EU – Capitalism and Human Values

Fundamentalism and the EU “four freedoms”.

The single market of the EU is founded on four freedoms, the freedoms of movement of goods, services, capital and people. This is a wonderful piece of political branding, for who could possibly be against freedoms? Only a fool or a Brexiteer, if there is a difference in EU eyes. But in fact the package is one of several mechanisms (the Euro being the most notorious) by which a programme of market fundamentalism has been imposed on the people of Europe.

Market fundamentalism is a view which although under attack is still the dominant political ideology of our times, that markets know best. Markets decide and the rest of the social fabric must lie as it falls. And accordingly, the main effect of the treaty obligations by which the members have bound themselves is to reduce the power of governments to intervene in their own economies.

No wonder there is such contempt for democracy in the institutional arrangements of the EU and such horror when people are allowed to express a view. Democracy and market fundamentalism are incompatible, radically opposing views of how society should be shaped. Democracy implies that people can not only have aims not presented to them by the market, but make viable choices outside the market. To fundamentalists this is dangerous nonsense.

Looking at the freedoms themselves, it is not surprising that free movement of capital will largely benefit its owners, although predictable that capital will seek the cheapest sources of labour. But freedom of movement of goods sounds thoroughly benign – who wants their goods priced up by tariffs or held up by obstructive officials? Besides, trade in goods benefits everyone, comparative advantage providing both more guns and more butter as every schoolchild knows. But as always, it depends where you start. Just as every developing economy which has emerged in the last half century (ever?) has built up its industry from fragile beginnings behind the protection of tariff walls, so mature and even declining industries might need similar protection, if only to give people time to adjust. The tide perhaps cannot be held back, but sometimes a wall to keep out the worst storms is useful.

The timing of the EU single market could in this respect not have been worse. Industries already reeling from cheaper goods and lower labour costs outside Europe have had to face additional competition from within Europe. Whole cities and communities in the UK have been hollowed out as a result of the dual onslaught – I think of once prosperous Loughborough and Leicester near where I live, now shadows of what they used to be. In response the mantras of market fundamentalism are hypnotically repeated: markets are sovereign, governments cannot intervene and must step aside. But stepping aside is not a neutral act.

Besides accepting that markets are more important than people, inaction disproportionately benefits the multinational corporations within which something like two thirds of all international trade takes place. These corporations ARE the market – in other words most trade is a sort of fiction. These corporations are the same as show such aversion to paying taxes in countries where they operate, but this aside they might claim it is up to governments to look after their own people, while multinationals attend to their earnings. But even that saving balance has been lost.

Fundamentalist governments are gripped by the sense that all prosperity requires is to shrink the state and let markets provide. Gone, dismissed as leftist nonsense, is any sense that governments might have any duties of trusteeship towards their people. So the externalities of trade, the hollowing out which destroys communities in the old world and the pollution which destroys the environment in the new, are left unattended. Corporations inherit a scorched earth.

Then we have the free movement of people. This controversial freedom can be made to sound as if it restores the power of the worker – if firms in one country are not congenial, the workers will flow to those of another, onwards and upwards. Maybe this is true for a very small proportion of highly sought-after workers. But for most the reality is that any successful economy will be flooded with cheap labour. There will be consequent strains on public spending as public services are oversubscribed, reinforcing or excusing the fundamentalist view that shrinking the state is the only way forward.

But think what desperation anyway might cause a worker to uproot family, abandon home and possessions and travel thousands of miles to a country of different culture and language in the hope of work. Just as with the great emigrations of the nineteenth century, and indeed the economic refugees of today, the “free” movement of people is a cruel symbol of failure or abdication of responsibility by governments.

For indigenous workers, free movement of people acts only to depress pay, preventing them from sharing in any gains from trade and filling them with such rage and despair they will turn to whomever promises revenge. It is a freedom which comes with a heavy price. This is no liberal regret, for the greatest irony is how severely free movement attacks the basis of traditional conservatism, that attachment to place, tradition and evolved culture which at its best gives people roots and nurtures values.

So the four freedoms are not gifts to the people of Europe, they are pillars of market fundamentalism. Is it too late to think again? Certainly the damage done to older industries is probably irreversible. But we might stop compounding the damage with further economic vandalism. We could reflect on what might matter more in our lives than the profits of multinationals. We might even consider whether there might after all be such a thing as society, whether competition is really the only model for how we live together. Or we could carry on until the anger of the newly dispossessed elects more demagogues and dictators.

