Globalization the EU and the Road to Serfdom

by Frank Lee

Francis Fukuyama prophet of ‘the end of history’ and globalization


It might be a good idea to start with some theoretical clarifications. Firstly, nationalism should not be confused with national sovereignty. Nations which are effectively ruled by outside agents – from Greece to Honduras – are not sovereign; they are colonies or vassals of some larger agency. And since they are not sovereign, the cannot be democratic, since decision making, and policies have been abrogated to an external ruling power. Secondly, nationalism: the term which in general is generally regarded as the all-weather bête noire by the orthodox left, can be and often is aggressive, racist, imperialistic, and so forth.
But this is only half the story and there are ample reasons to believe that this view is both simplistic and narrowly focussed; ‘nationalism’ can be either a reactionary or a radical/progressive force, depending on the local and political circumstances. This is simply an historical fact. The latter phenomenon is particularly true of those nations which struggled under the yoke of imperialism – from Algeria to Vietnam both ex-French colonies – and who actively engaged in national repeat, national, liberation struggles involving a broad coalition of political forces.
However, according to the conventional wisdom of the hyper-globalists both nation states and the whole concept of national sovereignty are now defunct. Their reasoning is based upon the following premises.
1. Most products have developed a very complex geography – with parts made in different countries and then assembled somewhere else – in which case labels of origin begin to lose their meaning.
2. Markets when left unfettered will arrive at optimal price, allocative, and productive efficiency.
3.This means that capital, commodities and labour should be free to move around the globe without let or hindrance to achieve these goals.
4. Any barriers to this process – capital controls, trade unions, exchange rate controls, welfare expenditures, minimum wage legislation, wages and even public goods – will result in price and allocative distortions. Q.E.D.
Such globalization (neo-liberalism writ large) has come to be seen and defined by its proponents as the ‘natural order’, almost a force of nature; an inevitable and inexorable process of increasing geographical spread and increasing functional integration between economic activities. This current orthodoxy goes by various other names, Washington consensus, market liberalisation, neo-liberalism and so on and so forth. In fact, there is nothing ‘natural’ about this stage of historical development, since the whole phenomenon has been politically driven from the outset. (Of which more later).
It is important to note, however, the difference between contemporary imperialism in its present stage – i.e., globalization – and the classical imperialism of pre-1914 vintage which preoccupied Hobson, Lenin, Bukharin and Rosa Luxemburg. Classical imperialism was characterised by a shallow integration manifested in arms-length trade in goods and services through independent firms and international movement of portfolio capital and relatively simple direct investment. Note also that the British state granted Charters to investment entities such as the East India Company and the British South Africa Chartered Company to ‘develop’ (i.e. exploit) these colonial possessions.
Thus, even at this early stage the British state actively intervened to facilitate and open up markets for British capital in India and Africa. This was the liberal epoch trade of the 19th century. Full-on globalization did not develop, however, due to inter-imperialist rivalries and mercantilist policies being carried out by the competing imperial powers (which eventuated in WW1). The opening up and liberalization of markets – which did not at that time occur – was and still is the conditio sine qua non for the development of full-blown globalization, which even today is nowhere near total.
This generalised retreat from a classical liberal colonialism began with the First World War and lasted until the early 1970s. This statist phase of the global economy was universalized in the west after the aftermath of WW2 in the form of social-democracy and the welfare state. Suffice it to say that this period is long gone having been systematically deconstructed by the present neo-liberal counter-revolution which began circa 1979. The neoliberal phase really got going in the 1980s. This was the time of the Washington Consensus, a set of ideological prescriptions based upon archaic Ricardian trade theory (comparative advantage) to be followed to the letter and by all and sundry. It was/is argued that this would result in an economic nirvana attendant on the removal of distortions to the market mechanism brought about by welfare capitalism. To repeat: the tripod on which neoliberalism is based consists of
1. The free-movement of labour and ‘flexible’ labour markets,
2. the free movement of capital and commodities which in essence means the loss of control of monetary policy, exchange rate policy and capital controls. The neo-liberal regimen also involves
3. downward harmonisation of wages and working conditions, involving fixed term contracts, zero-hour contracts, the weakening or in the case of the United States, the virtual elimination of trade unions, stagnant wages, structural unemployment, which in turn leads to increased indebtedness which benefits the rentier class, and ongoing and deepening structural inequality. This is sometimes called austerity, but this is putting the cart before the horse. Austerity is the effect not the cause of liberalised financial, labour and commodity markets.
Moreover, the present stage of neo-liberal imperialism differs from the classical stage insofar as we currently live in a world of deep integration organized primarily within and between geographical and complex global production networks as well as other mechanisms. In addition, a new factor became apparent in this Brave New World – financialization. There has been a massive increase in both the size and scope of financial markets, with money moving electronically around the world at unprecedented speeds, generating enormous repercussions and instability. The system of unlimited fiat currencies mainly used for purely speculative purposes is resulting in ongoing asset price bubbles particularly in stocks, bonds and property, as well as other exotic financial instruments, e.g. derivatives.
The list of financial and economic blow-outs is extensive and co-incidental with the ending of the Bretton Woods agreement and de facto end of the gold standard.

  1. The surge of bank loans to Mexico in the 1970s – Th tequila crisis.
  2. The bubble in stocks and Real Estate in Japan – 1985-89
  3. The 1985-89 bubble in stocks and property in Norway, Finland and Sweden
  4. The bubble in real estate, stocks and currencies in East Asia in 1992-97
  5. The bubble in over the counter (OTC) stocks in the US, including hi-tech start-ups
  6. The 2002-2008. The property bubble in the US, UK, Spain, Ireland, Iceland and Greek sovereign debt.

