the international division of labor and assess its impact on the daily lives of ordinary EU citizens in a first approximation. The second section will outline political approaches to addressing the problem of the coexistence of liberal freedom and democracy in the EU against the backdrop of the decline of American hegemony. Conclusions will sum up the article, briefly outlining its main arguments.

Research tasks. To fulfill the research objectives, two research tasks have been identified. The first one is to determine the impact of ordoliberal market practices on ordinary citizens and the functioning of democratic institutions in the EU. The second one is to define the conditions for the functioning of the modern repertoires of contention on the EU scale and the stabilization of already existing institutions that do not allow society to move into a praetorian state, as well as the formation of a status group of `Europeans,' which will allow ignoring class differences.

The EU as a project of a market utopia and its evaluation

The key issues of political theory are the problem of creating a community and articulating the common interest. The liberal doctrine claims that the state is a free association of individuals that differs from a school, church, or literature circle only in scale, which allows its members to potentially leave this association if their interests do not coincide with the interests of the group (Schmitt, 2016, p. 316).

However, both the interests of individual members and the interests of the community are diverse and contradictory. The situation is aggravated by the fact that political interaction is primarily the interaction of groups. And an individual, being outside the group, runs the risk of becoming a means rather than an end goal for other groups, which raises questions of the principle of methodological individualism.

Thus, there is a problem of the articulation of the public interest. At first glance, the easiest solution seems to be voting on what is considered the common interest. However, electoral democracy also conflicts with the principle of methodological individualism, since there are winners and losers in any election (Mouffe, 2000, p. 39).

Theoretically, this problem can be solved through achieving consensus in the course of rational public discussion. Now, this approach is being propagated by representatives of the Frankfurt School with their ideal communicative community. However, in practice, this can only be achieved if a small, relatively homogeneous social group retains the right to vote. This is how the liberal `democracies' of the 19th century functioned. But with the spread of universal suffrage, this approach is poorly implemented in practice. And it has resulted in discussions about the `revolt of the masses' in the late 19th and first half of the 20th centuries and in the current `anti-populist' rhetoric, which emphasizes the irrationality and short-sightedness of ordinary voters.

In the conditions of competitive politics, when socially significant decisions become debatable, one of the obligatory conditions for their legitimization is the principle of disinterest and universality. This principle asserts that decisions are made for the benefit of the whole group, not for the satisfaction of some personal interest.

Therefore, the solution to the problem of `liberal democracy' is possible not only through an increase in the level of democratic participation of citizens, which represents a particular principle, but also through the depoliticization and neutralization of the decision-making process and the transfer of power to bureaucratic structures that make decisions according to the rules.

The alternative is to believe in the idea of the market as an objective economic mechanism that gives everyone what they deserve, which involves eliminating the very idea of the public good and reducing social interaction to individual competition.

Naturally, these approaches are not mutually exclusive. This is reflected in the practices of neoconstitutionalism, which limit the intervention of the masses in the functioning of the economy, which makes it possible to reconcile the opposing principles temporarily, although we need to stress their conditionality and limitations. There can be no completely autonomous bureaucratic institutions within a particular state, especially if they function to guarantee the freedom of the market. Sooner or later, the principle of disinterest and universality will be violated in favor of common or private interests.

Therefore, the exemplary embodiment of a liberal utopia is a space of free migration of atomized individuals pursuing their selfish interests, who periodically go to court to protect their rights (Mouffe, 2000, p. 42) with zero influence of democratic mechanisms.

The concept of market utopia is described in P. Rosanvallon's Utopian Capitalism: A History of the Idea of the Market (2007). In this work, the author demonstrates that the idea of the market opposes the theory of the social contract and claims that thanks to the principle of the division of labor and free trade (exchange), people could achieve prosperity by following the selfish desires of individuals, without having a single decision-making center that articulate the common good.

The division of labor can also solve the problem of justice. This theory legitimized social inequality not by social benefit or tradition, but by market efficiency, which becomes the only measure of the value of separate individuals and entire social groups (Rosanvallon, 2007, p. 24-32).

Thus, the only function left to the government is to protect the sacred right of private property and clear the way for the market. Any interference in public life is interpreted as iniquity that harms market harmony and the right of individuals. This point of view rejects the autonomy of the political sphere and reduces all aspects of social life to the level of economy (Rosanvallon, 2007, p. 105-107).

