Andy Storey – Navigating the Brexit Strait

Andy Storey analyses Costas Lapavitsas’s book “The Left Case Against the EU” (review by BRAVE NEW EUROPE here) and the future of Lexit  (Left exit from the EU).

To view the footnotes just click on the number

Andy Storey is a lecturer in political economy at University College Dublin and a board member of human rights group Action from Ireland (Afri).

Cross-posted from the Monthly Review

“Sovereignty,” in the view of Costas Lapavitsas, “is jeopardised only when a state is forced to submit its will to that of another.” He further claims that “Germany seeks to impose its will on others” through the European Union (EU)—the main challenge to sovereignty, and to democracy itself, that Lapavitsas highlights in Europe today.1

At the core of Lapavitsas’s case for leaving the EU is the potential it unlocks for the reclaiming of sovereignty. Specifically in relation to Brexit—the United Kingdom leaving the EU—he argues that to “leave could potentially open the door to nationalisation, public banking, a transformative industrial policy, income and wealth redistribution and the lifting of austerity.” Such policies would be impossible to implement within the (arguably German-forged) straitjacket of the EU single market because they would require a violation of the EU’s commitments to the free flow of goods, services, labor, and capital.2

Lapavitsas’s brilliant book The Left Case Against the EU documents how the current EU governance model serves the interests of German export capital.3 But that does not mean that it serves only those interests, nor that a break with it would actually result in the implementation of more progressive policies in any EU country, including the United Kingdom.

Let us start with the issue of German dominance of the EU. Nicholas Mulder has recently made the very important point that the neoliberal nature of the EU is due not just to German influence and domination, but to the capture of all major European states by neoliberal forces from at least the 1980s onward.4 He emphasizes the strong liberalizing drive emanating from powerful figures around François Mitterrand (after his short-lived flirtation with socialism in one country) in the early 1980s, as well as the neoliberal impetus later provided by the leaderships of the Netherlands, Finland, Luxembourg, and elsewhere. Mulder hits a crucial nail on the head when he says that “neoliberal consensus exists in every EU member state,” at least at elite levels.

Alexis Moraitis has also forcefully reminded us of how French policymakers used the fig leaf of EU rules to decrease state support for the French steel industry, again in the early 1980s, reflecting homegrown neoliberal impulses that had nothing to do with any kowtowing to German will.5 Joseph Halevi goes further (albeit in a rather sweeping manner), describing France as “the epicenter of austerity” and Mitterrand-era French technocrats (not German ordoliberals) as the founding fathers of the neoliberal Economic and Monetary Union (EMU).6

Analyzing more recent events, Neil Dooley shows how the interests of German capital (while of course hugely important) were not as dominant in the creation of or the response to the eurozone debt crisis as sometimes supposed. For example, German banks were, in many cases, less important creditors to the European periphery than the banks of other countries, including those of France, Spain (doubling up as creditor and debtor), and the United Kingdom.7

An important political point flows from these observations: escape from the EU (and the clutches of the claimed German hegemon) will not guarantee entry to the sunny uplands of socialism, not while the forces driving neoliberalism remain dominant throughout the EU, even in a country seeking to exit it.8 This has direct bearing on the Brexit debates in particular.

Lapavitsas, like many others, emphasizes the significant constraints that EU membership places on the potential for radical transformation of the UK economy, echoing Wolfgang Streeck’s wider restatement of “the way in which the European Union’s de facto constitution limits the political space for any anticapitalist or even pro-labor program.”9 In a similar vein, John Weeks makes the plausible claim that most people in the United Kingdom would be better off under a Jeremy Corbyn Labour government outside the EU than under any Conservative government within the EU, while Thomas Fazi and Bill Mitchell cite the opportunities a United Kingdom unshackled by EU regulations would have to challenge the privileges of capital.10 Philip Whyman also makes a clear case for how the left could (and, in his view, should) use Brexit to build a more progressive economy and society, while Charles Woolfson examines how the United Kingdom outside the EU could upgrade its labor standards and protections.11

But there is a lot riding on ideas of possibility and potential here. In reality, would a Corbyn-led (or similar) government be able or willing to seize the left opportunities Brexit, in theory, might afford? Lapavitsas himself notes that UK governments basically abided by the restrictive debt and deficit rules of the Maastricht Treaty despite the fact that they were not obliged to do so (the United Kingdom did not sign on to the Fiscal Treaty and associated economic governance framework). In other words, UK austerity was homegrown, a domestic policy choice not forced upon the country by the EU. And it was chosen because it suited the interests of UK capital (supposed German hegemony was irrelevant here) and was supported by most UK parliamentarians, including not just Conservatives but also many of the Blairites still chafing under Corbyn’s leadership of the Labour Party.

