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Family Issues-The brexit as a combat between two neoliberalism models

By Dina Tzouvala

[originally written in Greek for K-lab.zone and translated in English by Kollect’s I’mpossible editor]

***

Let’s start with a Gramscian cliché: We live in the time of monsters. Even though the word aversion is being used often and lightly, it is probably the best description of the referendum of the United Kingdom (UK) for staying or not in the European Union, which is due to take place on the 23rd of  June.

But let’s start from the beginning. For different reasons that have to do both with the post-war UK’s Keynesianism, as well as with the country’s attachment to the USA and the development of a different safety doctrine against the USSR, but also due to the slow realization of the ending of the British Empire and the cultural distance from ‘Europe’, the UK wasn’t amongst the countries that built the European Coal and Steel Community and the European Monetary Union. Furthermore, because of consecutive Vetos from the side of France, the UK became a member of the EU just in 1973. So, a series of events regarding the British capitalism happened independently from the EU’s policies. Maybe, the most important – and rarely acknowledged – event was the ‘sterling crisis’ of 1976, which was the aftereffect of the Oil crisis of 1973. The crisis led to the defeat of the left wing of the Labor Party, and to a loan of 4 billion from the IMF. This was the first case (long before the debt crisis of South America during the 80’s), where the IMF set strict prerequisites of fiscal discipline for providing the loans. This intervention set the basis both for the role of the IMF in the neoliberal restructuring of global capitalism, and for the election of Margaret Thatcher in the UK.

Furthermore, the roots of the Conservative Party’s current stance can be traced back at the late years of Margaret Thatcher’s premiership. Just before 1990, within the Conservatives, a strong wing of Eurosceptics made its appearance. Their main argument was that the European Monetary Union (and afterwards the EU) was too “socialist” putting some boundaries regarding the defense of labor rights, protection of the environment etc. Before the coup from within her party, Margaret Thatcher seemed to be leaning towards this direction, since the “federalism” of the French socialist Jacques Delors, was considered a threat for the United Kingdom’s domination. It is important to note here that for the right wing of the Conservative Party, the Uk’s domination, back then but now as well, is a necessary prerequisite for the further neoliberal restructuring of the country. The known joke amongst Eurosceptics, about EU trying to regulate even the shape of the cucumbers is not coincidental. Basically, the criticism from the right wing of Eurosceptics is that EU is a bunch of bureaucrats trying to regulate everything, leading to distortion of the market and damaging the competitiveness of British capitalism. If to this we add the efforts for limiting immigration, restricting welfare benefits towards EU citizens, a generalized and vague worry about Uk’s sovereignty and also a certain nostalgia for the degraded empire, it is made clear that under the current circumstances the British Euroscepticism has clearly rightwing, neoliberal, xenophobic traits. This of course, doesn’t mean that UK doesn’t have a tradition of leftist radicalism, with main example the historical ‘leader’ of the left wing of the Labor Party, Tony Benn. Nevertheless, under the present circumstances, both the Labor Party under the leadership of Jeremy Corbyn, as well as the Green Party and even groups of the “extra parliamentary left”, support, others more and others less critically, the stay of the country in the EU.

This analysis of course, seems preposterous if we take into consideration the role of the EU in the neoliberal restructuring of the European South and of the Europe altogether. The argument that EU, which is explicitly based on the competitive market economy, the fiscal discipline and the strict submission of the public sector to the market logic, is not “adequately neoliberal”, seems out of place and time. To better understand this paradox, two clarifications need to be made: a theoretical and a political one.

