Why Brexit is bad for Liberty

I have been debating classical liberalism and the European Union with Edwin van de Haar. For the moment at least, I think the debate should end or we will risk repetition of previously made points. I would like to thank Edwin for a constructive debate and to invited readers to read through it themselves. Now is the time to move onto a more concrete discussions of the UK referendum vote to leave the European Union.

The UK referendum vote to leave the European Union is not producing the consequences its most eloquent supporters and ideologues had predicted. It is of course very early to have a complete view of the consequences of Brexit, but a large part of Brexit journalistic, campaigning and intellectual elite have argued for leaving the EU on the grounds it would enable a mıore free market UK, one less burdened by regulations ‘imposed’ from Brussels.

A disproportionate part of this elite claims to be libertarian or conservative libertarian, operating in party politics via the Conservative Party and the UK Independence Party and operating in libertarian to conservative campaigning groups. Employees of the most important classical liberal and libertarian policy institutions, the Institute of Economic Affairs and the Adam Smith Institute were divided on this issue. However, some part of the Brexit elites were High Tory, that is traditionalist conservative.

The insistence on sovereignty and national institutions outweighs a commitment to free markets and individual rights. Immigration in particular comes off badly here. The High Tory narrative dominates the Brexit narrative in practice. Some Brexit enthusiasts welcome the supposed opportunity to boost defence spending (though this has nothing do with the European Union which places no limits whatsoever on national defence spending) and believe Brexit will allow restoring the UK’s Great Power status. This is already very high by general European standards and given the inherent limits of the UK’s resources compared with the USA, Russia and China, it’s hard to see how great power status could be attained and why the UK should try. It is clearly not compatible with retrenchment of the state.

David Cameron announced his resignation as Conservative Party leader and Prime Minister straight after the referendum result. His replacement Theresa May began her term of office with a speech suggesting greater state involvement in the economy and society. As Home Secretary she has a particularly illiberal record in civil liberties, immigration and drugs. She has announced support for changes in company law to force firms to accept employee representatives onto boards and restriction on takeover laws.

These measures have led the ‘Red Tory’, Philip Blond, to announce compatibility with his views and enthusiasm for her leadership. Blond runs the policy institute, ResPublica (http://www.respublica.org.uk). He was a colleague of mine in graduate programs at the University of Warwick in the late eighties, though I have not been in touch with him since. He moved from a period of research and university teaching in theology (he was studying European philosophy since the early nineteenth century when I knew him) into the policy world.

The contemporary theologian who influenced him most is John Milbank, an adherent of a version of the Christian tradition which tends to advocate community above individual, or at least would seem to do so if its social philosophy is turned into state enforced actions. There is a strong element of Medieval nostalgia for an organic society in Blond’s social and political thought. He is arguing for less not more free markets and individualism. Now there is no reason to think that Blond’s ideas will have a major influence on May, but if he feels so comfortable with her then that is reason to think there will be strong streak of communalist conservatism in the post-referendum government and even a hint of Christian socialism.

May’s approach has also been compared to that of Joseph Chamberlain, a nineteenth century advocate of interventionist local government and then of a protectionist, state-welfare orientated British Empire; he was as well considered by some to be the strongest advocate of Empire ideology in his time.

Even the Brexit supporters who have the strongest free market small government history have come out in favour of interventionist and corporatist polices. Allister Heath, a senior member of the Daily Telegraph staff, who has a reputation as a free market advocate published advice to Theresa May which is anything but free market, full of corporatism and buying off people who might be relative losers in the post-Brexit UK.

Previous free market advocates, who found it easy to be advocates when the EU served as a scapegoat for any and every overextension of state activity in the UK (whether or not in reality it originated with the EU), have become less clear in their commitment given that some EU support for open markets, such as bans on subsidies to keep bankrupt companies afloat, are no longer available. With some institutional supports for free markets removed, the Brexit liberty advocates find themselves in a world of paying off voters who voted for ‘leave’ because they don’t like ‘neoliberalism’ and blame any difficult consequences of technological invention and market innovation on Brussels Bureaucrats along with immigration from EU countries.

One key theme of the more ostensibly libertarian parts of the ‘leave’ campaign was to argue that they did not want to reduce immigration, but globalise it by replacing automatic rights of EU citizens to live in the UK with an Australian points system, which allows people to enter from anywhere in the world who has sufficient points with regard to educational level, scarce skills, money to invest and so on. However, it is clear that many ‘leave’ voters just want a reduction in immigration and May has distanced herself from a ‘points’ system in favour of absolute reduction.

The ‘leave’ vote won based on the anti-immigration, anti-globalist and anti-‘neoliberal’ instincts of a significant section of the ‘leave’ vote. It is not the whole of the ‘leave’ vote, but  ‘leave’ could not have won without it. The evidence so far is that whatever the intentions of the libertarian to conservative element of ‘leave’ thinking that the government is now driven by the wish to follow that aspect of public opinion. The UK is headed towards communalist corporatism, or even protectionist/mercantilist, security-state Great Power nationalist versions of conservatism. Clearly there is much work for liberty advocates to do in the UK counteracting this disaster.

Art, Photography, and Homophobia

Sometimes the theater of the absurd, current events that is, just gets to be too much and I have to comment. This time the issue is whether photography is an art form, a case arising from a professional photographer’s refusal to cover a lesbian wedding. If photography is art, goes the argument, it’s a form of speech protected by the Constitution and that protection overrides any laws prohibiting discrimination on account of sexual orientation.

