Populism versus Constitutional Democracy

What is the difference between a conservative and a reactionary? A conservative knows when she has lost.

A conservative respects the status quo for the sake of stability. The reactionary rebels against it. Unfortunately, it is the reactionary impulse within Brexit that now threatens to hem in the liberties of British citizens, and threaten the rights of foreign residents, for a long time to come. A looser but productive relationship that Britain could have had with the European Union was lost, first at Maastricht in 1992, then again at Lisbon in 2007. A conservative recognizes this loss and adapts her politics to the new landscape. The reactionary tries to reconstruct those lost pasts in vain as the chaotic debates in Britain and the increasingly disappointing outcome illustrates.

Does this mean that referendums are bad? Do they only embolden radicals and reactionaries? It depends. If referendums are used to rubberstamp the decisions of a party in power, or as a way of deferring political judgement, then they are useless at best, dangerous at worst. By contrast, if they are part of the fabric of a democracy, and act as a real veto on constitutional change, rather than a populist rallying point, then they can be enormously valuable. They act as an additional check on the political establishment that might be irrationally fixated on some new governance structure. It ensures that every major change carries with it some level of majority support.

Ten years ago, I wrote a monograph Total Recall: How direct democracy can improve Britain. I advocated supplementing representative democracy with a norm or statutory requirement for referendums on constitutional issues and new local initiative powers. I focused on direct democracy in US states that mean that US state elections often involve both voting for representatives and on propositions. Referendums are required for state constitutional changes. In some states, citizens can initiate new legislation through propositions.

There are parallel constitutional requirements in force in parts of Europe, particularly in Switzerland, Norway and Ireland. It is hardly a coincidence that direct democratic mechanisms have slowed down European integration wherever they have had statutory rather than merely advisory force. Ireland had to go to the polls several times to get the ‘right’ answer but at least this meant that a majority of Irish eventually accepted the new EU arrangements. By contrast, Switzerland and Norway, against the wishes of their political establishments, took European integration only so far before settling with generous trade relations and much more limited political integration. The cost-benefit calculus of their arrangements are up for debate, but fewwould deny their legitimacy. Britain’s future position, by contrast, may turn out to look much worse and all because its people never had the chance to say ‘no’ until long after the facts on the ground changed.

It’s the ability to say ‘no’ that’s important, with the implication that the status quo must still be a viable option. A people cannot be legislators. Mass votes can’t add up to complex judgements to inform actionable law. Hence the Brexit referendum for leaving the EU for an unknown alternative was bound to lead to chaos which, in the long run, may undermine the legitimacy of representative government, let alone popular democracy, rather than strengthen it. There is no status quo ante to return to.

At the time I was writing Total Recall, the spirits of referendums never voted on haunted British politics. Referendums were promised on adopting the Euro and the European Constitution. Both were abandoned when the Government realized they would almost certainly lose. So we stayed out of the Euro but signed what became the Lisbon Treaty. This turned out to be a deadly combination that eventually led to Brexit. The Euro is quite badly managed as an economic scheme. As a political mechanism, however, it binds members of the Euro much closer together. Leaving the European Union, as Britain is doing, is perilous and costly. Leaving the Eurozone would be even more difficult as it would involve establishing a new currency from scratch. If New Labour had been serious about putting Britain in a federal united states of Europe, it should have gone all in with the Euro from the beginning.

So Brexit could have been avoided but not by ignoring majority sentiments. If British referendums were constitutionally mandated rather than the random outcome of internal (in this case, Conservative) party politics; if referendums were required to change the status quo rather than a mechanism for a belligerent minority to relitigate past losses, then, like Switzerland and Norway, we would be in a much better position now.

Will our political leaders learn this lesson for the future? That I doubt.

Nightcap

  1. Why sadness is better than happiness Adam Roberts, Aeon
  2. Stan wojenny and memories of Poland in the 1980s Branko Milanovic, globalinequality
  3. Macron ramps up EU power play with pitch to liberals Maïa de La Baume, Politico
  4. Is This Gary Johnson’s Last Campaign? Todd Krainin, Reason

Economic Liberalism and (Re)Building Europe after WWII.

It is important to understand that economic recovery and growth in Europe after World War II is not as tied to Keynesianism, unfunded welfarism, and corporatism as is sometimes assumed.

The Glorious Thirty Years of European recovery from world war and subsequent growth were not due to ‘Keynesianism’ etc. The Thirty Years ended because the influence of liberal policies had weakened and the costs of other policies had accumulated to create an obviously dysfunctional system. Left-wingers (and communitarian-corporatist conservatives) who think ‘market fundamentalists’ overthrew a well functioning social and economic settlement which was behind all the economic growth and associated institution building (post-war national recovery and European Union construction) are in error. It is a major error to ignore the influence of Austrian School liberals (see the discussion by a leading current practitioner of Austrian economics, Peter Boettke) and the related Ordoliberalismus of the Freiburg School.

