The European Union, the European experiment, emerged in the Twentieth Century from an unimaginable horror of war and destruction. The notion that England would withdraw from this partnership, and the largest single economic market in the world, is an idea that is fraught with socio-political tension, community fear and yes, even individual emotion.
No short article can encompass the macro-economic arguments and social disengagement consequences in detail. Indeed, neither it seems can current political debate in the UK. What it does strive to do is contextualise sixty years of being a European and the claim that economic history has on that journey.
Then we vote…
In England we have a long history of conflating a fear of others and economic malaise. William Cecil in a speech to Parliament in 1588, spoke ‘…for a Bill against strangers and aliens selling wares by retail‘(1).
Cecil was socially compassionate but economically rigid.
‘…in the person of the stranger, I consider the miserable and afflicted state of these poor exiles, who, together with their countries, have lost all (or the greatest) comforts of this life, and, for the want of friends, lie exposed to the wrongs ans injuries of the mailicious and ill-effected. The condition of strangers is that they have many harbours but few friends…’
None the less, Cecil was petitioning to ban newly arrived ‘strangers’ from retail sales for a period of seven years. An echo of contemporary embargoes and restraints in our own society?
A lack of humanity, or a disregard for it can, when coupled to a thirst for resources, mineral or geographical, propel states into the onslaught of war. The building of the European Union has its roots in an attempt to mediate the materials and processes of war production, in an attempt to deliver stability and peace for the wider community after 1946.
These are not just empty rhetorical devices from politicians. Although not lucidly expressed by politicians perhaps, economic connection and the duality of market development is our best guarantee of never seeing another European wide war.
In the Twentieth Century one only has to look at the example of Japan, with Imperial and expansionist aims, pitching neighbouring countries into devastating conflict to satisfy its thirst for war material and resources, human or otherwise.(2)
The economist J.K.Galbraith, in a later work, looked back at the emergence of Keynesianism after the Second World War, as a politico-economic philosophy. With the advance of Capital he argued ‘...full employment would no longer be considered the autonomous consequence of the competitive economy. The unemployment equilibrium would now be assumed, and henceforth it would be a deliberate purpose of government to break that equilibrium and ensure full employment in its place‘.(3) ( If only that had been true…).
The current debate on our membership of the European Union has continued elements of these three entwining historical strands. The fear of strangers and immigration, coupled to a failure of any one economic theory to master complex economic models in an everchanging world and the seeming ignorance of the imminence of war, as a pursuit of economic gain by other means.
When coupled to the false ideology and mythology of the plucky, independent island mastering its own destiny, these elemental strands might actually pitch us into an economic downturn, a rising tide of extremism from all corners of the political spectrum and a paucity of well-being, human and capital, for our citizens.
It is these skeins of history that bring us to the vote on European Union membership in June 2016. But it is the conditionality of the previous five hundred years of turmoil that serve as the backdrop for the reality, for the humanity, of our current situation.
Belonging to a group, being in a club of any kind, offers members advantages and constraints. Two hundred years ago the French Declaration of Rights defined liberty as ‘…the freedom to do everything which injures no-one else: the exercise of the natural rights of each man has no limits, except those which assure to the other members of the society, the enjoyment of the same rights’. ( A concept the writer Gilles Saint-Paul now argues is ‘long forgotten’). (4)
Railing against the imposition of constraints, against the imposition of restraint, is not a new thing either.
The philosopher Johann Gottfried Herder, in the 1790’s was ‘…scathing about any attempt by European Alliances to impose their notion of happiness despotically on all other nations on earth‘. Herder railed on ‘…the very thought of a superior culture is a blatant insult to the majesty of nature.’ (5)
Whilst some may see an echo of the contemporary argument about the restraint to sovereignty in Herder’s view, it is an argument leavened by the advantage of freedom of movement, entrpreneurial borderless endeavour and democratic representation that lies at the heart of the individual states that constitiute the EU. We are not dissolving sovereignty, we are enhancing broad geographical opportunities in support of our own interests.
We have heard, from the left, the argument that the EU is part of the global, capital conspiracy. The machinations of TTIP are often cited in evidence. However, surely, as part of the European social partnership, we must be better off with the concerted support of colleagues across the continent to ensure that there is no dilution of the safeguards to work practices and welfare, which can be chipped away by isolationist, idiologically opposed elites and pan-global companies? If capital is a conspiracy, are we not safer as a united family?
The ‘anti-democratic’ cry is also often heard. The EU is a parliamentary body, with elected representatives of our communities charged with voicing our interests. The fact that we might imagine examples of elected members to the European Parliament taking expenses and salaries whilst at the same time working to dissolve the very foundations of the body corporate smacks of moral cowardice and opportunism. It is not the pursuit of your interests or mine we imagined. It is not the fight against internatioanal restraints that hold back humanitarian and economic progress we had dreamed of.
Theories of conspiracy and self interest bring us into the realm of political economy. Utilitarian philosophies of state management, Saint-Paul argues, see their intervention ‘…whether aimed at correcting inequalities or externalites, consider the state as a abstract benevolent entity whose only purpose is to maximise the social welfare function‘.
Political economy, for Saint-Paul ‘…realises that the state is a coalition of real people who are equally self-interested. Instead of maximisation of social welfare, policy is determined by interest groups‘, with the application of policy which seeks ‘…redistribution in favour of powerful lobbies and political majorities‘. (6)
It is these two manichaeistic philosophies of interest and outcome that perhaps sum up the current EU debate. Self interest versus utilitarian social benevolence. We would cleave strongly to the view that the European constitution, the European experiment, is vital to maximise the social welfare functions of government. Vital to deliver this agenda in the midst of a maelstrom of free market, self interest and global corporatism.
We leave the last word to economist Mancur Olsen. He recognised in his research the overwhelming effect that a resurgence in entrepreneurship and innovation, particularly in information technology and communications, which was tempered by developmental pressures from intense foreign competetion, gave to the United States economy in the Twentieth Century.
His argument though was developed to encompass capital and special interests as ultimately being the drivers of paralysis, conflict and stagnation. (7)
We would argue that European aggregation of trade, movement of goods and people and the encouragement of entrepreneurship at the European level is, all at the same time, paradoxically, our best defense against special interests and regional economic paralysis.
…and then we vote to remain in Europe.
Notes and sources:
1. The People Speak, Democracy is not a Spectator Sport. Ed. Colin Firth and Anthony Arnove, Connaught Books, Edinburgh, 2014, p.14
2. Japanese Economic Development – Theory & Practice. Penelope Franks, Routledge, London, 1992, p.68
3. A History of Economics – The Past and the Present. John Kenneth Galbraith, Hamish Hamilton, London, 1987, p.
4. The Tyranny of Utility: Behavioural Science and the Rise of Paternalism. Gilles Saint-Paul, Princeton University Press, 2007, p.1
5. The Romantic Economist – Imagination in Economics. Richard Bronk, Cambridge University Press, 2009, p.149
6. The Tyranny of Utility: Behavioural Science and the Rise of Paternalism. Gilles Saint-Paul, Princeton UIniversity Press, 2007, Chapter 3, Economics, Last Bastion of Rationality, p.39
7. Good Capitalism, Bad Capitalsim and the Economics of Growth and Prosperity. W.J. Baunol et al, Yale University Press, 2007, p.229