This nonsense arises from the notion that some forms of voluntary transactions should enjoy legal protection and others shouldn’t. Transactions that are deemed to be exercises of religion or freedom of speech are protected while it’s OK to suppress others even when they are mutually voluntary. The courts view artistic works forms of speech, and are protected. This protection covers not just engaging in protected activities but also refraining from engaging in them. Thus if photography is art, then refraining from photographing a lesbian wedding is an exercise of free speech, protected by the first amendment.

That’s all well and good as far as it goes, but it leaves courts with the job of drawing lines delimiting religious activity or free speech activity. Example: during Prohibition, Catholics were allowed to use wine as part of their Communion sacrament. But Native Americans who want to use peyote as part of their religious ceremonies have consistently run afoul of the law. What’s the difference? Obviously, Catholics are more numerous and politically powerful than Native Americans. Since there is no objective way of delimiting either religion or art (as presently understood), court decisions about these matters are necessarily political.

Delimiting artistic expression may be even more problematic than with religion. Given that any and all kinds of garbage can be found in “Modern Art” museums, it would seem that almost any activity, spraying graffiti for example, could be construed as artistic expression.

The solution is to recognize the right of free association and its concomitant freedom of dissociation, whether in personal or business affairs. (Though not a part of the First Amendment, these rights might be found in the Ninth Amendment.) There are two qualifications. First, any transaction that infringes on the rights of third parties is illegitimate. As Ayn Rand put it, “any alleged ‘right’ of one man, which necessitates the violation of the rights of another, is not and cannot be a right.” Second, politicians and bureaucrats must not be allowed to discriminate since they are supposed to represent the entire population. Those qualifications aside, any business person must be free to turn away gays, blacks, Jews, or anybody else, with or without explanation. But woe unto anyone who tries such exclusions in today’s world. They would pay a stiff price in lost business and boycotts. Unless they found a niche market among KKK bigots, such business people would very likely lose most of their customers, including, I hasten to add, this writer.

Some time ago I posted a piece on these pages defending the right of Lester Maddox, a truly obnoxious character, to exclude blacks from his chicken restaurant, which he did in the 1960s in defiance of the Civil Rights Act. Those were different times, and he garnered enough support to get elected Governor of Georgia. That would not happen these days.

Though I got a lot of pushback, I stand by the argument that obnoxious characters like Lester Maddox constitute a vanguard that helps defend the rights of us “normal” folks. If their outrageous but non-aggressive actions are protected, our moderate actions are safe. Nobody has made this case better than Walter Block in his book “Defending the Undefendable.” He trots out and defends one seedy character after another—pimps, prostitutes, you name it—whose actions, while distasteful to almost everyone, violate no one’s rights.

Returning to the photographer in question, it should make no difference whether her refusal is informed by religion or by hatred of gays.  She should be free to turn away customers for good reasons, bad reasons, or no reason.

Incidentally, my friend Michelle Kamhi recently convinced me that photography is not art. I highly recommend her book Who Says That’s Art?, devoted primarily to demolishing modern and post-modern “art” which she calls “anti-art.” I think she’s spot on, but whether you agree or not, you will have to admire the courage and tight reasoning in her book.

The Nice Massacre

Following the massacre in Nice yesterday, I am hearing comments on radio that, together, would have one believe that it could not happen here, that it’s somehow the fault of the French themselves. I think that’s a dangerous dream.

Americans have to get past the Irma la Douce fantasy about France that many still shelter in their hearts. The French do not wile away their days at sidewalk cafes terraces brimming with insouciance. (That means a “devil-may care” attitude.) France is an industrial society pretty much like the US though without most of the inventiveness. Its economic policies for the past twenty years have been stinky. The causes of the French stagnation would sound familiar to any Bernie Sanders supporter. The current government of the Socialist Party differs from the Obama administration in matters of degree only. The same la-la-la Land dream occupies the minds of most of the French Left as of most American liberals. If anything, the French tend to be more realistic because they have had more experience of its failures.

It’s not the case that France has had an open borders policy as I have heard say on conservative radio today. Nevertheless, for historical reasons, France probably has many more Muslims proportionately than the US has. “Probably” because no one knows who is really a Muslim; no one really knows who is really a Catholic. The only thing that’s more or less known is the number of Muslims names. There are many. Most are French citizens by birth.

The current French Minister of Labor has a Muslim name. People with Muslim names are present throughout all levels of French society. They are in banking, in entertainment. The most popular French citizens probably have Muslims names; they are in sports. By and large, such people are well integrated within a mostly religiously indifferent French society. That is, as well as can be done within an economically stagnant society with a permanent unemployment rate of 10%, 20% for the young. How much discrimination there is against people with Muslim names is anyone’s guess. The fact is that immigrants with Muslim names keep trying hard to move to France. Not many try to move to Egypt or even to Saudi Arabia, for example, where the fate of immigrants may be even worse.

This large population with Muslim names is seen from the US as providing a bottomless pool of jihadist recruits. That’s true but it should also be an asset in combating violent jihadism. Thousands of French police personnel have Muslim names. (The police officer murdered outside Charlie Hebdo was one such.) Hundreds if not thousands of police and other security personnel are fluent in diverse dialects of Arabic. This is more, of course, than can be said of their American counterparts.

