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.
Capitalism and Human Values 