Free Life 27, September 1997, Books about the European Union and the United Kingdom, Reviewed by Sean Gabb

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From Free Life, Issue 27, September 1997
ISSN: 0260 5112

Better Off Out? The Benefits or Costs of European Union
Brian Hindley and Martin Howe QC
Institute of Economic Affairs, London, 1996, 95pp, £8 (pbk)
(ISBN 0 255 36388 5)

Scotland and the United Kingdom:
The Economy and the Union in the Twentieth Century

Clive Howard Lee
Manchester University Press, Manchester, 1995, 244pp, £35 (hbk)
(ISBN 0 7190 4101 5)

Though written from the economic point of view, these books are both about the British Constitution. The first looks at the alleged economic benefits of our being in the European Union, the second at those for Scotland of being part of the United Kingdom. Since both works have been in print for some time, and the first has already been exhaustively reviewed in all the usual places, I will not bother to say much about their contents. I will instead give my own views, for what these may be worth, on British - and perhaps on English - independence.

To begin with Europe, Messrs Hindley and Howe try to establish a proposition I have never doubted - that this country would be better off with free markets at home and unilateral free trade abroad than inside the European Union. The cost-benefit arguments they use are shaky, so far as they give numerical weights to things that cannot really be numbered. Even so, ordinary economic analysis is enough to show that they are right, and to dismiss the various threats and promises about economic performance on which the case for Europe has usually been founded.

However, this does not in itself make a case against the European Union. It is also necessary to show that withdrawal would be followed by the adoption of free market policies. Since until recently, I thought this unlikely, I preferred not to join the clamour against Europe. Certainly, I was never enthusiastic about Europe. It may have made sense for a group of Roman Law countries, with more or less despotic political cultures, to come together in a federation. It made no sense to me for England to join in the process. I could see differences between us and the main European countries so great as to make any formal union impossible without massive changes on one or both sides; and the balance of numbers and wealth could only put the main burden of change on us. I variously despised and feared these changes - the agricultural and fishing policies, the forced metrication, the general hostility to individuality and local customs. Even so, I was broadly in favour of remaining in the European Union because I thought its limited commitment to free markets was a useful influence in the British debate on economic policy.

Right through the 1980s, the Labour Party was committed to policies that involved insulating the country within a mass of import and exchange controls, and then stealing everything by law that could not be stolen by inflation. Parts of the Tory Party were hardly better - the anti-socialism of most activists owed far more to Corelli Barnet than to Milton Friedman or Enoch Powell, and some would have welcomed almost any degree of economic nationalism. With alternatives like these, Europe could be seen as an expensive but necessary insurance policy. At best, it co-opted people like Michael Heseltine and Neil Kinnock, thereby depriving the protectionists of their natural leaders. At worst, it was an institutional obstacle that might slow down any government that wanted to unplug this country from the world economy.

But times are altered now. The Tory protectionists have fallen silent - some dead, others become Thatcherite free marketeers. The more intelligent Labour ones have simply stopped being socialists in the Bennite sense. They have bought Armani suits and started talking in post-modernese about Bill Gates and global culture. This does not mean everything is fine. Michael Howard is a Thatcherite, and was the most beastly Home Secretary of all time. The New Labour people are going to ban tobacco advertising, and will probably put health warnings on Jaffa Cakes. But it does mean that all British politicians currently in or near power are unlikely to wreck the economy.

This being the case, we no longer need the European Union. It has served its purpose as an obstacle to socialism. It is now instead an obstacle to radical free market policies. Admittedly, these are not yet on any British political agenda. It is significant, though, that they are being argued against by the Establishment intellectuals rather than dismissed out of hand. In Europe, they remain for the most part unknown, and are unlikely to make any intellectual progress for at least a generation. And so Europe must be dumped. It needs to be dumped with as little gratitude as the people have just dumped the Conservatives.

That is the negative case against Europe; and it ought to be enough to decide any libertarian on the issue. There is, however, a more positive case that reaches out far beyond economics, and the persuasive force of which ought to be felt by others besides libertarians. This is that all the things I hated about Europe in the past are now not only unbalanced by advantages, but are growing rapidly worse.

There is no point enumerating the evils imposed on us by membership of the European Union. That has been done already by Christopher Booker and Richard North, and no speech on Europe by a Conservative politician is complete without its reference to some expensive or simply mad new regulation. What interests me is the means of imposition. These are still not generally understood, but ought to be seen as the real positive case against Europe.

It would be nice if the evils of European membership could all be traced to Brussels or Bonn or some other European capital. It would then be a simple matter of throwing off the foreign yoke. We could drive the invaders screaming into the sea and set about restoring our freedom and greatness. Reality is not that simple. I have no doubt that membership of the European Union endangers our survival as a nation of free individuals - but it does so by raising up a wholly domestic enemy.