My remarks on what the major terms and schools in this paragraph refer to have become uncontrollably long, so they are relegated to the bottom of the post. I hope readers will have the patience to reach them.

The key points are that the German post-war Economic Miracle came from Ordo-liberal policies, while economic growth in France after Charles de Gaulle came to power for the second time in 1958 comes from the policies of Jacques Rueff, a civil servant, judge, and economist who participated in the 1938 Walter Lippmann Colloquium in Paris, a decisive event in the revival of liberal economic thinking attended by Hayek and many other notable liberal thinkers.

Such ideas have had a lot more influence in France than lazy propagators of clichés about statist France and liberal America understand. Of course, if we look at the French and American economies we can see notable ways in which the US economy is more liberal, but that should not obscure the reality that France has had good economic times and that these have come about because liberal economic policies were applied, even where, as under de Gaulle, the political narrative of the government was not liberal. The France of 1958 and after was able to stabilise institutionally after a real danger of the collapse of constitutional democracy and have a good economic period because of neoliberal economic ideas.

Some on the left think the relative revival of market liberalism in the 1970s can be rooted in the Chilean Coup of September 1973, after which economic policy was to some degree influenced by Chilean economists with doctorates from the University of Chicago. This revival of market liberalism is known as neoliberalism, a potentially useful term which came out of the Lippmann Colloquium (see below) that has unfortunately collapsed into an empty term of abuse for any kind of market thinking in government policy, wherein even the most modest accommodation of economic rationality is labelled ‘neoliberal’ and therefore extreme, authoritarian, and based on the narrow greed of the rich. It is sometimes accompanied by attempts to read enlightenment liberals as somehow ‘really’ left-liberal, social democratic, or even socialist.

The reality is that neoliberal ideas were first obviously influential on Continue reading

The EU’s laudable Asia Connectivity Strategy

The European Union (EU) has put forward a plan for enhancing connectivity within Asia, and has been dubbed as the Asia Connectivity Strategy.

The EU does not want to give an impression that the Asia Connectivity Strategy (ACS) is a counter to the Belt and Road Initiative (BRI). Yet, senior officials of the EU, while commenting on the broad aims and objectives of the project, have categorically stated that the primary goal of the Asia Connectivity Strategy is enhancing connectivity (physical and digital) while also ensuring that local communities benefit from such a project, and that environmental and social norms are not flouted (this is a clear allusion to the shortcomings of the BRI). There are no clear details with regard to the budget, and other modalities of the project (EU member countries are likely to give a go ahead for this project, before the Asia-Europe Meeting in October 2018). The EU has categorically stated that it would like to ensure that the ACS is economically sustainable.

Other alternatives to BRI: the US

It is not just the EU, but also the US, along with Japan and Australia, which are trying to create an alternative vision to the BRI.

Continue reading

Brexit Breakdown and Confusion

I posted earlier this month on Brexit Breakdown suggesting that the aims of enthusiasts for the United Kingdom of Great Britain and Northern Ireland, leaving the European Union, have been eroded as the UK government’s positions drifts towards ‘soft Brexit’ accepting alignment with EU regulations on industrial goods and food, at the very least. This is still the case, but the situation has become increasingly complex, driven in an unpredictable way by contradictory forces, as I will attempt to explain below.

Full ‘soft Brexit’ would mean membership of the European Free Trade Association (EFTA), with almost complete adherence to European regulation. ‘Hard Brexit’ means eliminating any adherence to EU regulations, which in its most rock hard form means a willingness, even a preference, for crashing out of the EU with no agreement, resorting to World Trade Organisation rules to govern trade. On the other side are ‘Remainers’, including myself, who ideally would like to stay in the European Union after a referendum reversing the decision of two years ago; and who if this is not possible will work for the return of the UK to the EU at a future date.

It is still the case that over time the government has drifted towards soft Brexit, though not EFTA, and seems likely to end up agreeing to an even softer Brexit after EU negotiations are complete. The most notable area of likely compromise with the EU is to preserve an almost completely open border between Northern Ireland and the Republic of Ireland by allowing de facto membership of the EU Customs Union of Northern Ireland through a de facto border in the Irish Sea between Great Britain and Northern Ireland, largely in the form of EU customs inspections on ships between Northern Ireland and Great Britain.