Perhaps, F. Hayek (1939) was the first theorist who tried to apply the concept of market utopia to the process of European integration. He claims that a pan-European federation creates uniquely favorable conditions for the functioning of the free market. Because its population would be too heterogeneous to create common demands for the government, and the `state' itself would be too large to be governed. As a result, a huge space of powerlessness would arise, filled by the market element of individual selfishness.

He believed that interstate integration would become a weapon for promoting liberal freedom. A state that claims to join such a federation will be forced to sacrifice control over its economy, which means it will lose the opportunity to pursue authoritarian policies. This article has become prophetic, describing many modern aspects of the functioning of the EU (Hopner & Schafer, 2012).

Let us now turn to the critics of the market utopia who have challenged its sustainability and fairness. One such critic is Carl Schmitt, who sought to justify the autonomy of the political sphere. He regards politics as a process of intense formation of boundaries between groups, when individuals are ready to kill and die for the survival of their political entity. This fundamental interest is the determining factor that distinguishes between friends, who support the community, and enemies, who seek to destroy it. This approach prioritizes political motives over economic expediency in public life (Schmitt, 2016, p. 302-305).

Moreover, Schmitt rejects `liberal democracy' as a state of pluralism of opinions. Instead, he claims that democracy is possible only if the demos exist as a relatively homogeneous political subject whose interests are expressed by the sovereign, the bearer of unlimited power (Schmitt, 2016, p. 101). Continuing this thought, he equalizes the political community, sovereignty, and democracy. He argues that democracy, as the unlimited will of the people, can only function in a situation of complete sovereignty (Schmitt, 2016, p. 109-110). It means that the sovereign has the unlimited ability to define friends and enemies and impose martial law if the state's existence is threatened.

However, Schmitt did not restrict himself to issues of sovereignty. He also draws attention to the fact that society tends to depoliticize certain aspects of life, thereby creating a consensus on vital issues (Schmitt, 2016, p. 364-365). For his time, he considered the economy and interstate relations to be the critical issue of political delimitation. Still, in the event of a complete triumph of liberalism, these areas, if possible, will be depoliticized (Schmitt, 2016, p. 347-364).

Thus, Schmitt's concept of depoliticization offers two ways through which the `creeping' repoliticization of liberal society takes place. Firstly, if people can neither kill each other because of economic contradictions nor forbid interstate wars, then cultural differences are politicized. From here, it starts the roots of cultural wars, BLM, ethnonationalism, etc. It is only a matter of time before such confrontations lead to violence.

Secondly, liberalism's claim to universality leads to the fact that it cannot exist in the same room as any other version of modernity. Thus, this is a situation that demands starting a total war “to end the wars”. Therefore, the liberal utopia is potentially sick with its death that is just waiting for its time.

The ideas of Schmitt were modernized by Chantal Mouffe (2000), who emphasized that liberal democracy can only function as a state of pluralism of opinions if there are neutral state mechanisms independent from the unrest of public life (p. 83-90). She further shifts the focus to inclusion-exclusion mechanisms, claiming that liberal politics does not contradict Carl Schmitt's ideas if one considers a dynamic aspect to the process of demos formation (Mouffe, 2000, p. 100-101).

Considering her thesis, political entity precedes any form of social life. Thus, the confrontation between the concepts of liberal and `Schmittian' people's democracy becomes quite wrong. They interact with each other like a nesting doll, i.e., a political entity is a necessary condition for liberal democracy or any other political regime (Mouffe, 2000, p. 99-100). The case of the European Union is particularly interesting in this context. While the EU has established a common economy, it has not developed a corresponding political superstructure that could unify the conditions of life and create a sense of EU demos. This has resulted in a situation where the social sphere exists in isolation from the political one, at least at first glance.

This situation creates a space of opportunity for the functioning of supranational regulators and the implementation of neo-constitutional practices on the EU scale, and hence a more consistent implementation of the liberal utopia (Saveska, 2014, p. 45-59).

Liberal socio-political practice is derived from the abundance of resources. Belief in the market, selforganization of civil society, free trade, the prohibition of war, and the refusal to treat groups as politically significant one can only succeed in a highly successful economic model that can exist without government intervention and provide sufficient resources for everyone. At this point, we should admit that political rhetoric often declares any result as an achievement by shifting the target to the point where the politician hits, instead of objectively evaluating the effectiveness of their actions. To emphasize this point, we need to establish a clear distinction between political theory and political practice.