Manias, Panics and Crashes – Kindleberger and Aliber – 2011

Also, the global institutions, which emerged from the Bretton Woods Conference of 1944, the IMF, GATT/WTO, World Bank, and increasingly central banks around the world, play a crucial role of the construction of trade policies, co-ordination, guidance, as well as providing and enforcing legal statutes designed to keep the globalist ship afloat. But it should be understood that these institutions are highly politicised and ideologically driven and not disinterested arbiters of the common weal. This is amply illustrated by the recurring breakdowns in the various rounds of trade liberalization talks conducted by the WTO when what are perceived by the developing world (with some justification) as being unfair trade agreements foisted on the them by the more affluent and controlling developed states nations who control voting procedures.
In passing, it should also be noted that the EU represents a regionalised version of these global institutional structures, the ECB, EC, Council of Ministers, Eurozone Finance Ministers, European Round Table of Industrialists and so forth. (see below). Moreover, there exists a revolving door – in career terms – between state institutions and private corporations. N.B. the ease of which big-time globalist financial honchos such as Henry (Hank) Paulson, Steve Mnuchin and Mario Draghi glide effortlessly between the leading US investment bank, Goldman Sachs, and the US Treasury Department and ECB.
Power to shape/control this system is concentrated in the hands of states and/or the newly emergent Transnational Corporations (TNCs). Of course, there is not going to be a simple description of this development as the relationship between these two pillars of modern imperialism is both fractious and permanently mutating. The received wisdom, as put forward by the various spokespersons for globalization, ranging from the Bank of International Settlements (BIS) OECD, and IMF, and through the globalist house journals of the global Transnational Uberklasse – The Financial Times, The Economist and Wall Street Journal – is predictable enough. Namely that the state is always in a subservient position vis-à-vis the dominant TNCs.
This perhaps would qualify as a procrustean effort to make the facts fit the theory. Contrary to the image of the all-powerful TNC demanding fealty and obedience from prostrate states, the relationship is somewhat more symmetrical; corporations and states are always to a certain degree joined at the hip.

“…they are both competitive and competing, both supportive and conflictual. They operate in a fully dialectical relationship, locked into unified but contradictory roles and positions, neither one nor the other partner completely able to dominate.” Picciotto, S. 1991 The Internationalisation of the State – Capital and Class 43.43-63 – quoted in Global Shift 2012– Peter Dicken

The widespread notion that a TNC can simply up sticks and move lock, stock and barrel to a more compatible venue if its home base no longer suits it purposes is fanciful in the extreme. All TNCs have home bases, national HQs. Here is where global strategy is determined; here is where top-end R&D is carried out; here is where design and marketing strategies take place; here is where the domestic market is situated and where long-term domestic suppliers are located; here is where overseas operations are conceived planned and carried through; here is where AGMs of the Corporations takes place with published accounts circulated to all shareholders; here is where the local workforce, at all levels, is recruited; here is where the political bureaucracy and the above mentioned institutions are situated and amenable to lobbying. Picking an obvious example, the US defence industries, Raytheon, Lockheed-Martin, Northrop-Grumman are all based domestically and are not going to move out anytime soon.
It is unquestionably true that TNCs and states often have divergent goals: TNCs’ primary function is to maximise profits and enhance shareholder value, whereas the economic role of the state should be to maximise the economic welfare of its society. But although this conflictual relationship exists, states and TNCs need and lean on each other in a variety of ways. States might wish that TNCs are bound by allegiance to national borders – and in many ways they are (see above) – but total allegiance is not an option in a liberal capitalist economy. Indeed, it would be true to say that some states regard TNC (activities) as being complementary to their foreign policy. Here economic issues merge with geopolitical imperatives. For example:

American political leaders have believed that the national interest has also been served by the foreign expansion of US corporations in manufacturing and services. FDI has been considered a major instrument through which the US could maintain its relative position in world markets, and the overseas expansion of TNCs has been regarded as a means to maintain America’s dominant world position.” Gilpin, R. 1987 – The Political Economy of International Relations – quoted in Global Shift

