The horizon is not so far as we can see, but as far as we can imagine

Category: Europe Page 4 of 14

Rising and Falling

** MANDOS POST **

In several recent threads on this blog, we discussed (i.e., argued passionately about) the current goings on in Europe (Brexit, Greece, Italy, etc.) as signs of the impending decay and demise of the European project. I used to share this view to some extent, because I too am sometimes in the grip of a moral fallacy that haunts left-wing discourse: that things that are good, work, and things that aren’t good, don’t work. I actually think that in the bigger picture, this is true, but only in the largest temporal and spatial frames. In the medium term, lots of things that are good, are not stable enough in context to work (as in, be sustained for more than a short period of time), and lots of things that are not good, are nevertheless stable enough to last decades and even centuries.

Predicting whether, when, and how some particular set of events will cause large institutions to rise or fall cannot be done lightly or easily, and such predictions, when done in the moment, are more likely wrong than right. You should expect unexpected things to occur; there are too many variables. Some people are better at it than others, but you should take even the best track records with a grain of salt. Even two to three years ago, I would have predicted that the build-up of “bad karma” in the European system would have caused the EU to break apart by now. Even a few months ago, the rise of Euroskeptic populists in some countries suggested to me that the situation is increasingly desperate for European unity. However, over that time, and somewhat unexpectedly to me I must admit, it appears that some sort of inflection point has been reached.

The EU, as it stands now, was designed by a set of people that had different attitudes and goals over time. Therefore, it is a mixed bag, when it comes to good, not good, works, doesn’t work. A good chunk of its institutions were designed at around the peak of the neoliberal revolt against state management of the economy. In the EU, this took its expression in an approach to the economy that militated against state attempts to protect or bolster industrial employment in both public and private sectors. Because Europe does not suffer so much from the “moralized” version of libertarianism from which the US suffers (essentially, that your bank account is a virtual extension of your physical body), there is a stronger commercial regulatory apparatus developed even in the neoliberal era than what other developed “capitalist” countries tend to have. The neoliberal bits, especially the most recent ones like the Eurozone, have increasingly showed themselves to be not good and not working.

But this cannot be taken out of the context of the whole. It’s increasingly clear to me that Europe is still not that far off from the overall intended trajectory of the two generations of designers of European convergence. It is absolutely true that those who built the system had, for a number of different reasons, a deep suspicion of the public and popular sovereignty, even while they were also against outright dictatorship. I generally consider this to be overall not good and probably won’t work in the long run. (But I must note that the designers of the EU also recognized that they might need to legitimize popular sovereignty at a European level and built in provisions for systems to implement it.) However, they believed both in the necessity of European unity (in the modern world, a disunited Europe is structurally, deeply vulnerable), and the difficulty in getting a multilingual, multicultural subcontinent of fallen empires to accept the necessity of unification, so they constructed a system of what are effectively one-way traps to ensure that the cost of departure is always greater than the cost of endurance, even when the system in some matters doesn’t work. The goal is therefore for this endurance to eventually result in a crisis whose only positive-sum resolution is the Europeanization of authority.

With Italy’s effective capitulation to the Commission, and yes, with Greece’s previous compliance, and yes again, with a Brexit that is already providing the necessary object lessons, it appears that the crisis-and-trap strategy is still operating, or rather, it cannot be said to have failed at this point in time. That is, it remains that case that the strategy of making a series of systems that don’t work is working.

Considering that this game of deliberate historical manipulation has real human costs and indeed a known death toll in itself, one may well choose to designate it as not good. But, the evidence is that it still works.

So what would the decline of the European project actually look like?  Well, there are, of course, phenomena that are hard to predict directly, like, sudden environmental cataclysms. If I were forced to make a prediction, however, the political coming-apart would probably have to look like one of the following options:

  1. A situation comes to pass where it is immediately more materially beneficial to leave than to stay (this has not yet happened).
  2. One or more countries decide to leave a major institution/treaty despite the costs, and they do economically better in the relatively short run after departure. (Brexit under the Tories is not likely to be an example of this.)
  3. A consensus develops in several countries that long-term economic suffering is more desirable than staying in the EU, even if that suffering is greater than what they might have experienced inside the EU, and they sustain this consensus even after feeling that suffering.