The House of Commons anyway came very close recently to voting for the UK as a whole to form a customs union between the UK and the EU, so a proposal backed by the government for a form of customs union between the UK and the EU allowing an open border between Northern Ireland and the Republic without a customs border in the Irish Sea would certainly pass the House of Commons. It is one of the oddities of Brexit that a free vote of the House of Commons would result in the UK joining EFTA and this is resisted by the leadership of the two largest parties.

The Labour Party leadership resists EFTA (or any other way in which the UK stays in the Customs Union or the Single Market) though most Labour Party Members of Parliament, party members, and voters support remaining in the EU. The Labour leader Jeremy Corbyn supported Remain in the referendum though he has always looked like a socialist critic of the EU as a capitalist club. The Conservative Party leadership resists EFTA, though most Conservative MPs supported Remain in the referendum and would vote for EFTA now, and the leader (who is also Prime Minister), Theresa May, supported Remain during the referendum. In the case of the Conservatives though, party members and voters are mostly Leave and hard Brexit.

Theresa May gathered her Cabinet at the Prime Minister’s country residence, Chequers, recently to force through a soft Brexit package, in the hope of ending increasingly public conflict on the issue. Two members of the Cabinet have since resigned and Brexiteers in the House of Commons have forced some concessions, though of a rather secondary kind, which might disappear in further negotiations with the EU and the final parliamentary vote on the exit deal.

The consequences of recent political manoeuvres are as follows:

  1. The government has moved towards a softer Brexit,
  2. Hardcore Brexiteers have pushed back with some success,
  3. A second referendum seems more likely though not the most likely scenario,
  4. A no deal hard Brexit seems more likely though not the most likely scenario.

These four things do not seem to go together and what has happened is a drift from what seemed like the overwhelming probability of a hard Brexit with an agreement, to a relatively chaotic situation in which it is becoming harder and harder to decide on the most likely of the possible outcomes.

Hard Brexit without a deal has come to seem more likely because hard Brexiteers in the Conservative Party may undermine any agreement the Prime Minister (who has recently started to exercise direct control over negotiations) may reach with the EU and there are signs that the United Kingdom Independence Party (UKIP) will take voters from the Conservatives in the case of a soft Brexit. Theresa May is trying to achieve a position which can get most MPs behind her, and most Conservative MPs will probably support any deal she proposes. However, the hard Brexit people are willing to do anything to undermine a deal they consider inadequate and may vote with Labour in voting down a deal, though for very different reasons.

May’s hold on the Conservative Party is weak after her very poor performance in last year’s general election and no one expects her to be the leader at the next election (though given that the impossible seems to be becoming possible maybe we should not accept this as a given). Any election for the leader requires a contest in the parliamentary party to determine two candidates, with the Conservative Party membership as a whole deciding between them. The membership will undoubtedly vote for the more hard Brexit candidate, which at the moment seems likely to be Boris Johnson or Jacob Rees-Mogg. Rees-Mogg has absolutely no governmental experience at all, which would create an unprecedented situation if he does become Conservative leader and Prime Minister.

Neither Rees-Mogg nor Johnson is popular with the parliamentary party, so there must be a real possibility that neither makes it the final list of two candidates, presuming the parliamentary party does not persuade the candidates behind the leader of the first round to abandon the contest, which is what happened in May’s case. This could set off a major crisis in the Conservative Party.

The possibility of a second referendum (labelled a People’s Vote by its main advocates) is increasing because it seems likely that hard Conservative Brexiteers allied with the Labour Party will vote down any soft Brexit, and it also seems likely (but less likely as hard Brexiteers are more willing to vote against their own government) that an alliance of soft Conservative Brexiteers and the Labour Party will vote down any hard Brexit. It also seems very possible that the EU will reject any UK offer, as the arguments within Parliament and the Cabinet on the terms of Brexit refer to what can be agreed within British politics, not what the EU might find acceptable. At the very least it seems increasingly likely that substantive Brexit will be postponed, apart from withdrawal of UK representatives from EU institutions, for at least a couple of years after next year’s formal withdrawal.

The various forms of deadlock described above have not yet made a second referendum likely, but are increasing the likelihood of a second resort to the People to find a solution, though the question that would be asked, the form of any such referendum, its timing and so on remain unclear. Opinion polls show increasing support for a second vote and for then remaining in the EU, while the media is giving more coverage to the possibility. I would be happy to see such a result myself. The increasing uncertainty about what Brexit means itself undermined Leave claims that it would be an easy exit. Nevertheless, I have to say that the UK is probably leaving and that a no-deal Brexit is also increasing in probability.

Brexit Breakdown

Ir has been obvious for at least a month now that soft Brexit has won out in the UK, though the Prime Minister Theresa May would never admit such a thing directly. Government discussion of access to the EU internal market at its existing level, or very close, and keeping the border open between the Republic of Ireland and Northern Ireland (a fundamental of the peace settlement in the north) would at the very least require continuing regulatory alignment in goods (that is, following the rules made by the European Union).

