This little review is chock full of great insights. He explains that the EU, while it does not really infringe UK sovereignty–”this country is governed from London, and by our own ruling class–has “help[ed] make the exercise of power by this ruling class less accountable.” He gives the example of metrification foisted on the country in 1995. Gabb points out that the British Government ignores other EU directives when it wants to (Gabb gives examples). But when it enacts a law based on an EU directive, it provides cover for the politicians who can just point to the EU and blame it on them. This allows special interest groups like the big four supermarkets to lobby the state to pass laws that harm smaller competitors, and the politicians to be absolved of blame by pointing to the EU Directive they “have” to enact (even though the ignore others). The larger grocery stores can afford the expense of retraining but hobble smaller grocery stores.
This is yet another example of how big businesses are actually in support of supposedly “anti-business” regulations since it helps to protect them from competition. Rothbard has pointed this out many times as I note in this post.1
By the way, I recommend Gabb’s novel The Churchill Memorandum and also his excellent Literary Essays, both linked at his site. About the latter book I wrote the following for a back cover blurb: “Libertarians have sound ideas but are not always great writers, and are not usually authorities on literature and literary matters. Rarer still is the literary essayist who is not confused or ignorant about politics and economics. It is thus refreshing to encounter Sean Gabb’s literary writing. A long-time libertarian activist and writer who is also a superb novelist and literary essayist, an honest and clear writer, he is our modern libertarian man of letters. This splendid and sparkling collection of essays provides fascinating insights into literature and other literary topics, without the typical leftist baggage and economic illiteracy.”)
Review by Sean Gabb
Time to Say No:
Alternatives to EU Membership
by Ian Milne
Civitas, London, 78pp, £8.00
In its supporting evidence, this is a very useful book. In its overall purpose, it is quite useless. Its former is the claim that British membership of the European Union does not pass any kind of cost-benefit analysis. Our trade outside the EU has been growing much faster than our trade within. This will continue for at least the next generation, as the main EU countries are demographically in decline and, on the whole, stagnant economically. Indeed, taking into account direct and indirect costs of membership, the gains from being part of the Single Market could be negative. In purely economic terms, Britain is better off out.
The book is worth reading for its short but authoritative stating of these arguments. But I will now explain why it is generally useless. Mr Milne imagines a referendum, in June 2014, on British membership of the EU. He imagines this will go in favour of withdrawal, and that the governing and opposition parties work harmoniously together, and with the EU institutions, for a phased two year withdrawal as required by the Treaty of Lisbon. After this, the country can be free again to govern itself.
The problem with this scenario is that its main assumption is absurd. This country is not ultimately governed from Brussels. We are not victims of foreign control. It is a false belief that our own liberal and therefore benign institutions have been checked by the European Commission, and that leaving the EU will have much the same effect as removing a stone from a horse’s hoof. The truth is that, just as before 1973, this country is governed from London, and by our own ruling class. All that EU membership has achieved is to help make the exercise of power by this ruling class less accountable.
Since the final disappearance, around 1980, of decency and regard for the public good in our politics, every tax and regulation and change in the law had been made for the benefit of some wealthy interest group. The political wing of our ruling class has been acting on behalf of its economic wing. If there have sometimes been disputes between and within these wings, we should not deceive ourselves on the essential unity of state and big business. Now, this is an actual constitution that is best hidden from democratic scrutiny. And so we have had a growth of supranational organisations to hide the reality of how power is exercised. Though by far the most prominent in this country, the European Union is just one among many of these institutions.
Let me explain this abstract point with an actual example. I do not think anyone of importance in Brussels has ever cared what system of measurements we use in this country. Yet, starting in 1995, we suffered a rapid and brutal metrication. By 2000, it could be a criminal offence to sell a pound of bananas. Anyone who complained about this was referred to an EU Directive from 1989 that allegedly tied the hands of British politicians. What seems really to have happened, though, is that the big four supermarkets had found a way to hobble their smaller competitors. Metrication required new measuring instruments. More importantly, it needed an expensive retraining of staff to work at commercial speed in so far unfamiliar measurements. The big supermarkets could spend millions on this without noticing. It was a different impact on small grocers.