The theoretical clarification lies on the fact that neoliberalism is not a unified ideology. On the contrary, if we follow Foucault’s categorization in the “Birth of Bio-politics” we have two distinct ideological currents: the american neoliberalism, with main representatives Hayek, Friedman and Buchanan, and the german neoliberalism (also known as ordoliberalism), with representative such as Eucken, Erhard and Roepke. Both currents share the same roots, as they emerged in the form of critique towards the classical liberalism of the 19th century (Adam Smith’s “invisible hand of the market”) as well as towards the increasing state interventionism, the welfare state and any form of “collectivism” from Bismarck’s paternalistic conservatism till the post-war british Keynesianism and the USSR. Indeed, before the end of the 1940’s we can not talk about two currents, but only for a single one, and all the important neoliberals were coiled around Mont Pelerin’s think tank. However, since the end of the 1940’s, the differences between them started to become more evident. Even though both the American and the German neoliberals believed that that competition should be the base of the economy (and of the society), significant differences started to emerge. The american neoliberals gradually stopped exerting criticism on the monopolies, which they considered to be either a consequence of the free market function (and as such, a legitimate phenomenon), or a ‘lesser evil’ compared to state interventionism. On the other hand, the ordoliberals insisted on the need of drastic state intervention so as to prevent the formation of monopolies, which de facto abolish the competition.

In other words, according to the american neoliberals, the state should intervene, but only to ensure the market function. On the other hand, according to their german counterparts, the state should intervene in order to ensure the function of competition, even if that would mean going against short term market functions. On top of that, the experience of Nazism, but also of a mass revolutionary movement, has implanted in the center of the ordoliberal thought the fear of “proletarianization”. Therefore, for the german neoliberals it was legitimate and necessary for the state to intervene, promoting this way the decentralization and ensuring a minimum standard of living, so as to avoid the “proletarianization of the masses”. Of course, this intervention has to be exerted with respect towards the principles of competition. For example, the public and free (or generally affordable) education was considered an acceptable measure, but price regulation not. On the other side, the american neoliberals had – because of their different experience of the history and a different intellectual tradition – a view a lot more restrictive regarding state interventionism.

This split, justifies in part the repulsion of the right wing conservatives towards the EU. Because of the historical relationship between UK and USA, and also because of the inherent neoliberal tradition of the country, the dominant neoliberal model is much closer to the one of Hayek and Friedman rather that the ordoliberal. On the other side, the EU – despite being a significantly complex model of administration of the several national capitalisms – it embodies strong ordoliberal traits. For example, the fact that it protects a lot more systematically the labor rights or the environment than the national legal systems of each country do, relates directly to the relevancy of ordoliberalism with the “regulatory capitalism”, but also the “social market economy” (Soziale Marktwirtschaft). Let us not forget that Schaeuble studied at the University of Freiburg, which is a historical stronghold of the German ordoliberals, while recently, Donald Tusk publically expressed his admiration for the ordoliberal worldview. Therefore, I believe that one of the ways to perceive this referendum is as a combat between two different neoliberal models.

My second clarification is of a political nature. It is absolutely necessary for this analysis to not project on the british reality, forms that represent the political situation in Greece, so as to justify our political choices. During last September we witnessed this paradox when the election of Jeremy Corbyn for the Labor Party leadership became a (bad) alibi for those who chose to stay in the SYRIZA party that in the end supported the memorandums. Therefore, it would be a mistake from the part of the radical left to project its analysis regarding the EU on the reality of the UK and deduce that leaving the EU would be the most preferable solution. Under the current circumstances, the exit of the UK from the EU would almost certainly be “from the right”, while the short and medium term physical consequences would mean the deterioration of the living standards of both Britons and the immigrants from the EU countries. Moreover, it is very likely that exiting the EU would mean the end of the United Kingdom. It is very possible that Scotland would attempt a second referendum, which would very likely lead to independence, while Irish nationalism in Northern Ireland would gain ground. Despite the fact that both of these scenarios are not by definition negative, it is almost certain that they would cause chaos. And Mao  may believed that a big turmoil is a nice situation, but he believed that because he knew that he could drastically intervene and create a new order, favorable to his political plans. Under the current circumstances, taking into consideration the specific balance of class and political powers, it seems impossible to me that the prevalence of chaos could lead to the improvement of the labor powers position.

Let us finish this article as we started it: with a cliché. Following the conversation about the referendum, the only thing that I am thinking about is that the best outcome would be for both parts to loose and that “In the earthquakes to come, I very much hope”.

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