On the other hand. Businesses, Corporations, TNCs, have always needed the state to provide the necessary infrastructure without which their operations would not be possible. This infrastructure includes what are sometimes called ‘public goods’ the built environment of roads, railways, airports, ports, canals, health services, education at all levels, a legal system, a centralised government with the power to tax and spend, as well as control monetary policy by a central bank, various procurement policies – in the US particularly involving the Military Industrial Complex – publicly funded research, which played an absolutely vital role in the development of the internet and Silicon Valley. In addition, there have been a range of cultural and political goods – the media for example – some of which were provided by the state, the BBC and public service broadcasting, and some by the market, newspapers and commercial television, albeit privately subsidised.
In short, the relationship between TNCs and states is complex and symmetrical and does not conform to the simplistic ‘Me Tarzan, you Jane’ globalist trope. In fact, the relationship has betimes been the other way around. During the post-war period both Japan and South Korea were at pains to block Foreign Direct Investment (FDI) from overseas TNCs entering their economies, principally by operationalising import controls. This notwithstanding the fact that both countries were export orientated. The reasoning behind this policy was that the type nation-building mercantilism being which has been and is still the only way out of under-development could not work in an open liberalised economy.
Similarly, Chinese development included inward FDI by overseas Corporations, BUT this time around the state-TNC roles were reversed. Automobile firms wished to invest in China for the simple reason of access to the world’s largest growing market which served as a powerful incentive for these firms to enter. But the Chinese government, consistent with its state-capitalist, mercantilist policies had complete control over such entry and adopted a policy of limited access to foreign firms. It is customary to imagine that TNCs always have the upper hand in the bargaining process, but this time it was different. Auto TNCs whose experience had conditioned them to play off states against each other, were subjected to the humbling experience of China who – given its control of FDI entry – was able to play off one TNC against another.
In fact, the East Asian development model – which for want of a better label I will call, state-capitalist mercantilism – has been successful in enabling states such as China, South Korea, Taiwan, Singapore, and possibly Thailand, and Malaysia to claw their way out of the trap of underdevelopment. This nation-building developmental strategy was first outlined by the 19th century German economist Freidrich List. The policy advocated imposing tariffs on imported goods while supporting free trade of domestic goods and stated the cost of a tariff should be seen as an investment in a nation’s future productivity – worked and was operationalised in the 19th century by both Germany and the United States, with a view to breaking British industrial and trade hegemony, which it did. As for free-trade, that was, and a fortiori still is, a policy strictly for the losers who to this day stay under-developed. It is also worth adding that the East Asian development bloc did not seek permission from the imperialist behemoth to carve out their own place in the sun.
We can say, therefore, that ultimately the negotiating relationship and outcomes between states and TNCs will depend on the relative bargaining strength in any specific instance. Nevertheless, it continues to be argued by state-denialists that if nation states are capable of so much why does the record show that they have achieved so little. By way of illustration, however, the argument can be reversed. In the case of South Korea which was about equal to Tanzania in terms of all the economic, social and cultural indictors in the 1950s when it was just recovering from the Korean war, there has taken place a progressive economic and social transformation of that country from that time to the present.
South Korea is now one of the developing world’s long-term success stories. The country is now classified by the World Bank as a high-income economy, with PPP income exceeding $29,000.00 in 2010. Korean consumer electronics and other goods – auto-vehicles, Kia and Hyundai – have become synonymous with high quality and low price. Even more impressive is Korea’s achievements in social development, in education, and health. Life expectancy is now over 75 and the country’s HDI was placed 26th in 2004. As was the case in Japan inward investment was discouraged in favour of an infant protection industry and export led growth. Exports in such sectors as consumer electronics and auto-vehicles, and more recently in high technology have grown at an extraordinary rate. One very important reason for this has been a national strategy that has favoured the promotion of increasingly sophisticated exports and technology. Strong financial incentives for industrial firms to move up the value chain of skills and technology were built into most of the government’s policies. These policies included:

  1. 1. Currency Undervaluation: The effective exchange rate favoured cheaper exports and more expensive imports – an overt mercantilist approach
  2. 2. Preferential access to imported intermediate inputs needed to produce export goods
  3. 3. Targeted infant industry protection as a first stage before launching an export drive.
  4. 4. Tariff exemption on imports of capital goods needed in exporting activities
  5. 5. Tax breaks for domestic suppliers of inputs to exporting firms, which constitutes a domestic content incentive
  6. 6. Domestic indirect tax exemptions for successful exporters.
  7. 7. Lower direct taxation on incomes gained from exports.
  8. 8. The creation of public enterprises to lead the way in establishing a new industry.
  9. 9. The setting of export targets for firms.

Todaro and Smith – Economic Development – 2009

These policies were, of course, and still are, the exact opposite of the Ricardian free-trade comparative advantage model and are an anathema to any orthodox economists.
Herewith a development comparison Tanzania/South Korea (statistics source).
Tanzania:
GDP: US$47,652
GDP per capita: US$857
Education Expenditure: US$1678.9
Govt Health Expenditure per capita: US$24
South Korea:
GDP: US$1,411,042
GDP per capita: US$27,535
Education Expenditure: US$289,283.4
Govt. Health Expenditure per capita: US$159
I think this is enough and don’t wish to labour the point, the gap is self-evidently enormous. But now the subsidiary question arises: what explains the divergent paths of development for two countries starting from the same point?
Well, according to the conventional wisdom “the incidence of wealth is only weakly related to the way in which the sovereign power of the state is exercised and is much more closely aligned to the ways in which states are aligned with the circuits of global capitalism.”
Wrong! Political agency has everything to do with economic and social development, “and the way in which the sovereign power of the state is exercised.” If this were not the case East Asian development strategies would never have worked. Modernisation and development requires/required the indispensable political prerequisite of a modernising, nation-building ruling stratum which mobilises the whole nation in this revolution from above. This pattern has always been almost without exception the historical experience of capitalist development.
Such political and state institutions together with modernising class forces have/been and are, notably weak or even absent in what we generally refer to as the under-developed or developing world. ‘States’ (and I use this term advisably) such as Tanzania and the Democratic Republic of the Congo lack the political and social modernising, structures and institutions as we understand them which might bring about economic and social development.
Crucially, the class structure of these societies is dominated by a comprador bourgeoisie, a self-aggrandising, self-serving elite whose interests are intertwined with the imperial overlord in the ongoing exploitation and looting of their own country. We also know that such nations are stuck in the production of raw materials and agricultural products – low value-added, low research-intensive, low-productivity, primary commodities – all of which are both price and income inelastic and have had a tendency toward price stagnation and decline in the long run – a structural deterioration in their terms of trade. (Oil may be an exception to this, but oil prices are notoriously volatile.)
Thus, the unequal and increasing gap between the higher income and lower income countries. But is this the end of the matter? Well from a rigidly structuralist point of view it would seem to be.
History, however, is an open ended and semi-voluntaristic process – as the famous quote goes, ‘Men make history, but do not do it as they please’ and any number of possibilities for fundamental structural changes exist. But for real change to take place both economic and political/ideological conditions must be present.

