After World War II, social democracy gradually became the reigning political and economic idea in Western Europe. Seen as a synthesis of different ideas that were opposed to the two extreme poles of fascism and communism, it attracted not just stalwart Labour politicians such as Dennis Healey, but also those on the Left of the Conservative Party; Butskellism became the prevailing policy of both parties, essentially from 1950 up to Margaret Thatcher’s accession in 1979. Social democracy as practiced in different countries can vary a lot, but it tends to include various nationalisations, state support of industry, ‘industrial policy’, high social benefits – all of the preceding list leading to high national expenditures – high levels of taxation and a view that the more regulation, the better.
The first few post-war decades, however, saw in most Western European countries more of a traditional free-market approach, rather than full-blown social democracy. This led to high levels of economic growth, and more and more prosperous and contented populations. However, during the 1960s and beyond, the social democratic viewpoint increasingly took the upper hand, with the expansion of the size of the state, steady increases in levels of taxation, greater regulation and a straightforward decline in economic growth levels and thus a parallel decline in the contentment of the population of Western Europe.
Britain had, immediately post-war, gone the opposite way to the rest of Europe, as the socialistic Attlee government of 1945 went further on nationalisation, social expenditure (the near-communistic approach of the NHS being highly popular, but also inefficient and expensive), regulation (including, astoundingly, rationing, with the use of vouchers to buy food, clothing, petroleum – indeed, most commodities, all this only fully ending in 1954) and high taxation. So the UK suffered from poor growth compared to the rest of Europe, and by the late 1960s, the previous two decades’ success of the common market-countries in Europe, compared with the awful consequences of Attlee, followed by Butskellism, in the UK, convinced centralists such as Edward Heath that joining the common market was the way out of our economic malaise. Even Margaret Thatcher thought it was a great idea; so we joined, in consequence ripping up our relationship with the Commonwealth (which, while now understandably somewhat less enamoured of the UK since that betrayal by us, is now a larger and more friendly economic group than the EU, and is growing at rapid pace, far faster than the malaise-stricken European Union). Heath’s fundamental failure was an inability to understand that the economic principles that had led Western Europe to grow after World War II were rapidly being abandoned; they were being replaced with principles and policies that would inevitably result in slower and slower growth.
Half a century later, annual economic growth, particularly growth per capita, has more or less disappeared in the EU while in our own country, the UK, things are just as bad: state expenditure has increased from some 30% of GDP to 45%; taxes from 30% of GDP to 36% (my egocentrically named ‘moynicurve’, about which I’ve been writing for a decade, asserts that it’s almost impossible to get the tax take in the UK above 36% for any length of time); and regulation ever-more stifling. We have left the EU, but we have done little to exploit our new freedoms in a way that will bring us out of the social democratic trap.
Ross Clark’s new book, ‘Far from EUtopia‘, is a timely and important review of the state of play in the EU. Since we voted to leave the EU, things have not stood still there. The inherent and unstable logic of social democracy, along with the impossiblism of a currency union without a political/economic union, is creating wider and wider fissures there that must, in the end, either blow the whole Union apart or – something that is unlikely to be accepted passively by national populations in Europe – end with a full form of Union, of the sort enjoyed in the United States.
Clark takes us through the whole horrible story of the swathes of destruction that have been brought about in the EU by social democracy: the fell hand of regulation, the erection of trade barriers (despite free trade having been known for centuries as one of the core drivers of economic growth), the dysfunctional impact of the euro, the problems of crime, costly food due to the common agricultural policy (now we have left, a healthy home-prepared meal is far cheaper in the UK than in the EU – and there are more savings to be had once we are buying our food at average world prices) and so much more.
The demographics of the EU are frightening: the UK, if you can believe it, is one of the few countries in Western Europe where there is not such a disastrous demographic pyramid building up, of fewer and fewer working people supporting the people who have reached pensionable age. More work in the UK will have to be done to protect us against an ever-ageing population, in particular increasing the pensionable age even more, and closing down our farcically expensive gold-plated Civil Service pensions, but our situation is better than in the larger EU economies; and who is to know whether and when the EU is going to socialise those old-age costs across the Union, forcing countries with healthier demographics to pay for the pensions, healthcare and other costs of those EU national populations whose retirement age is far earlier then we have in the UK? (This is just one of many bullets that we have ducked by our decision to leave.)
Clark explains why the mythical belief in an effective and functioning single market in the EU is incorrect. He describes so many barriers that the EU has erected, in particular in the services sector, which, distinctly different from the rest of the EU, is now over 80% of the UK‘s economy. So much of the Commonwealth and of the CPTTP, the transpacific partnership that we have now signed up to, is made up of economies that based themselves on the common law used by us and the rest of the Anglosphere, so – a fact that constitutes a firm rebuttal of EU fanatics’ obsession with a discredited concept called the ‘gravity model’, that they use to argue that the EU is the best trading bloc for us to align with – it is far easier for us to deploy our services to those economies than to the EU.