The French intelligence services have earned the respect of their allies. The country was not caught sleeping after the Bataclan slaughter. It had been under a state of emergency lightly suspending some personal rights. The state of emergency was slated to be removed in the coming days. Perhaps, someone did not want it to stop although it’s hard to believe given how light it was.

As I write on July 15th, there has been no claim by any Islamist organization. The only thing known is that the driver of the truck, the murder weapon, was a person of Tunisian origin who was probably a French citizen. That’s not enough to prove a link to Islamist terrorist organizations. The man was known to the police as a petty criminal (a familiar story). Note that a petty criminal is one who is not very successful, one at the bottom of the criminal pecking order. He was also undergoing a difficult divorce. I speculate that jihadist organizations provide people of Muslim origin undergoing personal difficulties a high-sounding excuse for venting their anger on the innocent many.

If there was indeed an involvement of ISIS or Al Qaida, no reason for the attack on civilians need to be found. They hate Westerners, irrespective of what Westerners actually do. The fact that France has been publicly involved in fighting Islamist terrorism in two theaters – in Iraq next to the US and in Mali may have made it a priority target for jihadists.

With this group assassination the lack of scruples of violent jihadists is confirmed again. Given the number of victims, the circumstance and the location of the crime, there is a 100% certainty that some of the victims have Muslim names. (By the way, the best video of the event was supplied by an Egyptian tourist.) I wonder if this is going to prompt Muslim organizations everywhere, including in the US, to do more than passively deplore the crime. I wonder if this is going to lead to request for energetic surveillance measures involving the breeding marshes of violent jhadists, which are not Lutheran seminaries or Buddhist monasteries. I ask because, under Obama, in this country, we are paralyzed by political correctness as if avoiding bruising the feelings of some was well worth a few hundred blown up civilians here and there.

Classical Liberalism and the Nation State

Barry’s response to my earlier post is another interesting read, yet it is also rather broad brush historical. I think he is erroneous if he claims that ‘it did not occur to classical liberals, on the whole, to question the state system as they knew it’. In fact the founding fathers of classical liberalism, David Hume and Adam Smith, were very much aware of other, often cosmopolitan ideals of world order. Yet they argued that the nation was attached to individual emotion, which could not be the case for entities beyond the nation state. This was also the position of later classical liberals such as Von Mises and Hayek, as I show in Classical Liberalism and International Relations Theory (Palgrave, 2009).  Let me elaborate a little, also in the wider context of international political theory.

Liberalism is the political expression of individualism, yet cooperation of individuals in groups is valued positively. For classical liberals the nation, or the country, is the largest group in society which is the object of human passion, both positive in the sense of national pride and negative in the sense of shame and humiliation. Hume noted that there are few men entirely indifferent to their country, and both he and Adam Smith underlined that humans sympathise more with people to whom they are close than with strangers or foreigners. Feelings for the nation are strong, natural motivational forces for individuals.[i]

This also applies in the age of modern states and nationalism. Despite the atrocities committed in the name of national glory throughout the twentieth century, Mises and Hayek never predicted nor called for the end of the nation state. Mises thought that language was the essence of nationality, and with the fragmentation of the polyglot Austro-Hungarian Empire in mind he argued that multi-language countries were doomed to failure. His solution was an increase in possibilities for individual self-determination and group secession, but not in the expectation that this would lead to a world without sovereign states.[ii] Hayek saw the nation as a prime source of human bonding and individual loyalty, but recognised the negative aspects of nationalism. He valued the nation, but nationalism was a poison,[iii] not least because he saw a strong relation between nationalism and imperialism. After all, it is a small step from thinking good about one’s country to trying to rule and civilise allegedly inferior others. Often, although certainly not in all cases, the nation as a group is politically organised as a sovereign state. In the classical liberal view, states are the most important actors in international relations.

To maximise individual freedom the state should only have a limited number of tasks. The state is an important protector of natural rights, but history has shown that it is also the biggest abuser of these rights. The principle of the rule of law intends to protect the negative liberty of individuals. Classical liberals think the state can best be bound by a combination of constitutions; separation of the legislative, executive and judicial powers; and the limitation of positive law.

In international affairs this means that states should be cautious about concluding and ratifying treaties and other forms of positive law. These are often binding commitments that are very hard to change or to get rid of, with a large possible negative impact on individual freedom. Some international agreements may be useful to smooth the working of the international society of states, or to settle practical matters. But the dangers of overregulation are just as real in world politics as they are in national politics. Besides some specific cross-border issues, the classical liberal rule of thumb is that there is no need for international state action if there is no domestic state task.

Consequently, attempts to build a better world by establishing international organisations and regimes are rejected. Mises and Hayek were strong critics of the League of Nations and its successor the United Nations, and Hayek was a fierce critic of the International Labour Organization. Their main concern was that these and other organisations were taking up tasks they should not perform, just like overactive states in national circumstances. Social constructivism is bad, no matter at what level it is performed.[iv]

In Degrees of Freedom (Transaction, 2015)  I have tried to illuiminate the differences between the different forms of liberalism (and conservatism, also see my earlier post on the differences between them entitled “Let’s clear up the liberal mess”), including their views in international relations. In summary it looks like this:

Liberalism, Conservatism and International Relations

Classical liberalism Social liberalism Libertarianism Conserva

tism.