From the political theories we mentioned earlier, liberal market utopia must appear as we have described it. However, things seem different in reality due to the crisis of liberal democracy predicted by

Schmitt. `Liberal democracy' failed not when people voted for someone like D. Trump but when the government began treating certain people not as individuals but as members of a particular group.

It forces us to take a closer look at the practice of the functioning of the market in the EU since only in this way can we clarify the limits of the viability of the liberal market utopia. Specifically, what are the circumstances under which self-interested individuals, driven by their desires, generate societal prosperity, and when does this manifest as an ideological delusion?

Measuring the performance of an economic model is a challenging task that can be broadened beyond purely economic indicators. This is especially true when we are interested in the socio-political consequences of economic processes. Analyzing the EU as an embodied market utopia, we should focus on three questions:

How efficient is the market for the EU population?

How consistently is the principle of impartiality observed by the EU supranational regulators, which guarantees the correct functioning of market mechanisms?

Whether the economic model of the EU is effective at the global level, since if the EU enterprises are not competitive, they will have to be protected by political means.

Considering the issue of the influence of the market eсonomy on the life of EU citizens, it is necessary to separate economic problems from social problems, as far as possible, despite the conventionality of such a division. Since material inequality and uneven economic growth could potentially be combined with relative socio-political stability.

In this regard, we should focus on Karl Polanyi's seminal work The Great Transformation (1944/2001). The cornerstone of this work is the idea that the logic of the functioning of the market does not always coincide with the interests of individuals and/or society.

Polanyi introduced the concept of the `embeddedness' of the market, arguing that in modern industrial civilization, the market is a mechanism that ensures the functioning of society as a whole (Polanyi, 1944/2001, p. 60). However, if all spheres of social life are brought under the control of market dynamics, we will find ourselves in the middle of a wilderness (Polanyi, 1944/2001, p. 3-4). Thus, the reaction in defense of social foundations should not be automatically interpreted as some kind of archaic relic.

Polanyi builds his position on the notion of fictitious commodities, namely labor, land, and money. He argues that the sale of labor should not be considered a simple market transaction, as it involves human beings who may perish if their lives are subordinated to market dynamics. Similarly, the exploitation of land for maximum profit inevitably leads to environmental degradation. As for money, the interpretation of it as a commodity results in cyclical booms and busts on the stock exchange (Polanyi, 1944/2001, p. 75-76). Therefore, for a liberal market civilization, the key issue is democracy, which interferes with the process of market equilibrium (Polanyi, 1944/2001, p. 3-4).

Polanyi describes the conflict between democracy and the market in terms of double movement. He focuses his empirical research on the problem of the gold standard which was the international means of payment. The refusal to link the national currency's exchange rate to gold inevitably led to the destruction of international trade. This issue became central to political and economic discourse after World War I (Polanyi, 1944/2001, p.138-148). Moreover, Polanyi argues that the financial oligarchy, who had a vested interest in preserving the market in the form of the gold standard, blocked grassroots democratic initiatives aimed at promoting societal interests (Polanyi, 1944/2001, p. 79-80).

Although the situation in global finance has changed significantly since then, the European Union faces a similar predicament. According to Woodruff D.M., the loss of the ability to issue their currency on the level of individual member states of the EU led to a repetition of the interwar situation of a double movement in the eurozone politic and policies in process of the European debt crisis in the period 2010-2012 (Woodruff, 2014, p. 3).

Woodruff's work is part of a relatively long line of analyses by Polanyi on the European Union. However, J. Caporaso & S. Tarrow (2009) claimed that the contradiction between society and the market of the EU was resolved not through democratic politics, but through the protection of individual rights in the European Court of Justice (ECJ) (Caporaso & Tarrow, 2009, p.595). If this argument would be true, the EU will be the ideal space for liberal freedom that successfully escaped the temptation of democracy (Mouffe, 2000, p. 42).

This `idealistic' claim was criticized in an article by Hopner and Schafer (2012), who demonstrated that transnational institutions not only have enough influence to redistribute wealth across the EU but also undermine such opportunity at the level of individual member states. On our behalf, we add that in all three cases taken as examples by Caporaso and Tarrow ( 2009), the ECJ did not act as a defender of the society of both separate states and the EU as a whole, but rather make them even more open to the market.