All of this may lead you to consider projects like the European unification, designed explicitly around creating consequences that override popular will, to be not good. I have given you at least three possibilities for it to not work. So I would say, as before, that it is a mixed bag.

Political theodicy is dead. Long live political theodicy.

Capitaly

*** MANDOS POST ***

Italy has essentially “caved” on its threat to run a high budget deficit and confront the managers of the Eurozone.

The Italian government will trim its deficit target for next year in its latest proposal that seeks to avoid European Union sanctions for violating the bloc’s budget rules, the Ansa news agency reported.

“We have reached agreement on everything,” Deputy Prime Minister Matteo Salvini said after a lengthy budget meeting in Rome Sunday night. The budget would be “within limits that should please the EU.”

In a previous Brexit thread, the idea that Italy was about to confront and maybe start the process of leaving the Eurozone due to the budget conflict was bruited about. I laid out the main path by which this could occur in a comment:

Right now, the main issue is Italy, and the deciding questions are:

  1. Whether the Five Star/Lega Nord government is really going to escalate the budgetary conflict with the Commission.
  2. Whether, in doing so, they will force the Commission to back down.
  3. Otherwise, whether the resulting conflict will cause them to back down.
  4. If they don’t back down, whether the Greece-like economic consequences will cause them to lose popularity.

The path to an EU breakup is charted with: (1) yes; (2) no; (3) no, and; (4) no. So far we are getting (1), maybe, and (2) no.

Italy has already departed this path at step (1), and with a non-buffoon “clever” right-wing agitator in the driver’s seat like Matteo Salvini.

Meanwhile in Hungary

*** MANDOS POST ***

The Hungarian government, led by Victor Orbán, the great defender of the worker from the hordes of cheap labour and cultural contamination knocking on Hungary’s doors, has decided to pass a law that:

  • Drastically raises mandatory overtime for 250 to 400 hours.
  • Allows employers to bypass union negotiations and make agreements with individual workers.
  • Allows employers to pay out overtime over three years, rather than one.

The combined changes make it possible for employers to make Hungarian workers work a six-day week rather than a five-day week.

Orbán is widely considered the leading figure of the “nationalist international,” promoting “family values” that will protect ordinary working people against the social and economic dilution brought about by liberal attitudes to culture and immigration. In reality, this type of nationalism (perhaps all types?) is not a real protection for the worker and typically presages a different set of extractive and exploitative compromises with capital.

The French Yellow Jacket Protests

So, there are major protests across France, protesting Macron’s policies. Macron has raised fuel taxes and removed worker protections, among other things. He is a neoliberal’s neoliberal, who believes in free labor markets (a.k.a. markets where workers can be easily fired, made to work overtime, and so on.)

His popularity rating is 20 percent, there is no chance that he will be re-elected, and he is unlikely to give in to any protests–both because he is a true believer and because his future is assured if he pushes through as much destruction of France’s social state as possible. He will be rewarded by the rich.

Some of the protests have been somewhat violent (I am not all that impressed by property violence as “terrible”), and, of course, the French police have brutally beaten many protestors. It always amuses me to watch the so-called brave surrounding a man to kick him while he’s down. Any man who participates in such a beating outs himself as a coward, the same as any man who tortures someone who cannot resist.

While it seems unlikely, it wouldn’t bother me if the current French state was overthrown.

More likely, what will matter is whether La Pen or Melenchon (who is a real left-winger) wins the next election. Hopefully the French are not so stupid as to vote for another pretty neoliberal.

Little that has been done by Macron, or other neoliberal twats, cannot be undone if a government is elected with a mandate to do so.


