EU (1) — The Left's Treason

A Distortion of Europe - like the EU.

Siehe deutsche Zusammenfassung am Ende des Beitrags.

The fact that the EU has actually been able to spring into existence is the fire signal of a momentous change in political culture: the disappearance of the Left in its classic and social democratic form. 

The social democratic Left used to be a political force dedicated to balancing the interests of capital and labour, with a sober understanding of the needs of entrepreneurs and markets, and a genuine concern for the interests of the ordinary working population.

Not only has the EU been supported by the Left, to this day, the latter act as the staunchest advocates of the project.

A very unlikely scenario, one would have thought. 

But it happened.

The EU is a thoroughly monetarist, neoliberal construction that flies in the face of everything the Left used to stand for (until perhaps the end of the 1970s) — notably, government policies 

• (a) to ensure growth and full employment, 

• (b) to avoid or lessen economic downturns,

• (c) to keep a balance between the interests of capital and labour, and 

• (d) to ensure support for regions and sections of the population threatened by economic decline.

How the Left, once proudly rooted in the workers movement, could suddenly shed its soul long with its balanced approach to the needs of capital and labour, only to become partisan of capital and the vanguard of neoliberal policies, I fail to understand as yet.

But the treacherous about-face of the Left is real.

And Wynn Godley noticed it in his bewildered account issued in 1992 of how everything the Left used to stand and fight for was abandoned and reversed in order to pursue the EU-project.

The central idea of the Maastricht Treaty is that the EC countries should move towards an economic and monetary union, with a single currency managed by an independent central bank. But how is the rest of economic policy to be run?

As the treaty proposes no new institutions other than a European bank, its sponsors must suppose that nothing more is needed.

But this could only be correct if modern economies were self-adjusting systems that didn’t need any management at all.

What Wynne Godley is saying here, from my perspective focusing on the treason of the Left, is that in implementing the EU all the economic policy tools that used to be vital in achieving the social goals of the social democratic Left have been discarded. 

In their stead the Europhile Left have come to advocate a neoliberal regime based on the idea that "self-adjusting" capital and markets produce optimal social outcomes not to be disturbed by "any management at all".  

Put differently, progressive Left policies successfully practised by social democratic governments between 1945 and 1975 depended on an intact and orderly functioning nation state. 

The EU, however, ripped apart the functional integrity of the nation states under its umbrella, while offering no substitute entity that would be able to continue to perform the policies listed above ((a), (b), (c), (d)).

Warns Godley in 1992,

The incredible lacuna in the Maastricht programme is that, while it contains a blueprint for the establishment and modus operandi of an independent central bank, there is no blueprint whatever of the analogue, in Community terms, of a central government.

Yet there would simply have to be a system of institutions which fulfils all those functions at a Community level which are at present exercised by the central governments of individual member countries.

The Maastricht Treaty, argues Godley, 

... is a crude and extreme version of the view which for some time now has constituted Europe’s conventional wisdom [...] that governments are unable, and therefore should not try, to achieve any of the traditional goals of economic policy, such as growth and full employment. 

All that can legitimately be done, according to this view, is to control the money supply and balance the budget. 

It took a group largely composed of bankers (the Delors Committee) to reach the conclusion that an independent central bank was the only supra-national institution necessary to run an integrated, supra-national Europe.

In other words, in becoming ardent proponents of the EU, the Left turned thoroughly neoliberal and monetarist, completely reversing the principles from which they used to derive their identity and credibility. 

For the sake of the EU, the Left allowed the nation state to be truncated in such a manner as to lose its ability to conduct vital policies that were the hallmarks of the socially balanced social democratic state. 

Explains Godly:

It needs to be emphasised at the start that the establishment of a single currency in the EC would indeed bring to an end the sovereignty of its component nations and their power to take independent action on major issues. 

[T]he power to issue its own money, to make drafts on its own central bank, is the main thing which defines national independence. 

If a country gives up or loses this power, it acquires the status of a local authority or colony. Local authorities and regions obviously cannot devalue. 

But they also lose the power to finance deficits through money creation while other methods of raising finance are subject to central regulation. 

Nor can they change interest rates. 

As local authorities possess none of the instruments of macro-economic policy, their political choice is confined to relatively minor matters of emphasis – a bit more education here, a bit less infrastructure there. 

I think that when Jacques Delors lays new emphasis on the principle of ‘subsidiarity’, he is really only telling us we will be allowed to make decisions about a larger number of relatively unimportant matters than we might previously have supposed. 

Perhaps he will let us have curly cucumbers after all. Big deal!

Note annother facet of the heedless abandonment of social responsibility on the part of the Left in lending support to the EU's badly flawed design which prevents effective action by individual countries while putting nothing in its place:

Another important role which any central government must perform is to put a safety net under the livelihood of component regions which are in distress for structural reasons – because of the decline of some industry, say, or because of some economically-adverse demographic change. 

At present this happens in the natural course of events, without anyone really noticing, because common standards of public provision (for instance, health, education, pensions and rates of unemployment benefit) and a common (it is to be hoped, progressive) burden of taxation are both generally instituted throughout individual realms. 

