Brexit will only count if everybody leaves the EU

Britain can leave the European Union, but it would remain just as tied to capitalist markets as before. The decision to leave the EU is not a decision to leave the world capitalist system, or even disengage from Europe, and thus is not a decision that will lead to any additional “independence” or “sovereignty” outside of proponents’ imaginations.

What has been unleashed is the nationalism and xenophobia of right-wing “populism” — those on the Left celebrating a blow against elites might pause for thought. Yes, voting in defiance of what elites told them to do played its part in favor of a British exit from the EU, but nationalism, scapegoating of immigrants, and convincing people at the mercy of corporate power that less regulation is in their interest were dominant.

It is the far Right that been given a shot in the arm from Brexit — from the National Front in France and the Party for Freedom in the Netherlands to the United Kingdom Independence Party (UKIP) and the hard right within the Conservative Party. The Labour Party’s Blairites have also been emboldened, as the parliamentary coup against Jeremy Corbyn illustrates.

Sunset near Tromsø, Norway (photo by Moyan Brenn)

Sunset near Tromsø, Norway (photo by Moyan Brenn)

By no means is the above survey meant as any defense of the EU. It is a neoliberal project from top to bottom, an anti-democratic exercise in raw corporate power to strip Europeans of the gains and protections hard won over two generations. The EU has a similar function to the North American Free Trade Agreement on the other side of the Atlantic. European capitalists desire the ability to challenge the United States for economic supremacy, but cannot do so without the combined clout of a united continent. This wish underlies the anti-democratic push to steadily tighten the EU, including mandatory national budget benchmarks that require cutting social safety nets and forcing policies designed to break down solidarity among wage earners across borders by imposing harsher competition through imposed austerity.

So we should be celebrating anything that weakens the EU, yes? Perhaps. If this were the first blow to a visibly crumbling edifice, then surely yes. If there were a continental Left with a clear alternative vision to corporate globalization, then emphatically yes. But neither of these conditions are in force, so a more cautious response is called for. What is really needed is the destruction of the EU, for all countries to leave it, not only one.

Britain leaving by itself will lead to far less of a change than Brexit proponents hope, and not necessarily for the better. This is so because the conditions of capitalist competition will remain untouched.

Norway and Switzerland are out but are really in

Brexit proponents point to Norway and Switzerland as models of countries outside the EU but which retain trading access. But what those countries have is the responsibilities of EU membership without having any say.

Norway has the closer relationship of the two. Norway (along with Iceland and the micro-state of Lichtenstein) is part of the European Economic Area, essentially an agreement tightly binding those three countries to the EU. The EEA has been described as a “transmission belt” whereby the EU ensures that the EEA countries adopt EU laws as the price for being a part of the “free trade” area of the EU. That is a one-way transmission. Norway has no say in the creation of any EU laws and regulations.

The EEA treaty calls for Norwegian consultation, but Norway is not represented in any EU body. The agreement allows Norway to “suspend” any EU law that is disliked, but Norway has done so only once. By contrast, Norway’s parliament has approved EU legislation 287 times, most of them unanimously. This loss of sovereignty does not seem to be an issue for Norway’s political leaders. A 2012 Norwegian review of EEA membership concludes:

“This raises democratic problems. Norway is not represented in decision-making processes that have direct consequences for Norway, and neither do we have any significant influence on them. … [O]ur form of association with the EU dampens political engagement and debate in Norway and makes it difficult to monitor the government and hold it accountable for its European policy.”

The chair of the review committee noted that “There is no upside for Norwegian politicians to engage in European policy. … Because politicians are not interested in European policies, the media are not interested, and lack of media interest reinforces the lack of politicians’ interest.”

The minister of European Affairs in the current Conservative Party-led Norwegian government, Elisabeth Aspaker, confirms government ease with adaptation to EU law. Norway, in fact, has committed to voluntarily contribute €2.8 billion in aid to poorer EU countries for the period 2014 to 2021. In an interview with EurActiv, Minister Aspaker said:

“[W]e believe this is in our interest to improve social and economic cohesion in Europe. If Europe is doing well, Norway will also be doing well. If Europe is doing poorly or is destabilised, this will have a negative impact on Norway and the Norwegian economy. So this is why we believe we should involve ourselves beyond what is required under the EEA agreement.”

Switzerland has a separate agreement with the EU that is essentially a “free trade” agreement. Switzerland has a little bit of room to not adopt EU laws, but some of its goods are blocked from export to EU countries as a result. Switzerland, however, is under pressure to do as the EU dictates, and not only does Berne not have representation, it lacks even the toothless consultation that Oslo has.

