Category Archives: Irexit

Brexit and Ireland – part 3

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The North of Ireland is the weakest part of the UK so should expect to be hit most by Brexit.  Local news has reported two companies as already shifting operations to the Irish State in preparation for the UK leaving.  The EU is the North’s largest export market and while for the UK as a whole, for the period 2004 to 2014, the share of exports going to non-EU countries has grown more than that to EU countries, this has not been the case for Northern Ireland. Since it has been pointed out that some agricultural products can pass across the border numerous times, the scope for tariff and non-tariff barriers to stifle this trade is significant.  Such tariffs generally range between 6 and 22 per cent

While for the three years reported in this paper, the share of EU exports going to the EU has been around 50% for the UK, it has been around 60% for Northern Ireland (NI). In terms of cross-border trade, exports from the North to the South are more important to the North than exports to the North are for the South.   Foreign Direct Investment uses Northern Ireland to export into the rest of the EU so any exit will hit this investment and this employment.

Finally, there is the loss of EU funding, especially for farmers, not that this seems to have prevented many unionist farmers from voting for Brexit.  The UK Department of the Environment, Food and Rural Affairs estimated that direct payments to farmers under EU Common Agricultural Policy subsidies represented 87% of annual farm income in NI.

Brexit could impel the UK into trade based on World Trade Organisation rules, just when the US under Trump signals that it may ignore these rules when it doesn’t suit.  China is also reported to be breaking WTO rules but the length of time it takes to rule on any breach and the potential for retaliation are strong impediments to enforcement.   In any case the UK is already failing to manage its trade and might be fined billions of Euros by the EU for failing effectively to police the existing EU rules.  Hardly an endorsement of its ability to look after its own borders after Brexit.

The new US administration is hailed as a potential alternative to the EU even while Trump threatens to restrict and withdraw US investment abroad.  You know Brexit is a disaster when the nationalist policy of the Trump administration is put forward as the alternative, but more importantly you know how stupid the Brexit idea is in the first place when you admit you need an alternative and don’t already have one.

If Brexit makes no sense in the North it scarcely represents an advantage to the South.  It may benefit from firms relocating from NI and Britain but this is likely to be relatively minor compared to the disruption to trade with the UK, which is worth over €1 billion per week.  Exports from the Irish agri-food sector to the UK amount to over €3 billion or over 50% of that sector’s value.  The Irish State has the biggest share of exports going into the UK of any EU country, so has the greatest exposure to potential reduction of this trade.  It also has one of the biggest numbers of its citizens living in the UK of any EU country, exposing them to the threats to their rights the Tories are deploying in an effort to get a better deal.

Merchandise exports from the Irish State to the UK were over 25% of such exports in 2015 while services traded to the UK were nearly 19% of such services.  It has been estimated that in 2014 200,000 people were employed as a direct result of exports to the UK, or over 10 per cent of employment.   Again any reduction in markets could lead to reduced employment, wages, tax receipts and thus state-funded services.

In this respect, it is interesting to note that many of the economic forecasts of the quantitative economic impact of Brexit show greater falls in wages than in economic growth generally, which is no doubt a feature of the models but which shows that it is assumed that workers will pay most from Brexit.

None of this is particularly surprising and most people just get numbed by too many figures.  The effects are recognised and the question is how these are to be mitigated.  The Tories talk about opening up Britain to the world, but this world includes a growing protectionist US; a more powerful China that has already forced a British climb-down over a nuclear power station; Japanese car companies who have done the same; a Commonwealth that is supposed to welcome a return to a 21st century British Empire, and the rest of the world, much of which is part of trade blocs that the British are rejecting.  Given this context, were Brexit to go ahead, the direction of the British state will be less under its control than it was inside the EU.

Similar problems will face the Irish State if Brexit goes ahead. Up to now it could straddle a growing relationship to the EU with historic but declining dependence on the UK; and it could do this while acting as if it was the latest State to join the Union, that is the union of the United States of America.  Brexit threatens the second and Trump threatens the third.  The first is threatened by the nature of the type of Brexit that may occur and by being squeezed by the US and Britain.

