The political economy of Brixit

16 Jan

At the end of this week, David Cameron will deliver “the speech”: his much talked-about and endlessly-put-off speech on the place of the United Kingdom in the European Union. Choosing to give the speech abroad, in the Netherlands, Cameron is hoping to gain the gravitas of earlier famous speeches on Europe, like Thatcher’s in Bruges in 1988. After so much feverish speculation, the speech will probably disappoint. But it does raise the question of what exactly is going on with the UK and its relations with the EU. Is “Brixit” really likely? Does anyone actually want it to happen? Or is the debate only really about a more cosmetic recalibration of the UK’s membership of the EU?

The Current Moment has previously argued that were “Brixit” to occur, it would be rather in the manner of the “accidental divorce” of Slovakia and the Czech Republic: a curious historical event, where neither side was virulently separatist but a split occurred nonetheless. But how likely is “Brixit”? The Current Moment also suggested that it was unlikely given how implicated the UK is in the EU. The country is far more of a member state than its political leaders admit and finds itself active in the policymaking process even in areas where it has formally opted out.

Even if the UK doesn’t leave, current events still need to be explained. Why this particularly awkward relationship to the EU? Why the prominence of Eurosceptic movements like UKIP and the political classes’ fixation – above all on the Tory side – with reclaiming power back from the EU? Some of the explanation is historical: the UK joined later than many other members after having been rebuffed twice by Charles de Gaulle and made itself unpopular by trying to renegotiate its membership immediately upon entering. Thatcher’s long-standing battles against the European Commission no doubt left scars on both sides. But these explanations are too dated to have much purchase on events in recent years and they don’t explain the climate within the UK and the virulent anti-Europeanism of some its political class that is pushing a rather neutral David Cameron in the direction of “Brixit”.

One powerful argument is that the British establishment, and its political class in particular, does not need Europe in the same was as others do in the rest of Europe. There are various economic ties between the UK and Europe that make the case for EU membership rather strong, as Lord Heseltine and others have argued recently. But the political economy of UK membership in the EU is somewhat distinctive from other member states. In short, the UK has managed its transition away from postwar social democracy on its own, without too much reliance on the EU. Compare Thatcher and Mitterrand. At exactly the same time as the British police were – on Thatcher’s orders – fighting pitched battles against the trade unions, Mitterrand was undertaking his own retreat from Keynesianism via the European backdoor. Rather than take on the militant elements of the French working class directly, Mitterrand preferred to rely on European agreements as a way of slowly and partially dismantling the mixed economy model of postwar capitalism. Thatcher attacked the public sector directly, Mitterrand – and Kohl – did so indirectly via European directives. The same holds true for other countries – like the Netherlands, Belgium and Denmark – where old corporatist models of national capitalism were slowly reformed and wound down via a reliance on European agreements. From the Maastricht Treaty to the Lisbon Agenda to the present day Fiscal Pact, the management of socio-economic change across European societies has been conducted collectively at the European level. In the more extreme cases, like Italy, the vast swathe of the political class believes that macro-economic stability can only be achieved if the country is bound up tightly within a set of European rules. The Euro – with its Stability and Growth Pact and now with the new rules being introduced – was the apotheosis of this particular approach to governing national societies.

In contrast to all of this, Britain has generally managed the transition alone. Its own way of dismantling the postwar social contract was to isolate decision-making power from the authority of the national legislature. Politicians gave up powers to independent bodies, from the multiple national regulatory agencies to the Central Bank and the Office of Budgetary Responsibility. Decision-making was located outside of politics, but not outside of the UK as such.

For this reason, the British political class needs the EU and Brussels much less in the governing of British society. The EU is less tied up with the transformations of British capitalism than it is the transformations of national capitalisms on the continent. That leaves the door open to all the parochialism and xenophobia that animates the British political debate on the EU. This also makes it possible, though still unlikely, that the UK would leave the EU.

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3 Responses to “The political economy of Brixit”

  1. Nicholas Martin January 16, 2013 at 12:01 pm #

    Interesting points. A few not very well organized thoughts, some of which are maybe a little unfair:

    1) This reasoning could be turned on its head: if the EU was such a crucial mechanism for pushing through the transformation of national capitalisms on the continent, why has it not attracted far more ire and opposition from the losers in that process? If the EU’s greater usefulness to domestic elites on the Continent really is key, wouldn’t we expect a much more extensive, militant anti-EU politics on the Continent, and conversely far less EU-scepticism in Britain, since the EU is, on this logic, much less relevant to major domestic political battles?

    2) The cooly calculating technocratic logic of the blog post’s argument doesn’t really capture the somewhat unhinged rhetoric and sentiment that seems to animate much of British Euro-sceptic politics (EUSSR, etc.). The leaders of Euro-skepticism in Britain are not, as far as I can tell (I might be overlooking some people), the kind of fairly technocratic albeit a little Macchiavellian policy-makers that the blog post would seem to suggest, but relative policy outsiders with bases in the media and parts of the parliamentary Tory party and grassroots followings (e.g. Hannan, Johnson, David Davis, Mark Reckless, Helmer on the nuttier fringes).

    3) Directly related to this, the post has no role for the media (this is perhaps a little unfair; I know you’re not trying to explain the drivers of Brixit in their entirety), and it fails to really deconstruct the “political establishment”, to analyze which bits of it are driving Brixit. The post would suggest it is policy makers: they are dispensing with a mechanism they have little need for when it comes to pushing through policy. I suggest (below) that is is mainly political entrepreneurs (vulgo, demagogues) who are driving Brixit, not those parts of the political establishment actually involved in governance.