History has shown that the vicious circles of poverty and underdevelopment can be effectively attacked only by qualitatively changing the production structures of poor and failing states. A successful strategy implies an increasing diversification away from sectors with diminishing returns (traditional raw materials and agriculture) to sectors with constant and increasing returns (technology, intensive manufacturing and services) creating a new and more complex division of labour and new social-economic structures in the process. In addition to breaking away from subsistence agriculture, this will create an urban market for goods, which will further induce specialization and innovation, bring in new technologies, create both alternative employment and the economic synergies that unite a nation state. The key to economic development is the interplay between the sectors with increasing and diminishing returns in the same labour market.” How Rich Countries got Rich, Why Poor Countries Stay Poor – Erik Reinert 2007

Thus, if you wish to bake a cake these are the ingredients. But comprador bourgeoisies and their imperial sponsors have other priorities and preoccupations, nation-building and economic development are not among them.
Turning to the EU the regional prototype for the globalization project, it was Patrick Buchanan, an American conservative who once correctly stated that Congress ‘‘is Israeli occupied territory; you got a problem with that’’ (May 5, Wallwritings 2009) by which he meant of course that Israel and the Israeli Lobby, both external and internal, has had a huge input into the framing and operation of US foreign policy. In a similar vein the EU is also occupied territory under the tutelage of US imperialism. (This process of blatant meddling in European affairs by the US-CIA started with ‘Operation Gladio’ in the late 1940s) but the perceived enemy was not merely Soviet communism, but also sotto voce European social and political theory and practise, notably, Gaullism and social-democracy, both of which have long since been politically cleansed with the EU being reconfigured as neo-liberal, and (since the alignment of the EU security structures have been aligned with NATO) neo-conservative vassal states overseen and represented by odious Petainist/Quisling occupation regimes.
This is only too apparent when the fawning behaviours of May, Macron and Merkel vis-à-vis the US are observed. Whenever the US master says jump, the Europeans will reply ‘how high’ And this is even more pronounced by the newly arrived Eastern European states. A group which Dick Cheney once described as the ‘new Europe.’ By which meant the political force which was operationalised to fundamentally change the political direction of the EU in the late 20th century. Euro-widening was meant to prevent euro-deepening, and it worked a treat.
The ongoing Americanisation of Europe carries with it the toxic values of liberal individualism, market liberalisation, structural inequality, a philosophy of winner takes all, and a rapacious/murderous imperialism. A nightmare Hobbesian world of a ‘war of everyman against everyman’; John Stuart Mill also weighed in with considerable disdain writing:

I confess I am not charmed with the ideal of life held out by those who think that the normal state of human beings is that of struggling to get on; that of trampling, crushing, elbowing, and treading on each other’s heels, which forms the existing type of social life are the most desirable lot of humankind…”J.S.Mill – Principles of Political Economy

The Americanisation process has been going on for the last half century. It degrades Europe, causes it to regress, forces it to abandon everything in its progressive past contribution to the capitalist stage of production the antidotes which it allowed it to resist the liberal poison and promote democracy and equality despite it.
“Old Europe”, argues the Egyptian Marxist Samir Amin, has nothing to learn from “Young America.” There will be no progress possible on any European project as long as the US grand strategy is not foiled.”
One crisis in the EU – the unfolding and denouement of the Greek debacle – has presented an archetypal learning curve for an understanding of the structural problems involved in the EU and occasioned a virtual industry of copious tracts which purport to explain the crisis, and I have no wish to repeat the whole sorry tale here. I would say, however, that if Syriza was in earnest in taking on the Troika it would have required not just an imaginary backing of a long-defunct and toothless euro social-democracy, but also a withdrawal from the euro – certainly a leap into the unknown. Assuredly this would have been a high-risk policy, and no-one should be under the illusion that there was any easy way out. The trouble is that social-democracy has vanished into history; the soft-options specialists. The SPD (Germany) PS (France) PASOK (Greece) PSOE (Spain) are political organizations which might (occasionally) refer to themselves as social-democrats, or even on occasion ‘socialists’ but of course they are nothing of the sort. ‘By their works shall thee know them.’

…Syriza’s strategy was not only long-run but also attempted to incorporate the social virtues of Europe’s once dominant social-democratic heritage. What Syriza did not adequately understand, however, was that heritage was now history, buried deep under the refuse pile of new neo-liberal values.”

Now we have Varoufakis going on to declare that the ‘nation is dead’. Well, that is certainly true of Greece, which is now to all intents and purposes a colony with the grotesque spectacle of Syriza now playing a governing role in a regime that at one time it stridently opposed. The assertion that nations as such are no longer sovereign – a statement which is wrong both theoretically and empirically – and has only a limited application. Truth be told some states are more sovereign than others, and the sovereign nations call the shots vis-à-vis the vassal/colonies which are not sovereign. (One wonders if the United States, or Israel or indeed Syria which has been engaged in physically defending its sovereignty for some time, are not sovereign. I think they are, but Mr Varoufakis may wish to differ) Greek sovereignty and democracy disappeared when the Troika and EU finance ministers and French and German banks forced the surrender and took over the running(-down) of the Greek economy. But this was inevitable in a liberal internationalist globalist economy; open borders will simply mean that TNCs will be free to exploit the productive resources of any country in the world – particularly labour – in order to maximise their economic power at the expense of society’s. In other words, societies with open markets, will be unable to impose any effective controls to protect themselves from the rapacious incursions of TNCs as Polanyi pointed out long ago.
So, what does the ‘supra-national’ solution offer other than comforting words.
Try the following.

DiEM2025 stands today as an attempt to learn the lessons of defeat, and to prepare for future struggles for building a stronger network, not of globalists, but left-wing internationalists whose strategies for advance include the dislocation of imperialist economic chains, as well as real progress in building the capacities of national societies to strengthen democracy and provide for the well-being of their nations.”