The Ph.D. dissertation of M. Saveska (2014) should be mentioned in a separate line. The key advantage of this text, in our opinion, is a vivid demonstration of the Achilles' heel of all K. Polanyi's mental constructions, which did not give a clear definition of what moment the market dynamics begin to be destructive for social relations. This was even reflected in the title of the dissertation "The Evolving Governance Structure of the European Union: Asymmetric, but not Disembedded: Immanent Possibilities in the Social and Environmental Policy."

The easiest way to find out how ordinary citizens evaluate the impact of the market on their lives is through elections. The success with which right and left `populists' and Euroskeptics have in these elections is obvious feedback on the entire EU and its member states' ability to satisfy their citizens' needs.

However, the comfort of individuals or even social groups cannot justify radical policy decisions at the macro level. It is necessary to draw a clear line between inconvenience resulting from the destruction of the usual way of life and a social collapse that requires immediate action.

Continuing this thought, we should note that not every way of life is worthy of salvation, and military-political events can destroy a habitual way of life much more effectively than market dynamics. Therefore, automatically taking a `pro-social'/anti-market position, as many researchers do, for example (Saveska, 2014), is a gross mistake.

It is important to stress that the reception of K. Polanyi in the works that we used often turns him into an American `progressive liberal' who advocates for increasing social benefits and restricting the market. However, he was a right-wing Christian socialist who, like us, saw a direct connection between individual freedom and the liberal market.

However, despite seeing liberal freedom as necessary, Polanyi considered the market a disastrous institution and did not believe it was required to sacrifice the principles of social coexistence for liberal freedom. He witnessed the collapse of market civilization as the main result of World War II (Polanyi, 1944/2001, p. 257-259). Since the welfare states dominated social and political practice until the 1970s, his assessment was not entirely inaccurate.

Moving forward, our analysis will incorporate a spatiotemporal aspect. The market utopia deliberately ignores it, reducing the question of justice to the merits and demerits of individual individuals (Rosanvallon, 2007, p. 109-118). In practice, we can observe that wealth and poverty tend to be concentrated at both the state and regional levels.

As the first step in the analysis of the spatiotemporal aspect of the market, we will utilize Immanuel Wallerstein's concept of the capitalist world-system. His theory is based on the phenomenon of unequal exchange between various parts of the capitalist world-system, including the Core, the Semi-Periphery, and the Periphery. The key indicator for determining the different zones of the world-system is the mode of exploitation of the labor force and the spatial localization of industries. ordoliberal market electoral democracy

The Core is characterized by free purchase and sale of skilled labor necessary to serve highly profitable sectors of the economy, At the same time, the Periphery specializes in raw materials and uses unpaid labor such as slavery and serfdom, reducing the costs of extracting cheap raw materials (Wallerstein, 2011a, p.86-87). From a state-building point of view, the Core is characterized by the emergence of strong states capable of smoothing out the class struggle by creating a status group (nation) and imposing unfavorable exchange conditions on less developed territories, which fixes them in a peripheral status.

The different zones of the world-system have varying regimes of exploitation of workers and are implicitly characterized by the emergence of different regimes of symbolic violence. The Core states are characterized by liberalism (Wallerstein, 2011a, p. XXVI), while the authorities of the Periphery seek to justify their legitimacy by inventing tradition (Wallerstein, 2011a, p.356). The Semi-Periphery, on the other hand, occupies an intermediate position between these two extremes: constantly striving to move towards the Core while avoiding sliding into the position of the Periphery, which creates conditions for chronic political and economic instability in this part of the world-system (Kutuiev, 2016, p. 242-244).

Capitalism allows elites to appropriate surplus value without creating a military-bureaucratic superstructure to collect tribute. As the oppressed classes are literally in the territory of another state, it limits class antagonism (Wallerstein, 2011a, p. 16-17).

Evidently, the concept of the international division of labor contradicts the EU's status as a single community. Since the national borders and sovereignties are blurred, creating such a conditional political structure results in 'unnecessarily' close interaction between different zones of the world system, which requires either the separation of the EU or the economic convergence of its member states. Additionally, a single social policy seems to be even more crucial for the EU's integration.

