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.

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“No one left behind”

Progressive politics, the only form of non-repressive politics, must be based on sound ethical foundations. That is one reason why the effort to articulate such foundations and show how they work both for individuals and communities is important.

Economic systems and solutions must be built on these same ethical foundations – that is where Marxism and many other forms of socialism went wrong because the economics came first, in the belief that economic relations are the determinants of everything else. Well, they may be, indeed they are in the world we have come to accept, but ONLY IF WE LET THEM. And the irony of this wrong approach is that politics becomes a question of which economic policies produce the greatest short term gain, rather than being about the kind of society we live in.

At a time of such political upheaval and revolt against the political establishment as we are now seeing it is high time that we reexamined the basis of that society. What kind of community do we want to create and live in and bequeath to future generations?

But the world, and my country, cannot wait for the outcome and general acceptance of what will always appear to many as abstruse intellectual ramblings. We live in a world of soundbites and we need a good one, quickly, now. We can unpack it later. What would you suggest? Here’s mine, not original but I think it works:

NO ONE LEFT BEHIND.

Left and right

Oversimplifying only a little, the right in Western politics is generally about individuality, from self reliance at the better end to selfishness and greedy at the worse. The left is about collectivity or concern for others, from solidarity and compassion at the better end to compulsion or subjugation to the common cause. Both ends of the conventional spectrum can result, at their worst, in cruelty, fundamentalism or totalitarianism.

But this suggests that we should classify political positions not in one dimension – the usual left-right spectrum – but in two.

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We could thus look at politics derived from human values as superseding the old left-right divisions. In fact, left and right define a dimension which is not the critical dimension for human flourishing at all and arguably never was. Both left and right have their positives but also their negatives, the latter making them almost indistinguishable at the worst extreme. The important dimension lies on another axis entirely.

 

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.