    4) All this is a rather longwinded way of proposing a different PE of Brixit. This is rather speculative, as I don’t really do Western European party systems, but let’s try:

    I wonder if one might argue that the contemporary Tory Party and contemporary Continental conservative parties of government differ in important ways in their membership composition and interest-representation function. I’m going to discuss this mainly through a mini-comparison of the Tories and the CDU, as that is the party I know most about. I suspect that most other major contemporary continental conservative parties are rather more similar to the CDU than the Tories in the respects discussed (and of course that the CDU and the Tories are as I make them out to be) but of course neither may be the case. Again, this isn’t my field.

    The CDU seems to me to be much more deeply anchored in German socio-econ. life than the Tories. It has a significantly larger membership (450,000-odd via 170,000-odd I seem to recall), major producer groups (big business, SMEs, workers, the welfare apparatus, etc.) have much greater and more systematic representation within the Party both at national and federal levels, and the local parties are much more deeply involved in local and regional government than in Britain, due to the federal system. Outside of Westminster, by contrast, the Tories seem to be actually quite divorced from the actual process of governing. The major producer groups (much less organized in the UK than in Germany to start with) have much less of a voice and less of a stable position in the Tories and their internal debates than they do in the CDU. The local parties are also much less involved in governing or preparing to govern their locality and/or region than in Germany, because so much more is done from Westminster.

    The consequence, I speculate, is that because the Tories as a party are much more divorced from the actual, messy everyday process of governing and reaching compromises over governance issues, they are more prone to becoming involved in inward-looking, somewhat extremist or unhinged debates that have limited contact to reality. Because local party organizations have little direct involvement in governance they can afford the luxury of indulging wacko debates and personalities, and because major producer groups (who tend to be much more directly focused on governance outcomes) are less strongly represented in the Tories, there is less of an internal check in the party to hold the loopier/more enthusiastic tendencies in check. The tendency to inward-looking extremism created by this double absence is then amplified by the way the media operates in the UK, the way it seeks out and rewards radical (“interesting”) positions, debate for debate’s sake, and has only limited capacity or interest in checking gross distortions. This media and party environment provides a relatively large niche to political (not necessarily policy) entrepreneurs who can provide consistently exciting, eloquent and outrage-stirring copy and grassroots mobilization.

    This doesn’t explain why one has ended up with a specifically Euro-sceptic sentiment in the Tory party or the UK media.The (hypothesized) structure of the contemporary Tory party and its interaction with the media would be expected to relatively easily give rise to vituperative if unhinged debates with limited contact to reality on all manner of topics. That “Europe” ended up being the cause celebre was more of a coincidence. It might however explain why the debate in the UK about Brixit and renegotiation has assumed such a curiously fantastical quality: Lots of outrage but very little specificity about wherein exactly the grievances lie* and only very abstract discussion of what the likely consequences of different changes to the status quo are (I have seen virtually no numbers attached to anything) or how feasible even the different negotiating ploys and positions are. It helps explain why the country could get to the point where there is a realistic chance of taking a momentous decision rather by accident (“falling out”).

    —-
    *The standard litanies seem to revolve around the working-time directive, criminal punishment and social policy, excessive reliance on trade with the EU, potential threats to the City, and immigration. None of these tend to get discussed in any detail and nor is it generally specified in any serious way how leaving the EU would improve these or which specific powers (apart from the 48-hour week) are to be repatriated. Some have arguably got nothing to do with the EU (immigration).

    • thecurrentmoment January 16, 2013 at 2:39 pm #

      Thanks Nicholas for some very interesting points. To reply to them in turn. The point about the usefulness of the EU to national elites on the continent is precisely that it is a way of diffusing conflict by the diffusing of responsibility. Making changes via European directives makes mobilization more difficult: who is responsible? who exactly took the decision and when? That helps explain the weak mobilization on the continent. In the UK’s case, it is precisely because the EU plays less of a central role in the management of national capitalism that there is space granted to letting off Eurosceptic steam. The debate is so vitriolic because there is little necessity on the part of the political class to reign it in. The media we think is important but is as much symptom as cause. What explains the absence of vocal and strong pro-European sentiment able to impose itself upon the national political debate? Most striking recently is that the voices heard defending the UK’s role in the EU have been from outside the UK, people like Philip Gordon at the US State Department. The post was trying to explain a little why the pro-EU sentiment at the elite level has been weak, letting anti-EU voices at the elite and popular level dominate. The alternative explanation you propose, based on the fact that the British Tory party is relatively disembedded and distant from British society, is interesting. But it does seem obvious that in many respects the Tory party, at least in its upper echelons, is closely tied to business and financial interests. And its base it at least representative of a particular strand of opinion, however loopy it may seem. The question once again is why are there not more powerful counter-vailing forces keeping the UK firmly within the EU. This is not to say that there are no such forces, only that they are relatively weak.

  2. davidbick01 January 17, 2013 at 9:34 am #

    I’ve been listening to Cameron in the Commons, and others, and the core of the government’s current argument seems to be:
    (a) the EU is changing very fast,
    (b) the driver is the economic situation of members of the Eurozone,
    (c) the UK is – and always will be? – outside the Eurozone,
    (d) the UK must therefore distance itself from the drive to fiscal and increasingly political unification,
    (e) but the UK’s financial services industry is so important it needs to keep a foot in the door, and
    (f) as a trading nation the UK needs to maintain favourable access to the eurozone economies.
    Sounds logical, and highlights a genuine dilemma, but on balance I’d expect the economic interest to win through against the eurosceptic hysteria. Let’s see how the “big speech” actually puts it.

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