Those forces remain in place and they will seek to uphold the neoliberal line whether the United Kingdom remains in the EU or not, as the procorporate nature of the (so far stymied) UK withdrawal agreements clearly demonstrates.12 Indeed, if Brexit were to occur, some of those same actors would seek to advance the neoliberal agenda. For example, they would push the further erosion of labor and environmental standards by means such as the negotiation of new trade and investment agreements with the United States and elsewhere—agreements that would likely prove even worse than the already ghastly (and myriad) ones negotiated through the EU.13

As ordinary people see their social protections further dismantled in this vision of a post-Brexit United Kingdom, so will evermore desperate attempts be made to divert (as is already happening) anger toward the usual scapegoats—foreigners, especially migrants and refugees.14 Thus, those already suffering from the EU’s increasingly restrictive and immoral migration policies will, in the event of their reaching the United Kingdom, likely suffer still further abuse (as will foreigners and members of ethnic minorities already in the country).15

The ideas of possibility and potential cut both ways when it comes to Brexit. Yes, a brave and principled Labour Party could use freedom from EU governance to reinvent progressive state intervention in the economy and to build a fairer, more inclusive society.16 But it is telling that the Labour Party has not listed repeal of EU state aid rules as one of its preconditions for supporting a Brexit deal.17 Indeed, Alex Callinicos describes Labour’s approach to Brexit (including a commitment to abide by the existing rules of the single market) as “a major capitulation on Corbyn’s part; if implemented, it would make it much harder for a left-wing Labour government to pursue policies that begin to move Britain away from neoliberalism.”18 Far from challenging neoliberalism, it seems at least as likely that a Conservative or Blairite administration (or even a Corbyn one flattened by corporate, U.S., and media onslaught) could drive the United Kingdom further down into a dystopian future characterized by neoliberalism while cloaked in the legitimizing garb of intensified racism.19

Critically, in the context of our current debate, that dystopian prospect would have little to do with the United Kingdom being obliged to submit to another state and could, indeed, arise even as it escaped from claimed subordination to Germany through its EU membership. A narrow definition of sovereignty might be reclaimed even as real democracy and social justice became evermore attenuated.

I do not claim that these constitute clinching arguments against the left case for Brexit or for other countries to leave the EU (dubbed Lexit). All politics are ultimately about judgment calls and leaps of faith, and much depends on the balance of forces in different places and at different times. But we need to be acutely conscious of the risks to be faced as well as the potentials to be realized. The left case against the EU is proven beyond doubt, including by Lapavitsas, but the appropriate response to it remains open to debate. Three further points need to be taken into consideration.

First, should the left support immigration control? Lapavitsas says it should and that the rallying call of socialists is for workers of the world to unite, not for open borders. But how feasible is it to call for unity with those we seek to exclude?20 How seriously, in particular, can those fleeing political and economic persecution take calls for international proletarian solidarity when they are confronted with our fences and border guards? It is a big ask. And that is before we consider how the endorsement of controls on labor movement is firmly in line with the principal political priority of the right.

Second, have we fully tested the limits of resistance (short of exit) to the EU’s economic governance model? Yes, the formal edifice is beyond reform, but can it fully enforce its own rules?21 Portugal and Spain have breached the EU Fiscal Treaty provisions and not been penalized for it, while Emmanuel Macron has made tax and spending concessions to the Yellow Vest protests that will likely see France also miss EU fiscal targets. Italy’s attempt to circumvent those targets is being challenged strongly by the European Commission and by other EU powers, but what could or would actually be done if an Italian government told those powers to get lost?22 In other words, we can agree that it is not possible to turn the EU into a socialist entity (neoliberalism is hardwired into its structure), but it may be that we can turn it into an empty shell in some respects, one in which the neoliberal rules are flouted by governments with the capacity and will to act for social justice, even while they do not (initially at least) formally endorse withdrawal from the EU per se.23

Lapavitsas and others may respond that this last scenario is ultimately utopian and they may well be right—it is one thing for the EU to not fine a government for not following the fiscal rules, it would be quite another for it to tolerate a government (like the one the left hopes for in the post-Brexit United Kingdom) that nationalized swaths of the economy and imposed capital controls. And yet, politically, it may be possible for a member state government progressively to escalate its defiance while still remaining within the EU, taking step after step in contravention of EU regulations until a breakup becomes unavoidable even without a formal petition for divorce.

