Europe was a strange thing going into the century, and even stranger at the end of it. It was called the first postmodern state, as it came pre-deconstructed. Nobody could take a map and draw the borders of Europe; rather, it was an amalgam of overlapping legal, political and economic organisations. Gradually, a single polity emerged at the centre of Europe: known as ‘the Core’, it comprised France, Germany, the Netherlands, Flanders, Wallonia, Luxemburg, Spain, Catalonia, Euskal Herria, Denmark, the Czech Republic and Portugal. The Core was more or less a unified country, federal in structure; other countries were more or less closely affiliated with it in varying ways, from Georgia to Greenland and Estonia to Morocco.
Socialism lay at the heart of Europe – albeit a more pragmatic and less centralist socialism than in the previous century. In America, investment was by the great corporations, and increasingly by the oligarchic families who hijacked them; in Europe, they spoke of the three pillars of society: private enterprise, the State, and the Popular Funds. Originating as pension funds, insurance schemes and co-operatives, the Funds provided a third way, in which investors would receive modest interest on their savings along with a say in how companies were run: for no company could survive without finance from the Funds, and the Funds, being largely local and small, were receptive to the wishes of their investors. The Funds did not confine themselves to corporate regulation, but branched out to offer many services to their members – insurance, health care, legal aid, and education. These three pillars were constrained by a fourth factor in the form of organised labour: organised not in horizontal unions, but in vertical employment councils, with the workers of a company having considerable – sometimes even total – control over corporate policy.
It was an inefficient system which could not compete with American ruthlessness: but by then, Europe knew that it could not compete in any case. Unable to achieve the profits of the US as it did not have equivalent oil reserves, it focused instead on improving quality of life: instead of fortunes, it promised equality, financial security, and intangible investments in happiness. Once more, American tourists would gawp in wonder at the beauty of Paris, Madrid and Berlin, cities that each spent more on flowers and road-cleaning than did the whole of the USA – while at the same time condemning their populations as indolent and effete.
Income inequalities in Europe were far narrower than in America, and security was far greater – it was harder to dismiss workers, and those dismissed could fall back on the welfare state. As a result, class differences were less dramatic than in America, and mobility was greater. However, economics alone was not enough to bring unity: over time, distinct ‘castes’ emerged, separated not by wealth but by self-imposed social and ethical barriers. Offspring of the laborial, commercial, official and professional castes could and did change caste, but in doing so they faced considerable opposition from both old and new castes.
Of particular interest to world history was the European professional caste, which included quaternary and quinary sector employees. Europe enjoyed a considerable relative advantage in education and skills production, and as a result sent out a giant diaspora of academics and experts throughout the world.
When the Long Winter arrived, high welfare payments to the growing numbers of unemployed became unsustainable; the populace, however, would not allow this. Populist governments sustained their own welfare payments, prevented the Funds from cutting loose unemployed investors, and forced companies to maintain high levels of employment. At first, this helped prevent total depression – but before long, Europe was caught between the jaws of simultaneous inflation and depression. Preventing hyperinflation required dramatically raising taxes on those still employed, which in turn required an increasingly authoritarian state. There was no coup in Europe, but the free democratic process turned increasingly toward parties who favoured a strong government backed by popular ideological unity; by the end of the Winter, critics and supporters alike were openly describing their continent as ruled by a form of “liberal integralism”. By that time, Europe was a continent afflicted by universal poverty – though perhaps nobody in Europe was so poor as the poorer parts of the population in any other part of the world.