As a consequence, if one region suffers an unusual degree of structural decline, the fiscal system automatically generates net transfers in favour of it. In extremis, a region which could produce nothing at all would not starve because it would be in receipt of pensions, unemployment benefit and the incomes of public servants.

In the real EU, enforced to the cheers of the Europhile Left, such automatic net transfers do not occur. 

Instead, there is much venom exchanged among the members, not rarely bordering on racism featuring "lazy Greeks" and "Nazi Germans" and betraying a deep divide pitting against each other Europe's patriots within a forced and artificial EU-construct unsupported by grown and genuine solidarity.

If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalisation, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation.

Unsurprsingly, there is genuine economic and social distress throughout the EU, with tens of millions suffering hardship and misery, whose avoidance used to be not only the calling but also the accomplished masterpiece of the social democratic Left.

I am quoting from this article by Wynne Godley.

Deutsche Zusammenfassung:

Das verstärkt ab den 1990er Jahren betriebene EU-Projekt markiert eine Zeitenwende.  

Mit ihr verschwindet die sozialdemokratische Linke. 

Es bricht eine Ära heran, in der die Linke ihre tradierten Überzeugungen (Ausgleich der Interessen von Kapital und Arbeit) und ihr klassisches Klientel (die Werktätigen und Angestellten) aufgibt.

Sie verschreibt sich nun Idealen, die in diametralem Gegensatz zu dem stehen, was ihr zuvor als soziale Gerechtigkeit galt.

Sie übernimmt den Monetarismus ihrer früheren Gegner und wird zu einer Kraft, die entschlossen für das neoliberale Wirtschafts- und Gesellschaftsmodell eintritt.

Das Gut sozialverträglicher Wachstumspolitik und der Primat einer Politik der Vollbeschäftigung weichen dem neoliberalen Glauben an eine sich selbst regulierende Wirtschaft, in der der Rückzug des Staats aus Wirtschafts- und Sozialpolitik und die Betonung der Eigenverantwortung des Individuums als Garanten eines verbesserten Gesellschaftsmodells angesehen werden.

Dieser Sinneswandel zeigt sich besonders deutlich im Bekenntnis der Linken zur EU.

Die Linke wird zum Vorreiter für ein europäisches Interregnum, in dem der für eine sozialdemokratische Wirtschafts- und Sozialpolitik unverzichtbare souveräne Nationalstaat demontiert wird, zugunsten einer supranationalen Entität, der EU, die aber keinen Ersatz bietet für die aufgegebenen Institutionen linker Gesellschaftspolitik.

Die Nationalstaaten verlieren ihre Souveränität an die EU.

Der Bauplan der EU sieht jedoch keine fiskalpolitische Kompetenz auf supranationaler Ebene vor, die an die Stelle treten könnte der vormals von den Nationalstaaten bewältigten konjunkturpolitischen Eingriffe und eines den Wohlstand gleichmäßig verbreitenden Nettotransfers von Mitteln von wirtschaftlich leistungsfähigeren Regionen/Zielgruppen zugunsten strukturschwacher Regionen/Zielgruppen.

Den Mitgliedsstaaten ist die Möglichkeit genommen, durch eigenständige Währungs- und Fiskalpolitik, Krisen abzuwenden und sozial abzufedern sowie ein zu starkes Wohlstandsgefälle zwischen Regionen und bestimmten Gruppen zu verhindern.

An die Stelle dieser Hauptmerkmale erfolgreicher sozialdemokratischer Politik ist eine Situation getreten, in der zahlreiche Mitgliedsstaaten der EU in wirtschaftlichen Dauerkrisen verharren. 

Millionen von Bürgern der EU sehen sich nun großen wirtschaftlichen Schwierigkeiten chronisch ausgesetzt, deren entschlossene Abwendung vormals noch den ethischen Anspruch und die bewiesene Leistungsstärke der sozialdemokratischen Linken geprägt hatte. 

Die Solidarität des sozialdemokratischen Nationalstaats findet keine Entsprechung in der EU, in der eine derartige Transferpolitik an den eifersüchtig gehüteten Partikularinteressen der Mitgliedsstaaten scheitert. 

Indes die Mitgliedsstaaten keine intakten Nationalstaaten mehr sind, vermag die EU in ihrer - von der Linken gutgeheißenen - derzeitigen Verfassung selbst nicht den Charakter eines Nationalstaats anzunehmen. 

Daher wäre die EU - selbst bei einer Rückbesinnung auf die Werte der alten Sozialdemokratie - nicht imstande, die Ideale der sozialen Gerechtigkeit und eines Wirtschaftswachstums unter Bedingungen der Vollbeschäftigung  zu realisieren.

Stattdessen zeichnet sich die EU als das Manövergelände einer wirtschaftlichen und sozialen Dauerkrise aus, unter Zuspruch und Federführung einer europhilen Linken, die ihren Gesinnungskern in verhältnismäßig kurzer Zeit völlig auf den Kopf gestellt hat.