How And Why Neoliberalism And Ultra Neoliberalism Is Behind Brexit

Dr. T. J. Coles: “Unlike War, Peace Is Not a Profitable Pursuit” | Uprootedpalestinians’s Blog

It’s pretty clear that the majority of business owners and politicians wanted to Remain in the European Union. For them, slow economic growth in a neoliberal Union was preferable to the uncertainty of Leaving. Investment banks call this “stability” and “predictability,” which is why they like to promote multilateral trade and investment deals or unions, like the EU, the Trans-Pacific Partnership and so on. But for the last 20 years or more, a new breed of profiteer class has grown in importance: financial services and their specialists. Financial services include insurance companies, hedge funds, liquidity firms, and so on. They have an opposite view to the more traditional neoliberals. They believe that bilateral trade and investment work best because they aren’t importing and exporting products that need assembling and reimporting, the way traditional producers are. They rely on digital transactions that require very little human resources. For them, the new and more profitable economy is pure money: making money from money. They see lucrative markets in the growing economies of Asia. These are ultra-neoliberals. So the neoliberal EU is terrible for working people, but the ultra-neoliberal financial markets economy is even worse.

Brexit and the political fallout is due to this battle between the status quo neoliberals who think they ought to Remain part of the EU and the ultra-neoliberals who want to Leave. Elements of the Conservative party in the UK have always hated Europe because some of the strongest players, notably France, have retained some state controls over their economies. The ultra-neoliberals in the UK want as few state controls as possible, except where state controls benefit their cronies. For example, they were happy to have state intervention to bail out the banks after the crisis in ’08-09. But they were not happy when the EU imposed some rules (MIFID and MIFID II) on financial transactions. The government’s Bank of England was not under the control of the European Central Bank, contrary to what a lot of Britons thought. But private financiers were constrained by EU directives.

The interests of the ultra-neoliberal faction coincided with the anger of a large number of working-class Britons who were conditioned by media propaganda to believe that the EU was responsible for their economic misery. Had the British been Greek or Irish, it would have been true. In those countries, the deliberate choice to impose brutal financial austerity on the public of Europe came from the EU bureaucrats and Troika: the European Commission, the European Central Bank, and the US-led International Monetary Fund. But British fiscal and monetary policy is not determined by the EU due to the fact that Britain never accepted the euro as its currency or accepted European Central Bank jurisdiction. In fact, Britain was, in some ways, never really part of the EU. It never accepted the euro as its currency, never signed onto the Schengen Area of free movement, and it opted out of a record number of agreements. On occasion, EU Directives are cited by the British government as the pretext to privatize public assets. For example, the privatization of Royal Mail, the British postal service, was enacted under an EU Directive that made privatization mandatory. But successive British governments were committed to privatization anyway, regardless of EU membership.

via Dr. T. J. Coles: “Unlike War, Peace Is Not a Profitable Pursuit” | Uprootedpalestinians’s Blog