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What May’s Brexit Deal Tells Us About the EU and Britain’s Future

So, May has a Brexit deal. It’s a terrible deal, which makes the UK subject to many EU laws, and which doesn’t allow Britain to withdraw from the deal if the EU doesn’t want it to.

This has caused ministerial resignations, and Corbyn has come out against it.

But the interesting part is what the EU and May have negotiated. This clause, for example:

Corbyn’s policies include straight up re-nationalization of the railways, regulation of housing prices, and the government outright building vast numbers of flats, among many other similar policies.

In other words, Corbyn’s policies interfere with liberal market rules. They are, actually, forbidden by the EU–but on occasion exceptions are made.

Of course, retaining privileged access to the EU market was going to require some rule taking, but May has chosen to take more rules that are “no socialism” and less rules that are “treat your people decently.”

What May has done is negotiate a deal which ties Corbyn’s hands: He can’t implement his policies if he becomes Prime Minister, and he can’t leave the deal. (Well, in theory, and perhaps in practice.)

Of course, Britain can still leave the deal: Parliament is supreme, and one parliament cannot tie the hands of another parliament. Nonetheless, leaving the deal would be damaging to Britain’s relationship with the EU, to put it mildly.

These sorts of efforts to tie future government’s hands so that are forced to preserve neoliberal policies are common. The now-dead Canadian Chinese trade deal had a clause which required a 20-year withdrawal notice, for example. The Canadian-EU free trade deal forbids the Canadian government from many of the same sorts of policies that May rejected as well.

This is the great problem with the neoliberal world order: It is set up to force countries into a specific sort of economy, and to punish them if they resist or refuse. That would be somewhat okay–but only somewhat–if neoliberal economics worked, but they don’t.

What neoliberal economics does, instead, is impoverish large minorities, even pluralities, in the countries which adopt its policies. Those pluralities then become demagogue bait. (Hello, Trump!)

Meanwhile Macron has proposed an EU military, and Germany’s Merkel has said she supports the idea.

EU elites are absolutely convinced their way is best, and that anyone who is against it is wrong. They are not primarily concerned with democracy (the EU is run primarily by un-elected bureaucrats), and do not consider democratic legitimacy as primary. If people vote for the “wrong” thing, EU elites feel they have the right to override that. They have overseen what amount to coups in both Greece and Italy in the past ten years.

The funny thing is that orthodox neoliberal economic theory admits there will be losers to neoliberal policies and states that they must be compensated. The problem is that this has never been done, and indeed, with accelerating austerity, they’ve done just the opposite: At the same time as a plurality is impoverished, the social supports have been kicked out from under them.

Macron has been particularly pointed in this, gutting labor rights in the name of “labor market flexibility.”

Neoliberalism, in other words, creates the conditions of its own failure. It is failing around the world: In the US, (Trump does not believe in the multilateral, neoliberal order), in Europe, and so on.

Even in countries that “support” the EU, there are substantial minorities, pushing into plurality status, which don’t support neoliberalism.

So Europe needs an army. Because Eurocrats know best, and since neoliberalism isn’t working for enough people that things like Brexit happen; that Italy is ignoring rules, that the East is boiling over with right-wing xenophobia, well, force is going to be needed. A European military, with French nukes, is the core of a great power military. And soon countries won’t be able to leave.

That, at any rate, is where things are headed. We’ll see if the EU cracks up first.

In the meantime, May’s Brexit deal really is worse than no deal, and in no way should be passed. In fact, if I’m Corbyn, and it’s been passed, if I became PM, I’d get rid of it. Because it either goes or he’ll have to substantially break all of his most important electoral promises.

The EU is loathsome. I won’t say it’s done no good, but it’s now doing more harm than good (indeed it has been for at least a decade). As with the US, because the EU is misusing its power, it needs to lose it. That process will be ugly, as a lot of those who are rising to challenge it are right-wing assholes (because the left has abandoned sovereignty).