Nation as limit of individual sympathy Yes No No Yes
State as prime actor in world politics Yes No No Yes
International governmental

institutions/regimes

No Yes No No
Can war be eliminated No Yes Yes No
Does trade foster peace? No Yes Yes No

Source: Edwin van de Haar, Degrees of Freedom. Liberal Political Philosophy and Ideology (Transaction Publishers, 2015).

That also explain partly why Barrry can rightly argue that the ideas of Kant, Mill and to a lesser extent Montesquieu differ from those of Hume, Smith, Mises and Hayek: they are not classical liberals but social liberals.

Notes:

[i] Hume, Treatise,79, 317; Adam Smith, The Theory of Moral Sentiments (Indianapolis: Liberty Fund, 1982), 299; also Edwin van de Haar, ‘David Hume and International Political Theory: A Reappraisal,’ Review of International Studies, 34:2 (April 2008), 225–242.

[ii] Ludwig von Mises, Nation, State, and Economy. Contributions to the Politics and History of Our Time (New York and London: Institute for Humane Studies & New York University Press, 1983), 39–40, 82.

[iii] Friedrich Hayek, Studies in Philosophy, Politics and Economics (New York: Simon and Schuster, 1967), 143.

[iv] Mises, Nation, State and Economy, 90–91; Ludwig von Mises, Omnipotent Government. The Rise of the Total State and Total War (Grove City: Libertarian Pres, 1985), 292–294; Friedrich Hayek, The Road to Serfdom (London: Routledge, 1997), 176.

Classical Liberalism, Cosmopolitanism and Nationalism

In another thought-provoking post on Facebook (does the guy ever write mediocre stuff, I wonder?) Barry raised the question of the relation between classical liberalism, nationalism and cosmopolitanism. He wrote the following:

“On the capture of classical liberal/libertarianism by anti-cosmopolitans. This is very influential at the heart of the ‘leave’ ‘elite’ in the UK, and can only be destructive of classical liberalism/libertarianism. The immediate political consequence of Leave is the elevation of Theresa May to Tory leadership/Prime Minister’s office on a much more ‘Red Tory’, communitarian, corporatist foundation than existed under Cameron. ’To the extent to which the current wave of populism maps into a conflict over national versus transnational identity (Dan Drezner is unconvinced), the problem is not an excess of cosmopolitanism but rather its absence, especially on the conservative, free-market right.”

He seems to take a positive relation between classical liberalism and cosmopolitanism as the default position. Of course Barry did not provide definitions in a FB post, but here I take cosmopolitanism to mean “the idea that all human beings, regardless of their political affiliations, belong to a common moral community. Cosmopolitans often believe that all individuals have the same basic moral status, and tend to downplay the importance or desirability of national political institutions. [They are] opposed to nationalism” (source: Matt Zwolinski (editor), Arguing About Political Philosophy, Routledge, 2009).

I argue that Barry overlooks that classical liberalism combines a cosmopolitan side, with a strong defense of national political institutions (e.g. the state). The cosmopolitan side is perhaps easiest to see, if one takes the idea of free trade as the guiding principle. Free trade is by nature morally neutral for the individuals involved, and has numerous positive economic effects; it fosters cultural exchange as well as innovation and knowledge sharing. In that sense classical liberalism is indeed related to cosmopolitanism.

Yet this stops where the national state comes into play. Classical liberals never predicted any positive political effects of trade (see my earlier notes on this topic) and, just as importantly, they actually favor a strong state, with a limited number of tasks. At the same time, from Hume and Smith onwards to Mises and Hayek, they strongly dislike the idea of transnational political institutions, because these lack any substantial emotional basis which nations do posses. Also, these large political institutions easily become a threat to individual liberty, even more so than national states with too many tasks. So, there is no really no relations between political cosmopolitanism and classical liberalism at all.

There is also no relation between nationalism and classical liberalism. A preference for the national state does not lead to nationalism, which is the vicious and poisonous belief in the superiority of one’s country, often accompanied with a dislike of allegedly inferior neighboring countries or peoples or groups. This is collectivism turned even worse, which is a double ‘no’ from a classical liberal perspective. This said, if patriotism is defined as national pride, then classical liberalism and patriotism can and will go together. There is a fine line between the two sometimes, but patriotism is not violent and dividing, but a binding force between individuals sharing a national state.

The last point is on the European Union. Hayek and Mises have been on record with strong support for a European Federation, primarily as a remedy to war-torn and nationalism-infected Europe. In these circumstances the default position of an international order as a society of states no longer functioned, so there was a need to seek an alternative. Needless to say their federation had little resemblance with the current super state we know as the European Union, which has become a classical liberal nightmare in terms of liberty and property rights violations it commits on a daily basis.

The current EU has some classical liberal traits (the imperfect common market is the single most important one), which is of tremendous use to all European individuals. It is, however, way too cosmopolitan in the bad political way. A likely consequence of Brexit is that this will become even worse, now that the French and their allies will get more room for their collectivist fallacies.

Why a Nexit would be good for the Netherlands

Past Friday, 51.9% of the British have voted to leave the European Union against 48.1% of those who have voted to remain. The details of the EU referendum can be found on BBC’s EU referendum page. Although it is still unclear what shape the relationship between Britain and the EU will take, I expect that the Brexit will offer good economic opportunities for Britain provided that they can reach free trade agreements with all nations within the EU and provided that they will continue to open up their markets for free trade with other countries outside of the EU.

