There is a famous scene in Le Bourgeois gentilhomme, where Monsieur Jourdain discovers that he has been speaking prose all his life and did not know it. Shortly before the EU referendum last June, I realised that I had in fact been a Eurosceptic for most of my life without fully realising it. I did so as a political outlier: I am a classical liberal with very different priorities from most of the British public, not least a desire to increase our current rate of immigration from around the world. Like other liberals who voted Leave, the designated Leave campaign at times nearly persuaded me to join my many friends voting Remain. In what follows, I will explain why I did not.
As I see it, the European Union is, first and foremost, a trading bloc: it removes barriers to trade among its own members, while agreeing common tariffs and other types of trade barrier between itself and the rest of the world. The level of specialisation a national economy can attain – and therefore its wealth – is limited by the size of the market that it is exposed to. Trade allows us to focus on our comparative advantage in certain industries, re-allocating jobs across the economy in a more productive way. How well does the EU promote this?
In the 1970s, when the UK first joined, the developed world was carved up between large regional trading blocs in the United States and Comecon. The European Economic Community offered an opportunity to forge a trading bloc of our own, with economies — especially Germany, following its successful post-war development – that seemed far more advanced than our own. The great reduction in barriers to trade between European countries in the 1970s and 80s can in large part be attributed to the EEC and its successors.
Since then, however, the rest of the world has been catching up. Rising incomes in the developing world — especially China and Latin America — have allowed them to participate in trade on a global scale for the first time since the 19th century. Meanwhile, external barriers to trade have been gradually falling all over the world, in part due to the work carried out by the World Trade Organisation: as Roland Smith points out in a recent article for the Adam Smith Institute, there are probably the same or a lower number of external barriers between two non-EU states today than there were between two EEC member states in the 1970s.
The increasing openness of global trade has at times threatened to make the EU look old-fashioned. Its response has been to change focus to internal barriers to trade: domestic laws or policies that could have the effect of distorting trade across borders. This is the origin of the EU’s expanding regulatory function. The battle against protectionism has become a guerrilla war: the protection of uncompetitive industries could be hidden in the interstices of any seemingly-innocent domestic regulation.
The EU’s approach regarding this issue has not been facilitate co-operation among members states to increase regulatory conversion, but rather to legislate in some areas on behalf of its member states. In doing so, it inevitably must take on some of the functions of statehood. This idea — that as the rate of transactions across borders continues to increase around the world, a degree of state sovereignty must be exchanged in return for gains from trade — has become the foundational economic claim of the EU. This places the question of the relinquishing of sovereignty at the heart of the debate about the merit of the organisation.
Historically, sovereignty rested in the monarch, under the guise of the Divine Right of Kings. The first great achievement of classical liberalism was to transform our understanding of sovereignty so that it rested on a bargaining process with a broad cross-section of the public. This forces governments to pay attention to public unhappiness they might otherwise ignore, which in the long-run encourages more successful policy.
Is the political bargaining process of the EU broad or narrow? It certainly possesses many of the trappings of a democratic society: it has a directly-elected Parliament and has recently adopted a Charter of Fundamental Freedoms. But does it really qualify as a democracy? One of the oldest, simplest definitions of a democracy comes from Joseph Schumpeter: the public should be able to remove their government, and replace it with a new one, without resort to violent means. In its current form, the European Union fails this test on two levels.
At the supranational level, the right to initiate legislation rests wholly with the European Commission. Each Commissioner is appointed independently by national governments. National governments are of course themselves elected, but Commissioners are not allowed to act on their behalf, and are instead required to act on behalf of the European Institutions. The European Parliament can block, slow down or amend laws as they are prepared, but it cannot propose new legislation of its own or remove a law once it is passed. It is therefore largely an arena for political display without effective power. That is how voters in the UK and elsewhere regard it, often using European elections merely as an opportunity to pass judgement on their own national government.
At the national level, the EU has become a mechanism for governments to pursue policies without justifying them to their electorates. I have never accepted the argument (made by Nigel Farage and many others) that the EU takes power away from national governments. It has the opposite problem: it makes the power of national governments unaccountable to the public. It is this failure of national governments to honestly represent their intentions at election-time — on immigration and many other issues — that has helped to encourage the rise of populist parties on both the right and left, across Europe.
The EU was founded in the belief that nationalism – and populism in general – is the great monster of European history. Representative democratic institutions should allow the public to express its concerns without allowing government to become captive to tyranny of the masses. But this tells only half the story. The true monster is unaccountable power: it removes all peaceful methods for public unhappiness to be resolved, slowly undermining the confidence of the public in its democratic institutions.
Having made the decision to leave, the UK must face the question of how to reap the benefits of globalisation while escaping the flaws of supranational economic governance that the institutions of the EU represent. In doing so it must find a way to balance the competing demands of market size and responsive institutions. The risks for my generation are great and it is very possible that the UK will fail. However, even if we do, I hope it will eventually be recognised that only a few Leave voters were prejudiced nativists opposed to the changes wrought by globalisation. Many were responding to years of frustration at the democratic process in London and Brussels, while some of us were motivated by a sincere belief in national sovereignty as a core historic value of the classical liberal tradition.
Jonathan Ainslie is a Scottish PhD student in legal history. He lives in Edinburgh and has been a member of the Liberal Democrats since November 2013. He identifies with the British classical liberal tradition and has called himself an Orange Booker in the past.