If controls on immigration that are under the authority of the EU and British impede migration to the UK, the importance of this migration will decline relative to the Irish State’s greater trade with the EU, making it more attractive to enter into the Schengen area to facilitate such trade.  Entry into the Schengen area for any reason would make problematic any more favourable Irish migration arrangements with the UK compared to others, who might object to less favourable arrangements for their own EU citizens. Either way migration links to Britain could suffer, and such migration (just like that to the US) has always been a safety valve for the young fleeing a country that is regularly unable to promise it a future.

So, if the UK leaving the EU will hurt both Irish States, it is hard to see the sense in advocating that the Irish State also leave.  Unlike in Britain this policy is really confined to sections of the Left and more ‘radical’ nationalists and republicans.  But at least it is consistent with the latter’s nationalism, while how the Left expects workers to become more internationalist while their country becomes more isolated is another sorrowful mystery; even the Tories recognise the need to develop international links.  But why would European workers rally to a movement that declares that the problem is their ‘foreign’ capitalist states and not its own.

But of course, some new orientation to the world would be necessary for an Irish State outside the EU and there is really only one immediate candidate – back to the loving embrace of the similarly isolated British State, ludicrously trying to re-live its imperial youth.  A death-embrace of two states simultaneously pursuing a race to the bottom as a low wage, deregulated, offshore tax haven.

In doing so an Irish State would suffer badly, and just like the economic models relating to Brexit, we can be certain that it would be Irish workers who would suffer most for the nationalist fantasy that is Irexit.  The idea that something progressive or even socialist could develop out of such a project is preposterous.

The Euro area is by far the Irish State’s biggest trading partner, €109 billion in combined exports and imports in 2013/2014, compared to €52 billion for the UK.  Much of the foreign direct investment in the Irish State is because of its access to the EU market and could be expected to leave if it left the EU.  Foreign owned companies account for more than 20 per cent of employment while they dominate exports.

The Irish State would have to create a new currency, especially if (in the very unlikely event) its exit was motivated by the nationalist Left, which regards the Euro as a devil incarnate.  Establishing the credibility of this currency would require massive austerity while failure to do so would guarantee massive inflation.  In either case living standards could be expected to plummet.

In both parts of Ireland Brexit and Irexit is and would be a disaster.

The Left supporters of Irexit would have to find a new name for the above description of the results of Brexit and Irexit, as dismissing it as another ‘Project Fear’ wouldn’t quite cut it, as the experience of attempting to destroy capitalism by destroying capitalism only became a reality.

How ironic that it is the ideological supporters of capitalism itself that are inflicting this damage, rather than the relatively irrelevant proponents of Lexit.  Not only is this Left’s programme of breaking with the EU being implemented by the likes of UKIP, Tories, the Daily Mail and The Sun but the nonsense of a ‘progressive’ Brexit is being pursued by Corbyn’s Labour Party.  And we can see how useless that is as well.

Rarely does this Left get such an opportunity to see its big policies implemented. Unfortunately, it’s unlikely they will learn anything from their errors, since they seem barely to recognise that what they have wanted is actually being implemented.

Concluded

Back to part 2

 

 

 

Brexit and Ireland part 1 – the Irish Left

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irexitI have just read that various police forces in Britain have taken steps to prepare for a spike in racist and ‘hate’ crimes once Article 50 is triggered in March.  It is also correctly predicted that the course of the negotiations will present numerous opportunities for nationalists and racists to turn the failure of these negotiations to deliver on their fantasies into attacks on foreigners.  What the Tories will do verbally in attacking the EU it can be safely assumed that nationalist street thugs will do with their fists.

The reactionary outcome of the Brexit referendum is so obvious that it is simply grotesque and monstrously stupid that those sections of the left who supported Brexit still see it as progressive.  How dim or blinded by political dogma does one have to be not to see the link between the rise in racist attacks and the encouragement given to racists by the Brexit result?