Our biggest trade opportunity, of course, is and always has been the US. News in recent days that Keir Starmer is sensibly going to seek a deal will, if the UK is not punished by the Republicans’ understandable irritation with Labour’s interference in the recent US presidential election, finally make it more than incontrovertible that it is far easier for the UK to do trade deals, now that we are out of the EU, than it was when we were, by virtue of our being in the EU, forced to leave it to others in the EU to negotiate our trade deals for us.
The role of the European Court of Human Rights (ECHR) is carefully explained by Clark. Although it is not part of the EU, we were nevertheless bound to be part of it as part of the EU treaty. Now that we have left, we can, if we wish, remove ourselves from it. Clark explains how the ECHR developed itself from being a simple treaty, a large part of it based on UK law and written by British jurists, into something much larger when the court, a decade and a half after its founding, unilaterally decided to expand its vision of human rights with something called the ‘living instrument doctrine’. Clark defines this as ‘a euphemism for making up the law as it goes along’. Thus, as Clark explains, we have the ECHR judges agreeing that a small number of elderly Swiss ladies were having their human rights denied if certain actions, deemed by them and the court to be useful in combating global warming, were not taken, so that Switzerland as a signatory to the ECHR must now undertake those actions; and British soldiers’ actions taken in the heat or fog of war are to be subject to precisely the same legal constraints as if they were policemen, as Lord Sumption put it, ‘turning in pickpockets at European police station’.
This jurisprudential ‘living instrument’ fungus has started to infect British courts, which are currently bound to go along with ECHR rulings. Derogating from the ECHR, along with a complete rewrite of the various equality and human rights laws in British law, and indeed legislating against this ‘living instrument doctrine’, is essential if we are to have a democratic parliamentary system rather than, as Clark puts it, a kritarchy (rule by judges). Leaving the ECHR is, however, something that to date most political parties have shrunk from taking any practical step towards. The problem that bedevils those considering such a move is that it is the vehicle by which the UK guarantees important human rights – both for our own people and for others around the world. We have enshrined much of that into UK law with such bills as the Equality Act 2010, and were we to leave the ECHR, those UK human rights laws would have to be rewritten in a way that allowed us to step away from some of the more ludicrous decisions of the Court.
A particularly interesting chapter is ‘How can Britain escape the EU’s low trajectory?’. He gives the example of gene editing, where we have not adopted the ludicrous EU approach (although of course, Westminster’s great betrayal of Northern Ireland means that there, they cannot pursue such opportunities). There are plenty of similar areas where we can diverge from the EU: GM technologies, shale gas (which, utterly hypocritically, we currently import massive quantities of from America, yet ban the home-grown drilling of such), data, AI and, of course, the implementation of the whole Retained EU Law Act, which was intended to get rid of unnecessary EU law from the UK. Few of these have been attempted to date. I would add my own humble prescription, which is to abandon the whole social democratic cul de sac, by getting the size of the state down to 33% of GDP, tax down to 30%, half the regulators to go altogether and the funding of the remaining half cut to one third of their current outlays.
Clark’s main focus is, however, not on the UK and its relationship with the EU, but on explaining the extreme dysfunction of the EU to any inappropriately starry-eyed Briton. Remainiacs obsessed with returning to an imagined prelapsarian EU nirvana (Clark’s ‘EUtopia’) seem, in the main, to have little understanding that the EU is currently falling apart, as is comprehensively detailed in this book. Focusing on a few imagined (most of them not even real) small benefits, such as freedom of movement and academic collaboration, rejoiners don’t see how the predictions made in 2016 by Brexiteers who were urgently advocating departure – the astronomically increasing cost of membership and the ever-decreasing benefits – have all been coming true, with ever-more bonkers legislation and regulation, ever-worsening financial conditions, larger and larger contingent liabilities, corruption, near-zero economic growth and even worse age demographics than our own.
By voting to leave in 2016, we escaped a terrible fate, by a whisker; yet still we have to dread the threat, posed by those whose heart rules their head (if they have a head), still relentlessly wishing that we should move back, inch by inch, towards the doomed, discredited concept of social democracy.
Ross Clark has written an important book. Anyone interested in the future political and economic progress of our country should read it – especially any who are still tempted to believe that our future might lie in realigning ourselves with the European Union.
Ross Clark’s latest book, ‘Far from EUtopia’, is published by Abacus Books and can be purchased here.
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