All of which strikes this writer as a series of clichés and meaningless abstractions. Please note, the dog-eared phraseology, ‘learn the lessons of defeat’ ‘prepare for future struggles’ ‘strengthen democracy’ and ‘provide for the well-being of their populations.’ You might as well throw in motherhood and apple pie whilst you’re at it.
Then comes the dawn of realization that ‘any future Labour government in the UK which attempts to carry out its declared programme of bringing some elements of the economy under national control will come under the assault not only from the EU, but also Washington.’ (Chartist, Ibid.) Really! Never occurred to me that! What does a Labour government do in this hypothetical situation? Not carry out its stated policies? Or perhaps, surrender, Syriza style. No, according to the Remain and Reform school, we apparently need a Europe-wide supra-national strategy based upon what policies exactly? We must assume, according to the orthodoxy, that the nation state is either dead or dying, an article of faith of the globalist left and the Washington Consensus.
Ergo, the policy the ‘left internationalists’ is one of inter alia ‘strengthening democracy’ – all very noble. But provided that the neo-liberal tripod of the three freedoms of movement – capital, labour, commodities – remains in place, political change will not take place. And provided the institutional infrastructure of globalized capitalism – the IMF, WTO, World Bank, the EU are overseeing and enabling the neoliberal project, economic and political change will not take place.
It is not the shackles of nationalism that give rise to the bureaucratic monstrosity which is the EU but precisely the opposite. The neo-liberal imperatives of open borders, liberalized commodity markets, capital accounts and exchange rate controls, flexible labour markets and freedom of movement of labour, might have had something to do with it. Unless these political/ideological roadblocks are addressed the status quo will continue and continue to deteriorate.
In terms of alliance building, political convergence between states cannot be constructed at regional (for example the EU) or even less so at global levels even if it is not achieved firstly at the level of nations. Because whether we like it or not, nations define and manage concrete realities and challenges, and it is only at these levels that changes in the social and political balance of forces to the advantage of the popular classes will or will not occur. Changes at the regional and global level may reflect national advances and certainly facilitate them – but nothing more.
In order to stop the onward march of globalist neoliberalism governments and state must regain control of their economies. There is no single way to achieve this critical goal, but without it hemispheric co-operation will remain little more than an empty rhetorical flourish. Moreover, everywhere electorates are looking to governments to be a counterweight to footloose corporations. It is this intuitive perception to rein-in markets that will increasingly occupy centre-stage between pro and anti the coming decade.
For social-political movements the nation-state continues to be the chosen instrument for the organization of society. It cannot be any other way. However much social institutions will have to adapt to new global pressures, what is not in doubt is that the nation-state remains the crucible for equality seeking movements the world over. Efficiency, profitability and competitiveness have not won the hearts and minds of the peoples worldwide, nor are they likely to do so; precisely the opposite in fact.
Reform of the EU, which I understand to be the goal of the campaign of pro-EU aligned leftist factions, fails to take into consideration the fact that the EU cannot be reformed since its whole ideological structure and constitution is built upon neo-liberal technocratic assumptions which can clearly be identified in the interior belief-systems of the bureaucracy, and consequently the daily practise and deliberations of internal institutions explicitly designed on a neoliberal model and cemented by legal statutes have made such changes impossible.

Any belief that the EU can be ‘democratised’ and reformed in a progressive direction is a pious illusion. Not only would this require an impossible alignment of left movements/governments to emerge simultaneously at the international level. On a more fundamental level, a system that was created with the specific aim of constraining democracy cannot be democratised. It can only be rejected. Thomas Fawzi – Lexit Digest

Reinforcing the neo-liberal constitutional structure of the EU’s political institutions, and here I have in mind the European Parliament, are two powerful and dominant voting blocs.
1. An alliance of political parties, centre-left and centre-right which form the usual centrist mish-mash, the extreme centre. This centrist bloc is composed predominantly of euro-enthusiasts and who command a working majority in the European parliament and other EU institutions. 2. The geo-political alliance – i.e., the infusion of members of the ‘New (Eastern) Europe’ into the EU, who were generally very pro-American and fanatically Russophobic, this along with the parallel expansion and incorporation of these new states into NATO has served to undermine some of the earlier Gaullist and social democratic traditions in Europe.
It seems clear, therefore, that the pro-EU bloc which dictates the political, economic and strategic agenda of the EU, in addition to the permanent institutional structures which are mandated to carry out existing policies, will continue to do so for any foreseeable future despite the pipe-dreams of the ‘left-wing internationalists’. Even Varoufakis has admitted that this approach is frankly ‘utopian’ – and if this is the case, the Remainer left can only play games and give a leftish veneer in an attempt to reform what they apparently believe is an unstoppable historical development (globalization).
Having said all this the outcome of this imbroglio may include elements of piecemeal reform and/and or outright rejection, which is what usually happens. We shall see. But it would be useful perhaps to have an open dialogue between all parties involved rather than highly partisan and misleading attempts to smear and shout down opponents – and we are all guilty to a degree in this respect – who may have something positive to offer.


Frank Lee left school at age 15 without any qualifications, but gained degrees from both New College Oxford and the London School of Economics (it's a long story). He spent many years as a lecturer in politics and economics, and in the Civil Service, before retirement. He lives in Sutton with his wife and little dog.

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Frank Lee left school at age 15 without any qualifications, but gained degrees from both New College Oxford and the London School of Economics (it's a long story). He spent many years as a lecturer in politics and economics, and in the Civil Service, before retirement. He lives in Sutton with his wife and little dog.