If it had needed a Weights and Measures Bill to go through Parliament in the old way, there would have been an outcry, and someone important might have found it worth discussing who was pushing for this. Instead, the law was changed without meaningful reference to Parliament, and everyone who disagreed could rail against the European Union in general, while the actual projectors and beneficiaries of the change could walk away smiling.
And that is how we are governed – in little things and in great. The British Government is practically at liberty to enforce or not enforce any EU law it chooses. It does not comply with a Directive from the 1970s that seems to require identity cards. It does not comply with another Directive that, by implication, seems to forbid it from prohibiting civilian ownership of handguns. If our Government does choose to follow EU law, it is either because that particular law benefits – or has even been procured by – some privileged interest in this country, or because the only interests actually damaged are outside the ruling class.
This is why, regardless of which party is in office, and regardless of what the party leaders may have said in opposition, every British Government since 1973 has been committed to EU membership. And this is why the withdrawal scenario given by Mr Milne is impossible. No referendum will be allowed. If one must be allowed, the question will be slanted – for example, giving a “compromise” option of renegotiation to divide the anti-EU vote – and the mainstream media and whole of big business will argue for staying in. If there is a vote for withdrawal, the referendum will simply be rerun six months later.
The problem with most Eurosceptics is still their assumption that leaving the EU will allow us to solve all our problems. The truth is that the EU is not the cause of our problems: it is merely another symptom of how we have failed as a nation. If we are not to fade away as a distinct nation before the middle of this century, we need a revolution. Undoubtedly, one of the first acts of a revolutionary government must be immediate withdrawal from the EU – just as it must be withdrawal from every other supranational institution. But regarding withdrawal as of supreme importance in itself is the political equivalent of trying to cure chicken pox by popping all the blisters.
Yes, Mr Milne has probably got his sums right. If he really believes our masters will allow us a genuine voice about EU membership, or will listen to that voice, he needs to think again.
And one final point. I do sound in this review as if I am simply copying Richard North. I do greatly admire Dr North. He has said much more than I have about the European Union, and knows things in detail that I at best only dimly perceive. There can be no shame in putting in my own words what he has persuaded me to believe. But I have reached these opinions independently of him. For example, here they are, given ten years ago in much their present form. This is a moderately important point to make. When one reasonably intelligent person is persuaded by another, it adds some weight to a conclusion. When that conclusion is reached independently, the weight is increased. By all means, we could both be wrong. But this final point is worth making.
See note 10 and accompanying text of my article Reducing the Cost of IP Law (“Once again, as in the case of minimum-wage, social-security, and prounion laws, federal legislation works in favor of big business, … For a recent example, UPS is currently lobbying Congress to enact legislation that would redefine its rival, FedEx, as a trucking company rather than the airline it started out as in an attempt to make it easier for the Teamsters union to unionize FedEx drivers and raise their wage rates—and of course FedEx’s cost structure. See Del Quentin Wilber & Jeffrey H. Birnbaum, Taking the Hill By Air and Ground: Shift in Congress Favors Labor, UPS Over FedEx, Washington Post(September 14, 2007).