Britain will still pay but have no say

Will Britain really be free of transfers to Brussels as the “Leave” campaign, dominated by the Tory right and UKIP, loudly claimed before the referendum? Their immediate back-tracking on that, and on their implied promise of significantly reduced immigration, provides an important clue. The Centre for European Reform, a neoliberal think tank that declares itself in favor of European integration, in a nonetheless sober analysis declares that Britain would pay a substantial amount to retain its access to European markets. In its report, “Outsiders on the inside: Swiss and Norwegian lessons for the UK,” the Centre writes:

“Britain would also have to pay a financial price, as well as a political price, for retaining access to the single market. As a relatively rich country, it would presumably be expected to pay special contributions to EU cohesion and aid programmes on a similar basis [as] the Norwegians and Swiss do. Currently, Norway contributes €340m a year to the EU. If multiplied by 12 for Britain’s much larger population, that rate would imply a contribution for the UK of just over €4 billion, or nearly half its current net contribution to the EU budget as a full member. That is a lot to pay for associate status of the club.”

It is possible to grumble that the foregoing is a product of a pro-EU perspective, but doing so would ignore that Britain’s firm place in the world capitalist system, geographical location and trading patterns dictate that it retain its commercial access to Europe. A post-Brexit Britain’s remittances to Brussels might be larger than even that postulated by the Centre for European Reform. An Open Europe analysis calculates that Norway’s net contribution to the EU works out to €107 per person, while Britain’s current contribution is €139 per person. It may not be realistic to expect a future British contribution to be substantially less than Norway’s.

Sea defenses on the South Coast near Winchelsea, England (photo by Atelier Joly)

Sea defenses on the South Coast near Winchelsea, England (photo by Atelier Joly)

Furthermore, the Open Europe analysis notes that gross immigration to Britain is significantly less than that of Norway, Switzerland and Iceland. Those countries each must accept the free flow of people (along with goods, services and capital) the same as any EU member. The scare tactics of UKIP and the Tory right were simply that, tactics. And the promise by Brexit proponents of the return of an golden age and the scare tactics of Brexit opponents that financial armeggedon would be at hand? A separate Open Europe report finds the most likely range of change to British GDP would be within minus 0.8 percent to plus 0.6 percent by 2030.

Not much of a change. The high end of that modest range assumes that Britain adopts “unilateral liberalisation” with all its major trading partners because “free trade” offers the “greatest benefit,” the Open Europe report asserts. But studies purporting to demonstrate the benefits of “free trade” agreements tend to wildly overstate their case through specious assumptions. These often start with models that assume liberalization can not cause or worsen employment, capital flight or trade imbalances, and that capital and labor will smoothly shift to new productive uses under seamless market forces.

Thus groups like the Peterson Institute invariably come up with rosy projections for “free trade” agreements, including fantasy figures for the North American Free Trade Agreement and the Trans-Pacific Partnership that ignore the reality of job losses and resulting downward drag on wages. So it is perhaps not a surprise that the rosiest prediction here is for Britain to throw itself wide open to world markets, as if Britain wasn’t already one of the most de-regulated countries in the global North.

There are lies and then there are damned lies

A different sort of lack of realism pervaded the Brexit campaign, and their avowed desire to remain in the European single market surely has something to do with their rapid backtracking. Boris Johnson, a leading spokesperson for Brexit, certainly was far more cautious in his post-vote June 26 column in The Telegraph than during the campaign. He claimed, in the face of all evidence, that immigration fears were not a campaign factor, that the British economy is “outstandingly strong” and “nothing changes” except for a goodbye to European bureaucracy. Seldom do we see so much undisguised lying in a single article.

The response from the other side of the English Channel is illuminating. A commentary in Der Spiegel, undoubtedly reflecting official thinking in Germany, concludes by declaring, “The British have chosen out, and now they must face the consequences,” given with a favorable reference to hard-line Finance Minister Wolfgang Schäuble. The Guardian, quoting an assortment of European diplomats, provided this report:

“ ‘It is a pipe dream,’ said [one] EU diplomat. ‘You cannot have full access to the single market and not accept its rules. If we gave that kind of deal to the UK, then why not to Australia or New Zealand. It would be a free-for-all.’

A second EU diplomat said: ‘There are no preferences, there are principles and the principle is no pick and choose.’

