Poorer But Freer Is An Oxymoron

As all of the lies told by the Brexiteers, during the referendum, are exposed, and as Operation Yellowhammer shows the chaos that would ensue from a No Deal Brexit, the Brexiteers have fallen back on to another line of defence. They say that, when people voted Leave in 2016, they knew they were voting to make themselves poorer, but they were prepared to accept that, in order to be freer. It is, of course, nonsense. The Brexiteers, in 2016, promised everyone that Britain would get a good deal, that they would have £365 million of free money to spend on the NHS, they would be able to continue trading with the EU on the same basis, but also be free to trade with the rest of the world on better terms, negotiated by Britain and so on. It was all of the nonsensical have cake and eat it stuff that has been exposed as a fantasy over the last three years. But, even were it true, it is still a fantasy, because the truth is that you cannot be poorer, but freer. It is an oxymoron. Freedom is a function of wealth and power. If you become poorer, you necessarily become less powerful, and less free. 

The reason that workers have to hand over increasing amounts of unpaid labour to capital is precisely for that reason. Workers need to work, and to work labour must have access to means of production. The more the minimum efficient size of businesses has increased, the less it becomes possible for individual workers to own means of production on that scale. So, in order to live, workers have to sell their labour-power to capital, and the condition for capital agreeing to employ the worker is then that the capitalist obtains profits, and those profits come from the worker providing the capitalist with unpaid labour, in addition to their paid labour.

The value of labour-power continually falls, because rising productivity means that less and less labour-time is required to reproduce the wage goods needed by workers to reproduce their labour-power.  But, the amount of labour provided by workers to capital does not fall correspondingly, which means that a greater proportion of the working-day is free labour for the capitalist. The workers standard of living may rise, because as productivity rises, the value of the wage goods the worker needs to consume falls, and a given money wage, then buys more of them, but the capitalist will always ensure that the proportion of the additional production they obtain in profits, from this increased productivity, rises faster than the proportion that goes to the worker. No matter how affluent the workers are, in other words, no matter how high their wages, the capitalist is able to do this, because the workers become progressively poorer in terms of their ability to own the means of production. Indeed, there is a direct comparison here with the EU, because the only way that it becomes possible for workers, themselves, to own the means of production, on a sufficiently large scale, so as to be able to produce efficiently, is to give up the old peasant, individualist idea of owning their own individual means of production, and, instead, to join with their fellow workers, so as to own the means of production collectively. 

The capitalist is more powerful because they are wealthy; they own the means of production that workers must use in order to work. The workers are weak, because they must work to live, and to work they must have access to means of production they do not own. The owner of capital is free to use their capital to consume or to employ labour-power. The worker is not free to consume, because to consume they must work, and so must sell their labour-power to the capitalist, on terms dictated by the capitalist. To paraphrase the old adage, both the billionaire and the pauper are free to sleep under the railway arches, but only the billionaire is free to choose to sleep in a penthouse apartment. 

And, the same is true in relation to nations. The freedom of a nation state is a direct function of its economic and military power, the latter itself being a function of the former. Britain enjoyed much greater freedom than did India, or its other colonies, during the heyday of its Empire. That Empire did not arise because, somehow, Britain had some innate superiority. It arose, because British Mercantilism amassed great monetary wealth from trade, when Britain replaced the Netherlands as the world's foremost mercantile power. The Netherlands itself had created its own Empire on that basis, via the Dutch East India Company etc. And, when Britain used the commercial wealth it had amassed, as the basis for its industrial revolution, and the development of industrial capital, which made Britain the workshop of the world, that gave Britain even more economic power, which was the basis of its global political power, and its ability, thereby, to exercise its freedom, often at the expense of the freedom of others. As soon as Britain's economic power began to falter, towards the end of the 19th century, as the economic power of the United States, Germany, France and Japan began to rise, so too Britain's global military and political power diminished, and so too did its freedom to act to further its interests at the expense of others. 

A look at the experience of Iran demonstrates this point. Iran abided by the terms of the nuclear deal it had signed with the US, EU, Russia and China. The fact it had to sign such a deal, denying it the freedom to acquire the nuclear weapons that the other signatories already possessed, itself shows the point. But, the US, under Trump, decided to renege on the Treaty anyway. The EU, Russia and China agreed to continue with the treaty, but the US, used its huge economic muscle, and the fact that it controls global money flows through the dominance of the Dollar, to dictate to companies, around the globe, that if they continued to trade with Iran, they would face US sanctions too. In the long term, this is likely to backfire on the US, because the EU, which is a larger economy than the US, has no desire itself to be subordinated to US power and whim. It has been incentivised, now, to find alternatives to the dominance of the Dollar as global reserve currency, and alternatives to US dominated global monetary payments systems. But, again, the reason why the EU will be able to do that is precisely because it is a larger economy than the US. A small economy like Iran does not have such freedom, indeed, a relatively small economy like the UK, which is only a seventh the size of the EU, or the US, does not have the freedom to do that. 

Freedom is a function of power, and power is a function of wealth. 