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Mishko
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Mishko

Europa is also a long-suffering hostage of the cultural indoctrination by Hollywood and the music / entertainment-industry. Loads of damage done that way.

bevin
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bevin

In justice it has to be noted that the EU cannot be accused of attempting to hold on to the sovereignty that it takes from its member states. As this story makes clear it acts as a middleman: no sooner do individual states cede powers to the EU than the EU hands them on to the corporations which it serves. Under the CET Agreement europeans lose their power to control their own environment, by, for example, banning noxious agricultural chemicals, because by doing so they risk being sued in arbitration tribunals run by corporate lawyers for whom the public interest… Read more »

Robbobbobin
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Robbobbobin

“This was the time of the Washington Consensus, a set of ideological prescriptions based upon archaic Ricardian trade theory (comparative advantage) to be followed to the letter and by all and sundry. It was/is argued that this would result in an economic nirvana attendant on the removal of distortions to the market mechanism brought about by welfare capitalism. To repeat: the tripod on which neoliberalism is based consists of 1. The free-movement of labour and ‘flexible’ labour markets, 2. the free movement of capital and commodities…” Ricardo himself noted that “comparative advantage” would not work if there were free movement… Read more »

bevin
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bevin

” The EU is not the denial of national sovereignty. On the contrary, it is the guarantor of national sovereignty in the face of imperialism.” Like the article itself this should be re-read in the light of current developments in Italy, where a coalition, with the support of a majority of the electorate has been denied its chance to govern because its nominee for Finance Minister opposes the Euro. It is also noteworthy that the government saw a possible reconciliation with Russia and a re-opening of trade relations as a viable policy option. In place of the electorate’s choice the… Read more »

Mulga Mumblebrain
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Mulga Mumblebrain

It’s ‘Emergency!”stations throughout the kleptosphere, Bevin. The whole filthy, Evil, psychopathic regime of elite barbarism (austerity) and insatiable greed, is teetering. The Italian thug President would be acting on orders from the Bosses, in thus so completely abrogating ‘democracy’, once again revealed as a total sham under capitalism. Argentina is blowing out, Turkey is being targeted, Italian banks are all insolvent, Greece is STILL being brutalised with exquisite sadistic relish. Micron has set the serfs a-rising, and, faintly, one can just make out the distant sound of the tumbrels rolling again. Invest in tumbrel futures.

jdseanjd
Reader

Interestingly, not once are the words Rothschild or Rockefeller mentioned.
The RR influence is massive.
Two books I recommend:
Pawns in the Game, William Guy Carr, a WWII Canadian naval intelligence officer.
The Creature from Jekyll Island, G. Edward Griffin. His website: http://www.needtoknow.news
Youtube & put in search box: Retired Head Of FBI Tells All….
1 hr 4 mins.
Ted Gunderson, an honest man, was being poisoned with arsenic when he died of cancer.
John Doran.

elenits
Reader

This is a brilliant article and a keeper – thank you Frank Lee. We in Greece are mind-boggled by the British Remainers, and can only conclude that they are (1) onboard beneficiaries of ‘the Project’ – or – (2) brainwashed by Soros non sequitur distractions (‘because racism”).

BigB
Reader
BigB

Elenits: we (or I at least) in Britain are mind-boggled by the British Remainers …for the very reasons you state.I have postulated before that the real reason for the Brexit project is towards further neoliberal globalisation. My thesis is that as the BRICS bloc integrates, via Free Trade Agreements and Preferential Trade Agreements between the various Regional Trade Associations that constitute BRICS: the UK will act as a hub creating bilateral and multilateral FTAs that tie the South -South integration into North-South integration. Only, there is no evidence to support my thesis. Oh, but there is the small matter of… Read more »

Astonished
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Astonished

This is a terrific article in that it addresses the core of the global economic problem: the fact that the nation state sits in a kind of unstable relationship with TNCs. That is trade and the ‘real’ economy. The problems are far worse in the finance sector, where cross border capital flows have become like a giant roulette wheel, a sort of threatening alien craft sitting on top of everything (5 days trade in $US = the entire US Federal debt, for instance). I love to compare the logic of the neo-liberal play books. Ricardo’s ideas are tautologies, rightly described… Read more »

Mulga Mumblebrain
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Mulga Mumblebrain

When we ‘floated’ our dollar here in Austfailure, back in 83 or 84, the econocrats declared that, due to the ‘Market Magic of Invisible Hands’ blah, blah, our dollar would thus, infallibly (because the Holy Market is truly infallible, unlike mere Popes)find its ‘True Value’, and our trade and current accounts would become, magically, balanced. In the thirty years since we have rarely, even for a month, achieved balances or surpluses, despite the greatest ‘terms of trade’, thanks to Evil China, that we have enjoyed for sixty years, or ever. As predicted at the time of floating by nasty old… Read more »

Robbobbobin
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Robbobbobin

Fucking ormolu clocks. That was the initial cause of all your problems, not the invisible hands of invisible fairies fondling the bottoms of your invisible markets. Just plain, old fashioned, mercurial brain rot. Pinching our glorious Queen’s derrière on broadcast television? #SaAussi? Ormolu fucking clocks.

rilme
Reader
rilme

The author says:
“the East India Company .. exploited … [Britain’s] colonial possessions.”
That is SO antisemitic! Weren’t the two opium wars Britain’s fault? Why blame “the Jews”?

elenits
Reader

Excuse me, are you off your rocker?! The East India Company by its very charter exploited Britain’s colonial possessions : that was the sole raison d’être of the East India Company. How could such a statement be considered anti-semitic unless YOU are saying the EIC consisted only of jews. And even if this was so, how can a simple fact [ie bees are yellow & black] suddenly become “anti-semitic”?
Unless you are making a joke….