The diplomat stressed that participating in the single market meant accepting EU rules, including the jurisdiction of the European court of justice, monitoring by the European commission and accepting the primacy of EU law over national law — conditions that will be anathema to leave advocates who campaigned on the mantra ‘take back control.’ ”

No wonder no Tory seems eager to start negotiations. Perhaps “more of the same but with less say” will not meet the expectations of those who voted for a British exit from the EU. Certainly, corporate ideology has done its job well of convincing some that corporations abandoning communities isn’t the fault of the corporations leaving nor the capitalism that rewards those abandonments. Consider this passage in The New York Times on June 28, quoting a blue-collar worker in an English city that voted heavily to leave:

“ ‘All the industries, everything, has gone,’ said Michael Wake, 55, forklift operator, gesturing toward Roker Beach, once black from the soot of the shipyards. ‘We were powerful, strong. But Brussels and the government, they’ve taken it all away.’ ”

Of course, the ceaseless competitive pressure of capitalism, ever ready to move to the place with the lowest wages and weakest regulations, is responsible for the hollowing out of Sunderland, England, and so many industrial cities like it. Britain adhering to EU rules on unrestricted mobility of capital as the price of retaining its European trade links will have exactly zero effect on that dynamic, and British entry into “free trade” agreements like the Transatlantic Trade and Investment Partnership or similar deals will accelerate it. Governments sign such agreements, true, but they are acting under compulsion of powerful industrialists and financiers within and without their borders, conceding ever more sovereignty to multi-national capital as the price of remaining “competitive.”

The EU is a bonanza for multi-national corporations and an autocratic disaster for working people across Europe. But one country leaving and agreeing to the same terms as an “outsider” will effect no change whatsoever. An exit from capitalism is what the world needs, not from this or that capitalist treaty.

21 comments on “Brexit will only count if everybody leaves the EU

  1. […] Brexit will only count if everybody leaves the EU […]

  2. newtonfinn says:

    Brexit, for whatever the mixture of reasons it won, was not well-received by the neoliberal austerity overlords. Maybe we on the left should take more stock of that angry, fearful reaction. Maybe there is potentially more here than meets the eye. As a boxing fan during the days of the great Ali, I saw many a less-than-spectacular punch that nevertheless caused a telling grimace of pain in the opponent, pain that eventually took its toll. Global capitalism will not be knocked out by Brexit, true enough. But the unexpected blow caused signs of injury that bode well in the rounds to come.

    • The blow will only bode well for future rounds if the Left can organize across borders, and present clear alternatives based on international solidarity instead of top-down corporate globalization. As the right wing has a stranglehold on the corporate media, this will not be easy but it must be done.

  3. Alcuin says:

    I’ve read a couple of interesting articles in the last few days that deal with Brexit. The first, by John Feffer of IPS, is The Most Important Election of Your Life isn’t This Year and deals with what he calls Europe A and Europe B. He then draws parallels between those Europes and the Americas that exist here: Trump/Sanders and Clinton. The second article is a wonderful look at neo-liberalism through Polanyi glasses. It was written by William R. Neil for the website of the Real World Economics Review and is entitled, Karl Polanyi and the coming U.S. election.

    Yes, I absolutely agree that Brexit is just another convulsion in the death throes of late-stage capitalism. Brexit leads to nightmares and is not anything to be celebrated by either the Left or the Right.

    • It’s no accident that the Feffer article started with Poland, and its arch-reactionary Law and Justice Party, in his account of the cleavages between urban and rural. Poland’s Left has imploded. It would be as if the U.S. Republican Party split into separate big business and Christian fundamentalist parties, and that elections were contested between those two.

      The second article I’ll have to read through another day, but in glancing through the first page or so, it wondered why United Statesians won’t call the dominant ideology by a specific name. Neil proposed we use call it “neoliberalism,” as the rest of the world does. (And as I do on this blog.) I find, however, the word is confusing to most people in the U.S. because of the different meaning “liberal” has there (and in Canada) as opposed to the rest of the world.

      In part this is because United Statesians tend to have very little knowledge of the rest of the world. A friend of mine, quite a ways to the Left, flatly told me “that’s crazy” when I attempted to explain the term neoliberalism to him. I suppose we could just call it capitalism.

      • Alcuin says:

        You are indeed correct that most “United Statesians tend to have very little knowledge of the rest of the world.” I’m in the minority in that area, though. What I find ironic is that so few United Statesians realize that both liberals and conservatives are active proponents of a capitalist market economy. Liberals want more regulations in the pursuit of a “just” economy, while conservatives want no regulations in their pursuit of “freedom.” There is no justice in capitalism. Polanyi spent a great deal of time explaining his concept of “double movement” and I’d encourage readers to buy or borrow a copy of his book, The Great Transformation: the Political and Economic Origins of Our Time.

