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Against a second Brexit referendum

The British people, failed by their natural representative, the Labour Party, opted for the nationalist radicalism of Farage’s UKIP. Thus, the demagogues won. But not those who voted for them.

lead Former prime minister Tony Blair makes a speech on progressive politics in an era of populism at the Royal Academy in London, November 14, 2018. Victoria Jones/Press Association. All rights reserved.

Nothing can be more wrong for Britain, the British people and Europe than a second referendum between “Remain in the EU vs. a Canadian-style free trade agreement”. The Labour Party’s policy towards the EU should be an internationalist policy against the current ordoliberal EU dominated by Germany.1.

People may not know what ordoliberalism means in the EU context. Ordoliberalism is a form of neo-liberal rule-making that emanated intellectually in Germany and Austria in the inter-war period. It then dominated post-war Germany under the economic policy of “social market economy” and began entering the European Treaties by way of transplanting German ordoliberal principles in them, the French position being outflanked in secret negotiations since the early 1960s.2.  These principles are:  

•    Sound money, de-politicisation of the social economy and quantification of economics and public policy
•    Rule of Law and disciplinary regulation of professional life and every-day private life
•    Anti-inflation bias and wage stagnation
•    Low wages / precarious labour / part-time labour
•    Export-led growth
•    Complete independence of Central Bank
•    Complete de-politicisation of economic relations and fair competition
•    Balanced budgets
•    Anti-Trust legislation
•    Bio-politics and “social” market economy
•    Supply-side Constitution: The Ordo Economy is a Legal Order (Freedom is constituted by the state and premised on order) 3.

Germany managed to insert all these principles in a complex set of consecutive Treaties from the Treaty of Rome (1956-7) onwards, which took a clear ordoliberal form after the collapse of the Keynesian experiment in France (1981-83) and the endorsement of the Maastricht Treaty (1991-2).

The Stability and Growth Pact, which was put forth in order to solidify the advent of the Euro as world money, embedded ordoliberal principles in the body of EU law even further. Thus, when the global financial crisis and the Eurozone crisis broke out, Germany became the natural political manager of them in the Euro-area.

Had Britain been a member of the Eurozone it would have been subjected to Germany’s crisis management rules, such as the Fiscal Compact and the European Semester programme. This would have meant, above all, having officials from Brussels and Berlin scrutinising British expenditure and the British budget which is undoubtedly a most humiliating experience, demonstrating complete loss of national and popular sovereignty.

The entire British party-political establishment, including the Labour Party, failed to capture the popular mood on the Brexit referendum. They lost the vote to a bunch of nationalist and even racist demagogues, some of whom are not even interested in British and European politics anymore. Their slogans? “Stop migration”, “get back control” and “stop contributing to the EU budget re-directing them to saving the NHS”.

Against this nonsense, the Labour Party, whose current leadership is quite knowledgeable when it comes to what a socialist-class analysis of the EU means, offered lukewarm support to the Remain campaign, as did the Tories.

The British people, failed by their natural representative, the Labour Party, opted for the nationalist radicalism of Nigel Farage and UKIP. Thus, the demagogues won but not the people who voted for them, that is, mostly, workers and working-class families. Their programme is a neo-Thatcherite programme aimed at deepening free market reforms, thus the misery of British people. Exiting the EU on a neo-liberal, Tory ticket will not change their lives and, at best, it would be the same as it was inside the German-dominated EU. Exiting the EU on a neo-liberal, Tory ticket will not change their lives and, at best, it would be the same as it was inside the German-dominated EU.

Today, more than 60% of Labour Party voters and about 70 of its MPs seem to want a second referendum, hoping that this time the popular vote will be in favour of Remain, thus in favour of Britain and British people.

Tony Blair, the key spokesperson of ordoliberalism in Britain together with the New European, a Blairite tabloid, as well as other agencies funded by the pro-European ruling class, argue for a second referendum between “Remain in the EU vs. a Canadian-style free trade agreement”. John McDonnell, in a recent BBC interview, insinuated that a second referendum is possible.   

