Why capitalists should support the European Union

Like most Canadians, I favour the European Union and have a negative opinion of Brexit. According to a poll by Carleton University, 75 per cent of Canadians have positive or somewhat positive opinion of the E.U. and 64 per cent are unsympathetic or somewhat unsympathetic of Brexit.

European Union flag. Image: Vector illustration.

Curiously, Canadian views are partisan. More Conservatives are sympathetic of Brexit than Liberals and New Democrats (46, 13, and 8 per cent, respectively). What’s odd about Conservative sympathy is that Brexit will hurt the flow of British capital.

Equally odd is support for Brexit by Britain’s Tory Party, the traditional party of capital.  Neil Davidson, author and professor at the University of Glasgow, explains:

“The Tory Party is not acting in the interests of British capital in pushing through Brexit. This dereliction of its duty is the result of how ruling-class parties have evolved in the neoliberal era (Harper’s, October, 2019).”

This is further evidence of the shift in conservative values towards populism. The Republican Party in the U.S. no longer has capitalism as a core value, rather it owes fealty to a reckless madcap leader who supporters see as maverick. Britain’s Boris Johnson has the same eccentric appeal.

Here’s why rational conservatives should support the European Union:

“Given the illusions many on the left have about the E.U., it’s ironic that its structure corresponds quite closely to the model of ‘interstate federalism’ devised by the economist Friedrich A. Hayek in 1939,” says Davidson. “Hayek, in many ways the intellectual forerunner of neoliberalism, proposed that economic activity in a federal Europe should be governed by a set of nonnegotiable rules presided over by a group of unelected bureaucrats, without any elected members of government and irrational voters getting in the way,”

British capitalists have always been in favour of the E.U. as a replacement for their colonies. As the British Empire imploded and colonies became self-governing and resistant to exploitation, British capital sought new opportunities for investment and found them right next door.

Not only Britain, but capitalists in Germany and France looked within Europe itself for opportunities. Global capital needed outlets for investment beyond the boundaries of individual states. At a time when decolonization across the Global South reduced slavery as a source of cheap labour, the E.U. provided a means for capitalism within Western Europe.

Contrary to my impression of the E.U. as being a foil to the rising U.S. military industrial complex, the E.U. benefited the U.S. as well. The E.U. was a political and economic complement to the NATO military alliance in Europe, part of Washington’s Cold War imperial project.

The global economic crisis in 2008 exposed the structural inequalities of the E.U. as not a union of equals. Germany imposed austerity measures on weaker states, throwing countries such as Greece into depressions.

The E.U. is a model of globalization in which “free trade” is the advertised objective but the imposition of non-trade clauses, such as copyright and protection of Big Pharma patents, is a primary goal.

The E.U. is more undemocratic than any of the nation-states that compose it, including Britain. Its least democratic institutions such as the European Commission and the European Global Central Bank have the most power while the nominally democratic European Parliament has the least. It’s a undemocratic institution designed to prevent social democrats from infringing on the logic of capital in Europe.

Brexit will diminish the power of capitalism as we move into an era of populism and protectionism characterized by the Trump administration.

My hope is that organic movements, such as climate activism, will rise to restore sanity in resolving the greatest threat to humanity.

Don’t call the TPP a free trade agreement

Canada is a trading nation. Trade agreements are good for Canada. The Trans-Pacific Partnership is not one of those.

WASHINGTON, DC - JUNE 23:  Demonstrators protest against the Trans Pacific Partnership trade agreement outside the Senate office buildings on Capitol Hill June 23, 2015 in Washington, DC. The Senate passed an important proceedural vote on the trade bill, which would grant President Barack Obama enhanced negotiating powers to complete a major Pacific trade accord, clearing the way for final passage as early as Wednesday.  (Photo by Chip Somodevilla/Getty Images)

With a few exceptions, Canada’s trade barriers are already low and the TPP will have little effect on trade. Professor Blayne Haggart from Brock University in St. Catharines, Ontario, says it’s all about increasing corporate power. Sections that are supposed to be incidental riders are the real essence:

“Instead, agreements such as the TPP are about implementing policies that have nothing to do with comparative advantage, policies that are often designed to lead to higher consumer costs and concentrated corporate power. Treated as marginal issues, these policies are ‘free-trade free-riders,’ coasting along on an unearned legitimacy.”

By “comparative advantage” he means trade between partners that benefits both. “Costs are lowered, production is maximized and people can buy imports at prices lower than would have prevailed had they produced everything themselves,” explains Haggart in the Globe and Mail.

The TPP is not a free trade agreement; it’s a consolidation of U.S. interests globally. The details have to be carefully dissected but here are a few things that we know.

One of the “free-trade free-riders” is intellectual property. The U.S. wants to extend the patent protection for drugs to prevent generic manufacturers from providing cheaper medicines. Groups such as Doctors Without Borders warn that greater drug-patent protection would “limit competition from generic drug manufacturers that reduce drug prices and improve access to treatment, and would accelerate already soaring medicine and vaccine prices.”

Another is extended copyright length. The TPP would extend the life of copyrights from 50 years to 70 years beyond the life of the author. This would benefit U.S. media companies and provide little benefit for artists or the public. Copyright holders are often corporate media giants like Disney.

If the negotiators of the TPP were honest, they would admit that this is not a “partnership,” it’s an imposition of U.S. interests on trading partners. One of the biggest U.S. exports is American culture, what they like to call the entertainment industry. Another is health care. These are the money-makers that the U.S. wants to protect.

One more free-trade free-rider is the infamous “investor-state dispute settlement.” It places corporations on the same level of states, allowing foreign firms to sue countries, not only for breach of contract but for public policies such as environmental protection and access to drinking water.

As I explained in my column of October 15, Canada is already on the receiving end of the most dispute claims under NAFTA. We can expect more under the TPP as corporations try to bring our public policies in line with their private interests.

Yet another provision would allow car manufacturers to hide operating codes that allow them to cheat on emission regulations the way Volkswagen did under the guise of intellectual property. These codes should be examined by regulators the way that slot machines are.

Just how bad the TPP is for Canada has yet to be determined. The 6,000 pages of the secretly negotiated agreement have only been recently released. One thing that should make us suspicious is when supporters call it a free trade agreement.