EU: Peaceful, Prosperous, Neoliberal

By Cygnus

There are plenty of discussions now on what kind of Scotland we intend to work towards in the next few years, with an eye to social change. Radical Independence Campaign (RIC), the Scottish Socialist Party, the Scottish Green Party and – to a lesser extent – Yes Scotland are often focussed on the same overlapping and intersecting themes and issues. The democratic deficit, crushing poverty and inequality, and unemployment are recurrent in our proposed solutions to the social and economic injustice that characterises the British state today. Specifically, then, and in terms of concrete change, we want quality jobs, workers’ rights, and free and universal health care. Independence, we have realised, is a means to attain these goals, which are socially oriented. This therefore requires a democratised economy which is geared towards achieving ‘sustainable wellbeing’[i] and not the accumulation of profit and the expansion of capital. We are intent on working towards a socially just economy, as opposed to one driven by market fundamentalism, but certain economic structures in place now are, by mere design, a threat to progressive change. This is because their purpose is to implement and maintain neoliberal capitalism, and they are found at the supranational and international levels. However, a coherent discussion about the international economic structures appears to be neglected, despite these having an enormous influence on how we organise our economy.

At the time of writing, the EU-US Transatlantic Trade and Investment Partnership (TTIP) is being negotiated. According to the EU Commission, this trade agreement aims at “removing trade barriers (tariffs, unnecessary regulations, restrictions on investment, etc) in a wide range of economic sectors so as to make it easier to buy and sell goods and services between the EU and US. The EU and US also want to make it easier for their companies to invest in each other’s economy”.[ii]

While vague on virtually everything, it is clear from the language that this is a serious attempt at the supranational level to further entrench neoliberalism and deepen corporate power over states. In March this year, Tory cabinet minister, Ken Clarke, “hosted a roundtable meeting with professional business services to discuss barriers to the US market that they currently face and explore the many opportunities for business that the proposed [TTIP] will bring”.[iii] Much like the EU level negotiations, we are given no clue as to which individuals representing ‘professional business services’ are present in talks on economic policy that is skewed towards the interests of business. In effect, what this deal does is cut away any bureaucratic fetters on corporations, and grants them unprecedented power, by allowing them to legally alter the structures designed initially to regulate them.[iv] This agreement will be a comically dystopian victory for capital, due to one particular element of it: the Investor-State Dispute Settlement. This is a mechanism that grants multinationals the power to sue states for limiting their profits with regulations.[v] While many of us identify states as obstacles to genuine democracy in themselves – due to their necessarily hierarchical and violent structures – we must concede that they can at least assist with the creation of (somewhat) democratic institutions; laws amended or written by multinationals will be oriented towards the accumulation of capital only.

Even if the dark era of TTIP does not begin (although there is currently no organised opposition to speak of), an independent Scotland will likely be a member of the EU, World Trade Organisation, World Bank and the International Monetary Fund. All of the latter three institutions are configured to implement, or assist in implementing, neoliberal capitalism on a global scale – and have succeeded – although only the WTO was created specifically for this purpose in the mid-nineties.

The EU is dedicated to upholding the principle of market fundamentalism, and ensuring that its members run free trade economies. The IMF, the European Central Bank, and the European Commission (executive arm of the EU) work together to ensure that states in the Eurozone adhere to neoliberalism. This is most starkly demonstrated in the event of capitalist crises, where savage public spending cuts are imposed to pay for private losses – Greece being the most current and stark example.

The IMF’s purpose, it claims, is to “provide the public good of financial stability”.[vi] The World Bank has two goals to be complete (by 2030): to “end extreme poverty” and to “promote shared prosperity”.[vii] Both of these international institutions enjoy membership (therefore ‘legitimacy’) from almost all states in the world (188). It’s worth considering the internal democracy of these two bodies with nobly egalitarian aims. Since its inception in 1946, all presidents of the WB have been US citizens, and since the same year, all managing directors of the IMF have been Europeans. Driven by their desire for financial stability and poverty reduction, the WB and IMF have been responsible for socio-economic atrocities on a global scale, notably in the global South. During the 1970s, they put pressure on countries to take out loans, borrow, and deepen national debt. By the early 1980s, those indebted countries were abandoned. There were then pressured to implement ‘structural adjustment programmes’ – this, in short, meant that the working class are required to pay of the debts of the rich.[viii] More recently, the World Bank demanded that Tanzania privatise its water system, and advocated that food subsidies to post-invasion Iraq be terminated.[ix] The role of the IMF and World Bank is to ensure the interests of the rich remain unthreatened by the needs of the many; it is for this reason that Chomsky aptly labelled them “tools of the neoliberal onslaught”.[x] The WTO describes its aims as “reducing obstacles to international trade and ensuring a level playing field for all” and boasts that it has contributed to “unprecedented global growth”.[xi] These words are being echoed today in the TTIP. A US trade representative once lauded the WTO as being adept at promoting “America’s passion for deregulation”.[xii]

