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

Eye Candy: Gay marriage in Europe (2018)

NOL gay marriage Europe
Click here to zoom

Opponents of gay marriage might have trouble explaining this one, at least in the free world.

Too many shadows whispering voices. Faces on posters too many choices. If when why what how much have you got…

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

Eye Candy: Shanghai Cooperation Organization

NOL map SCO 2018

First off, Shanghai and Warsaw are two very different cities, and because of that I think the SCO is a different animal than the Warsaw Pact. For one thing (aside from the difference in the two cities, one being selected for its geographical prominence, the other for its commercial acumen), the Warsaw Pact was a military alliance led by the Soviet Union, while the SCO is dedicated to political and economic cooperation as well as military security. Notably, the security aspect of the SCO is dedicated to coordinating state-led efforts against terrorism and separatism rather than against a rival alliance.

I don’t see anything wrong with multilateral efforts undertaken by states other than the US. I don’t see any need to worry, fret, or otherwise suspect the SCO of undermining world peace and prosperity. The fact that the SCO is made up of cooperating autocratic regimes rather than democratic ones does not faze me. The SCO has been making overtures to the democracies of India, Iran, and Sri Lanka (be sure to check out Tridivesh’s excellent take on India and the SCO), and multilateral cooperation among states is in itself an exercise in political participation among equals, albeit not at an individual level.

There is also cause to be happy that China and Russia have bound themselves up in such a prominent cooperative venture, too, given the two powers’ history of fighting each other. The SCO is contributing to peace and prosperity, and while it appears on the surface that the venture is designed to be a rival of the Western-built world order, the Shanghai Cooperation Organization actually contributes to it.

(h/t Nick)

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.

Law, Judgement, Republicanism

Draft material for a joint conference paper/Work in Progress on a long term project

This paper comes out of a long term project to work on ideas of liberty in relation to republicanism in political thought, along with issues of law and sovereignty. The paper in question here comes out of collaborative work on questions of law, judgement, and republicanism in relation to Turkey’s history and its current politics. Though this comes from collaborative work, I take sole responsibility for this iteration of draft material towards a joint conference paper, drafted with the needs of a blog with a broad audience in mind.

The starting point is in Immanuel Kant with regard to his view of law and judgement. His jurisprudence, mostly to be found in the first part of the Metaphysics of Morals on ‘The Doctrine of Right’, is that of law based on morality, so is an alternative to legal positivism. The argument here is not to take his explicit jurisprudence as the foundation of legal philosophy. There is another way of looking at Kant’s jurisprudence which will be discussed soon. 

What is particularly valuable at this point is that Kant suggests an alternative to legal positivism and the Utilitarian ethics with which is has affinities, particularly in Jeremy Bentham. Legal positivism refers to a position in which laws are commands understood only as commands, with regard to some broader principles of justice. It is historically rooted in the idea of the political sovereign as the author of laws. Historically such a way of thinking about law was embedded in what is known to us as natural law, that is, ideas of universal rules of justice. This began with a very sacralised view of law as coming from the cosmos and divine, in which the sovereign is part of the divinely ordained laws. Over time this conception develops more into the idea of law as an autonomous institution resting on sovereign will. Positivism develops from such an idea of legal sovereignty, leaving no impediment to the sovereign will.

Kant’s understanding of morality leaves law rooted in ideas of rationality, universality, human community, autonomy, and individual ends which are central to Kant’s moral philosophy. The critique of legal positivism is necessary to understanding law in relation to politics and citizenship in ways which don’t leave a sovereign will with unlimited power over law. Kant’s view of judgement suggests a way of taking Kant’s morality and jurisprudence out of the idealist abstraction he tends towards. His philosophy of judgement can be found in the Critique of Judgement Power, divided into parts on aesthetic judgments of beauty and teleological judgments of nature.

The important aspect here is the aesthetic judgement, given political significance through the interpretation of Hannah Arendt. From Arendt we can take an understanding of Kant’s attempts at a moral basis for law, something that takes political judgement as an autonomous, though related, area. On this basis it can be said that the judgement necessary for there to be legal process, bringing particular cases under a universal rule, according to a non-deterministic subjective activity, on the model of Kant’s aesthetic judgement is at the root of politics.

Politics is a process of public judgement about particular cases in relation to the moral principles at the basis of politics. The making of laws is at the centre of the political process and the application of law in court should also have a public aspect. We can see a model of a kind in antiquity with regard to the minor citizen assembly, selected by lottery, serving as a jury in the law courts of ancient Athens. It is Roman law that tends to impose a state oriented view of law, in which the will of the sovereign is applied in a very absolutist way, so that in the end the Emperor is highest law maker and highest judge of the laws.

As Michel Foucault argues, and Montesquieu before him, the German tribes which took over Roman lands had more communal and less rigidly defined forms of court judgement, and were more concerned with negotiating social peace than applying laws rigidly to cases. Foucault showed how law always has some political significance with regard to the ways in which sovereignty works and power is felt. That is the law and the work of the courts is a demonstration of sovereignty, while punishment is concerned with the ways that sovereignty is embedded in power, and how that power is exercised on the body to form a kind of model subjugation to sovereignty. The Foucauldian perspective should not be one in which everything to do with the laws, the courts, and methods of punishment is an expression of politics narrowly understood.

The point is to understand sovereignty as whole, including the inseparability of institutions of justice from the political state. The accountability of the state and the accountability of justice must be taken together. Both should work in the context of public accessibility and public discussion. The ways in which laws, courts, and judges can be accountable to ideas of autonomy must be declared and debate. Courts should be understood as ways of addressing social harms and finding reconciliation rather than as the imposition of state-centric declarations of law.