Baggini and representative democracy

I read two articles this week by the philosopher/journalist Julian Baggini brandishing the idea of representative democracy to decry in one case the result of the Brexit referendum and in the other Jeremy Corbyn’s refusal to abandon the mandate his membership gave him because his Parliamentary colleagues don’t like him being leader.
Democracy is such an important idea in our society that confusion about it is always interesting.We tend to assume that the idea needs no examination. In fact, if philosophy has any purpose at all it is to examine precisely those ideas we take for granted but put great weight on.
It is probably true that difficult decisions are best taken by those able to understand the implications of various courses. Leaders with a certain level of intelligence are a good thing, although they need many other qualities. This is not the same and should not be confused with the probably false idea that government is best left to experts or technocrats. Experts need to provide the known facts but all difficult decsions go beyond known facts and need some judgement about factual uncertainties and more importantly, values.
Moreover it is never obvious or even determinable in advance who will make what will turn out to be happy decisions. Complexity rules out government by continual plebiscite (technologically enhanced Athenian democracy) not because the people are too ignorant or too easily misled to know what is good for them but because the questions are too difficult to frame for a binary (yes/no) answer, not to mention the sheer number of decisions great and small which need to be taken. But this has nothing to do with a certain elite class or even elite individuals knowing better what is good for us collectively. The philosopher kings that Plato wished for do not and never will exist. In that sense, democracy is a process of eternal disappointment, but the alternative is to believe that someone has privileged access to the answers, which is the meaning of fascism (and what it has in common with theocracy).
So we select rulers as best we can, from a limited choice offered to us and bounded by whatever artificial constraints our particular voting system places on the method of choosing. The best ruler we can hope for is capable of understanding and taking into account the expert advice but not being dominated by it, best illustrated perhaps by the political command of a country’s armed forces. Even though we nearly always end up disappointed, we can at least reject those who have tried and failed and those we feel should not be allowed to try. And as long as we can all participate in this process in whatever way our system allows and most importantly revise our choice at suitable intervals, we are protected from at least some of the worst abuses of power. This is the value of democracy, it offers no miracles but a measure of protection well worth the two cheers Forster proposed.
Returning to Baggini’s two targets, it is certainly arguable that we should never have referendums and instead leave all major decisions to our elected rulers. With hindsight, our ex-PM might agree! But the argument, such as it is, is just about our constitutional arrangements, not about the intellectual capacity of the electorate. It is particularly weak in the case of Brexit because we have had several referendums on major constitutional questions before and even a referendum on the EU. An alternative view is that since we choose leaders within a given constitutional framework, major changes to the framework itself should not be taken by those leaders but put to the governed. In that view the referendum came rather late.
(Remainers, of which I think Baggini is one, seem always to assume that Leavers can only have been misled or stupid, but people voted Leave for many reasons, some good and some bad just like Remainers. Not least, although many supported a free trade area they simply did not see the point of a federal Europe, which is the goal and lodestar of the EU institutions and many of the member governments but for which interestingly no one argued a positive case.)
As for Mr Corbyn, it is hard to see why any idea of representative democracy even touches his decision not to stand down as leader of his party. A party, after all, is just a group of people hoping to convince the electorate at large to allow it to rule. That group can make its own internal governance arrangements but there is absolutely no reason why it should mirror those of the state. It could choose to privilege the opinions of those it has succeeded in getting elected into Parliament, but it need not and it has not. So, whether Mr Corbyn is right or wrong to stay as leader of his party against the wishes of his MPs just has nothing to do with the fact that we live in a representative democracy.

Brexit, common law and ethical thinking

I have just read two sharply contrasting articles in “Prospect” about Brexit. Jay Elwes runs out the already familiar “we woz robbed” line, embellished with quotes from Popper which could however equally be applied to either side. Roger Scruton on the other hand makes a far more interesting attempt to understand and interpret why people voted as they did, without the patronising assumption that only stupidity or gullibility can explain the vote. Whether he is right or wrong in his particular analysis – and in my view he is far more right than wrong on this occasion – this approach of taking the vote seriously as something whose meaning(s) must be sought and grasped rather than as a nonsensical aberration to be dismissed is surely the best way to move on past current turmoil and division.

In explaining some of the uneasiness the English in particular have always felt towards the EU, Scruton makes a very interesting point about the essential difference between the UK common law tradition and European (including Scottish) Roman law traditions. The first starts from cases, with rules and principles emerging as “precedent” only from the attempt to grapple with the complexities of the particular. The second starts from principles and seeks to apply them to particular cases, giving perhaps an appearance of greater intellectual consistency but at the expense sometimes of shoehorning some of the facts.