Mulga Mumblebrain
Reader
Mulga Mumblebrain

Elenits, these days EVERYTHING but kissing Bibi’s backside while smiling broadly is ‘antisemitic’. Your denial of the ‘antisemitism’ is I regret to say, ‘antisemitic’.

monostrovich
Reader
monostrovich

The plan is that authentic left-wing discourse on any subject will be progressively pathologized as “anti-semitic”. Vocabulary such as “bankers”, “global elites” and even “the 1%”, has already been criminalized. Once all terminology which relates to political and social reality has been outlawed in this way, it won’t be possible to have any discussion at all which doesn’t implicitly accept neoliberal assumptions about the world. The farcically absurd complaint above illustrates how this will be done. Presumably, the historical fact of the “East India Company” and “Britain’s colonial possessions” would be hard to stuff down the memory hole, so the… Read more »

Humbaba
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Humbaba

Views of Europe from the Anglosphere are invariably tainted by a hidden imperialist agenda, no matter if they come from the left or the right. Added to their glaring ignorance of the political realities in Europe, that makes these views totally useless. The EU is not the denial of national sovereignty. On the contrary, it is the guarantor of national sovereignty in the face of imperialism. Pre-EU Europe was not characterized by the peaceful coexistence of nation states but by the competition of empires. In fact, the EU provides enhanced sovereignty to small countries that would otherwise have no voice.… Read more »

Mishko
Reader
Mishko

Wow, triple wow the wow. Well played playing devil’s advocate, sir/my lady!

elenits
Reader

We Greeks loved this statement:
“In fact, the EU provides enhanced sovereignty to small countries that would otherwise have no voice. ” And this: “The EU is the only thing that protects us from imperialism.”
Clearly Humbaba is writing from the PR desk of the Commission. The one thing Humbaba won’t say is that the EU is an imperial project on steroids conceived at Bretton Woods and run out of Washington.

Tony M
Reader
Tony M

I cannot be alone in seeing the contradiction in these two sentences: “Views of Europe from the Anglosphere are invariably tainted by a hidden imperialist agenda […] Pre-EU Europe was not characterized by the peaceful coexistence of nation states but by the competition of empires. Not Empire but Empires, plural. Are you really trying to say with a straight-face and with with no fingers crossed behind your back that Europe outside the Anglo-sphere was not and is not still residually imperialist, that is piffle, Spain is forgotten an Empire of sorts when England was still an abandoned Roman tin-mine colony,… Read more »

Jen
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Jen

How do you explain though that since joining the European Union and the eurozone, several southern European nations (and small southern nations like Greece and Portugal in particular) have had their economies ruined by debt and the economies of eastern European nations seem to returning to pre-industrial conditions, exporting commodities and emigrants? The Baltic nations in particular are finding the only way they can survive is by becoming a massive military barracks for NATO troops in order to get foreign money. Poland and the Czech Republic may be thriving mainly by hosting factories (and providing labour) for German companies looking… Read more »

Mulga Mumblebrain
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Mulga Mumblebrain

The EU is a slave supra-state, totally controlled by the USA and Israel. It will NEVER be a threat to US global hegemony. The real threats are Russia, and paramount in the Exceptionalists’ nightmares, China. The difference in achievements over the last twenty years between the USA, crumbling, vastly unequal, downing in unpayable debt and insanely aggressive and genocidal across the planet, and China, creating the greatest economic advance in history while attacking no-one and destroying no other country, is plain to any sane observer. And there is no, and never will be, any ‘Israel First’ Lobby controlling politics in… Read more »

rilme
Reader
rilme

Never is a long time, Mulga. Remember the “is” are a team:
a vid about Intel, “israel” and backdoors:

Mulga Mumblebrain
Reader
Mulga Mumblebrain

The Chinese have been woken up by Trump’s attack on ZTE, and the insanely arrogant, Imperialist revanchist to the point of insanity, demands by the USA that China simply give up its high tech surge, so that the Masters of the Universe can continue their Full Spectrum Dominance forever. They already have 17 or so ‘Silicon Valleys’ and produce more patents and vastly more graduates and post-graduates that the US Reich, but they’ll just get more determined. The Exceptionalists shooting themselves in the foot in their deliriums of arrogance is really very funny

BigB
Reader
BigB

MM: re Trump’s attack on ZTE – who offered to bail them out? And who let them reopen after paying a $1.3bn ‘fine’? And who will offer up offer up NXP to a Qualcomm buy out in a *quid pro quo* arrangement? Sorry MM, there is the China in your mind and the China in the world. And the latter is opening up its ‘market access’ to foreign direct investment; that is $$$$ denominated access and $$$$ denominated capital investment. Follow Jack Rasmus on Twitter for all the developments. China and Russia are integrating into the neoliberal globalist project (or… Read more »

Mulga Mumblebrain
Reader
Mulga Mumblebrain

I very much doubt that the Chinese, after 200 years of struggle against the racist West, are going to surrender to Western hegemony. It simply defies belief. China joining these neo-liberal groups just signals, in my opinion, their intention to dominate them and change their behaviour. The Chinese have brought more people out of poverty and want that the rest of the world combined, while, in the West, the majority of the population has been ground down or stagnated, in the USA for decades. If China really was a puppet-state of the USA, there would not be the deranged campaign… Read more »

BigB
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BigB

Ahh, they let $$$$ capital in to dominate their part-private SOEs, let the flight capital flow offshore through Hong Kong and Macau, export their overcapacities throughout Asia Pacific, sub-imperially rape South America and Africa for the raw materials, and come to dominate the West …by joining them in a race to oblivion? Got it! 😉

intergenerationaltrauma
Reader

We’re not really engaged in Francis Fukuyama’s “end of history” so much as the West’s complete and utter – “end of sanity.” For decades the West has been engaged in movement into a mode of discourse that can only be described as evidence of a system of mass delusion. The West “manufactures reality” out of thin air and tells the rest of the planet to believe it or suffer the consequences of our terror. Our own Western oligarchic controlled undemocratic process = “democracy” – while other nations actual democratic elections = “election fraud” – if we in the West say… Read more »

Mulga Mumblebrain
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Mulga Mumblebrain

