The same objective historical laws have driven the formation of large, multinational economic blocs across the globe. These blocs of neighbouring states often begin, as the EU did, as a formalisation of the fact of their existing dependence on trade with each other. But, the very fact of this formalisation and recognition of their dependence on trade with each other, also, emphasises their separation as a bloc, from other similar blocs. A free trade area, i.e. a geographical formation in which different states place no restrictions, on the import or export of goods and services within it, by definition separates it, likewise, from the states outside it.
But, again, as with the EEC, this free trade, also, necessitates that those doing the trading do so on a level playing field. In the Brexit debate, and, now, with all of the delusory talk from Blue Labour about having a closer relation with the EU, let alone being “at the heart of Europe”, whilst, in reality, still being only on its external periphery, there was and is, a failure to understand that. It is, indeed, a weakness of the EU itself that it has not yet become a full political union. In the Brexit debate, for example, stress was put on the concept of the Customs Union. A Customs Union, means that those within it, agree to apply no tariffs, or quotas to members of it, and to agree a set of tariffs and quotas to be applied in relation to trade outside it.
The logic is obvious. If country A negotiates a deal with some country outside the Customs Union, in which it buys, say, chicken, on the basis of a zero tariff, whereas other countries in the Customs Union apply a common 10% tariff, on chicken imports from outside it, country A gains an advantage over them. At the very least, it reduces the cost of the food it consumes, and so of the wages it pays to its workers. It boosts profits, as a result of the lower wages. But, if it, then, as a member of the Customs Union, sells on these chickens, inside the Customs Union, either directly, or having processed them into chicken pies etc., it gains a further competitive advantage. When British industrial capital sought to get rid of the Corn Laws, which imposed tariffs on the import of corn, and other agricultural products, it was precisely for that reason of boosting their profits.
It is why, as I pointed out, long before the argument broke out in public, the question of the border in Ireland was going to be a severe, intractable problem, in relation to Brexit. But, that problem, as I explained, is not mainly a question of the Customs Union, because, in the modern world, the question of tariffs, and quotas is only a small element of the frictions on trade, and the need to establish a level playing field. The much bigger issue is the question of standards, and regulations. That is the realm of the creation of a single market, with a requirement that trade within it is conducted according to a set of agreed and common rules. It is not just a matter that, for example, Britain applies an agreed tariff on the import of American chicken, but that the American chicken it imports is not itself cheaper simply because the chickens had been kept in insanitary conditions, and their carcases, sprayed with chlorine.
The best that Blue Labour can offer, now, as it ridiculously claims to be seeking to put Britain “at the heart of Europe” whilst, in reality, sitting impotently on its outskirts, is that it will agree to common Phyto-sanitary regulations imposed by the EU, to facilitate such trade in animal products. But, that example, is just the tip of the iceberg. If companies in one country, say Britain, are allowed to deprive their workers of basic rights and freedoms, to work them all hours of the day, to have fewer holidays and so on, then, at least for a time, they will have a competitive advantage. I say for a time, because, as Marx and Engels showed, in the end, such means of undercutting your opponents, fail. This example, given by Marx, in relation to the pottery manufacturers, in my home city of Stoke, shows why. The pottery manufacturers had objected that being brought under the limitations of the Ten Hours Act would destroy them.
“In 1864, however, they were brought under the Act, and within sixteen months every “impossibility” had vanished.
'The improved method,” called forth by the Act, “of making slip by pressure instead of by evaporation, the newly-constructed stoves for drying the ware in its green state, &c., are each events of great importance in the pottery art, and mark an advance which the preceding century could not rival.... It has even considerably reduced the temperature of the stoves themselves with a considerable saving of fuel, and with a readier effect on the ware.'
In spite of every prophecy, the cost-price of earthenware did not rise, but the quantity produced did, and to such an extent that the export for the twelve months, ending December, 1865, exceeded in value by £138,628 the average of the preceding three years.”
But, again, here, can be seen the importance of scale of production, and of a large market to sell into. Making the investment in new fixed capital, required large-scale production. For much of the last century, by contrast, workers in the pottery industry were low paid. The pottery firms relied on those low wages, whilst they clung to their established markets, including those export markets developed during the period of the British colonial empire. In the mid 1970's, I worked for a large pottery company, and remember, the complacency, at the time, that the rising Japanese ceramic companies, despite using all sorts of mechanised production, would not be able to replace British pottery, because they were only good at copying. The same is being said, today, of China, even as, in one industry after another, it is dominating production.
The petty-bourgeois nationalists that backed Brexit sought to defy that reality, and to obtain competitive advantage by undercutting workers' wages and conditions, as well as deregulating consumer and environmental standards. This article shows why it is dangerous for workers, and short-sighted for capital, and why socialists should see the need to drive in the opposite direction, not because we see a bourgeois EU, or other such formation, as the answer to workers problems, but because it is, the fundamental basis, in the age of imperialism, for workers to build the solidarity between themselves, and create the conditions and social relations required for Socialism.
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