The key question at this analysis stage is whether market interaction can solve these problems during European integration. Rudy Weisenbacher claims that the EU has maintained a stable economic stratification into Core and Periphery since at least the 1960s. It has also demonstrated a clear correlation between the number of TNCs headquartered in EU member states and their level of GNP per capita (Weissenbacher, 2019, p.250). Thus, neither post-war Keynesian economics nor the triumphant return of the free market in the 1970s led the EU economies to converge (Weissenbacher, 2019, p. 239-248).

Of course, Weissenbacher's study has considerable flaws. Precisely, it ignores the volume of available social services and the level of material stratification in the EU member states (Weissenbacher, 2019, p. 232), which completely disregards the principle of world-system stratification proposed by Wallerstein.

Moreover, it is worth emphasizing Weissenbacher's two critical shortcomings. The first of these is to limit the scope of the analysis solely to the borders of the EU. However, it is obvious that the periphery of the EU should vastly exceed its institutional boundaries. If we talk about the role of South and Central Europe in the global division of labor, then this is at least the Semi-Periphery (Arrighi & Drangel, 1986, p. 11-16).

The second drawback is an attempt to use the state as a unit of analysis, although it is obvious that, for example, in France and the UK, the capitals are much more developed than the provinces, and Northern Italy is at the Core of the EU, while Southern Italy is on the Periphery. As a result, an attempt to locate these territories within the EU looks like an effort to measure the average temperature in a hospital (Weissenbacher, 2019, p. 230).

Thus, our answer to the question about the efficiency of the market for EU citizens, at least in terms of the spatial distribution of inequality, is negative. However, the answer to this question requires resolving the following difficulty: why has the EU been stable for many decades if convergence is not happening?

This question brings us to the final issue on our list. How competitive is the EU economic model at the global level? Are the ruling elites doing the right thing when they try to entrust the well-being of their citizens to the economic element?

To understand this, we need to raise the question of the stability of the international division of labor. On the one hand, Wallerstein argues that the stability of the system is guaranteed by the existence of a single ruling class (bourgeoisie) that benefits from the international division of labor by privatizing profits and nationalization of losses (Wallerstein, 2011a, p. 348). Thus, the elites of the Periphery and Semi-Periphery make significant efforts to ensure that their territory does not violate the status quo of the capitalist world-system. On the other hand, Wallerstein introduces the concept of a hegemonic state, i.e. a state that has consistently achieved superiority in agriculture, industry, and finance, which allows it to stabilize the international division of labor (Wallerstein, 2011b, p. 38-39).

The theory of hegemony in the world-system was developed by G. Arrighi (1996). He combined the hegemonic states findings by Wallerstein with the idea of hegemony by A. Gramsci, suggesting that the hegemonic group combines the expression of common interest with economic dominance and the capacity to use organized violence against those who disagree. The key driver of the development of capitalism is the crisis of the rate of profit caused by excessive competition.

Thus, if Wallerstein based his analysis on century-long `logistical' cycles of economic growth and decline, which could be traced back to the Bronze Age, and that made his concepts extremely vulnerable to criticism, Arrighi (1996) suggests that the cycles of capital accumulation became a hallmark of modern capitalism (p. 7-9).

It is important to emphasize that while Wallerstein's achievement was a new understanding of the interconnection of things, such as the rejection of the principle of methodological nationalism and the shift of attention to the functioning of the entire system of the international division of labor as a whole, Arrighi also made a significant contribution by introducing a temporal aspect to our understanding of the market. This note helps to avoid false universality when evaluating the effectiveness of specific socio-economic models.

Arrighi's approach was based on the views of F Braudel, who identified capitalism with the sphere of supranational non-market financial transactions, which are separate from the sphere of material life, nonmarket activity that ensures physical survival, and competitive market exchange. Arrighi (1996) enriched this approach with J. Schumpeter's concept that capitalism generates innovation to avoid the pressure of excessive competition (p. 10-11).

At the same time, Arrighi (1996) derives his theory of capital accumulation cycles not only from fluctuations in economic indicators but based on the achievements of the French `regulation school,' which focuses on institutional forms of organization of production (p.1-4). A distinctive feature of the hegemonic state is the presence of production relations that give it an advantage in the competitive struggle with the previous hegemon and other states of the Core, as well as the fact that each successive hegemonic state is larger than the previous one (p. 14).