The reactionary consequences of Brexit are glaringly obvious yet the process is being touted by it supporters in Britain as the way forward for the left in the rest of Europe.  The reactionary dreamers of a long lost imperial glory want to go back to the past while left supporters of Brexit imagine that a massive step back to the past will somehow represent a great leap forward into the future.  One of the few difference between the former and the latter is that the former makes more sense!

The European left have the luxury of watching the British events from one remove, but it is not the only advantage that they have.  Having witnessed the dire outcomes of Brexit they should stand firmly against their own states seeking the nationalist short cut to a non-solution though exiting the EU.  They too, just like British workers, must be alert to any weakening and diminution of their rights arising from the Brexit negotiations.  Of course, were Brexit the progressive outcome claimed by some we should expect a boost to workers’ rights from the negotiations, but the ridiculousness of such a thought only exposes the idea as incredible.

This is particularly the case for Irish workers whose state has the strongest links to Britain and could be most immediately and directly affected.  Yet even in Ireland the same left supporters of Brexit trot out the same ignorant arguments in favour of the decision; despite the increased xenophobia, despite the increased racist attacks, despite the massive shift to the right in the agenda of the Tory government, and opposite incoherence of the Corbyn-led Labour Party.  Despite all the evidence that the consequences have been reactionary the Brexit-supporting left has learned nothing.

The basis for their support for Brexit is the same mistaken arguments of their co-thinkers in Britain. Thus, they say that “the EU is run in the interest of Europe’s bosses and bankers.”  It is “deeply undemocratic, anti-worker, racist and regressive.”  Yep, mostly very true, just like the Irish State itself, which is the alternative to the EU that they put forward.  The nation state that doesn’t even include all of the nation is the alternative to the increased unity of the various states which determine the EU’s policy.  Apparently this is because although the EU cannot be reformed, the Irish State can.

In fact the Irish left must be applauded for making their illusions in nationalism so clear – that their opposition to the EU is based on their belief that the various capitalist nation states can be reformed and become the route to socialism.  The task across Europe is “to bring Left governments to power which will nationalise industry, while the EU would only be “a fetter on a future left-wing government.”

Capitalist state ownership and its political power is presented as socialism without an inkling that socialism is the power of the working class, which it is the capitalist state’s function to suppress and repress.  This complete misunderstanding of what socialism is about means that there is no conception of how it can arise from the current system.

It is correctly recognised that the EU is an attempt to “overcome the limitations of the nation state, to allow the free flow of capital and labour so as to maximise profits as well as forming a more powerful geo-political bloc.  The withdrawal of one of its major economies represents a profound blow to these ambitions.”

This apparently is what makes Brexit progressive.  It’s as if the objective of socialism is to restrict the free flow of capital and to frustrate the maximisation of profits.  It is probably news to these socialists that this is not the objective of socialism.

Capitalism presents its own barriers to the free flow of capital and the maximisation of profit, and which are expressions of the contradictions of capitalism pointed out by Karl Marx 150 years ago.  The point of socialism is to resolve these contradictions through the birth of a new system, not to intensify capitalist contradictions as an objective in itself.

On the other hand, it is an objective of socialism to support “the free flow of labour” and it is the objective of socialism to “overcome the limitations of the nation state”.  In fact, one objection to capitalism is that it has so far proved unable to do this.  Socialists do not seek to go back to the nation state but forward beyond it based on the steps that capitalism has already taken.  The first is called freedom of movement, an elementary democratic right and vital to workers’ unity, and the second is called socialist internationalism, the idea of which the Brexit left seems totally innocent.

Finally, this Brexit-Irexit left want to land a profound blow against “forming a more powerful geo-political bloc” by forming a Lilliputian bloc of one.

