Tuesday, 19 April 2016

Brexit or Bremain - not much of a choice...

George Osborne's blood-chilling predictions of financial armageddon (a cost of £4,300 a year per household) in the event of Brexit make me want to run screaming into the “No” camp - there to make common cause with a bunch of people with whom I disagree on almost everything. Why? Because if the British economy is really so sensitive, then the system is all wrong in the first place. In that case Brexit could be the medicine we need to force us to sort it out.

Like many progressives, I'm an unenthusiastic Bremainer, reluctant to abandon the principle of “togetherness” that the E.U. represents. But while I cling to the idea that the Europe of people can make togetherness a reality, I am forced to acknowledge that the Europe of institutions is making the problem worse.

Take free trade, which is the cornerstone of E.U. policy. In theory it boosts competition and encourages more productive methods. In practice it means that companies exploit the lowest wages and tax rates they can find, to make their investors richer. Productivity has been replaced by profitability as the economic objective, on the basis that the total amount of wealth is less important than the amount of it that one can grab for oneself.

British governments have been encouraging this approach for over 30 years. The result: wages have stagnated while corporate profits and asset prices (including house prices) have soared on a great bubble of consumer debt. Meanwhile, the E.U. has shaken off the social idealism of its founders in pursuit of a single market in which corporations thrive while their workers are encouraged to embrace the spirit of “flexibility” - a market that will soon be wide open to U.S. and Canadian companies, too.

Whatever happened to people in all of this? They are either labour to be exploited or consumers made to pay as much as possible using money lent to them at extortionate interest rates. In Europe it's getting harder and harder to challenge this, as the Greeks discovered last summer. In a Britain outside Europe change would be both possible and necessary, but with political elites largely on the side of the investors it could well be change for the worse.

How did we end up with a choice between two bad outcomes? Because the system is rotten however you look at it. One thing's for sure, however: if Britain votes no, then a new political vision will be needed quickly, before Johnson, Gove and the rest of them have their free market way.

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