During the past 25 years of European membership, our Constitution has been subtly amended. Some branches of government have been exalted as never before, others set on their way to extinction. The most obvious beneficiaries have been the administrators, the special interest groups, and the small number of politicians who learn to play the rules of the new system. These have become a ruling class largely freed from democratic control. The old democratic institutions remain, but are of decreasing significance. They have little real control over the decisions that affect our lives. Either they merely ratify those decisions, or they are not even formally consulted. At every point, this transfer of power is justified by the need to comply with obligations accepted under the various European Treaties.

Let me take what many will think a trivial example. In October 1995, it became a criminal offence to use English measurements in a wide range of commercial transactions. There was an outcry in the media and to some extent in Parliament, as people were forced to stop using measurements the very names of which are part of our language. The outcry was silenced by the explanation that this had been forced on us by "Europe". A Directive from 1989 was produced which required standard units of measurement throughout the Union.

The explanation was false. The Directive did require standardisation, but was silent about the outlawing of other units of measurement, or the use of criminal law to ensure compliance. Indeed, a Directive of the European Union is not a law. It is simply a wishlist sent out by the Commission to the member governments, which can be treated very largely as they wish. I am told that in Spain and Italy and Holland, I can still legally buy a gallon of petrol and even a scruple of vitamin C - assuming I can find anyone there willing to deal with me in these units. The forced metrication of this country happened not because Jacques Santer decreed that it be done, but because the relevant officials at the Board of Trade have tidy minds that are offended by the illogicality of the English system of weights and measures. These people used the excuse of Europe to avoid the political reaction that might have frustrated their design had they relied on a law made entirely in this country.

It is the same with agricultural and fishing regulation. Whole branches of commerce and ways of life are destroyed in manners that would never be possible were the destroyers accountable to Parliament. But the officials expand their empires, and a lucky few wire pullers grow rich, while public opinion rails against a European Commission that may not object at all to what is being done - that may even rather like it - but that may also not have required, nor had the legal power to compel, its doing.

In some cases, the corruption of democracy is still more impressive. The money laundering laws that make it hard to open a bank account in this country, or use large amounts of cash, appear to have been forced on the British Government by a European Directive made in 1991. The truth is that various Home Office and Treasury officials were looking for new things to regulate in the middle 1980s, at the same time as various City institutions were worrying about losing business as financial deregulation opened their markets to new entrants. There were other interested parties, but these were the important ones. They were powerful enough to lobby the British Government into joining with the Americans to call for a United Nations initiative against money laundering. This led to a Convention, that led to a Council of Europe Directive, that led in turn to a European Union Directive, that led finally to British laws for which no British politician can be blamed - no matter how much harm they do to the City as a whole - and which no democratic majority can overturn without first repudiating a mass of treaty obligations.

That is the European Union. And that is also the New World Order, of which Europe is only a fragment. There is no external conspiracy. There is no foreign domination. There are simply national élites who conceal their own despotism behind the fiction of obedience to international law. Some of them are not even that despotic. I was quite happy to play the same sort of game, and I am sure there are others who still do so for what they see as the best of reasons.

These élites do cooperate with each other across borders. They are gradually laying the foundations of a true world government, by way of multinational federations like the European Union. But for the moment, they are distinct from each other, and their power in any one country rests on bluff. They have not the means to smother a democratic revival in a large and powerful country like ours. This may change in the next generation, as the federations gain increasing powers of taxation, and build up military forces able and willing to prevent secessions. But that is not now. For the moment, withdrawing from the European Union ought not be seen as throwing off a foreign domination - it certainly ought not be allowed to sour commercial relations with France and Germany - but as a restoring of internal balance to our Constitution.

Needless to say, I want out as soon as possible, while the only enemies are domestic.

But this brings me to the second part of my article. To leave the European Union would require a referendum. Yet, so far as I can tell, membership is popular in Scotland. Suppose England voted to get out, but Scotland to stay in? Suppose a Scottish "yes" vote were large enough to balance an English "no" vote? Even without these complications, the mere act of withdrawing the United Kingdom from Europe might set a compelling precedent for withdrawals from the United Kingdom.

The answer is to accept this further disintegration as the price of withdrawal. Indeed, thinking about the matter, I see a very good general case for breaking up the United Kingdom from London, rather than waiting on events in Edinburgh and Cardiff.

Despite sharing a language and an island - despite even centuries of intermarriage - the English and Scottish are separate nations, each with its own distinct culture. Since 1707, there has been the formality of a common central government, but the obvious reality has been English domination. We are richer and more numerous than they. In any dispute between them and us, we must always prevail.

For the first two and a half centuries of "union", the Scottish were willing to accept this in exchange for the advantages of sharing in the commerce and administration of a world power. But with the Empire gone, and with what seems a securely liberal world trading order, they see little reason to accept continued domination.

The unionists on both sides talk about shared cultural values. As I see it, however, we have less in common with the Scottish than we have with the Americans or even the Irish. They have not shared in our history of peaceful development under a weak government and the rule of law. Their own experience has been of despotism broken by periods of wild disorder. That has made them different. It has made them far more European in their outlook. In their culture, strong and often unlimited government is not an alien, uncomfortable notion. It is common sense.