It seems very likely that negotiations of the terms of exit with the EU itself would make even this partial alignment with the internal market inadequate in order to get the desired level of access. At the very least EU negotiators would demand some inclusion of services (financial services are the big issue here) and something at least resembling free movement of labour.

That inclusion would be full UK access to the internal market after exiting and would require at least a Swiss style relationship with the EU, in which there is full market access in exchange for accepting EU rules and something close to free movement of labour. Such a relationship would mean accepting judgments of the European Court of Justice even if they are not incorporated into UK law. The UK might not follow Switzerland into EFTA (European Free Trade Association, see paragraph below).

It has even been suggested that the UK might find it necessary to adopt a ‘Norway’ solution, in which the UK is directly a member of the European Economic Area. Norway has free movement but opts out of common agricultural and fisheries agreements. It is not part of the EU customs agreement. Like Iceland, Lichtenstein, and Switzerland, it is a member of the European Free Trade Area, which essentially harmonises regulations between these countries and the EU; that is, EU regulations are enforced by EFTA institutions.

It is clear that most Conservative MPs and businesses (though more large business than small business) regard something like the arrangements above, soft Brexit, as preferable to hard Brexit (trade agreement with the EU as a completely external country, possibility of no deal). These MPs and business people, along with most Treasury economists and economists in general, believe that keeping complete access to EU markets is more valuable than vague claims of a trade boom through deals with non-EU states across the world.

Hard Brexiteers believe that economic growth of other parts of the world requires breaking free of EU shackles on global free trade. The soft Brexit, as well as Remain, argument is that membership of the EU does not prevent trade with the rest of the world and that some EU countries are already doing that very well compared with the UK. On this argument, geographical proximity will always make EU trade disproportionately important so that limiting access to EU markets in the hope that non-EU countries will want free trade agreements is unnecessary and probably very damaging.

May’s drift towards soft Brexit after presenting herself as the guardian of hard Brexit has the support of most of the Cabinet, and Conservative MPs, but has been disappointing hard Brexiteers for some time. An agreement of the full cabinet at the Prime Minister’s country residence for soft Brexit has led to the resignation of the two most hard Brexit-oriented ministers.

It seems unlikely this this will deter May from a soft Brexit policy, which everyone agrees can only become more soft in negotiations with the EU to achieve an agreed exit. It also seems unlikely that most Conservative MPs will resist this policy. The biggest problem for May could be that the opposition parties want to vote against the government in call circumstances, so could vote with hard Brexit Conservative MPs to bring down any Brexit agreement.

At this point Brexit might completely break down, with the UK becoming a full member of EFTA, so in practice a member of the EU which exchanges some opt-outs for absence from the decision making processes and institutions. It might even lead to a suspension of Brexit, or a second referendum in which the electorate chooses between the exit package and staying in the EU.

At present, the most likely options in descending order are: 1. soft Brexit, outside formal association with the EU, but like that in practice, 2. formal association with the EU, maybe meaning membership of EFTA, 3. the complete breakdown of Brexit. This could change and so far change has been to move further and further away from hard Brexit.

Personally I support continuing membership of the EU. It is inevitable that large parts of the UK economy will ‘align’ with EU regulations, so it is best to be part of the institutions and processes which decide on these regulations. That is the most pragmatic version of my argument.

I am also a strong European integrationist, even a federalist romantic. The qualification of this idealism is that integration should not go further than public opinion or institutional capacity can accept at any one moment and that economic realities should guide the relationship with Europe for and against the kind of integration I favour at heart.

My own ideal is a kind of revival of the medieval dreams of ‘universal’ (i.e. European) Empire. The poet Dante was a great exponent of such a vision in his classic of political thought On Monarchy, which does not exclude city republics, even favours them under a high European sovereign. We can join it with Marsiglio of Padua’s slightly later call for an empire with elections to have something like democratic federation for Europe.

Leaving my European romanticism aside for the moment, the current realities are that the UK’s exit from the EU has become more and more complicated by the disadvantages of disentangling complex and far reaching institutional and economic links, particularly when most people involved want to keep an open border with the Republic of Ireland and keep 100% of the current level of access to the internal market.

Nightcap

  1. If Hillary Hates Populism, She Should Love the Electoral College Ryan McMaken, Power & Market
  2. Why Are Some Libertarians So Conservative About Immigration? Christopher Freiman, Bleeding Heart Libertarians
  3. The Idea and Destiny of Europe Nick Nielsen, The View from Oregon
  4. Jobs, technical progress & productivity Chris Dillow, Stumbling & Mumbling