The absurdity of Labour’s enthusiasm for the European project

The absurdity of Labour’s enthusiasm for the European project

I’ve never been able to understand my party’s ignorance of economics and production. We’re good at fostering consumption and excellent at the NHS, education, social services and welfare, but appalling at understanding the basic economics of building and sustaining an industrial base on which everything rests. Instead of growing the economy by state backing and export-led growth as competitors have done, we’re left behind clinging to a protectionist bloc designed to protect French agriculture and German manufacturing at our expense.

We want to stay in the Single Market but ignore the fact that we’re running a £100 billion trade deficit in goods with it. That means the export of jobs, money and economic demand primarily to Germany. To survive we’re forced to borrow abroad or sell assets, companies, businesses and property to the degree that everything is now for sale and every fiddle is allowed if it brings in money. That means endless take-overs, the export of profits and the freedom of business to make profits in Britain but pay lower – even zero – taxes on them in Dublin or Luxembourg.

The EU of which we’re fighting so hard to remain a part has changed. Others joined for benefits; we joined through defeatism about the prospects for growth in a country becoming “ungovernable”. Britain originally saw it as a growing economy which would bring the un-socialist benefits of the “cold shower of competition” and hitch us to Europe’s faster growth. For that we abandoned our world markets and opened our doors to German industrial might, only to find now that the EU stopped growing and became an unemployment blackspot with a shrinking share of world trade. Now it’s under threat of recession as the euro deflates the weaker economies, forcing them to cost cutting and high unemployment, particularly of young workers. This in turn reduces their demand for German goods at the same time as that country’s export-led growth is stalling.

Labour’s 1983 manifesto proposed leaving the Common Market but then the left and the trade unions were beguiled by Jacques Delors and the “social market” offered as a protection against Margaret Thatcher’s neo-liberalism. Yet now the social market is pawky and British hopes from the Single Market have been undermined by the deflationary impact of the euro, imposing harsh German financial orthodoxies on the weaker economies. Its institutions now pander to the big corporations, having become their playground. Rather than checking their power, the European Court has begun to undermine social Europe by ruling in favour of business and undermining employment contracts and collective action, as in the Viking-Laval case prohibiting picketing against the use of cheaper immigrant labour.

As the EU moves to the right, it has become a threat to what a Labour government needs to do. We want to nationalise the railways, but can’t under the railway directive. We need to boost the economy by Keynesian expansion, but can’t because the Stability Pact limits deficits. It also inhibits big surpluses, but this fair balance is ignored as Holland and Germany drain ever bigger surpluses out of their captive market. EU regulation means one law for the rich states and another for the poor. Meanwhile local business is weakened with every contract open to European competition empowering the big boys.

In our new euro-enthusiasm we ignore two crucial facts. The only instrument Labour has found to advance the cause of the people, enrich their lives and keep those processes under democratic control is the nation state. A diffuse conglomeration of states diffuses everything to lowest common denominators and lacks the same democratic drive and will. The nation state put Britain ahead of Europe in developing labour and union rights and advancing women workers. Even now anything the EU can do (which is little enough), our own government can do better.

But to do it, Labour must win power and it’s because hope for that is dying that we now look so pathetically towards Europe. Our euro-enthusiasm is a total lack of confidence, compounded by the fact that the Blairites hope that EU membership will stop Jeremy Corbyn doing much of what he wants (and needs) to do.

EU membership means no nationalisation, no state aid to protect jobs, no effective regional policy, no massive deficit financing to stimulate a flagging economy. Instead Britain must continue to be drained and dragged down by a European Union, once dynamic but now on the brink of recession thanks to its German inspired neo-liberalism. The alternative to breaking out and fighting back is slow, long-term decline into Europe’s consumer of last resort.

This happens because Labour has become a consumer party, not the party of the producers. We’ve undermined our roots among the workers and in the old industrial areas to become a middle-class party dominated by the interests and aspiration of a dominant middle class which benefits from globalisation, Europeanisation, financialisation, deindustrialisation and rocketing house prices. Meanwhile the workers, and what we used to call the “lower orders”, are left behind, largely deprived of representation, to suffer the consequences in immigration, uncertain employment, rising rents, cuts and stagnant incomes. It’s no wonder they voted for Brexit. But it is amazing that the party which once represented them is so keen to shove them back into the trap while telling them it’s for their own good.