The Sovereignty of Innovation and the Innovation of Sovereignty
The 2025 Nobel Prize in Economics is a major milestone for the economic nationalism that fueled the election of Donald Trump and popular support for Brexit.
Joel Mokyr, Philippe Aghion, and Peter Howitt won this year’s prize for explaining how innovation drives economic growth. Their decades of research provide rigorous support for policies the establishment spent years dismissing: the value of political sovereignty, the dangers of regulatory harmonization, and the critical distinction between innovation-driven change and offshoring-driven destruction.
As far as we know, none of these economists would describe themselves as “economic nationalists.” That’s still a forbidden stance in most professional economic circles and would spark protests on university campuses in the U.S. and Europe. But their work undermines many of the key foundations for globalism and supports the stance of today’s nationalists in the U.S., the U.K., and Europe.
In today’s Breitbart Business Digest, we’ll explore Mokyr’s work and how sovereignty and political fragmentation supports innovation and growth. Tomorrow we will look at the work of Aghion and Howitt.
(Photo by Bedirhan Demirel/Anadolu via Getty Images)
Political Fragmentation Made the West Rich
Mokyr set out to discover why Europe became the world’s economic powerhouse. What he found is groundbreaking. Europe thrived because it was politically fragmented, not despite it.
For nearly a century, global governance enthusiasts have assumed that harmonized rules and centralized authority create prosperity. The European Union’s entire structure rests on this assumption, so do international regulatory bodies, trade agreements, and the broader project of global economic integration.
Mokyr’s research shows they have it exactly backward. Europe’s division into dozens of competing states created a “market for ideas” where innovators could escape repression. If France’s king banned your research, you moved to the Netherlands. If the Pope condemned your work, you found refuge in Protestant territories. Heterodox ideas survived because no single authority could suppress them everywhere.
Compare this to China: technologically advanced, culturally sophisticated, but unified under a single imperial bureaucracy that could quash innovation across the entire empire. China stagnated while Europe’s economy saw explosive growth.
The implications for today’s EU are devastating. Brussels now imposes continent-wide regulations on everything from AI development to labor markets to financial services. There’s no escape valve. If the EU decides your business model violates its rules, you’re out of options unless you leave Europe entirely.
Brussels has recreated the Chinese imperial model that Mokyr identifies as the enemy of innovation. No wonder Europe’s economy has been limping.
The Latin Secret: How Cultural Unity Enabled Political Diversity
Here’s the crucial element that makes Mokyr’s findings even more powerful: Europe achieved the ideal combination of political fragmentation with cultural and intellectual integration.
Latin served as the common language of science, philosophy, and learning across all of Europe. A scholar in Portugal could read the work of a German scientist. An Italian inventor could correspond with an English mathematician. The “Republic of Letters” operated in Latin regardless of which prince ruled your territory. This network of intellectuals sharing ideas across borders functioned above and beyond political divisions.
This wasn’t globalism in the modern sense. It was something better: a shared civilizational heritage from Rome and the Renaissance that allowed ideas to flow freely while political and regulatory structures remained diverse and competitive.
Scientists could move between jurisdictions and still communicate. They shared classical education, Christian theology (even when fighting over it), Roman law concepts, and Aristotelian frameworks. But they lived under radically different political systems with different rules, different patrons, and different regulatory approaches.
The modern equivalent isn’t the EU imposing uniform regulations while allowing physical movement. It’s the Anglosphere: the United States, United Kingdom, Canada, Australia sharing a common language, legal heritage, and cultural foundations while maintaining distinct political systems and regulatory approaches.
English now plays Latin’s role by enabling idea exchange across borders. But actual sovereignty allows meaningful experimentation. A British AI researcher and an American entrepreneur can collaborate seamlessly while working under completely different regulatory regimes. That’s the winning formula.
The EU, by contrast, is all political integration with declining cultural confidence. Brussels harmonizes regulations while European leaders apologize for Western civilization. They’ve inverted the successful model: political unity with cultural fragmentation instead of cultural unity with political fragmentation.
Why Mobility Without Diversity Is Meaningless
Here’s the mobility paradox the open-borders crowd never mentions: the ability to move between jurisdictions is worthless if all jurisdictions have identical rules.
The EU promises “freedom of movement.” You can relocate from Germany to France without a visa. Sounds great, right? But if both countries must follow the same Brussels directives on everything from data privacy to employment law to product standards, why would you bother moving?
A German AI researcher can’t escape GDPR restrictions by moving to France. A French entrepreneur can’t avoid EU labor regulations by relocating to Italy. The physical borders are open, but the regulatory borders are closed.
This is the opposite of what made historical Europe innovative. Scholars shared Latin and classical learning but worked under different princes with different rules. They had easy movement of ideas and people combined with genuine regulatory and political diversity. Now you have movement without diversity, freedom without meaningful choice.
The United States, by contrast, maintains genuine federalism. A tech founder can move from California to Texas and face radically different regulatory environments, tax structures, and business climates. Americans share language, culture, and constitutional principles, but states compete on policy. That’s a feature, not a bug. It maintains competitive pressure and allows experimentation.
The Enlightenment’s secret was that competition is superior to consensus. Sovereignty itself is an innovation that fosters growth. Europe’s laboratories of sovereignty built the modern world.
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