To perhaps strain the relationship metaphor, the approach might be to behave so badly that your partner throws you out, thus sparing you the troublesome move of initiating the separation. There is a potentially major political advantage for the left in adopting this strategy: the perceived bad behavior would be avowedly left wing in nature, whereas campaigns that start from the blanket position of exit from the EU inevitably attract support from all sides of the political spectrum (including the extreme right), thus making it harder to clearly delineate and establish the socialist basis for resistance.24

Callinicos is surely correct, and here he agrees with Lapavitsas, in arguing that “progressive alternatives are unlikely to gain traction unless the existing EU is broken up.”25 The problem is that these are not the only alternatives that gain traction in such a scenario. There is no guarantee that the left more vigorously joining a generalized anti-EU battle would not still result in a victory for the right, which might remain the numerically stronger and more dominant force on the EU-critical side. It is precisely this prospect that has caused left-wing Norwegian activists to ask whether “it really is possible to promote a progressive nationalism without legitimizing the chauvinistic nationalism of the right-wing populists.”26

Lapavitsas may respond that the example of Greece shows the ultimate limitations of any notion of implementing progressive policies while remaining within the EU. But chief among those limitations, occurring as it did within the narrower confines of the EMU, was membership of the common currency—a factor not constraining the freedom of action of the UK state (nor that of Denmark, Sweden, and others). By contrast, absent its own currency, the Syriza-led government was vulnerable to threats from the European Central Bank to cut off liquidity to the Greek banking sector. The lesson may be that if you are going to take on the EU (however you choose to do it) you had better be prepared, if push comes to shove, to print your own money—a practical instrument of sovereignty that, whatever our other differences of opinion, we can all agree is essential to the pursuit of economic justice. I fully agree with Lapavitsas when he writes that “the Left must not try to implement policies that are against austerity and in favor of working people while also attempting to stay in the EMU,” which he correctly terms “the Iron cage of the Euro.”27

Third, where should sovereignty reside? For Lapavitsas, “the terrain for popular sovereignty and democracy is the nation state.” But whose nation and whose state? If you are a Basque or Catalan nationalist, do you really want Madrid to exercise greater sovereignty over you? If you are an Irish or a Scottish nationalist, you likely see the territorial sovereignty of London, not membership of the EU, as the fundamental problem. Granted, the EU has done little or nothing for, to take one example, the cause of Catalan nationalism, but that does not necessarily make appealing the current constellation of nation-states nor the prospect of the extension of their remits and reaches by the breakup of the EU.28 Northern Irish nationalists, for instance, cannot view with equanimity the (plausible) prospect of a post-Brexit Conservative government becoming ever more supportive of Northern Irish unionists.29

To restate an earlier point, this is not an unassailable argument against Brexit or Lexit. It is quite possible to imagine a Spain outside the EU that was at least as promotive of the rights of Basques and Catalans as the Spain inside the EU. Equally, Corbyn’s long-standing and principled support for Irish republicanism could see a government led by him, inside or outside the EU, act very sympathetically to legitimate Irish nationalist concerns. But we have to make careful assessments as to which forces will likely be strengthened and which weakened by our actions at particular points of time, and we have to be at least cognizant of the potential for reactionary, imperial nationalisms to gain greater traction through measures that advance the breakup of the EU.

In summary, any case for Lexit needs to address the following questions (even if they do not lend themselves to easy or definitive answers):

  • Will exit from the EU lead to greater or less neoliberalism in the country concerned?
  • Will exit from the EU result in greater or less racism and discrimination directed against foreigners, migrants, and ethnic minorities?
  • Related to this last point, would left support for tightened immigration controls boost (however unintentionally) such racism and discrimination?
  • Might a strategy of progressive defiance of EU rules and regulations constitute a viable (perhaps preferable) political alternative to a full-blown campaign (from the outset) for exit from the EU?
  • How would exit from the EU impact critical so-called national questions within the country in question?

These debates take place within a context in which the left finds itself, in a sense, caught between the Scylla of authoritarian EU neoliberalism (including the violation of the rights of non-Europeans) and the Charybdis of right-wing nationalist reaction (often with an anti-EU stance of its own) that could make things even worse. Navigating this treacherous strait represents a formidable challenge indeed. And while it may not map out a precise course, and while I continue to disagree with some of its positions, Lapavitsas’s work makes an important contribution to the left’s attempts to chart the waters.30

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