We Need a Labour Brexit

Costas Lapavitsas

Posted July 16, 2019

Anti-Brexit protesters demonstrate outside the Houses of Parliament on March 13, 2019 in London. (Dan Kitwood/Getty Images)

Signed in 1992, the Maastricht Treaty represented the victory of neoliberalism in the European Union, as expressed by the single market and the single currency. Since then, democracy has steadily retreated across the European Union, accompanied by a collapse of popular sovereignty — the power of workers and the poor materially to affect their conditions of life and work.

The declining power of workers and the poor is especially apparent in the economic domain — perhaps the most important component of government policy. Within the European single market and the single currency, economic policy has in fact become increasingly detached from parliamentary elections. Once a government is in power, policies are broadly dictated by the demands of the “economy,” which largely means the European Union’s neoliberal establishment.

In fact, even in Britain — not a signatory to the Fiscal Compact of 2012 that reaffirmed the European Union’s neoliberal attachment to austerity — the framework of self-imposed austerity since the crisis of 2007–9 has explicitly sought to comply with the stipulations of the Maastricht Treaty (the public debt and fiscal deficit not exceeding 60 percent and 3 percent of GDP, respectively).

The dramatic loss of popular sovereignty underpins the mounting frustration of workers and the poor in the United Kingdom, as elsewhere across Europe. Yet the confidence of the British working class in its ability to confront capital is at a historically low point. Indeed, the “class for itself” has received a body blow across decades of neoliberalism.

Yet through the decades of neoliberalism there has been another, equally remarkable, development: the steady advance of social liberalism in Britain. During the last four decades British society has been characterized by liberal advances regarding sexual preferences, gender, race, attitude to immigrants, and so on, especially among the young.

This is not to suggest that these profound social problems of advanced capitalism have yet been resolved. Indeed, neoliberalism has had a deleterious impact on individual alienation and moral repression in British society. But there has not been a return to conservative social values: economic neoliberalism has learned to coexist with social liberalism. The shift has been so pronounced that even a thoroughly upper-class Tory prime minister, such as David Cameron, adopted the mantle of social liberalism in ways that would have been unthinkable for previous Conservative leaders.

The spread of liberal attitudes among wide sections of the transformed British working class has been a crucial element in the political debate following the referendum of 2016. Trade union organization and the ability to win in the struggle against capital might have declined precipitously, but progress in a variety of social fields has seemed feasible. In this context, the European Union has become ideologically associated with the defense of workers’ rights as well as with promoting social liberalism in the UK.

The failure of the radical left to achieve broad support for Lexit (a left-wing Brexit), especially among the young, as well as the advance of the call to “Remain and Reform” the European Union, are each related to these complex developments.

The Transformation of the Labour Rank and File

After the 2016 referendum, the rational course of action for the British left would have been to embrace Brexit as a decisive opportunity to escape the neoliberal straightjacket of the European Union, reforming the British economy in the interests of workers and the poor. Leave could potentially open the door to nationalization of key resources, public banking, a transformative industrial policy, redistribution of income and wealth, and the lifting of austerity, all of which are required radically to restructure the British economy. Leave would also offer the opportunity to renew democracy and restrengthen popular and national sovereignty, in line with the popular demands expressed in the referendum.

These policies are impossible to achieve within the EU single market with the required degree of socialist radicalism. That is precisely the meaning and the promise of Lexit. Unfortunately, the bulk of the British left, including the bulk of the Labour Party, has failed to move in that direction, becoming strongly attached to “Remain and Reform.”

There is little doubt that Jeremy Corbyn’s leadership of the Labour Party is aware of the obstacles placed by the neoliberal EU to implementing a radical socialist program. But the rank and file of the Labour Party has also been transformed in recent years, reflecting the transformation of the British economy and society. White-collar, professional workers are particularly prominent in large urban areas, and they have a very different outlook to traditional Labour members. Identity politics, matching the advance of social liberalism in recent decades, took a grip on the membership. The rank and file of Labour have veered strongly toward “Remain and Reform.”

