Greece and Gordon Brown’s Gaffe
Two stories dominated the news tonight – Brown’s gaffe and the Greek financial crisis. Both linked by a common thread – the economic consequences of a neo-liberal agenda for European unity.
The voter that Brown called a bigot was concerned about the combination of unemployment and the free movement of labour across the continent. From Brown’s standpoint, from the economic strategy that New Labour has followed, her views would have appeared as bigoted. Once New Labour had given up any socialist ambitions, the sole progressive pole open to it was a humanism based on liberal internationalism. The liberal internationalism of the market economy based on free movement of labour and capital.
For some years it appeared to have paid off. His successes during the ‘no-more boom and bust’ years were built on the easy availability of international credit and imported labour.
UK government policy towards Europe has, throughout the New Labour years been consistently neo-liberal. Successors to Thatcher, they built on the greatest foreign policy success of her and Regan : the dismantling of the social democratic economies of Eastern Europe. The resulting mass unemployment in Poland, created an external reserve army of labour for British capital. Almost alone in Europe, Britain insisted on immediate implementation of free labour migration from the East. The freedom that neo-liberalism brought to Europe was the freedom of primitive accumulation – the creation of a labour pool that was free of any existing means of livelihood, freed from their homes, free to serve business on demand.
For all Brown’s professed adherence to ‘post neoclassical endogenous growth models’, New Labour actually followed a policy that made good sense in terms of Marx or Solow : keep the labour supply growing as fast or faster than the growth of capital in order to maintain the rate of profit. In this context, spontaneous working class objections to increased competition in the labour market, are just bigoted objections to liberal progress.
At the same time they set their face against any transformation of the EU that would have strengthened the tax raising and spending powers of the European Parliament. The crisis in Greece, and shortly in Portugal, stems ultimately from this. The Eurozone is a monetary federation without the federal government tax and spend powers that have been essential to the functioning of earlier monetary federations like Germany or the USA. If the EU parliament had the power to levy income and property taxes across the Union, the current crisis in Greece would not be happening. A large part of the expenditure now met by the Greek Government would be being met by the Union out of general Union taxation: defence, pensions, perhaps medical costs.
Union taxes would, as in any other federal state act as a means of redistributing income between richer and poorer areas. Within the UK, Northern Ireland, being a relatively impoverished area, receives a greater per-capita share of central taxes.
But all this would have run counter to the neo-liberal agenda. Social democratic politics having been exorcised at the national level, could not be allowed to return at the Union level. Thus there was no question of the Union having the tax raising powers necessary to provide for example common EU pensions or an EU health service free at the point of need across the continent. Now workers at national level are refusing to let go of the few concessions they have won, and national opposition to EU-wide social democracy is causing problems because there’s no EU-wide capital safety net either.