You simply can’t fail pluralities of your population and stay stable without being a police state and holding yourself together with brutal force.

Those are the EU’s two most likely futures: brutal police state or crackup.

Pity, but that’s what EUcrats, with their insistence on neoliberal rules and hatred of democracy have made damn near inevitable.


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When Will the US Lose Control of the World Payments System?

One of the greatest powers of the United States, one which was hardly used before Clinton, is the ability to freeze people out of the payments system. When Argentina had its previous debt crisis, it cut a deal with investors: They took a haircut, and the government agreed to pay them the haircut. Some investors refused.

Later, that deal was effectively destroyed, because Argentina lost in a US court. As a result, they could not pay the investors who had taken the haircut–a US judge was able to cut a sovereign state off from paying its debtors. Argentina could only have access if it paid both those who took the haircut and those who didn’t.

Over the last 20 years, in particular, the US has enforced financial sanctions against a bewildering number of people and states. Right now, it is disallowing Venezuela from buying many foreign goods. (When “socialism” doesn’t collapse fast enough, the US is always on hand to give it a shove.)

During the Iran sanctions period, before the Iran nuclear deal, the US and the EU cut Iran off from the payments system, virtually wholesale. SWIFT, the electronic payments system headquartered in Brussels refused to cooperate, saying that it should not be used as a tool of politics.

But the EU threatened the board and senior SWIFT executives with criminal charges, and SWIFT folded.

Lots of Iranians died and suffered under those sanctions, just like Iraqis did under the sanctions in the 90s.

When the Iran deal was cut, the sanctions were eased.

But Trump, when he tore up the Iran deal, re-imposed sanctions. The EU disagreed, but many EU companies are obeying the American order because America has said that it will sanction both companies and individuals who disobey.

And even if SWIFT doesn’t cooperate as a body, the problem is that most payments at some point touch American banks. The moment they do, America jurisdiction cuts in. (This is how FIFA got hit for corruption by US law enforcement. None of the bribes had anything to do with the US, but payments went thru US banks.)

So Europe is considering creating a payments system which does not ever touch US jurisdiction:

Germany’s foreign minister has called for the creation of a new payments system independent of the US as a means of rescuing the nuclear deal between Iran and the west that Donald Trump withdrew from in May…

…“For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system,” he wrote.

This adds Europe to a group which includes Russia and China, along with virtually every nation who has been subject to US sanctions.

The thing is that such sanctions used to be fairly rare. But Clinton weaponized them against Iraq and every President since them has used them as a bludgeon. They are a way, like drones to punish countries and individuals and to ignore sovereign rights.

The MMT types go on and on about being sovereign in one’s currency, but the fact is that you aren’t sovereign if another country can cut you out of the payments system. And right now the only countries in the world that are sovereign in that sense are America, the EU and China. And the EU and China are only somewhat sovereign.

These punishments are extra-territorial, they are an imposition of US law on non US countries and citizens. They are possible only because the US is the world hegemonic power, and sits at the center of the world payments system. Venezuela can sanction, but no one cares unless they have assets actually in Venezuela.

This power has been abused, repeatedly, to interfere in business that is none of America’s business. One can say that it might have been used acceptably when the entire UN security council agreed (I disagree), but when it doesn’t, the US has acted anyway.

And so, now, every great power in the world, with the possible exception of Japan, wants to take that power away from the US.

About time, but it will take time. It isn’t just about virtual links, it is about physical links: it must be done over continental cables and thru satellites which are not American. The way current software acts doesn’t take that in account, and physical infrastructure as well as software needs to be built.

But I hope that Europe is serious, because combined with China and Russia this is something which can be done, and done fairly fast (within a decade, I’d guess.) The only problem is that the EU, too, likes having this power. Are they really willing to give it up? Because the best way to do this would be to create a system which cannot be sanctioned without the agreement of all the powers who create: a system which cannot be sanctioned unilaterally. Everyone involved should have a veto.