An Exit of the Netherlands, or a Nexit, will have more consequences than a Brexit as the Netherlands are also participants in the European Monetary Union. A Nexit could therefore lead to an end of the Euro. An analysis of the EU is a political analysis and as politics is always complemented by power, this analysis should hence incorporate insights on power struggles and competing visions. Each country has its own interests within the EU, just like any politician within the EU has his own special interests that he is serving. Participation in the EU is often represented as an exercise of solidarity and political appeasement, however it is still politics with politicians’ usual desire for self-enrichment.

There have always been two competing visions of the EU. The first one is a classical liberal vision, led by German speaking Christian democrats Schuman (France), Adenauer (Germany) and Alcide de Gasperi (Italy) with the Treaty of Rome (1957) as the greatest achievement of this classical liberal vision for Europe. The Treaty sought to deliver the following four freedoms: free movement of goods, freedom of movement for workers, the right of establishment and freedom to provide services, and free movement of capital. The other vision was a socialist vision led by mainly French politicians, such as Jacques Delors and François Mitterrand whose goal was to create a supranational state.

Treaty of Rome signed
Treaty of Rome.

Classical liberal vision
The first vision promotes political competition between the EU’s member states by opening up borders. When a person is discontent with the excessive taxes in his country, he could leave his country for another. Competition between member states would lead to smaller governments, lower taxes, and political respect for people who would want to pursue their individual freedoms in another member state. It would represent a return to the political model that was prevalent in Europe from the Middle Ages to the 19th century when different political systems coexisted independently. There were independent cities or city states in Flanders, Germany and Northern Italy. There was the kingdom of Bavaria, the republic of Venice, and small city states like Ghent and Bruges embraced their autonomy. The German writer and poet Johann Wolfgang von Goethe (1749-1832) had expressed the beauty of such a political system as follows when he discussed a Germany that was still splintered in 39 independent states:

“I do not fear that Germany will not be united; … she is united, because the German Taler and Groschen have the same value throughout the entire Empire, and because my suitcase can pass through all thirty-six states without being opened. … Germany is united in the areas of weights and measures, trade and migration, and a hundred similar things. … One is mistaken, however, if one thinks that Germany’s unity should be expressed in the form of one large capital city, and that this great city might benefit the masses in the same way that it might benefit the development of a few outstanding individuals. … What makes Germany great is her admirable popular culture, which has penetrated all parts of the Empire evenly. And is it not the many different princely residences from whence this culture springs and which are its bearers and curators? … Germany has twenty universities strewn out across the entire Empire, more than one hundred public libraries, and a similar number of art collections and natural museums; for every prince wanted to attract such beauty and good. Gymnasia, and technical and industrial schools exist in abundance; indeed, there is hardly a German village without its own school. … Furthermore, look at the number of German theaters, which exceeds seventy. … The appreciation of music and song and their performance is nowhere as prevalent as in Germany, … Then think about cities such as Dresden, Munich, Stuttgart, Kassel, Braunschweig, Hannover, and similar ones; think about the energy that these cities represent; think about the effects they have on neighboring provinces, and ask yourself, if all of this would exist, if such cities had not been the residences of princes for a long time. … Frankfurt, Bremen, Hamburg, Lübeck are large and brilliant, and their impact on the prosperity of Germany is incalculable. Yet, would they remain what they are if they were to lose their independence and be incorporated as provincial cities into one great German Empire? I have reason to doubt this.”[1]

In addition to the advancement of political competition, the vision also promotes economic competition. A German employee would not be obstructed from working in France anymore, a Dutchman would not be taxed by the government if he transfers money from a Dutch to a Spanish bank or when he decides to buy stocks on the Italian equity market. Nobody would withhold a Belgian brewery from selling beer in other countries within the European free trade area.

Socialist vision
The second vision promotes a European central state that holds the power to enact more regulations, redistribution of wealth, and harmonization of legal systems within the whole Union. A strong central political body is to coordinate such efforts. The consequence is that its member states would increasingly have to give up their sovereignty. This is clearly visible from the political events in Greece and Ireland during the financial crisis of 2008 when Brussels demanded from Greece and Ireland how they should deal with their deficits and what austerity measures they should take. The socialist vision of Europe is an ideal for the political class, bureaucrats, interest groups and the subsidized sectors that want a powerful central state for their self-enrichment. Political competition among its member states, something that the classical liberals supported, should be eliminated. Doing so, Europe becomes less democratic and political power is increasingly shifted into the hands of bureaucrats and technocrats in Brussels. Historically, such plans for concentrated political power had been realized by such figures as Charlemagne, Napoleon and Hitler. The difference with our times is that the creation of a modern European superstate does not directly require military means. The introduction of new institutes like the European Central Bank, a common currency like the Euro, and extended power of the European Commission would suffice. Similar socialist intentions were already visible from the start of the European integration in the European vision of Jean Monnet, the intellectual father of the European community. Fearing an independent and emerging Germany after the second World War, an integration of Germany into Europe was considered to be a good thing. Next to that, the French wanted to have control over the Rühr area and they wanted to keep other vital German resources out of solely German hands. After losing her colonial powers in Indochina and Africa, the French ruling elite were also looking for new influence and pride which they eventually found in the European community.[2] The French premier in 1950 had for example proposed a plan to install a European army under the leadership of the French.