The political complexity of Brexit for the Labour Party can now be clearly appreciated: Labour has a left leadership broadly opposed to the European Union, a rank-and-file membership strongly in favor of “Remain and Reform,” and an electoral base crucially allocated in constituencies voting for Leave. The majority of Labour Members of Parliament are in favor of “Remain and Reform,” but two-thirds were elected to represent constituencies that favor Leave. The political equation facing the Labour Party is thus horrendously complex. Getting the answer wrong would have disastrous implications for the Left in the UK and across Europe.

The End of May

These developments in the British left have taken place as Theresa May’s own attempt to deliver Brexit has proven a disaster. It is important to understand that May’s Withdrawal Agreement and the Political Declaration accompanying it were considerable balancing acts in favor of the British ruling bloc. From the perspective of the City of London and British big business, May’s deal was fully acceptable.

Provision was made formally to remove Britain from the European Union, withdrawing from EU institutions and even from the jurisdiction of the European Court of Justice (ECJ) after a transition period of less than two years. In sum, the Agreement took the country out of the rigmarole of EU political maneuvering that takes place under effective German hegemony; it removed the pressure on the British ruling bloc to replace its long-standing strategy of demanding “opt outs” within the European Union, which came to a practical end in 2015–16; it saved Britain the annual net contribution to the EU budget; it ensured the continuation of single market rules for British industry, by permanently accepting the framework of the single market for the production and trade of goods; it gave the City of London a strong chance to ensure its preponderance in Europe; it maintained the customs union for the transition period and possibly indefinitely, if a new status for Northern Ireland could not be ensured, which would be an acceptable cost for British capital. It also incorporated the existing EU regulations on state aid, public procurement, and competition, thus acting as a strong barrier against a future interventionist socialist government, possibly led by Corbyn.

May’s deal failed because of the deep political divisions within the Tory Party, which has lost much of its traditional ability to speak for the interests of the British ruling bloc. The main centers of economic and social power in the UK would certainly prefer a variant of Theresa May’s deal to be approved by Parliament, but the Tory Party — as it currently stands — is incapable of delivering it. Moreover, all other options following the election of a new Tory leader are very harsh.

The prospect of Britain exiting the European Union without a deal, thus assuming the status of a “third country” outside the single market and trading with the European Union based on World Trade Association rules, fills British manufacturing, and especially the City of London, with horror. “No deal” might have become the default position of Tory leadership candidates, but its chances of success in practice are low since neither the parliamentary arithmetic nor the minority status of the Tory government have been changed by May’s resignation.

Furthermore, the prospect of abandoning Brexit either by unilaterally revoking the decision to withdraw, or via a fresh referendum, is laden with major political risks. A formal unilateral revocation of Article 50 — originally triggered by the May government to exit the European Union — would be a gigantic international humiliation for the British ruling bloc. Its position in the European Union would be permanently weakened, and it would also have to cope with deep domestic anger.

Attempting to abandon Brexit via a second referendum, on the other hand, apart from also being a severe humiliation, would divide the country without offering a definitive answer. Despite the breezy assertions of the Remain side that the British people have regretted their vote in 2016, there is little substantial evidence that this is true. Quite to the contrary, the European elections offered ample evidence that the Leave side is numerous and angry. The meteoric rise of the Brexit party led by Nigel Farage indicates that the political debilitation of Britain since 2016 has led to profound frustration among workers and the poor. The electorate reacted powerfully against the parliamentary shenanigans following the referendum and the ensuing hollowing out of democracy.

It is a politically disastrous development that the popular anger of the last two years has been channeled toward right-wing populism. But things would become truly calamitous if, as the Tory Party thrashes blindly in search of an answer to the Brexit problem, the Labour Party openly sided with Remain, engaging in the wild goose chase of “Remaining and Reforming” theEuropean Union. Such a policy shift by Labour would sever its links with the working class and undermine Corbyn’s socialist project and his position as leader. It would also probably destroy Labour’s prospects of electoral victory since the marginal constituencies that it must win are typically in favor of Leave. The final nail in the coffin would be for Labour openly to advocate the revocation of Article 50, an affront to democracy and a huge national humiliation for Britain rolled into one.

For the broader European left, open adoption of a Remain position by the Labour Party would deliver a body blow to the prospect of developing a radical socialist stance toward the European Union. It would be a triumph for the dominant neoliberal forces on the continent, and a tremendous boost for the authoritarian right, further removing the Left from grassroots opposition to the status quo of Europe.

It is vitally important for the Left in the UK and Europe that the Labour Party should continue to uphold the result of the 2016 referendum. It is even more important for the Labour Party, even at this late hour, boldly to air arguments in favor of the radical potential of Leave. For readiness to exit the European Union is the true test of socialist opposition to the neoliberal iron collar currently throttling Europe.

For a Socialist Attitude Toward the European Union

Preparing for rupture with the institutions of the European Union is a necessary condition for socialist policies in Europe. This can be clearly seen by examining the dilemma of “Exit” versus “Remain and Reform” which can be found across a wide range of EU member countries, shaping other major questions, including migration, austerity, and inequality. Britain is, of course, not part of the eurozone, so “Exit” has a partially different content than, say, for Greece. Nonetheless, Brexit has taken the political debate to a higher level than Grexit by posing directly the issue of EU membership. In short, Brexit is the most important political challenge for the European left since the shameful capitulation of Syriza in 2015.

It is possible to identify the broad parameters of radical socialist reform in Britain with considerable applicability to other European countries. The UK ought to definancialize its economy by reducing the weight, impact, and role of the financial system. To that purpose it should also adopt an industrial policy that would change the sectoral balance of its economy away from services, while beginning to tackle the profound environmental crisis characteristic of financialized capitalism.

A targeted industrial policy would be necessary both for growth and to protect the environment. It would be further accompanied by lifting austerity and abandoning the self-defeating policy of reducing the national debt. A basis would thus be provided for the recovery of public investment that could also sustain private investment.

It cannot be overstressed that such radical policies require public property and sustained intervention by the state across a range of sectors, including transport, energy, water, and others. Public property and control would also be required over the financial system, creating public investment banks as well as introducing public control over key commercial banks. It would also be necessary to impose controls over the flows of money capital across borders limiting the international activities of the City of London.

Furthermore, a socialist government would pursue income and wealth redistribution through wage and tax measures that could deal with the extraordinary growth of inequality of the last four decades. Redistribution would further be promoted by strengthening public provision in health, housing, and education, reversing the destructive privatizations of recent decades. Finally, a socialist government would be against free trade but without seeking to isolate Britain from international trade. The aim would be to establish a framework of regulated trade to support the restructuring of the British economy.

These radical reforms would deliver a body blow to neoliberal capitalism and financialization, while changing the social balance in favor of labor and against capital, thus laying a path to socialist transformation. There is broad agreement within the Left regarding the tenor of these demands, several of which were present in the Labour manifesto in 2017.

The Fallacy of “Remain and Reform”

Unfortunately, much of the British and the European left continues to operate under the illusion that the European Union, despite its faults, poses no fundamental problems for a socialist program. “Remain and Reform” has effectively become the main left-wing political slogan across Europe, but it is devoid of content. The European Union is beyond radical reform in the interests of workers and the poor and is indeed impervious to democratic pressure from below.

It is not accidental that, when it comes to the “Reform” part of the slogan, there is a marked paucity of concrete suggestions regarding changes to be wrought to EU institutions, democratic practices, member state alliances, and so on. This is not surprising, for there is not the slightest chance that a socialist government, even in a powerful country such as Britain, would be able to implement radical institutional and democratic changes within the European Union.

To be a little more specific, any fundamental reform involving changes in the Treaties (the primary law of the European Union) would require unanimity of all governments of member states, including those of the authoritarian right. Any reform of secondary law (regulations, directives, and decisions) would require the consent of the Commission, which has the exclusive right to initiate legislation, plus the majority of the governments and the majority of the members of the European Parliament. If all that was somehow achieved, the reform would still have to satisfy the ECJ, the ultimate guardian of the Four Freedoms that underpin EU Law (the freedom to move money, goods, services, and people — labor — across the internal borders), thus buttressing the neoliberal transformation of the European Union. It would be a hopeless task.

Implementing a genuine socialist program in the UK or elsewhere in the European Union necessarily implies rejecting the single market and its Four Freedoms. It is inconceivable that a path to socialism could be established without democratic controls on the flows of goods, services, and money. The same point holds for labor. It is a complete fallacy to think that the Maastricht Treaty’s Freedom of Labor should be defended in the name of workers’ solidarity and internationalism. The individual right of freedom of movement within the European Union is necessarily circumscribed by its opposite — the inability of workers to move into the European Union from the outside. It is a policy aiming to support the profitability of European capital, allowing for the employment of EU workers, often under poor wage and working conditions, while excluding African and Asian workers. The Freedom of Labor in the European Union is a foundation of the exclusionary Fortress Europe.

The stance of a socialist government on migration should be determined by concrete policies defending immigrants, while protecting the conditions of domestic workers. Thus, in the UK, a socialist government ought to guarantee the rights of all resident EU nationals, while requesting equivalent rights for British workers in the European Union. It also ought to negotiate reciprocal conditions with countries across Europe, while providing full protection for workers from across the world who enter the British labor market. Not least, it should help ensure rights of safe passage and abode for refugees. These would be concrete steps based on socialist principles that are a world removed from the airy abstractions of the Maastricht Freedom of Labor serving big business. For the true slogan of socialist internationalism is “workers of the world, unite,” not “open borders.”

For Britain to adopt policies of this kind, it would be necessary to have popular control of the national levers of power, that is, genuine popular sovereignty. The socialist transformation of society rests on social controls across all fields, including labor, which is the most crucial component of human activity. Workers could then move across borders with full protection of wages, conditions of work, rights of housing, social security, education, and so on. Conscious intervention and control over labor, far from being divisive or a negation of human freedom, unites workers and facilitates freedom.

There is little doubt that a socialist government in the UK and elsewhere would be forced to consider a rupture with the European Union, if it wished to apply a radical program. In pursuing a socialist path, the government would face the unrelenting hostility of its own domestic ruling bloc, which would seek to maintain the closest possible links with the single market relying on the power afforded by EU Law and other mechanisms.

Rupture with the EU is the socialist answer, and it would immediately pose the question of democracy and its integral element, popular sovereignty. Socialism has always presumed democracy as a fundamental political principle, implying the ability to regulate the fabric of civil and political society according to popular will and through popular power. This is the ultimate source of popular sovereignty, which would be a prerequisite for a socialist program.

It cannot be overstressed that the terrain for popular sovereignty and democracy is the nation state. There is neither a European demos, nor a European working class. Political parties in the European Parliament are unstable party alliances that engage in horse trading based on crude national interests. Democratic class politics in Europe is always and without exception national. The transnational space of the European Union is natural ground for big business to thrive, democracy to be bypassed, and hegemonic states to limit national sovereignty. The workers and the poor of Europe have never accepted the transnational mechanisms of the European Union as their own, and their class instinct has been right.

Command over national space is a requirement for socialism. This has nothing to do with nationalism, or the negation of international solidarity among workers. On the contrary, popular control over the national levers of power is the bedrock of true internationalism. Socialism is certainly meaningless if it is not international, but it is equally devoid of meaning without worker command over national space. There is no doubt that this entails breaking with the neoliberal mechanisms of the European Union engulfing the continent.

The European left is in a state of weakness and confusion, clearly exhibited in the European elections of 2019. To recover, it must first realize that confronting neoliberal capitalism in Europe implies a rupture with the European Union. It should then start forming the political and ideological vehicles to support true internationalism and solidarity among the European peoples. This is the hardest challenge for twenty-first century socialism in Europe. It is still possible for the British Labour Party to grasp the unique historical opportunity offered by Brexit to open a path for the rest of Europe.

This article appeared on the Jacobin website on July 1, 2019 here.