Brexit means that Britain becomes poorer. It becomes poorer in two ways. Firstly, as above; the EU, as the world's largest economy, can treat on equal terms with the US, whose power is now partly historical, as was the case with Britain in the first half of the twentieth century. In other words, in the first half of the twentieth century, Britain's economic power was already diminished, and being surpassed by the US, Germany, France and Japan. But, Britain had been the dominant power for more than a century. It had inertial force on its side, along with a large amount of amassed wealth and power, including its Empire, and its huge navy. Like an aristocrat continuing to enjoy a lavish lifestyle by selling off parts of the estate, Britain could continue the facade of its greatness and power, by drawing down from its stored wealth. 

The US, today, is in a similar position. It is still undoubtedly a huge superpower, but the weakness of its economy is demonstrated by its astronomical and growing trade deficits, and ballooning budget deficits. It is like that aristocrat, continuing the facade of affluence only by going into massive debt, leveraged on its assets. It is no longer the world's premier economic or industrial power. The EU has a larger economy, Germany alone exports more than the US, and, at the same time, the US is challenged by a rising China, which can put itself at the head of a large Asian economic bloc, comprising Japan, Korea, Vietnam, Singapore, Malaysia and potentially India, and even Russia. As US economic power declines, so too its global strategic power declines, and along with it, so too its freedom to act. 

As a part of the EU, Britain enjoyed that economic power of the EU to treat on at least equal terms with these other huge powers, such as the US, and China. By leaving the EU, Britain loses that economic power of the EU, and loses the political power and freedom that goes with it. Britain could, after Brexit, be free to choose to align itself to the EU, which it will probably have to do, because it is its largest and closest trading partner, or with the US, but it cannot do both. That is at the heart of what all of the wrangling over the Irish backstop is about. It is about the extent to which Britain, long since an outpost for US interests, could, under a right-wing Trumpist/Johnson regime, draw even closer to the US, acting as a means of undermining and breaking apart the EU Single Market. That is why the EU will never give up the backstop, or do anything that allows that Single Market to be undermined, which would then fundamentally weaken the EU vis a vis the US. 

If Britain is then forced to align with the EU, in order to retain its existing trading relations, it will necessarily be drawn away from the US, because the US, particularly under Trump, requires those with which it does deals to agree to US terms and conditions, and those are at odds to those of the EU.  So, the supposed freedom from leaving the EU, would have been illusory. It would mean that Britain would continue to have to accept EU rules, regulations and standards, because otherwise it would not be able to export its goods and services to the EU. But, unlike now, it would have no role in formulating those rules, regulations and standards. It would have seriously reduced its own political freedom, because it would now have to simply abide by the rules set by others. The same is true were Britain instead to try to align itself with the US. Unless Britain were to seek to become the 51st state of the United States, which is impractical given the 3000 miles of Atlantic Ocean that separates us from them, it would have to again accept the rules, regulations and standards set by the US, without having any say in formulating them. It means that Britain essentially becomes a vassal state of whichever bloc it necessarily has to seek alignment with, in order to be able to trade on a substantial basis. That is the opposite of having increased freedom. The EU does not have to accept US terms and conditions, precisely because the EU is the world's largest economy, and the wealth and power that comes from that enables it the freedom to act accordingly. 

But, Britain becomes poorer in a more immediate sense too. The Brextremists have ridiculously tried to claim that the EU will agree to Britain's terms, because they want to avoid a No Deal, which would damage the EU economy. It is again nonsense. Studies suggest that the EU economy might suffer a loss of around 0.5% of GDP, as a result of a No Deal Brexit. However, they show that Britain would suffer a 10% drop in its GDP, or twenty times as much damage! The EU's huge economy can easily deal with a 0.5% drop, whereas the UK outside the protection of the EU, suffering a 10% drop would be catastrophic. It is more than the fall in GDP that followed the 2008 global financial crash. 

Britain's exports to the EU, as a proportion of its GDP, similarly, constitute around seven times the EU's exports to Britain, as a proportion of EU GDP. Moreover, if Britain leaves the EU, many European companies, like BMW, Siemens etc., that currently have production in Britain, will simply close them down, and move their operations to the EU, to avoid the problems arising from tariffs, and other trade frictions between Britain and the EU. It will simply shift jobs and economic power away from Britain and towards the EU. 

In the immediate aftermath of a No Deal Brexit, the EU would suffer some inconvenience, but the UK would suffer chaos, and economic disaster. Similarly, the Irish Republic would suffer some significant economic problems, because of the extent of its trade with Britain. But, it would not face the chaos that Britain would face, precisely because all of its relations with the EU would remain intact. Moreover, whilst the Republic might suffer some significant short term economic problems, Northern Ireland would face total meltdown. Northern Ireland depends far more on its trade with the Republic than the Republic depends on its trade with the rest of the UK. Whatever anyone might currently say, the inevitable consequence of a No Deal Brexit, will be the erection of a hard border in Ireland, and that will devastate the Northern Irish economy. 

What is more, whilst the $14 trillion EU economy, will be able to provide necessary support to the Irish economy, the £2 trillion British economy, as it goes itself into recession, and finds itself having to find huge sums to bail our farmers, fishermen, and to pay out unemployment benefits, or huge bribes to large companies to try to stop them leaving the country, will have no such possibility of rescuing a Northern Ireland economy plunged into such devastation. The obvious solution will be for Northern Ireland to reunite with the Republic, which would then undoubtedly set the scene for Scotland to become independent from England, forming potentially a federation with Ireland, and Wales, inside the EU, and leaving England stranded. 

None of that suggests that the consequence of the poverty of Britain outside the EU, would in any sense lead to it being freer.