This “bottom up versus top down” dichotomy is an oversimplification of course (Sir Roger does not suggest otherwise) but nevertheless of vital importance and not only for understanding the Brexit vote. I have argued in the book that exactly this priority of the individual case over rules should be the hallmark of our ethical thinking across the board, but did not make the analogy that it produces a sort of moral common law, or perhaps simply “common ethics”. The big difference is that there are no judges or experts in the ethical field, we each have to decide our own cases. But the analogy with common law, trying constantly to tread a consistent line but too aware of the complexity of everyday life to take shelter in simple rules, may be helpful in getting a handle on what may otherwise seem a daunting approach to ethical reasoning.

A thought about Brexit

If a UK exit from the EU (a Brexit) is as all-compassing an evil as our Prime Minister now tells us, leading to global recession, the outbreak of WW3, the economic collapse and isolation of the U.K., not to mention a dive in house prices and the death of all family pets (I may have made one of those up, but only one) – why did he even suggest a referendum which risks such outcomes in the first place?
Rhetorical question, of course, he did it for short term political advantage and did not think it through. But if half the things he now says are true, how reckless was his electoral promise to hold a referendum at all, with potential exposure, however slight, to all these claimed dangers which would not have arisen otherwise?

To be clear, I personally am glad that the people are being given a say, although depressed by the low standard of official debate which amounts on both sides to deliberately muddying waters and simple scaremongering of the kind that won the Scottish referendum. But that is not the point. I did not decide to hold a referendum nor do I think an “out” vote need be a catastrophe. In any field, if a person believes that one particular outcome of an event is as catastrophic as we are now being told Brexit would be and that person can decide whether or not the event should take place, why take even the slightest risk that the catastrophe will come about? It is a ludicrous gamble, like betting your house on a single card or worse, like Russian roulette. Surely it is the very epitome of recklessness and folly?
So, either he is wildly exaggerating – lying, as it is sometimes called – what he believes will be the consequences of Brexit or he is prepared to gamble with national – no, world, according to his own warnings – security to an extent bordering on treachery or madness. Whichever it is, is there anything in modern (OK, in pre-Trump!) times which compares to such political recklessness and shows anyone’s total unfitness for high office more clearly?

Democracy and Europe

Democracy in a small enough context can mean that people can individually influence decisions that may affect them. It does not mean that they will get their own way, for of course they may be outvoted, so it may still happen that a democratic decision is imposed on the unwilling. Nor is there any guarantee that decisions will be good ones, for the majority may be wrong just as any individual can be wrong. But at least everyone has a chance to influence the decision. The tyranny of a majority you had a chance to be part of is somehow more palatable than a tyranny you were excluded from altogether.

This idea (sentiment?) has to be abandoned however when the number of people involved is too great. Even before that threshold is passed, decisions may be sufficiently complex that many individuals do not have the knowledge or experience to make an informed decision. They will then probably follow with their vote whomever they feel has the right expertise and commands their confidence. So we quickly arrive at the idea of representative or leadership democracy. If we cannot all participate in every decision, because of numbers or complexity, the next best thing is to have a say in who gets to make decisions. This is the basis of western democracy in its many forms.

The people get to choose periodically who will rule and crucially they get to remove leaders who no longer impress, so that the rulers must always bear this in mind in their decision making. Combined with checks and balances, such as divisions of power and rights of appeal, transparency and openness of information where these exist, this is the way most western states are organised. At its heart is the idea that power depends on and derives from the consent of the majority of the people for a given individual or group to lead, a consent which may be withdrawn if the results are unsatisfactory or unpalatable.

A significant part of the case against the European Union is that it has been deliberately designed to evade such democratic control. Despite the changes in the Lisbon Treaty, the unelected Commission not only holds great executive power and has the duty to enforce EU decisions against member states but has the sole right to propose legislation. Basically, much can happen just because the Commission wants it to happen and nothing can happen unless the Commission proposes it should. True, the European Parliament must now approve the appointment of the Commission initially and has the somewhat “nuclear” option to dismiss the whole Commission by a vote of no confidence. But whatever its supporters may say, this is far from being the same as the way governments are chosen in parliamentary democracies, where executive power goes to those who have participated in and won an election themselves. Besides, if the Parliament does refuse to ratify the commission it opposes itself to the Council of ministers rather than the Commisssion. And once ratified, to a large degree there are no democratic controls on the executive powers of the Commission. Yet it acts in many respects as the European Government. Indeed, it is charged to take its own view of what is best for Europe, in contrast to the council of ministers where national government interests are represented or the parliament which, however inadequately, represents the people directly.

Unfortunately, this is a highly technical issue which does not lend itself to soundbites. But significant reform in this area, possibly even abolishing the Commission or replacing it with a regulatory body without a stranglehold on legislation or wide executive powers, would go a long way to changing popular perception of the EU and making its institutions more accountable and responsive to its people. It should be central to the debate about whether the UK continues to be a member.