If the Labour Party and its leadership want to carry the people to a victorious election and overturn the decades-long neo-liberal policies of Margaret Thatcher and Tony Blair, then their paramount duty is to tell the British people now what Remain means in terms of the new socialist policies enshrined in the programme of the party.

The Labour Party announced, correctly, that once in office a number of nationalisations would take place, such as in railways. This is against the competition policy of the EU Treaties. The EU’s competition rules require “transparent” bids with the participation of private providers and the British state is likely to lose the tender in any attempt at the nationalisation of private enterprises.

Similarly, a “Canadian-style free trade agreement” solves nothing because it means exactly the same: customs duties disappear but EU companies will always be able to bid for public contracts in the UK, undercutting the socialist state. Thus, Blair’s new referendum panacea is a complete fraud.

The same goes for re-nationalising branches of the NHS that have been privatised, or the founding of a National Investment Bank, which is John McDonnell’s socialist policy pillar buttressing a new public investment policy in Britain: all this is against the EU’s competition rules that, according to the ordoliberal rule-book, guarantee sound money and a de-politicised, free market economy.

The list is endless. Last but not least, the European Court of Justice is anything but protective of workers’ interests and rights across the EU. At least since 2007, posted workers can be employed in the host country but under terms and conditions that prevail in their country of national origin.

This says as much about EU working class rights as about freedom of people’s movement and migration inside the EU.5. The ordoliberal management of the Eurozone crisis have made things worse: it increased the Commission’s and the ECB’s discipline across Europe in a manner reminiscent of straightforward financial dictatorship and complete lack of democracy.

All in all, there is nothing socialist and democratic in this EU as it stands and staying inside in order to transform it is a great delusion: simply, once you are in you have to abide by the rules set out in Berlin and Brussels. It would… undermine the entire socialist programmatic base of the new Labour Party that not only this country but the entire Europe needs so much.In this context, opting for a second referendum hoping to undo the first and remain in the EU would be a catastrophic political move not just for the Labour Party but for Britain as a whole. Once carried out, it would come to undermine the entire socialist programmatic base of the new Labour Party that not only this country but the entire Europe needs so much; further, it would signify an unacceptable humiliation for Britain and the British people, while giving hopes for survival in an already disintegrating European project (just look at Italy, Greece and the rise of neo-fascist and racist movements across the continent, the result of the ordoliberal austerity imposed by Germany).

Only a successful socialist Britain will be in a position to prevail over Germany’s ordoliberal rule in Europe, undoing the decades-long neo-liberal policy of Thatcherite cabinets and opening up new state-national avenues for the other Europeans.
A socialist Britain may well be the death-knell of ordoliberal Europe and the dawn of socialist-internationalist democracy in Europe. That is why the Labour Party must explain what the EU means for the British people: it will not be possible for its socialist programme to be carried out within it, and its internationalist, pro-European socialist policy will be thrown out of the window.

[1] See, Vassilis K. Fouskas, “The Labour Party must embrace a hard, socialist Brexit to stand a chance of winning the general election”, The Conversation, 26 April 2017.

[2] See especially, Kenneth Dyson & Kevin Featherstone, The Road to Maastricht. Negotiating Economic & Monetary Union (Oxford: O.U.P., 1999)

[3] The most erudite and comprehensive work on ordoliberalism is that by Werner Bonefeld, The Strong State and the Free Economy (London: Rowman & Littlefield, 2017). See also, Vassilis K. Fouskas & Bülent Gökay, The Disintegration of Euro-Atlanticism & New Authoritarianism (London: Palgrave, 2019), esp. chapters 3 and 5..

[4] James Blitz, “Labour shifts on a second referendum”, Financial Times, 29 November 2018.

[5] This point is well captured by Costas Lapavitsas in his The Left Case against the EU (Cambridge: Polity, 2019), pp.113 ff.

About the author

Vassilis K. Fouskas is Professor of International Politics & Economics at the Royal Docks School of Business & Law, University of East London and Director of STAMP (Centre for the study of States, Markets & People). Vassilis K. Fouskas and Bülent Gökay are marking over 20 years of collaborative research with the publication of Power Shift. The Disintegration of Euro-Atlanticism and New Authoritarianism, forthcoming by Palgrave-Macmillan in November 2018. 


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