Thus, the basis of the economic power of Great Britain was the resources of its colonial worldempire, as well as a flexible system of small or medium size family companies, which provided the English economy with superiority over competitors in the 18th-19th centuries but could not oppose anything to the vertically integrated corporations of the USA and Germany by beginning of the 20th century (Arrighi, 1996, p. 282-283).

This situation turns the global economy into a zero-sum game, politicizes economic interactions, and forces the previous hegemon to abandon the benefits of free trade. Instead, hegemon focuses on the administrative protection of their markets, which leads to the disintegration of the world economy into spheres of influence. This condition is accompanied by a period of relative prosperity, culminating in what Wallerstein terms the 'Thirty Years' War' (Wallerstein, 1983). During this period, the system of international relations shifts from an anarchic to a chaotic state (Arrighi, 1996, p. 30). As interstate conflicts arise, the foundations of hierarchical social order are questioned.

The state of chaos serves as a test for hegemony, which is not merely the mechanical supremacy of a superpower over its competitors (Arrighi, 1996, p.51), but rather the ability to recreate the worldsystem based on new organizational principles by increasing capitalist power (Arrighi, 1996, p. 12-15) and proposing a new `universal' balance between the rulers and the ruled (Arrighi, 1996, p. 27-28).

The concept of hegemony is a metaphor that assumes the existence of a common interest. When we examine the concrete mechanisms, we observe the phenomenon of institutional isomorphism, which permeates the entire capitalist world-system. In exchange for the resources distributed by the hegemonic state, such as money, trade preferences, and legitimation, there is often an external but shallow adoption of `liberal' institutions from the Core (Volskyi, 2020, p. 8-10).

This approach allows us to abandon the normative view that characterized the Westphalian system of international relations, which assumes that all states are equal in their sovereignty. This, in turn, opens up the possibility of recognizing the fact that a significant number of `liberal democracies' outside the Core exist only thanks to external support and can respond to the decline of American hegemony in the same way that Eastern European regimes responded to the collapse of the USSR.

That is why the stability of the international division of labor in general and within the EU, in particular, is directly related to the US's role as a hegemonic state. History proves it is impossible to maintain a monopoly on the `ultimate weapon' of economic competition forever. That is why we witness, at first, a signal crisis of hegemony when other states of the Core seize the secret of the success of the hegemon, and then the final crisis when the previous hegemon demonstrates the inability to maintain the capitalist world-system in a stable state.

Arrighi(1996) urged to focus on the signal crisis of hegemony since it has a relatively straightforward beginning and end, in contrast to the terminal crisis, which looks like a whole string of crises following one after another (p. 216-217). Furthermore, it is difficult to determine where the end of hegemony occurs, both for the included observer and the historian who studies the situation post factum.

The signal crisis of American hegemony happened in the 1970s. This crisis produced paradoxical results. Despite the United States being at the peak of its power before it began, the situation changed radically after the end of the signal crisis. On the one hand, the USA lost its advantage in material production compared to other states of the Core. On the other hand, from 1981 to 1983, the SemiPeriphery lost all the positions defeated from the Core after World War II (Arrighi, 1986, p. 53). It should be noted that it was at this moment that the gap between the Semi-Periphery and the Core began to shrink apparently.

This new configuration of forces led to the collapse of the USSR as a semi-peripheral state and created the foundation for the neoliberal 'global' world we know. The US loss of an ultimatum advantage in material production deprived other Core states of fear that trade liberalization would lead to their inevitable bankruptcy in favor of North American TNCs. Moreover, the weakening of the semi-peripheral countries made it possible to establish a new form of property and financial dependence when the deployment of industrial capacities in territories with cheap labor did not lead to these states' rapid accumulation of capital because profits were either transferred directly to First World countries by Western companies that built factories or indirectly through the return of government loans to Western governments and/or international organizations (Arrighi et al, 2003).

Here it needs to be emphasized that Arrighi(1996) offers us two closely related hypotheses. The first one speaks of the fall in the rate of profit as a chronic disease of capitalism, which has been inherent in the modern world economy over the past decades. Moreover, the stability of the capitalist world-system ends when, instead of sharing profits, its main participants begin to share losses (p. 227).