After all, that debate should not be about trade and whether membership adds or subtracts on balance from UK GDP, because nobody really knows about that and the putative answers that are touted are all compromised by self interest.

It should not be about whether the UK can again be a great power on its own, because the negative answer to that question is surely beyond debate and only nostalgia keeps the argument alive.

It should not even be about control of borders because as the current refugee crisis shows sheer numbers rather than laws are the issue there.

It should certainly not be about entitlement to welfare benefits which seems to have risen to the top of the U.K. wish list, maybe (is this too cynical?) because it can be settled very easily.

The debate should simply be about the way we in the UK relate to the rest of Europe. It makes no sense to have an antagonistic attitude to our nearest neighbours, we must surely cooperate on as many issues as possible. We must trade with them as much as possible and we need to find joint solutions to many problems, not least security and the environment, which in the modern world a single nation state cannot address in isolation. It does not necessarily follow however that we should all have the same laws, the same currency or the same policies, still less merge our national identities into a supra-national state.

But the combination of the Commission’s powers and the de facto position that it alone represents a European standpoint means that at the heart of all European legislation is a drive towards more and more integration – closer and closer union. It is no use the President of the Council (the key intergovernmental body) assuring the UK government that closer union is not an aim of the EU, nor the UK government interpreting that as an “opt-out” from closer union for the UK. The institutions of the EU and in particular the Commission enshrine integration as an objective and put incremental progress towards it beyond democratic control.

So the question is whether it is better for the UK to stay in the EU as it stands and try to reform it from within, or to leave and try to encourage it to evolve in a sensible, more democratic, non-integrationist direction from without. The pity is that the current renegotiation might have given us a unique opportunity to push for change, but it looks like the chance will be squandered for some relatively minor reform of welfare entitlements. It has to be said that a strategy of reform from within has failed miserably so far – and why wouldn’t it, when the powerful original members are pro-integration? Why then should we expect it to work in the future? Thus the choice is to accept a flawed and ill-founded set of institutions which reduce our freedoms and take us towards a destination none of us want, or leave and try to start again. Neither option is attractive or without danger. But Brexit may be the lesser of two evils.

One thing is certain. A “yes” vote in the referendum will mean business as usual. A “no” might mean that the will of the people is taken seriously in Brussels and Berlin and that renegotiation acquires new urgency even after the vote.

Greece again

Greece has been brought to heel (or its knees) and the eurozone or EU feels more like the Fourth Reich. If that sounds offensive I am sorry, it is only because the Third was so loathsome. But what else would you call a Europe dominated by Germany in which democratic dissent is punished by draconian reprisals against a whole population?
Having said that, what on earth were Syriza thinking? Their only bargaining chip, it seemed, was that expelling them from the Eurozone would be as damaging to the Eurozone as it would be to Greece. But then it turned out that they would accept anything rather than be expelled, even defying a supportive referendum of the Greek people! What, one can only wonder, happened in the week after the referendum to change their minds? Or were they really just hoping all along that Germany would blink first, without having an alternative strategy? Crazy!
No one comes out of this with honour. There is no doubt that Greece has been profligate and that Greek public expenditure needs to be radically trimmed and brought under control. But some debt relief for Greece was the minimum assistance consistent with the solidarity among nations for which the EU is meant to stand. It is also something from which Germany itself benefited greatly in the past. OK, we understand that some things are done “pour encourager les autres” and that Syriza’s grandstanding annoyed everyone. But what has been done to Greece is shameful. It should make us all suspicious of the real motives behind the European project.

Greek debt

The Greek people have voted against more austerity. Who wouldn’t, given the choice? Politically, it is a strong move by Syriza: economically, well, we shall have to see. Germany is now faced with having to find a face saving formula to help Greece with fewer punitive (or reforming, depending on your point of view) measures – or have Greece leave the monetary union and possibly the EU.

No doubt it is better to be a creditor than a debtor. But there is some symbiosis in every case. As the old adage has it, if you owe and cannot pay the bank £100 you are in trouble. If you owe and cannot pay the bank £100 million the bank is in trouble. On an intergovernmental level the relationship is even more symbiotic than between customer and bank.

Country A has a surplus to lend only because country B has bought country A’s exports on credit, even if the relationship is confused by the parts played by many other countries. So it is not quite right for country A to claim the moral high ground, as Germany is now doing with Greece. Solidarity cuts both ways but the point about sovereign loans is that you cannot send the bailiffs round.