Why it is good for the Netherlands to leave the European Union
I believe that the EU should never have had more ambitions than the free trade zone that requires no supranational institutes, except for a European Court of Justice that is restricted to supervising conflicts between the member states and guaranteeing the four freedoms. The EU has become so far removed from the classical liberal vision of political and economic competition that it is not worthwhile anymore for the Netherlands to participate. It has declined into a malignant cartel of states that can tell its members with whom and how they should conduct their trade. A good example were the quotas and import levies on Chinese solar panels in 2013 under the disguise of ‘anti-dumping’ measures. Several countries like the Netherlands and Germany had first opposed to these measures as they would like to maintain good relationships with China. Nonetheless, the European Committee, apparently under influence of solar panel lobbyists like those of the German producer Solarworld AG, introduced ‘anti-dumping’ measures. The eventual winners of such measures are European solar panel producers and its victims are the European people that simply want to buy cheap solar panels. Another example are the sanctions that the EU had imposed on Russia since the Ukrainian conflict – a conflict that was provoked by American imperialists and NATO.[3] The deteriorating trade relationships between the EU and Russia is also detrimental to the wealth of ordinary European citizens. Another recent example is the prohibition of high-powered vacuum cleaners and possible future bans on other energy appliances such as kettles and hairdryers in order to reach environmental targets.[4] Those who profit from such measures are mainly large legacy organizations such as Bosch and Siemens that have enough capital to meet the strict EU regulations.

Another reason why a Nexit would be good for the Netherlands is that it offers an opportunity to extricate oneself from the Euro and the implicitly pledged financial aid when a future financial crisis will tear through Europe.

The tragedy of the Euro
The introduction of the Euro has proven to be a huge mistake, because it has enabled fiscally irresponsible governments of such countries like Portugal, Italy, Greece, Spain etc. to conduct unsustainable economic policies. In the past, when these states had their own currency, their governments had to finance their budget deficits through the sales of government bonds which resulted in higher government debts. The higher government debts manifested itself in higher interest rates on their government bonds, and a greater money supply would lead to devaluations of their currencies.

To illustrate how the process of government bonds financing works in the European Monetary Union, we could look at the development of 10-year government bonds. The graph below shows the interest rates that governments have to pay to the financiers of their 10-year government bonds from 1995 to 2011:

Development in Interest Rates on 10-year Government Bonds
Interest rates on 10-year government bonds from 1995-2011.

The y-axis represents the rates of interest that an investor receives from 10-year government bonds. Countries that are economically stronger and fiscally more conservative are rewarded with lower interest rates due to the smaller risk that these governments will not pay back their loans. In the case of Germany, a country with traditionally a stronger economy, a more conservative Bundesbank, and a fiscally more responsible government than many other European nations, investors received 7.5% interest on their 10-year government bonds in 1995. Greek government bonds had a yield of 18% in 1995. 1995 was the year in which the European Committee had announced that the Euro would arrive in 2002. Interest rates on government bonds consequently converged in the following years. At the end of 1997 all rates of interest on Portuguese, Irish, Spanish, Italian, French and German 10-year government bonds were more or less equal despite the fact that many of the governments of these countries still spent more than they received in tax incomes. The consequence of sharing a common currency with fiscally more responsible countries like Germany and the Netherlands is that fewer price signals in the form of higher interest rates on government bonds of fiscally irresponsible governments emerge. Irresponsible governments can issue government bonds to the banking sector that transfer these bonds as collateral to the ECB in return for loans. The interest rate that banks pay for the loans of the ECB are issued as profits to their governments. This is in short how ‘seigniorage’, the profits derived from money creation when the costs of money production and the distribution of money are lower than the value of money itself, is created.

Sovereign debt financing in EMU
Sovereign debt financing in the European Monetary Union.

This process leads to inflation, but the costs of inflation in the EMU are not solely borne by the respective country that issues the government bonds, but by all countries that participate in the EMU. A country like Spain can for example issue government bonds that traditionally would correspond with 10% inflation. However, when other countries like the Netherlands and Germany issue an amount of bonds that corresponds with 5% inflation, Spain benefits from seigniorage as the inflation created by Spain is higher and borne partly by the Netherlands and Germany. A Euro in this regard is beneficial for fiscally irresponsible governments. It is actually a “Tragedy of the commons”. Abusing the Euro in this way is exactly what countries like Portugal, Italy, Ireland, Greece, Spain and France have done. This works until a financial crisis shows how insolvent the governments of these countries actually are. That has happened in 2008, the moment when interest rates on European government bonds started diverging. The ECB had even decided to buy up Greek government debts in May 2010 in order to lower the interest rates on Greek government bonds. In June 2010, a temporary European Financial Stability Facility (EFSF) was founded with guarantees of up to €440 billion to combat the European sovereign debt crisis. It has provided financial assistance to Ireland, Portugal and Greece. The EFSF was later replaced by the European Stability Mechanism (ESM) in October 2012 with a total described capital of around €700 billion of which the Netherlands has pledged €40 billion in capital participation. The Dutch prime minister, Mark Rutte, had promised the Dutch in 2011 that the Netherlands would receive back the money it has loaned out to Greece in May 2010.[5] The total sum that was loaned to Greece by the Dutch was €3.2 billion. However, in 2012 when the Netherlands loaned out €14.5 billion of the second financial aid package of €130 billion that was pledged by Europe and the IMF to Greece, the Dutch minister of Finance, Jeroen Dijsselbloem, admitted that the Netherlands were losing money. Rutte also admitted that he could not guarantee that the Dutch loans to the Greeks would not be forgiven.[6] Three years later, on July 13 2015, the Netherlands loaned out another €22.6 billion to Greece.[7] It has become clear that such financial pledges of the Netherlands to fiscally irresponsible governments like that of Greece are not beneficial for the Dutch. Even in the long run it is not beneficial for the EU as it supports and prolongs a socialist European system that is deeply rotten to its core and destined to fail. What the EU needs is a radical return to decentralization and political competition.