The decline and fall of the West is a stark enough reality. You see it in the physical decay of US and UK infrastructure, in the insane greed of the ruling oligarchies, particularly in the Anglosphere, in the psychopathic viciousness of the one-sided class war waged against workers and the social sadism inflicted on the weak and defenceless ‘losers’ in an Evil system. But, like the dying cur, its brain inflamed and infested by rabies, the ruling Western elites in their death-throes, still refuse to believe that they are anything but Exceptional, and fall back on their 500 year experience… Read more »

Gary Weglarz
Reader
Gary Weglarz

Mulga – absolutely agree. Over the last 500+ years we in the West have literally created an entire global system that rewards and promotes the most narcissistic and psychopathic among the population to positions of unaccountable power, all in service to a group of yet wealthier oligarchs who’s wish is our command and who wouldn’t know what an ethical proposition was if they tripped over it. If you sat down to actually intentionally design such a corrupt amoral system you couldn’t come up with anything less humane and more violent than what we have created and labelled neoliberalism. If total… Read more »

Tony M
Reader
Tony M

“The reasoning behind this policy was that the type nation-building mercantilism being which has been and is still the only way out of under-development could not work in an open liberalised economy.” This is the argument I have made again and again in consideration of the SNP’s wishful-thinking independence plans in seeing the EU as some unlikely saviour instead of another menace from which to seek independence from, not to gravitate towards, all the countries of Europe are already subsumed and trade rigidly and centrally controlled to the order of transnational corporations. EU subservience to the US in respecting unilaterally… Read more »

Edwige
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Edwige

“TNCs’ primary function is to maximise profits”.
Really? How are (to pick three obvious examples) Google, Tesla and Amazon making profits? These companies are fronts. For who or what I can’t say, but it’s something that puts pushing agendas ahead of making a profit. They have massive financial resources which suggest access to black budgets or the ability to create money out of nothing (or both).
Who believes what they say about their profits? Take this:
https://dollarvigilante.com/blog/2018/02/04/dow-falls-666-points-on-33rd-day-of-the-year-as-cryptocurrencies-crash-and-krugman-emerges-from-his-van-down-by-the-river.html
And modern financial stats have some connection to reality? They’re about occult numerology, not reality:

Mulga Mumblebrain
Reader
Mulga Mumblebrain

Oh, control, total control over you, me and the other serfs is the PARAMOUNT priority of the parasite class. Profits are sacred, but without control, they will flow to the ‘useless eaters’ instead-an horrifying prospect.

rtj1211
Reader
rtj1211

The simple key issue is the lack of punishment for criminal behaviour by TNC financial institutions, political puppets servings arms corporations etc etc. As an example, Goldman Sachs should have had its license to practice banking irrevocably withdrawn for criminal fraud and misrepresentation of the Greek economy when creating a vassal state through ridiculous entry into the EU. GS knew exactly what it was doing and a minimum of 500 senior officers should have been banned from financial services, anywhere in the world, for life. HSBC, Wachovia and several other top banks should have been shut down and its officers… Read more »

BigB
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BigB

Neoliberal ‘deregulation’ means that they are not necessarily breaking the law. What they are doing is ‘legal’: if amoral. Another aspect of supra-sovereignty, not mentioned, is “too big to fail, too big to jail” (TBTF, TBTJ). If they are working for the IMF, World Bank, ECB, etc. they have diplomatic immunity. Which is probably why Lagarde walked despite being convicted of fraud; or ‘negligence’ as it is now known (unless you or I do it; then it becomes fraud again) If they work for another Structurally Important Financial Institution (SIFI): then even if they break the law, they are indemnified.… Read more »

Mulga Mumblebrain
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Mulga Mumblebrain

You got somethin’ against ‘liberal democracy’, B?

bevin
Reader
bevin

Let us put the economics aside for a moment: the most enduring form of exploitation is that of the daylight robber: “I have a big stick. Give me all that you have.” In its current form it us exemplified in the 900 overseas bases maintained by the US oligarchy, over the gates of each one the doctrine above would make an apposite motto. The outstanding fact of the era is that the United States occupies Europe, in much the same way that it occupies Honduras: it has bases there, with contingents of troops, extraterritorial privileges, nuclear weapons etc. It commands… Read more »

Mulga Mumblebrain
Reader
Mulga Mumblebrain

The USA is all-powerful. It has the predominant share of that power that determines all human affairs, in the end. The power of violence, and a quasi-religious lust for and delight in death and destruction. Once you are dead and your country destroyed, you no longer represent any threat.

BigB
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BigB

Bevin: when you make an excellent comment like this, there is, as I have already said, little or no room between the way we see things. We just differ on the thought that one man can change it all? Even though there are that many layers of supra-sovereignty above him (including the requisite Zionist control of the party). I fail to see how? And as the article shows: as part of the neoliberal globalisation, the UK creates its wealth elsewhere. We certainly don’t make anything locally, not without Chinese, Taiwanese, or South Korean parts. Most of our wealth comes from… Read more »

cat sick
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cat sick

Interestingly now the topic of massive media censorship has been well and truly raised by social media calling out the UK press over the topic that cannot currently be discussed, it would seem the Guardian have decided not to show comments being removed any more, looking at the Guardian site to see any mention of the topic that shall not be discussed for fear of time in prison it would seem that they no longer have the usual “this comment has been removed” but now just go with pretending nothing has been removed ….

Sebhel
Reader
Sebhel

Success can evolve from either of opposite situations. The first is through dominant management at the expence of respect for the workforce, combined with Downward Costs – enabling competiveness allied to exploitation, (who cares about societies replaceable losers?) This is short term success as it leads back to perceived failing third world economies! As happened in The third world where worker solidarity and representation was systematically destroyed! The second situation which evolved post war in successful “Western Economies” resulted from evolving stronger working class Trade Union Organisation. This allied with political strength, enabled progress towards gaining respect and recognition of… Read more »

CR Jones
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CR Jones

I doubt that the 1% will notice.