DO POLITICS drive economics or is it the other way round? The question has taken on a new urgency with the argument over whether the economic case for adopting the euro can be distinguished from the political one. But the issue has been around since the beginnings of recorded history. As we have been reminded in the past few days, the last time Europe had a single currency was under the Romans - the inference being that the only way of having a lasting currency bloc is to have a single political entity.
The immediate issue facing Britain, however, is less stark. It is to what extent a member of the EU can exert political influence if it is not a part of the eurozone. Tony Blair insists that it can. In an interview to the Italian newspaper La Repubblica he is quoted as saying: "I am convinced that Great Britain could be a key partner - if you like a partner leader in Europe - on fundamental sectors like defence, economic reform, environmental protection and so on. But entering the eurozone is another question."
It is hard to object to that. Leave aside the obvious military leadership role and focus on economic reform: the ideas that led to reform of the European tax systems and the privatisation of nationalised industries started in the UK. On the other hand, Blair's office maintains that naturally we would have even more influence in Europe were we members of the eurozone - and that too must be true over some aspects of economic policy. Self- evidently we have no influence over monetary policy in the eurozone if we are not part of it.
When puzzling about the future it is usually most helpful to look back. What can history tell us? There are no unambiguous messages but I suggest that there are two reasonably clear propositions from recent history - and one less clear from current observation.
The first is that in the modern world, at least, it is hard to sustain economic advantages by political action for very long. I suppose the Roman Empire did achieve a higher standard of living for citizens of Rome by requiring the outlying provinces to supply goods and services to the core. But the main recent example of this "conquest and tithe" approach to economics, the Eastern European empire of the Soviet Union, lasted little more than a generation and ended up by impoverishing not just the conquered but also the conquering power.
Yes, you can cart off the equipment in the factories, as the Russians did from East Germany after the war, but that does not get you very far. Wealth creation in the modern world is a vastly more complex and subtle process than that. British experience of imperialism demonstrates that once the political forces for independence became focused there was no economic advantage in trying to sustain the empire - in fact quite the reverse. As the most celebrated current work on the subject - British Imperialism 1688-2000, by Professors Cain and Hopkins - argues, it was "organised entrepreneurialism" that turned the world map pink. Economics and finance led politics.
The second proposition is that economic success need not of itself bring political power. Japan has established a great commercial empire since the Second World …