The EU has become a sinking ship. It appears to me that the Netherlands should leave the Union as soon as possible. I do not see how Europe can maneuver itself safely through the next financial crisis that is at the point of breaking out as more banks are on the brink of collapse.[8] I also expect greater centralization of political power within the EU and a greater loss of individual member countries’ sovereignty. On June 27, 2016, the Polish media had reported that France and Germany were taking matters into their own hands and are using the Brexit to unveil their plan to morph the continent’s countries into one giant superstate. Under their radical proposals,

“EU countries will lose the right to have their own army, criminal law, taxation system or central bank, with all those powers being transferred to Brussels.”[9]

Conclusion
A sensible Netherlands would leave the European Union and the European Monetary Union in order to preserve political and economic sovereignty. They would have free trade agreements with all countries within and outside of the EU. EenVandaag, a popular Dutch TV programme, had published the results of their 27,000 large online poll on Sunday June 26, 2016 in which 54% of the Dutch would like to hold a referendum about the Netherlands’ participation in the EU. 48% of the poll wanted the Netherlands to leave the EU against 45% who would like to remain in the EU.[10] In the meantime, the Remain camp will continue their nauseating snobbery accusing the Leave camp of being racist, nationalistic, isolationist or simply ignorant.

References
Bagus, P. (2010). The Tragedy of the Euro.

BBC. (2016). EU referendum: The result in maps and charts.

China Courant. (2014). Mogelijk nieuwe straffen voor producenten Chinese zonnepanelen.

Dijkstra, M. (2015). Griekse crisis: wat heeft het allemaal gekost?

DutchNews.nl. (2016). Dutch PM rejects referendum calls: not in the Netherlands’ interest.

Fullfact.org. (2016). First they came for the vacuum cleaners: will it be kettles next?

Gutteridge, N. (2016). European SUPERSTATE to be unveiled: EU nations ‘to be morphed into one’ post-Brexit.

Hoppe, H.H. (2001). Democracy the god that failed.

Judt, T. (2006). Postwar: A History of Europe Since 1945.

McMurtry, J. (2016). Ukraine, America’s “Lebensraum”. Is Washington prepared to wage war on Russia?

NOS. (2011). Rutte verwacht Grieks geld terug.

NU.nl. (2012). Rutte geeft verbreken verkiezingsbelofte toe.

Zerohedge.com. (2016). Deutsche Bank tumbles near record lows as yield curve crashes.

Footnotes
[1] From Johann Peter Eckermann’s Conversations with Goethe (1836-1848).

[2] Tony Judt writes in Postwar: A History of Europe Since 1945 (2006) that “[U]nhappy and frustrated at being reduced to the least of the great powers, France had embarked upon a novel vocation as the initiator of a new Europe” (p. 153). He also writes that “[F]or Charles de Gaulle, the lesson of the twentieth century was that France could only hope to recover its lost glories by investing in the European project and shaping it into the service of French goals (p. 292).”

[3] See for example Prof. John McMurtry’s “Ukraine, America’s ‘Lebensraum’. Is Washington prepared to wage war on Russia?” for an analysis how Washington had provoked the Ukrainian conflict with Russia.

[4] See “First they came for the vacuum cleaners: will it be kettles next?”

[5] See “Rutte verwacht Grieks geld terug” (2011). http://nos.nl/artikel/275035-rutte-verwacht-grieks-geld-terug.html

[6] See “Rutte geeft verbreken verkiezingsbelofte toe” (2012). http://www.nu.nl/algemeen/2968363/rutte-geeft-verbreken-verkiezingsbelofte-toe.html

[7] See “Griekse crisis: wat heeft het ons allemaal gekost?” http://www.elsevier.nl/economie/article/2015/07/griekse-crisis-wat-heeft-het-ons-allemaal-gekost-2657386W/

[8] See for example “Deutsche Bank tumbles near record lows as yield curve crashes.” http://www.zerohedge.com/news/2016-06-13/deutsche-bank-tumbles-near-record-lows-yield-curve-crashes

[9] See “European SUPERSTAT to be unveiled: EU nations ‘to be morphed into one’ post-Brexit.” http://www.express.co.uk/news/politics/683739/EU-referendum-German-French-European-superstate-Brexit

[10] See “Dutch PM rejects referendum calls: not in the Netherlands’ interest.” http://www.dutchnews.nl/news/archives/2016/06/92520-2/

Black Women are not the most educated group in the United States

Several news media have published in the past weeks that Black Women are the most educated group in the United States or that they are the most educated according to race and gender. I decided to look into the statistics, ran some numbers, and found out that this is not the case. Black Women don’t perform as well as Caucasian and Asian Men and Women.

