Bill Mitchell — Financial services agreements – the EU as a neoliberal, corporatist project

I have been reading the new book by Costas Lapavitsas – ‘The Left Case Against the EU’ – which has been recently published. It is solid and clearly explains why the EU is not an institution or structure than anyone on the progressive Left should support or think is capable of reform any time soon. It has become a neoliberal, corporatist state and hierarchical in operation, with Germany at the apex bullying the weaker states into submission. Divergence in outcomes across the geographic spread is the norm. It is also the anathema of our concepts of democracy both in concept and operation. It is more like a cabal of elites who are unelected and, largely unaccountable. By giving their support to this monstrosity, the traditional Left political parties (social democrats, socialists etc) have been increasingly wiped out such is the anger of voters to what has become a massive coup by capital against labour. These are the themes that Thomas Fazi and I also explored in our recent book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017). I also just finished reading an interesting report – Financial Regulation challenged by European Trade Policy – published by the Veblen Institute and Finance Watch (October 2, 2018), which examines “the impact of European trade policy on financial regulation”. It is essential reading for those progressives who still think that Britain should remain in the EU. If they understand the research findings they would change their minds....

The underlying problem is the crush of empires, which has been the scourge of Europe for centuries after tribal conflict became conflict of nations and nations were combined by force into empires. The empires of old in Europe largely disappeared after WWI or remained in a vestigial state. On the other hand, new empires arose (America) and old empires began to wake up (Russia, China, Iran, Turkey), while India is also assuming an imperial presence as the nationalistic aftermath of the British Raj.

European elites see the handwriting on the wall. If they do not unite Europe into a empire of states, similar to the US as domestic empire of sovereign states, they will be dominated, as they are now by the US, and likely crushed in the future conflict of empires on their borders.

Neoliberal globalization American-style is imperial statism masquerading as individualism. The dialectical response is growing nationalism domestically as the "peasants" push back and growing multipolarism and militarism internationally as old and new power centers collide.

This pressure is only going to increase as the arms race unfolds and the developing world comes on line (China, India, Iran, Turkey). This will eventually spread to Latin America, with Brazil as the dominant power. Africa still hangs in the balance, but its large Islamic population predisposes it to a renewed Islamic empire like the Ottoman.

All part of the process of globalization. There's an intelligent way to do this systematically, and a random way to do it chaotically. Nature probably doesn't "care" about the route taken, although Nature "prefers" the principle of least action (efficiency). It's up to humans to add effectiveness based on purpose.

How will that purpose be determined and by whom?

If left to self-interested and unaccountable elites, the direction is pretty obvious—more conflict. The West under the US will be pursuing transnational corporate totalitarianism under Western (read US) leadership—because American exceptionalism.

Economists tend to ignore political issues of this scale, even though they are fundamentally economic, being about control of territory, population, and resources, both financial and real. However, these forces are determinative historically. Hence, they constitute "the big picture" in which long term trends are embedded socially and unfold in time.

Bill Mitchell – billy blog
Financial services agreements – the EU as a neoliberal, corporatist project
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia