Securing a progressive Brexit: no saremongering, no borders

Written By: Yanis Varoufakis
Published: January 31, 2018 Last modified: January 31, 2018

 The main reason I am here [at the House of Commons], I believe is because I was prepared to advocate a Marxist case for the Norway agreement [with the European Union].

As a declared Corbynista and someone who could never be considered a lapdog for the EU but who dedicated every sinew I possess at the time to campaigning against Brexit – nevertheless I am here to present to you the case for what I call ‘Norway plus’ from a leftwing perspective, portrayed as an opportunity to do that which we progressives have been failing to do in the last year and a half, which is the following.

Let’s face it – here in this room we are reeling from a massive defeat in June 2016. We are deflated. A lot of what I have heard is correct but nevertheless defensive. It is as if I am hearing again the arguments which should have been heard loudly before the referendum! Let’s not keep fighting yesterday’s war.

I am in favour of a second referendum, but not one that annuls the first one. As a democrat I cannot stand up in front of an audience in Leeds or Doncaster or Clacton-on-Sea, look in the eye people who voted for Brexit and say to them what was said to Irish voters in 2004 – “You voted the wrong way. Go back and deliver the right verdict this time.” But at the same time I believe we have an internationalist duty, a progressive duty to save that which must be salvaged from the Brexit wreckage.

The possibility under this government or any Tory government of a decent, mutually advantageous agreement between the United Kingdom and the European Union is vanishingly small if not absolutely zero. So what we must save is firstly freedom of movement. Speaking from my perspective, I do not believe that you can be a Marxist, an internationalist, and believe that the solution to the problems of the working class is electrified fences and new borders coming up between European countries.

To those who say to me that this is hypocritical Eurocentrism, because you are still not allowing people from Pakistan and South Africa to come in, my argument is, ”Well, where borders have come down, even if they have come down for neoliberal reasons, for reasons that fit the agenda of big business, we should maintain the absence of those borders. We do not put them up. And we try to extend freedom of movement beyond the European Union to Pakistan, to South Africa. Ideally we want a world in which there are no borders, and one in which our identity, our culture, our democracy and our sovereignty is not defined through the capacity to exclude people from our territory.

Of course, the second thing we need to preserve is our supply chains. These are the economic arguments and I am an economist. I can wax lyrical about the disaster that will befall both sides of the English Channel if we move into a Canada or South Korea-like agreement.

But I have to add that tactically, ideologically, it is a gross error to hammer on about the costs of leaving the single market. It works exactly like those anti-drugs posters in the early 80s depicting drug addicts in the gutter, which drug addicts were quite happy to put up on the wall, identifying with that image. What are those who are fanatical Brexiteers thinking? Convince them that the cost of Brexit is huge, and this is going to make them even more passionately in favour. It’s a bit like the Blitz: the higher the cost, the greater the sense of solidarity that the British people will feel against Brussels.

If you are going to lead with the Norway plus argument that I am arguing, it has to be an inspirational, aspirational message. The greatest supporter of Brexit before the referendum was in fact the Treasury, the Bank of England, Wolfgang Schauble and Christine Lagarde who were sending messages to this country saying, “ If you dare vote for Brexit, Armageddon will descend on you, you will all be jobless and end up in the gutter.” Nothing helped Brexit more than those ludicrous estimates of the effect of Brexit on GDP. And as an economist I can tell you all these micro-economic predictions are a bit like sausages: ‘If you know how they are made you don’t want to touch them with a bargepole.’

That there is going to be a significant, substantial diminution of the living standards of the working class and Britain in general there is no doubt. But put no numbers to that process, because those numbers of statistical or econometric prediction are absolutely scientifically irrelevant without a large sample. If you have a small sample, you can’t make any predictions worth their salt, and here we have a zero sample. Previously, there has never been a case of a country coming out of the single market, out of the European Union. Logic may indicate that there is likely to be a substantial cost. But let us not attempt to turn around the debate in Britain on the basis of scare-mongering and estimates of costs that are not worth the paper they are written on.

What we should talk about is ‘getting our country back’. Take the Brexiteer argument and just stand it on its head. The only way of getting our country back, whether this is Britain or Greece or Portugal, is by dealing directly with the four crises that are destroying our communities and making people feel that they are not in control of their lives or of their countries.

What are those crises? In this country, it begins with private debt. It is the elephant in the room, rising inexorably and spearheading the next wave that will push the majority of households into depression – the fact that you have so many British families today needing to use credit cards in order to put food on the table.

Secondly, public debt, which is being used as an excuse for ‘austerity’.

Thirdly, the worst spate of under-investment in the history of postwar Europe, whether it is in Britain, Greece or indeed Germany. Did you know that Germany has the lowest level of investment since 1951 while at the same time having its highest level of savings?

And fourthly, of course, the increase in poverty which is the natural corollary of the other three already mentioned.

So these are the enemies that we must target. But like climate change, Britain cannot tackle these on its own, France cannot tackle these on its own, Greece cannot tackle these on its own. So that is why, exactly like climate change, we need local action, regional and national action, but we also need pan-European action and I won’t go on now to talk about the global action that we also need. At least we have a European Union and some useful institutions. Let us rethink the manner in which we are tackling the crises that make people feel that they are not in control of their country and wanting to retreat.

Let’s invest in the argument in the slogan, ‘Taking back control’, but let us talk about what it actually means for us to get our country back, and indeed who the ‘we’ is in this context, in this country.

This last point is a reference to what I shall be saying about the need to look at Brexit as a great opportunity to rethink the constitutional arrangements of the United Kingdom. The devolution that Tony Blair commenced was half-hearted: it did not go far enough. England is feeling disenfranchised. Brexit is an English toxic phenomenon. It has to do with a discarded working class and petit bourgeoisie in England, who unlike the Scots feel that they don’t have representation, that Thatcherism has more or less completed their deindustrialisation and that there is no one speaking for them even here in this House.

So – why Norway and Norway plus? Well, we need to respect the Brexit outcome. Norway does, because Britain steps out of the European Union. The referendum chose Brexit, but it is a binary process which does not specify what kind of Brexit. Had the vast majority of voters not wanted freedom of movement, all that was required was that 1.8% would either be indifferent about freedom of movement or in favour of freedom of movement, and there is no mandate for freedom of movement.

So respect Brexit while preserving freedom of movement; small ‘c’ conservatism – it is preposterous isn’t it that the Conservative Party which has built up its whole value-system on the basis of gradualism, now wants to blow everything up in one fell swoop!? – and thirdly – allow me now to speak as a Marxist.

In the Communist Manifesto, Marx says, “ The communists are being blamed or accused of wanting to take nationality, ethnicity, national pride away from the majority”. And he says, “Well, workers have no country. You cannot take away from them that which they do not have.” There is a very good leftwing Marxist argument in favour of the transnationality that the single market and indeed the European Union is putting forward. Remember that Marx was in favour of Zollverein – the German customs union of 1834. Why? Because he said he thought that it would speed up the capitalist process, and that without this development, you would not have the technologies essential for socialism.

I will speak no more about Marx. But you asked me to, so I did.

And finally, what, philosophically-speaking, is the most powerful argument for Brexit ? It is a rhetorical question, so I will answer it! “Sovereignty – returning parliamentary sovereignty to this great House.” What???! They butchered parliamentary sovereignty. The Brexiteers are in the process of brutally murdering the sovereignty of this House of Commons. There has been no discussion in the House of what kind of Brexit the country wants. Even the way that European legislation is transcribed into British law has been taken away from this House, and moved to a Tory Cabinet increasingly reminiscent of the Ministry of Funny Walks.

But suppose that we finally succeed in having a five-year, renewable Norway-style agreement after March 2019. This affords the House of Commons the opportunity to have the debate in peace and quiet and without a ticking clock and a gun pointing at their heads, of what they want in the longer term.

One of the great errors of both Remainers and Leavers in this country has been to imagine that the European Union is a bit like a gentlemen’s club here in London, the question being,” Do we want to belong to this? Is the fee justified by the services rendered?” This is a rubbish metaphor. The European Union is in a state of flux. It is a work in progress that in my view, is fragmenting due to the authoritarian incompetence of its establishment. It cannot continue the way it is. Maybe it will collapse. Maybe it will become democratised and turn from an austerity union to a union of shared prosperity.

This is what we are working for as DiEM25. But it is not a given. It is a gross error to believe that what Britain does is independent of developments within the European Union. So what we must also preserve is Britain’s presence in European politics, in the progressive movements in Europe that are necessary in order to make the European Union sustainable, democratic and a realm of shared prosperity.

And vice versa, we Europeans, whether you like it or not, have to be here, and to be part of the process of turning Britain into a progressive country, of reconfiguring its constitution and ending the Thatcherite traditions that have led as Marx again said, “the second time around” to “a farce” – Osborne, Cameron, Clegg – the awful period since 2010 which depleted so much social capital and created the circumstances for Nigel Farage’s fantastic success in the June 2016 referendum.

When I say Norway plus – what is the plus? Well, people including some of my comrades in this country and in this party, say to me that the problem with the Norway solution and the difficulty the Labour Party has in supporting it, is because it turns Britain into an EU rules-taker.

This of course is correct  – this is the price you have to pay for being inside a transnational market. But it doesn’t have to be that way. Britain does not have to be an EU rule-taker if it strikes a Norway-style agreement.

Allow me to be very specific in three areas here. One is labour market standards and protections for wage labour. Secondly, environmental standards and the protection of the environment. Thirdly, financial regulation. Nothing stops Britain in a Norway-style agreement from setting for itself and for any company working within the United Kingdom, higher regulatory standards for the City of London, higher environmental standards, higher minimum wages and higher standards for defending wage labour.

So instead of thinking of the EU single market rules as the ceilings: think of them as the floors! And think of Labour as the party that will campaign out there for improving the environmental standards, labour standards and financial regulation standards of Brussels and Frankfurt.

This gives the narrative of Norway plus a magnificent oomph. It allows us all, we progressives, to move in this country from a defensive stance to an inspirational one. Norway plus as a way of getting our country back, as a way of making Labour the hegemonic power in the United Kingdom, as a way of defending our environmental and labour standards, putting the financial genie back into the bottle where it belongs.

Allow me to conclude by going back to the point about the constitutional process. There is no doubt that the European Union needs a constitutional assembly process. Anyone who has read, or even held, a copy of the Lisbon Treaty knows that you cannot read it. It was written by bureaucrats ‘for cretins’, an abomination. It is like reading a Microsoft manual.

What is it that unites Americans? When the American constitution was first on offer, 60% of Americans didn’t speak English. But what united them is a text that is only 16, 17 pages long which begins with “We the people”. The act of writing it is what brought them together. We need that in Europe. This is what DiEM25 is striving for in Europe.  To have a text, of no more than 20 pages, that redefines European democracy on the level of the European Union, which begins “We the peoples”.

Now, we would love you to be a part of it. That is why I want a second referendum that enables you to come back into this kind of Europe by the end of the five year period of Norway plus.

But Norway plus must include, at least from the perspective of Labour, using this period to do two things: firstly, democratising the United Kingdom – democratising its institutions to turn it into a genuine federation; either that, or Scotland will leave.  Secondly, work with us across the English channel, along the lines of what we in DiEM25 are proposing as a European New Deal.

You don’t need to be in the European Union formally to do this. One last example and I will conclude. To its credit in the last election, Labour went to the voters with a proposal for a Public Investment Bank (PIB). You desperately need this in this country. Imagine you create it.

In Europe we have the European Investment Bank (EIB) of which you may no longer be a member, or maybe you will still be one. But it really doesn’t matter either way. What can stop us, on both sides of the English Channel, from coordinating the issuance of bonds from your new, Labour-instigated, Public Investment Bank with the activities of the EIB, soaking up the excess liquidity in the financial sectors of continental Europe and the City of London; and having the Bank of England in synchronicity with the European Central Bank cooperating to purchase those bonds of your PIB and our EIB in order to fund something like 5% of GDP every year invested in good quality jobs along the lines of a green energy union and green transition? Nothing.

Yanis Varoufakis was speaking at a meeting of Labour Party MPs and councillors on at the House of Commons on January 29. The discussion was hosted by Labour for the Single Market and Open Britain, and chaired by Chuka Ummuna MP. The text is published under a Creative Commons Attribution-NonCommercial 4.0 International licence courtesy opendemocracy.net.