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be a measure of sound policy and substantial justice.\n\u003e\n\u003e Alexander Hamilton, first US treasury secretary, 14 January 1790\n\n\n# Abstract\n\nWelfare states are best understood as mixed economies, where free market exchange is supplemented by planned state command in the service of equity, efficiency, or both.\n\nIn well-designed mixed economies, market and plan co-exist with minimal mutual distortions, and democratic sovereigns can trade off efficiency and equity at relatively small marginal cost.\nIntact mixed economies rely on a set of regulatory, monetary and fiscal tools that operate on the same scale as markets.\n\nIn negative integration, markets expand to larger scale, but states remain organized at lower levels, crippling the command tools of the mixed economy.\nAs a result, democratic sovereigns can no longer take primacy over the economy and any remaining welfare states will be inefficient, inequitable, unsustainable or all.\n\nEuropean integration is negative integration, and much of the 2010ff Euro-crises and the demise of European welfare states can be fruitfully analyzed as defunct mixed economies.\n\nCEEC, in particular, followed a bad route to liberalization and built largely dysfunctional welfare states, because they did not, and could not, engage the trade-offs and contradictions of mixed economies in the context of negative integration.\n\nSome of the existing literature on CEEC welfare and retrenchment fails to acknowledge the true constraints and alternatives of a mixed economy, and thereby fails to criticize and explain the societal and political choice of negative integration.\n\nThe current acquis threatens welfare, and, ultimately democracy and regional integration.\nIf the EU is to succeed, more economic integration must again always beget more political 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