This is what makes the Scottish Enlightenment so special. European thought in the 18th century can be seen as a long struggle to understand the English. Here was a people quite unlike any other - free, yet also strong and rich. The question was how these qualities - to the European mind not only separate, but even contradictory - could be reconciled. The English themselves could give no satisfactory answer. The French tried to explain us, but failed. It was the Scottish who succeeded. They had the advantages that French observers lacked, of a common language and very close acquaintance. At the same time, they were sufficiently different from us to see clearly the respects in which we were distinct from other peoples. Adam Smith and David Hume are among the greatest philosophers who ever lived, and they stood at the head of an uncommonly brilliant school of thought. But they also had the advantage of needing to understand and explain a civilisation that was alien to them, but to which their own had been joined.

The result was a codification of English civilisation into a set of doctrines known as classical liberalism. Reduced to a something that could be rationally discussed, and that seemed to work, the Scottish embraced liberalism, and for a while outdid the English in their radicalism. There followed more than a century of intellectual harmony between our two nations. They remained personally odd according to our notions of civility, but they thought what we felt; and that was good enough for both sides.

However, the decline of classical liberalism as an autonomous force has broken this harmony. The Scottish have reverted to their traditional views of the world; and while England has few outspoken classical liberals in public life, our culture remains essentially liberal.

Therefore the rise of Scottish nationalism. It began as a weird mixture of Fenianism and Nazism, and still contains enough oddities to shock or amuse those who go looking for them. But the real growth of the SNP since the 1970s has exactly coincided with the rebirth of classical liberalism in England. Before that, the two nations could just about get along. Since then, they have pulled inevitably apart.

Undeniably, the Thatcher revolution hit Scotland hard. But what made it hardest of all was that almost no one in Scotland appreciated what was being done. Like the French and other Europeans today, the Scottish took it for granted that the State could and should provide guaranteed employment for all at decent wages, plus an elaborate welfare state, and not go bankrupt in the process or turn the country into an economic desert. They saw these things denied to them by a Party they had rejected but able to count on large English majorities, and increasingly opted for varying degrees of independence. And even when the Scottish élites had perceived the rationality of what was being done, there was no rebirth of the old harmony. The Scots simply incorporated a limited acceptance of markets into their centralised, interventionist view of economic policy. The result was "New Labour".

Now, we have a New Labour Government. We are told it will hold office for a generation. I am not so sure. Every second voice in the new Government seems to be Scottish. As soon as the novelty of not having John Major any more wears off, there will be a growth of discontent in England, as Scottish notions of rationality and just authority are rammed down our throats. I can see trouble ahead. I lived in Czechoslovakia during the last days of the federation, and had an inside view of its collapse. I am beginning to feel the same drawing apart of English and Scottish as I saw between Czechs and Slovaks. And the differences between Czechs and Slovaks were minor compared with those between us and the Scottish.

And so there is a case for ending the union. It no longer serves any commercial purpose. There is the precedent of Irish neutrality for avoiding the threat of military encirclement. Most importantly, we no longer agree on how any united British kingdom ought to be governed, and elections are becoming a test of strength between two unequal sides, in which the weaker can win only in exceptional circustances. It would be terrible if Scottish independence were to be denied long enough for the Scottish to become as embittered and degraded as the Southern Irish.

This being said, there is also a case for ending it from London. From its beginning, the debate over devolution has been cast in terms of their wanting something from us, and their triumphing over us if they get it. I really do not wish to see a repetition of the Hong Kong surrender repeated in Edinburgh. I can imagine the mobs in Glasgow, running through the streets, smashing symbols of the union, insulting anyone with an English accent; and I see the pencilling in of National Freedom Days in the Scottish calendar. Much better for us if the disintegration of the United Kingdom were brought about by Englishmen demanding English independence. A little national pride would do us no harm at all. It might even spur us to a modest revolution. I hope it would not go so far as abolishing the House of Lords or disestablishing the Church - but a change of personnel at the top would be most welcome.

For Scotland it might also be of benefit. No effort should be spared to cut Scotland adrift on the best possible terms. They should be given the oil revenue, and we should take over the whole naitonal debt. Of course, there should be complete freedom of trade. There might even be a following of the Irish precedent in the granting of automatic rights of entry and settlement to Scottish citizens. With these advantages, it should be quite easy for a prudent Scottish Government to remain solvent and to allow brisk economic growth. A prosperous Scotland is obviously in English interests. And if the Scottish economy should fail, there should be no excuse given to the maniacs who lurk up there closer to the centre than ours do here to cry out that England has ruined their country.

This leaves the problem of what to do with Wales and Ulster. My solution is to force independence on them whether they want it or not. The Ulster Protestants should be given all they need to defeat the IRA, and should be encouraged to deal justly with their Catholics. But it will not be a problem for England if they decide not to.

However, this article is quite long enough without my going into further detail. I have said almost nothing about the books I am purportedly reviewing. But I have finally said what I want to about Europe and the coming debate over Scotland.

Sean Gabb

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