Here are examples of articles that wrongly claim that Black Women are the most educated group:

These media outlets have misrepresented the statistics from the National Center for Education Statistics and have misunderstood the report’s finding that

“From 1999–2000 to 2009–10, the percentage of degrees earned by females remained between approximately 60 and 62 percent for associate’s degrees and between 57 and 58 percent for bachelor’s degrees. In contrast, the percentages of both master’s and doctor’s degrees earned by females increased from 1999–2000 to 2009–10. Within each racial/ethnic group, women earned the majority of degrees at all levels in 2009–10. For example, among U.S. residents, Black females earned 68 percent of associate’s degrees, 66 percent of bachelor’s degrees, 71 percent of master’s degrees, and 65 percent of all doctor’s degrees awarded to Black students.”

From this, they conclude that Black Women are therefore necessarily the most educated group. What it shows however, is not that Black Women are the most educated, but that they have the highest proportion of graduates in comparison to their male counterparts by race. See here the data from the NCES:

Degrees conferred to Black Women
Table 1: Number of degrees conferred to females.

The data shows the following:

  • of the total Black population with an Associate Degree, 68% are female and 32% are male;
  • of the total Black population with a Bachelor’s Degree, 66% are female and 34% are male;
  • of the total Black population with a Master’s Degree, 71% are female and 29% are male;
  • of the total Black population with a Doctor’s Degree, 65% are female and 35% are male.

These findings indicate that Black Women have been much more successful in their educational endeavors in comparison to Black Men, but tell us nothing about the educational performances of Black Women compared to those of other or similar sexes of other races.

What is striking about the statistics of the NCES is that women far outperform men for all races. This graph is a clear depiction of that finding:

Degrees conferred to females
Table 2: Degrees conferred to females.

We can therefore conclude that women are more successful in obtaining degrees in Higher Education than men, but the gender gap is nowhere as wide for other races than for Blacks.

In order to have more insights in how well educated Black Women are compared to other groups, I have looked at statistics from the NCES on the educational level of people that are 25-29 years old:

Bachelor's degrees or higher for people ages 25-29 by race
Table 3: Bachelor’s degree or higher conferred by race.

According to the NCES, 60.1% of Asians aged 25-29 have at least a Bachelor’s Degree. Hispanics are the lowest performing group with 15.7%. Blacks have 20.5% and Whites 40.4%. Since the obtainment of Bachelor’s Degrees decreases the obtainment of Associate Degrees, it is more meaningful to look at the percentages of Bachelor’s Degrees or higher than to the percentages of conferred Associate Degrees. This graph however, has not specified the proportion of degree holders by gender. To approximate the degree holding male-female proportion, I have looked at table 1.

I have not found statistics that indicate the proportion of exclusively Asian degree holders by sex in Higher Education so I will make the assumption that the percentage of conferrals to Asian Women among the Asian population is approximately the same as that for Asian/Pacific Islander Women at around 55%. Hence, among the Asian group of which 60.1% aged 25-29 hold a Bachelor’s degree or higher, 55% are female: 33% of the total Asian population is female and holds a Bachelor’s degree or higher. 20.5% of Blacks aged 25-29 hold a Bachelor’s degree or higher of which around 68% is female. This means that around 14% of the total Black population is female and holds a Bachelor’s degree or higher. We can thus conclude that Asian Women perform much better educationally than Black Women with a ratio of almost 2:5.

How do Black Women perform in comparison to White Women? If we say that around 58% – this may not be entirely accurate, but from the NCES statistics it is reasonable to assume this number – of Bachelor’s Degrees and higher conferred to Whites are conferred to Women, we can assert that approximately 23% aged 25-29 of the total white population that have obtained these degrees are Women. According to my calculation, White Women thus perform far better than Black Women as well.

What if you would compare Black Women with Asian Men? According to my calculation, around 27% of all Bachelor’s Degrees and higher that have been conferred to the Asian population were conferred to Asian Men. Asian Men hence outperform Black Women with an approximate ratio of 1:2.

If you would compare Black Women with White Men, we can find that around 17.4% of the white population aged 25-29 that have obtained a Bachelor’s Degrees or higher are Men. This again is higher than the 14% of Black Women.

You can find a clear overview of my findings in the following table:

Group by gender and race Percentage holding Bachelor’s or higher degree w.r.t. their race
Black Men 7%
Black Women 14%
White Men 17%
White Women 23%
Asian Men 27%
Asian Women 33%

Conclusion
Black Women are by far not the most educated group within the United States. According to my calculations Black Women proportionally hold fewer Bachelor’s Degrees or higher compared to White Men, White Women, Asian Men, and Asian Women. An Asian Woman aged 25-29 is almost 2.5 times more likely to hold a Bachelor’s Degree or higher than a Black Woman aged 25-29. An Asian Man is almost 2 times more likely to hold a Bachelor’s Degree or higher. White Women more than 1.5 times more likely. I have not included Hispanics into my calculations, but I can see in one glance that Black Women do perform better than female and male Hispanics. Comparing Black Men with Asian Women, I find it shocking that an Asian Woman is almost 5 times more likely to hold a Bachelor’s Degree or higher than a Black Man.

I find it a shame that many news media have misinterpreted the data from the NCES and have spread the untruth that Black Women are the most educated group in the United States. Lastly, I would like to add that in order to gain more insights in how much better educated a group is we should also look into the type and quality of the courses and universities where these degrees were conferred. This is something I have not looked into.

References
Black Women Are Now The Most Educated Group In The U.S.
National Center for Education Statistics
Report: Black Women Have Become The Most Educated Group In The U.S.
Study: Black Women Most Educated in U.S.