See also Murray N. Rothbard, Origins of the Welfare State in America, Mises.org (1996) (“Big businesses, who were already voluntarily providing costly old-age pensions to their employees, could use the federal government to force their small-business competitors into paying for similar, costly, programs…. [T]he legislation deliberately penalizes the lower cost, ‘unprogressive,’ employer, and cripples him by artificially raising his costs compared to the larger employer.… It is no wonder, then, that the bigger businesses almost all backed the Social Security scheme to the hilt, while it was attacked by such associations of small business as the National Metal Trades Association, the Illinois Manufacturing Association, and the National Association of Manufacturers. By 1939, only 17 percent of American businesses favored repeal of the Social Security Act, while not one big business firm supported repeal.… Big business, indeed, collaborated enthusiastically with social security.”); Llewellyn H. Rockwell, Jr., “The Economics Of Discrimination,” in Speaking of Liberty (2003), at 99 (“One way the ADA [Americans with Disabilities Act] is enforced is through the use of government and private ‘testers.’ These actors, who will want to find all the “discrimination” they can, terrify small businesses. The smaller the business, the more ADA hurts. That’s partly why big business supported it. How nice to have the government clobber your up-and-coming competition.”); Rothbard, For A New Liberty (2002), pp. 316 et seq.; Rothbard, The Betrayal of the American Right, 185-86 (2007) (“This is the general view on the Right; in the remarkable phrase of Ayn Rand, Big Business is ‘America’s most persecuted minority.’ Persecuted minority, indeed! To be sure, there were charges aplenty against Big Business and its intimate connections with Big Government in the old McCormick Chicago Tribune and especially in the writings of Albert Jay Nock; but it took the Williams-Kolko analysis, and particularly the detailed investigation by Kolko, to portray the true anatomy and physiology of the America scene. As Kolko pointed out, all the various measures of federal regulation and welfare statism, beginning in the Progressive period, that Left and Right alike have always believed to be a mass movement against Big Business, are not only backed to the hilt by Big Business at the present time, but were originated by it for the very purpose of shifting from a free market to a cartelized economy. Under the guise of regulations “against monopoly” and “for the public welfare,” Big Business has succeeded in granting itself cartels and privileges through the use of government.”); Albert Jay Nock, quoted in Rothbard, The Betrayal of the American Right, 22 (2007) (“The simple truth is that our businessmen do not want a government that will let business alone. They want a government they can use. Offer them one made on Spencer’s model, and they would see the country blow up before they would accept it.”).
See also Timothy P. Carney, The Big Ripoff: How Big Business and Big Government Steal Your Money (2006), and also Rothbard, Confessions of a Right-Wing Liberal (“This is the general view on the right; in the remarkable phrase of Ayn Rand, Big Business is “America’s most persecuted minority.” Persecuted minority, indeed! Sure, there were thrusts against Big Business in the old McCormick Chicago Tribune and in the writings of Albert Jay Nock; but it took the Williams-Kolko analysis to portray the true anatomy and physiology of the American scene. … As Kolko pointed out, all the various measures of federal regulation and welfare statism that left and right alike have always believed to be mass movements against Big Business are not only now backed to the hilt by Big Business, but were originated by it for the very purpose of shifting from a free market to a cartelized economy that would benefit it. Imperialistic foreign policy and the permanent garrison state originated in the Big Business drive for foreign investments and for war contracts at home.”)
See also the Wikipedia article on Rothbard: “Rothbard was equally condemning of relationships he perceived between big business and big government. He cited many instances where business elites co-opted government’s monopoly power so as to influence laws and regulatory policy in a manner benefiting them at the expense of their competitive rivals. He wrote in criticism of Ayn Rand’s “misty devotion to the Big Businessman” that she: “is too committed emotionally to worship of the Big Businessman-as-Hero to concede that it is precisely Big Business that is largely responsible for the twentieth-century march into aggressive statism…” According to Rothbard, one example of such cronyism included grants of monopolistic privilege the railroads derived from sponsoring so-called conservation laws.”
Patents are state-granted monopolies, which are in “tension” with antitrust law; you can have and use this monopoly, even though it technically seems to violate the antitrust laws, so long as you don’t abuse it. This means that the larger companies who amass the large patent arsenals (and cross-license with each other) sort of have immunity from antitrust law while smaller competitors are not only subject to the anticompetitive effect of the patent monopolies possessed by the big players but also subject to antitrust law still. Absent antitrust law perhaps smaller companies could cartelize somehow to combat the patent monopolies of the big companies–for example perhaps they could form defensive patent pooling arrangements–pools that might under current law violate antitrust (I am not sure, have not looked into it in detail). I.e., the antitrust law (maybe) gives enough of an exemption to big companies to acquire large patent monopoly arsenals and to cross-license with each other forming anticompetitive barriers to entry but does not give enough of an exemption for smaller companies to collude and cartelize and form defensive patent pools. I sense that this is basically one thing that is going on.
Another example would perhaps be Big Sports. If I recall correctly federal antitrust law had to grant a special exemption to certain college or large sports leagues, so that they would not be hampered by antitrust law. I can imagine that the combined effect of antitrust law and the special exemption might give some favoritism to the NFL etc. This may be on point but not sure it’s the only one: http://en.wikipedia.org/wiki/Sports_Broadcasting_Act_of_1961. ↩