2007 and all that

Was this year a good thing? Ben Yarde-Buller casts his sideways glance over the past 12 months

Happy New EU

As is traditional the new year* began just after midnight with a wave of parties, treaties and new E.U. member states such as Bulgaria and even Romania. As the Bulgarians and Romanians had very few Gross Domestic Products* they were unable to drink any champagne to celebrate being the new poor men of Europe. However they managed to cheer themselves up by gathering in public places and attending free concerts, often simultaneously.

* 2007
* except some raw materials e.g. cabbage

Cash for Honours

Tony Blah did not have much time to govern in 2007 as he kept popping round to his local police station to swear that he had never made an Honours Penny in his life. He did not enjoy this at all, as the police refused to treat him as a suspect or indeed with any caution whatsoever, even though he was a Prime Minister and thus by definition a V.I.P.

Shaat Al-Arab

Shaat Al Arab is not a racist slur. On the contrary it is the name of a disputed waterway running between Iraq and Iran* where fifteen British sailors were humiliatingly captured by Irani terrorists in March. This was quite outrageous as at the time of their capture the sailors were very much minding their own business by boarding and searching Irani ships for smuggled goods.

Eventually Blah made a diplomatic effort and persuaded the Iranis to give the sailors right back. However he soon regretted his actions as on their return they all sold their stories to the tabloids, thus damaging Britain’s reputation (as the stories were rather boring and not even particularly well-written).

* or vice-versa depending on one’s viewpoint

The End of the Blah Era

In geological terms the Blah Era was a mere blip but to most of the people involved it didn’t seem that way at all.

Towards the end of his Era, Tony Blah started trying to work out what his Legacy should be. At first his main ideas were:

  • Africa
  • The Middle East
  • Iraq
  • Iran
  • Northern Ireland
  • Afghanistan
  • Bosnia
  • A.N. Other Country
  • Good Friday

However in the end it turned out that Blah’s Legacy was none of the above but Gordon Brown* instead.

* no relation of Bennett

Gordon Brown

Gordon Brown hotly denied that he was Blah’s Legacy, arguing that if anything it was the other way round (or vice-versa). He tried to prove this by having some very firm policies of his very own, fizz:

  • almost calling several elections
  • almost pulling several troops out of Iraq
  • almost gaining the confidence of several middle class voters

This is almost known as Leadership.

Smoking Ban

Smoking harms your unborn child (especially in public spaces) and was thus banned by the government on July 1st. This is known as a smoking ban and is a highly complex and controversial issue, as will now be proved beyond reasonable doubt:

Main Arguments (for the Smoking Ban)

  • I do not smoke
  • I do not like the smell of smoke on my clothes
  • Smoking harms my unborn child

Main Counter-Arguments (against the Smoking Ban)

  • I do smoke.
  • I do like the smell of smoke on my clothes.
  • Why should I believe you? Are you a scientist?

Sub Prime Lending Crisis

This unmemorable crisis was something to do with the American economy and is thus excessively relevant though not at all interesting except to:

  • people who have a lot of money and/or free time (and/or both)
  • people who are into northern rock
  • economists, doom-mongers, sub-prime-ministers* etc

Sub-Prime Lending might (but shouldn’t) be confused with the Cash for Honours Scandal, The Abrahams Affair or Political Donations in general.

* e.g. Gordon Brown

Afghanistan, Iraq and all that

Afghanistan and Iraq should on no account be mixed up even though they are both fundamentally somewhat Muslim and thus contain millions of disaffected young men with a negative attitude (and bombs). Also they are both Asian and larger than Europe and thus ideal venues for a war on terror.

In Afghanistan the War on Terror continued steadily towards Peace by means of skirmishes, massacres, roadside explosions, the Caliban and Class A drugs.

In Iraq the War on Terror brought so much Peace, security, schools, policemen, chaos and mayhem that British troops chose to withdraw in an orderly yet shambolic fashion before they were all killed. They tried their very best to hand over power to genuine Iraqis, but by mistake gave it to some Shia* Militias instead. This was A Bad Thing but can on no account be viewed as an abject failure (least of all by the politicians in charge).

* Irani

2008

It was thus finally time for everyone* to put their feet up and take a well-earned rest before 2008 (and all that…).

* especially politicians and other important types

END OF YEAR EXAM

1. Arrange in order of preference, starting with your absolute favourite: Afghanistan, Iraq, Sudan, North Korea, Iran, Northern Ireland, Congo. Give four glib reasons for your answer.

2. In your personal opinion, what is a Mullah?

3. Which European country has the Grossest Domestic Product? (Hint: The answer is Germany.)

4. Romania and Bulgaria joined the European Union in 2007. Whatever next? Turkey?

5. Is this a libellous statement: “Tony Blah solicited cash for the Labour Party in return for dispensing honours.”? How about this: “Tony Blah sexed up the September Dossier in order to bolster his case for going to war against Iraq.”?

6. On a scale of 1 to 10 (via 5) how humiliating was the capture of British sailors by Irani terrorists?

7. Mind your own business (while straying into another country’s territorial waters and searching their ships for smuggled goods).

8. How cool is Britannia? (N.B. This is not a rhetorical question.)

9. Imagine for a brief moment that you trust Gordon Brown. How was it?

10. Pay lip-service to the crucial importance of the American economy then turn your mind to something more interesting (e.g. football or The X Factor).

11. Confuse and contrast Iraq, Iran, the Gulf, Mesopotamia, the Middle East, Pakistan, Afghanistan, the Taliban and (if you still have time) North Korea.

12. Write an email to your local M.P., expressing yourself in no uncertain terms.

13. “A Scot, a Presbyterian and an Economist.” How accurate do you find this assessment of Sub-Prime-Minister Brown?

14. Using only unavailable evidence, assess the situation in Basra.

15. Was 2007 A Good Thing? Your answer should take account of all of the following: Iraq, Afghanistan, the Taliban, North Korea, the England Football Team, Floods, Sub-Prime Mortgages, Sub-Prime Ministers, Russian Democracy, Anglo-Russian Relations, the Housing Market, Madeleine McCann, the Dafur Region, Chlorine Bombs, Global Warming and Paul Potts.

2066 AND ALL THAT - a memorable
Memorable Modern History from the Suffragettes to Saddam and Beyond (via the Coronation Chicken) by Ben Yarde-Buller & Sophie Duncan
ISBN: 978-1-90584-729-7
Price: £ 9.99
Publisher: Old Street Publishing
December 2007

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.

 

 

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