The second hypothesis speaks of the emergence of a new hegemonic state capable of successfully restarting the accumulation cycle. Still, Arrighi (1996) suggests four cycles of accumulation and only three hegemonic states. During the first Spanish-Genoese cycle, the place of concentration was not the state but transnational banking networks (p. 128-132). The second `Dutch' cycle of accumulation created a territorial place for the concentration of capital. However, it did not create a sufficiently powerful political structure to streamline the international division of labor.

Therefore, the 17th and 18th centuries mark the period of endless European wars. The first thing that the other core states did after the end of the first 'Thirty Years' War' was an attack on the so-called 'hegemonic state', and already in 1672, France temporarily occupied most of the Dutch territory (Wallerstein, 2011b, 70-82).

However, if Arrighi (1996) emphasized the struggle of the states of the Core for the title of hegemon in his concepts (p.XII), then our reception of the crisis of hegemony calls for focusing on semi-peripheral states.

Usually, the main topic for scientific and political discussions become the problem of inequality between developing and developed countries, but the real problem is closing the gap between the states of the Core and other zones of the world-system (Piketti, 2016, p. 65-77).

This reduction does not need to be significant. It needs to be enough for the rise of semi-peripheral `regional superpowers' like the USSR, which will refuse to `pay tribute' to the Core. And then a rapid collapse of the entire international division of labor will begin, leading to a relative economic decline in the short and medium term and destroying opportunities for liberal practices anywhere.

Humanity had already witnessed a similar situation during World War II. As a result of the terminal crisis of British hegemony, the semi-peripheral states of Europe, led by the marginalized member of the Core, Germany, and the semi-peripheral imperial Japan, challenged the international liberal order. The situation was normalized only by using the USSR as the `continental sword' of the United States and the British Empire. The success of American hegemony lay in its ability to rebuild the capitalist world-system so that yesterday's enemies, Germany, Japan, and Italy, became part of the Core and were ready to actively help with crushing the last semi-peripheral `superpower' of the USSR.

Therefore, using world-system analysis as a middle-range theory, we can argue that the crisis of `liberal democracy' primarily results from a lack of resources due to growing material inequality in core states. Additionally, the rise of regional superpowers, such as Iran, Russia, Turkey, India, etc., has contributed to this crisis.

This approach rejects primitive Manichaeism. It rejects both the form of bad `neo-Weberism,' which claims that `liberal democracy' has stopped functioning because `bad' social groups do not believe in its values, and asserts that the current crisis can be solved by `pacifying' semiperipheral revisionist authoritarian powers.

No propaganda or military-political decision can create resources out of nothing - especially the endless resources required to implement the liberal utopia in words and deeds.

In 1994, Giovanni Arrighi(1996) believed that the United States had accumulated enough military and political power to interrupt the new cycle of accumulation by requisitioning surpluses from Southeast Asian countries, as they had done during the Plaza Accords in 1985 (Arrighi, 1996, p. 350-356). Representatives of the EU and Japan were forced to liberalize their financial markets in exchange for military and political protection from the United States. This position of dominance is directly related to the United States' ability to exert non-economic forms of pressure on actual and potential competitors. However, the very need for such pressure suggests that the economic foundation of hegemony is deeply undermined.

However, given the dynamics of US-China relations during the tenures of President D. Trump and J. Biden, the attempt at extra-economy pressure on the PRC as a new pretender to the center of accumulation was unsuccessful.

Thus, the world-system is going through a deglobalization period, hence a zero-sum game. Consequently, the free market on a global scale no longer plays into the hands of the prosperity of the EU member states, which forces us to speculate on the various options for the future of this association.

The possibility of the EU as a political community

Both liberalism and Marxism are based on economic premises. While liberal ideologists believe that selfish desires could be transformed by the market and lead society to prosperity and space of liberal freedom, Marxists proceed from the fact that the market leads to endless self-growth and concentration of capital, giving rise to violence, exploitation, and tyranny (Rosanvallon, 2007, p. 208).

Of course, the philosophical and economic theories of the 18th and 19th centuries are far removed from reality today. However, this realization prompts us to ask a critical question: if the market does not function as promised by earlier generations of thinkers, or as it did just a few years ago, should we abandon our political views and the way of a good life that we adhere to in our policy? Given that the economic sphere influences all aspects of social life, it may seem that we have no choice but to accept the current state of affairs if it fails to meet our expectations.