This left proclaims that it voted for Brexit “not because we have anything in common with the nationalism and xenophobia of the likes of UKIP” but because the EU is neo-liberal etc.  But this is obviously untrue.  The proposed Brexit referendum was sufficiently to their liking that they voted for it, called on everyone else to vote for it, still support even now and call for other countries to emulate it.  Nothing in common?  Is all this just a coincidence then?

What they both have in common is a nationalist conception of politics that is centred on the professed progressive potential of the nation state.  Both seek national independence as a prerequisite for progress and state intervention as the key to it. Totally the opposite of the socialist view that unity across nations is the key for workers and the nation state an obstacle to this.

Even in terms of the specific role of increased state spending, the views of this left are not so far from some of the proposals for increased spending presented by those other nationalists Trump and le Pen.  The tide of reactionary nationalism that these two and the Brexiteers represent threatens trade wars justified by rabid jingoistic rhetoric and sabre rattling.  The world has been here before in the twentieth century.  Giving a left gloss on this growth of reactionary nationalism by tail-ending it is a massive mistake, only reduced in effect by the relatively small forces advocating it.

The Brexit-supporting left is oblivious to their own role in the growth of this nationalist politics.  It minimises the xenophobic and racist content of the Brexit referendum by claiming that the Remain campaign was also anti-immigrant, ignoring the difference in degree and importance of such ideas on each side.  How quickly the murder of a Labour MP by a nationalist fanatic is forgotten!  How likely was this to have arisen from a supporter of the Remain campaign?

This left doesn’t even believe its own excuses – acknowledging that “the majority of ‘Remain’ voters did so for very positive reasons – in opposition to the xenophobia and inward-looking nationalism of the forces which dominated the official ‘Leave’ campaign, expressing a desire for unity across national borders.”  A desire expressed in freedom of movement within the EU, a freedom ignored completely in the series of analyses reviewed for this post.

All this exposes the hollowness of proclaimed opposition to rising anti-immigrant prejudices, prejudices fuelled by the decision they supported and still support.  Political positions have a logic outwith the sincerest of intentions – it’s commonly called the road to hell being paved with good intentions.  But even here the articles can’t help skirt with prejudice by talking of the “strain” caused by immigration and “the real concerns over the effects of immigration.”

This left presents frankly delusional claims that Brexit has been good for the working class – “opportunities are posed for the working class to organise and assert their interests” and “the working class can now more easily shape the course of events than it could within the glass prison of the EU.”

But in the real world the increase in racist attacks continues and reactionary nationalist rhetoric intensifies.  The Tories threaten to create a low-wage, low tax and deregulated free market paradise off the coast of Europe – a threat to British workers and to all of Europe’s workers – not an opportunity.

Most directly and immediately it is a threat to Irish workers.  After all, who else occupies the low tax, low regulation, super-business friendly niche that the Tories threaten to move into more obviously than the Irish?  My goodness, we even speak the same language.  Of course, the Irish State is inside the EU, which is a great attraction to US multinationals, but this does not help trade barriers for Irish-owned industry buying or selling into Britain, when Britain leaves the EU.  So, what better solution than for the Irish state to leave the EU as well?  After all, this fits the Trump agenda into the bargain.  Just a pity that this particular nationalist agenda also presents its own threats to the Irish ‘model’ of development.

Whatever way you look at it the nationalist agenda espoused by the Brexit-loving Irish left doesn’t offer any solutions to Irish workers.  But then, the Brexit left knows this itself:

“The bosses in Ireland will attempt to go on the offensive against the pay and conditions of workers in an attempt to make Irish exports more “competitive”, in the context of Sterling devaluing against the Euro. In short it is workers in Ireland, both public and private sector, who will be hit by the economic fallout of Brexit. Already the ESRI have talked of wage cuts taking place of between 4-5% for up to 60,000 workers. There have also been reports that the government may seek to attack the pay of public sector workers.”

So “it is workers in Ireland . . . who will be hit by the economic fallout of Brexit”.  But sure, wouldn’t it grand all the same?

Forward to part 2