Discussion of international neoliberal institutions is crucial if we want to have a socially just economy in an independent Scotland. We cannot ignore them because they will not ignore us: democratic grassroots movements to control the economy for the benefit of all can incur an authoritarian response from the state. There are precedents for avoiding or resisting global neoliberal structures in a formal capacity. In May 2007, Venezuela officially cut ties with the World Bank and the IMF. Regarding the latter, it shut down its offices in the country the previous year.[xiii] Despite this, Venezuela appears to still be considered a ‘member’ of both the IMF and the World Bank. Non-members of both include: Andorra, Liechtenstein, Monaco, Cuba, Nauru and North Korea. While these are serious politico-economic issues, they can only be dealt with in a post-independence Scotland. There are, at the moment, challenges to those who seek to build a new Scotland oriented towards social need, by those whose priority is the free market. One page on the site of Yes Scotland is entitled ‘Scotland Open for Business’ and states that the country is a “very attractive destination” to direct foreign investment.[xiv]. An article on the SNP website hails business opportunity in an independent Scotland, arguing that, after independence, it “will be able to strengthen its competitive business environment”.[xv] On another Yes Scotland page, there is simply a screed of uncategorised quotes by various capitalists endorsing independence to varying degrees. Among them are: UK president of PepsiCo, the chairman of BP and the chief executive of Tesco.[xvi] True, none of these pages speak of planning an orgy of privatisation or eroding further the already abysmal state of workers rights, but they do reveal a determination to create a Scotland which is supine, that will not disturb the neoliberal status quo. It is disconcerting that the country should be presented as prey to capitalists while a fifth of children in Scotland are living in poverty. Pandering to the interests of big business is not an ideal starting point for working towards a socially just economy. Even if they are doing this simply to capture the business community [sic] vote, it is a careless and desperate attempt to win a campaign.

The IMF, World Bank and WTO are state- and capital- centric institutions. Their aims, then, are to work with – or impose upon – states to ensure they remain fertile ground for neoliberalism. Likewise, the EU is a state-based politico-economic bloc, which has resorted to unspeakable savagery to maintain the ‘stability’ of the state and safe for business (see the Greek situation). These bodies interact with their members at the national level. For us in Scotland, there is a two year ‘transition’ period after the vote, meaning we can enter that space and prevent any pusillanimous bureaucrats from speaking for us and selling out. We can use this period to build coherent and organised resistance to external neoliberal entities. Erroneously, and sadly, some parties and groups – whose social concerns are at least informally expressed – maintain that the EU is some sort of progressive bloc. TTIP is not an aberration in policy, it is a logical and necessary continuation of EU neoliberal policy, so to oppose the TTIP but not the institution managing it is misguided. Scotland is part of a small island, but economically it is not isolated; it is part of an interconnected web of repressive economic structures. These are genuine threats to fundamental social change, and must be made a priority for those of us discussing a post-independent Scotland. There is a serious danger of being preoccupied with piecemeal political reform, to the detriment of economic restructuring. A reference here to James Connolly’s almost proverbial ‘hoisting the green flag’ argument is difficult to avoid here.

 

[i] See ‘Environment & the Economy’ by Scottish Environment LINK

[ii] http://ec.europa.eu/trade/policy/in-focus/ttip/questions-and-answers/

[iii] https://www.gov.uk/government/news/ken-clarke-discusses-proposed-transatlantic-trade-and-investment-partnership-with-professional-business-services

[iv] http://www.aljazeera.com/indepth/opinion/2013/12/trade-death-democracy-2013121812233660574.html

[v] http://www.theguardian.com/commentisfree/2013/nov/04/us-trade-deal-full-frontal-assault-on-democracy

[vi] https://www.imf.org/external/about/whatwedo.htm

[vii] http://www.worldbank.org/en/about/what-we-do

[viii] http://www.chomsky.info/interviews/20070516.htm

[ix] http://www.theguardian.com/commentisfree/2007/apr/27/comment.business

[x] http://tech.mit.edu/V120/N46/46chomsky.46n.html

[xi] http://www.wto.org/english/thewto_e/whatis_e/wto_dg_stat_e.htm

[xii] http://www.chomsky.info/articles/199705–.htm

[xiii] http://www.theguardian.com/business/2007/may/01/venezuela.imf

[xiv] http://www.yesscotland.net/news/scotland-open-business

[xv] http://www.snp.org/blog/post/2013/jan/business-opportunities-independent-scotland

[xvi] http://www.yesscotland.net/news/business-quotes-about-independent-scotland

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