Time will tell if Europe and, indeed, other nations, truly want a system that none of them can use to punish others.


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The Left-wing Case for Brexit

Jacobin recently had an excellent article on left-wing Brexit, which I suggest you read. But this is the graf I want to focus on:

for a Corbyn-led Labour government, not being a member of the European Union “solves more problems than it creates,” as Weeks notes. He is referring to the fact that many aspects of Corbyn’s manifesto — such as the renationalization of mail, rail, and energy firms and developmental support to specific companies — or other policies that a future Labour government may decide to implement, such as the adoption of capital controls, would be hard to implement under EU law and would almost certainly be challenged by the European Commission and European Court of Justice. After all, the EU was created with the precise intention of permanently outlawing such “radical” policies.

That is why Corbyn must resist the pressure from all quarters — first and foremost within his own party — to back a “soft Brexit.”

This is the issue. As Jacobin’s European editor wrote:

I have pointed this out multiple times before. The European Union, in its current form (post-Maastricht) is neoliberal at its core. The Euro (which Britain at least did not adopt) was also intended to break local labor power and gut wages.

Watching the EU break Greece upon the wheel to bail out German bankers indirectly, so that they wouldn’t be seen to directly bail them out ought to have been the corpse on everyone’s doorstep that alerted people to the fact that the people running the EU, are, in certain ways, really, really bad people.

The main reason to fear Brexit isn’t “economic apocalypse,” it’s that the EU elites will do everything they can to make Britain pay to send a message.

In other words, mafia logic: “Once you’re part of the family, you don’t ever leave.”

I agree with Jacobin: Britain’s best hope of an economy which works for most Britons is Jeremy Corbyn becoming Prime Minister and instituting the policies he has said he would. Moreover, having this work is the best hope for the left in a world where all major multinational institutions and treaties are coercively neoliberal–intended to take economic decision-making out of the hands of voters and to enable free movement of capital above all other considerations.

None of this is to say that Brexit will be without some dangers and costs, but those dangers are mostly of the “save us from ourselves” variety: Tories and Blairite Labour MPs are even nastier than EU elites. And the loss of the ability to work freely on the continent, or for continentals to work freely in Britain is also a loss (though one that need not be inevitable).

But equally, the EU makes it impossible to pursue a lot of actual left-wing policies.

You can have the EU, or you can move to the left.

It’s that simple.


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France Ends Freedom

The terrorists don’t hate us for our freedom, but if they did, well, they’d stop attacking France.

Fifty seven percent of the French approve, according to a poll.

It takes so very little to get people to give up their freedom. Find an enemy, have a few atrocities, and they’ll squeal for you to take it from them. Shades of Goerring’s comment on how easy it is to get citizens to line up behind wars.

“Why, of course, the people don’t want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece. Naturally, the common people don’t want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship…

Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.”

Such laws as France has passed, will be used against others. The anti-terrorism laws in the US have been used vigorously against environmental protestors, including entirely peaceful ones.


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Centuries ago Machiavelli observed that some peoples lacked sufficient virtue for freedom. They could only be ruled by despots. Increasingly, the West has shown that they have fallen into this class.

While the young are quite good on issues of economic fairness (out of self interest), they are not particularly good on most civil liberties, so we cannot be sure that the tide moving through the Anglo-West, towards more equal economic arrangements and less corporate control will necessarily push back on civil liberties abuses.

Humans didn’t evolve to live in large societies. We are terrible at it, and our decision-making heuristics are not capable of handling it. We cannot evaluate threats properly, our enlarged senses of identity (like nationalism and ethnic identification) are easily hijacked and usually we are unable to change our minds about anything important once we become an adult unless there is a catastrophe which personally devastates us, and when there is, we simply pick up (as Friedman noted) whatever ideas are around, rather than think critically.

And so, so much for Liberte.


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