On the other hand, if the repayment of loans is seen as optional, the whole process of international trade could grind to a halt because nobody wants to take the risk. Those with something to sell would insist on cash and just keep the money under the national mattress rather than lending it out. Actually it’s worse: what would “cash” even mean in this context? There would have to be a complicated system of barter, which is perhaps what happened in earlier and considerably poorer times.

So what will now happen? Haven’t got a clue! Germany must choose between two cherished aims, leadership of a United Europe and the maintenance of fiscal propriety. If Greece were the only major debtor my guess is solidarity would disappear and they would decide a United Europe without Greece was better than a loss of power. They would cut Greece loose to take the dire consequences of defiance and incidentally show other countries who runs things. But the calculation has to take into account what happens to the other Southern European debtor countries, who will come under immediate pressure from markets. Merely saying that the ECB supports them will not be nearly enough if Greece has gone. So a face saving formula involving a rescheduling of Greek debts with tough words but easier conditions is more likely. Interesting times.

Doubts about the EU

The EU project has at its heart a vision of European integration, a United States of Europe. In the beginning the vision was far off and involved only six countries. It was an abstraction anyway and the statesmen (they were all men) of the time saw the first steps as either safely subject to later modification or justifiable without popular consent as an act of leadership. The most important thing after all was to avoid another major European war.

So the institutions of Europe were made deliberately undemocratic. National governments each had a veto and that was enough of a safeguard. The people of Europe were to be led towards what was considered good for them, a good they might appreciate more and more as it unfolded but which they might foolishly doubt in the abstract, not least because of the then recent history of conflict.

But the vision of integration, not to mention the central concept of politicians as visionaries, survived changes in the structure and extent of the EU which no one envisaged at the start and which have been truly staggering, including the reunification of Germany and the collapse of the Soviet Union. In trying to deal with upheavals of such size and scope no one can blame politicians for using whatever tools and structures lay to hand, but the result was a tectonic shift in what made sense for Europe. Nevertheless, too much political capital had by then been invested in the vision, so the wise leaders pressed on.

For politicians had succumbed to their own myth and believed that their wisdom and guidance would lead their unruly peoples to a promised land, like Moses in the desert. Perhaps they were just sanguine about the changes that had occurred or perhaps they chose not to notice that the destination was now unrecognisable. Perhaps, more kindly, they responded to increased complexity with a desire to concentrate power simply to get necessary things done. They might for example have been genuinely torn between their answerability to their own national assemblies and the prospect of conflicting answerability to a pan-European assembly, so the nascent European Parliament was left as a travesty, a show assembly hardly more relevant than a party conference in a communist state.

Even when national vetoes were removed in the interests of easier governance, no balancing increase in democratic accountability took their place. When the wise leaders produced a European constitution to replace the treaties on which the EU rests the people in many countries had to be given the opportunity of a vote and in sufficient countries rejected the idea. But were the wise leaders daunted? No, they called the constitution something else and carried on anyway.

In the UK we are now promised a vote on whether to stay within the European Union. This will in the end be presented as an economic choice – are we collectively better or worse off inside or out? The truth is, nobody can be sure. Either course will be better for some, worse for others and the arithmetic is difficult. Business will weigh in on the side of remaining, because of course an integrated market is good for business, as is a single focus for lobbying. Since most politicians are in awe of business in one way or another that will likely be the political consensus too.

But surely it is not financial arithmetic which should be at the heart of the choice but what has become the arrogance of imposed political and economic integration. A wide European alliance is an excellent thing and a large free trade area is probably very helpful, although much less relevant than in the past because of developments in the world trading order. Without the ability for the people to have some choice in what should happen along the way, however, these benefits are bought at a high price even if GDP is higher.

It’s not that we can or should have referenda at every turn because, after all, nation states are already far too large for direct democracy. We choose leaders to act for us and trust that they will take decisions with which we broadly agree. But in the EU they can’t even do that. All they can do is go off and contend throughout the night with a couple of dozen leaders of other states with the outcome decided by some combination of trade-off, power and tiredness. Even the tenuous link of trust between us and them is broken. Democracy, already pale in the nation state, is bleached to such a ghostly shade in the EU that it no longer exists.

The central vision of a United States of Europe has thus become a crude weapon against democracy. The structures and assumptions of the EU need thorough revision to meet the needs of an organisation which stretches far beyond what its founders would have believed possible.

That process of examination and revision, that wholesale reimagining of the project, will just not happen. It will not be allowed to happen by those who benefit economically from the status quo. Power will move further and further away from the people over whom it is exercised. And that is why the EU, sadly for it has noble aspirations buried there somewhere, should be mistrusted.