        Yes, indeed, we “could just call it [neo-liberalism] capitalism.” That’s exactly what neo-liberalism is: raw unrestrained capitalism, as practiced in the early 19th century. United Statesians confuse liberal progressivism, which they call liberalism, with the economic definition of liberal, which was a reaction to restraints of feudal Europe.

  4. Chris LaPlante says:

    There is a typo in first paragraph…”not a decision that will not lead”.

  5. jmsabbagh says:

    Wait and see ,the domino affect.

  6. Oliver Tickell says:

    Thanks Pete:

  7. NoLeftNoRight says:

    Interesting points made in this article, but I would disagree with a few. This is a blow to Neo-Liberalism, even if in the short term its just optics. But it can also lead to some degree of democratization. It’s almost impossible to effect change in the EU, but not so in Britain proper. The closer policy making is to the people, the more effect they have on it.
    It highly unlikely that the EU will survive as is after Brexit. Holland has already said TTIP is dead, he would veto it, and he seemed to me to be the only one who understood the underlying reasons why so many who are not racist voted leave. France is likely the next chip to fall. So Brexit in fact could end up being a substantial blow to Neo-Liberalism. Yes state capitalism will go on as is, but like here in Canada, real choices can be made to counter neo-liberal policies like the election of Trudeau. He still plays the Neo-Liberal game, he has to, but he also has countered much of it, and already basically undone most of the Harper policies. Something like that could never happen under the bemoth called the EU. So maybe look at Brexit as democratization?

    A recent article in the Ecologist made a strong environmental argument for Brexit. What we need is a model of sustainability, not left wing or right wing ideas. But what needs to happen first is democratization. Brexit is step closer. That being said, I agree with the brunt of your article.

    • I hope you will be proven correct that Brexit will lead to an unraveling of the EU, although I tend to believe it won’t make much difference, at least in the short term. The potential for an unraveling is certainly there, but won’t happen without a much more organized movement, working across Europe on an international, not narrow national, basis.

      As to Justin Trudeau, I have a healthy skepticism. If he were really committed to reversing neoliberalism, he would have renounced the TPP and CETA on his first day, and announced an intention to revise NAFTA to, at a very minimum, eliminate the investor-state dispute mechanism. It’s too early to make any judgment on his administration, but the signs are there that changes might be more cosmetic than substantial, albeit not as paltry as those of Barack Obama.

  8. biowrite says:

    Reblogged this on The BioWrite Blog and commented:
    I tend to agree with this!

  9. Cybersyn says:

    Leaving the EU just means it will bemore of a pain in the ass to travel around Europe. Who would want this?

  10. yancey says:

    In order for others to leave the EU (France, Spain, Italy, Greece,…the most likely to leave and most likely to gain political and economic progress as a result), these countries will have to re-establish their former currencies. That, in part, is what kept Greece from leaving. That and the complicity of Syriza coupled with their lack of balls. Bankers running the continent from Brussels was always a bad idea with the winners (Germany and continental elites) were predictable. Hopefully this will be a European Spring movement with a series of exits followed up by prosecutions of the bankers who have insensitively and criminally ruined whole countries and destroyed countless lives.

    • That the European Central Bank runs the EU goes a long way toward explaining its workings. We can only hope we see the day when bankers, around the world and not just in Europe, are prosecuted.

  11. Naomi says:

    Just FYI it’s Jeremy Corbyn not Corbin.

  12. troutsky says:

    Though not ” utter chaos”, there is certainly Systemic Disorder under the sun. The question is whether “the situation is excellent” or whether this is a re-organization, a little creative destruction to circumvent over-accumulation? I always think there must be some meta-strategy, a game behind the game, but 2008 should have cured me of that. Anyway, I sense a profound global nostalgia, the dream of a time long ago and far away. A return to that which never was.

    • I don’t believe there is ever a meta-strategy, in part because capitalism is a system that nobody controls. Capitalists ride the tiger and attempt to shape events to their benefit as best they can. But much of this is done by the seat of the pants; that the 2008 collapse took capitalists by surprise, even though many of us saw the collapse coming (but of course could not predict timing) simply by having our eyes open, is emblematic of this.

      David Cameron wanted to co-op UKIP by promising the referendum, one he was confident of winning. His gamble blew up in his face, and the task for British capital now is how to stay in the EU but at the same time not make it obvious they are ignoring a democratic vote. I suspect they have no good idea on how to thread that needle right now.

      Boris Johnson’s abrupt dropping out of the Conservative leadership race and the Tory desire to postpone invoking Article 50 I believe are clues that the strategy, for the moment, is to buy some time and avoid handling a hot potato.

  13. Prole Center says:

    I think it is really important that we use the proper, revolutionary term of “working class” and not watered-down terms like “blue-collar” or “working people.”

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