The EU: to leave or not?

Yesterday I was widely criticised on Twitter by fellow libertarians for responding to the Times on-line poll that I would vote to stay in the EU (ignoring the fact for a moment that I don’t vote anyway). I’ve had accusations that I’m not a libertarian and I’m for big government, both preposterous extrapolations from one data point with no supporting evidence. Twitter is not a suitable medium to explain my current belief on the topic of EU membership, so I thought I’d write a quick post to explain my view to save me time.

Let’s start at the start: if we were voting today to join the current EU I would not support that. The EU as it stands has much to criticise, not least its ever-burgeoning budget and the evil Common Agricultural Policy that subsidises farmers in Europe at expense of European consumers and farmers in the developing world.

However, even the current manifestation of the EU does have three positive points: firstly it is a free-trade zone; secondly, it is a free-migration zone; thirdly it has been integral in removing the death penalty across Europe. As a libertarian the importance of these three aspects cannot be underestimated.

There is a fourth potential benefit, though this is difficult to prove either way so I don’t base my stance in it: many argue that the EU has prevented war in Europe since its inception. This is a contentious point but with the history of the preceding few hundred years, especially France, Germany and the UK, there is a correlation, causation being impossible to prove.

Trade*

One of the obvious benefits of EU membership is unfettered access to a huge free-trade zone. Advocates of withdrawal claim that we would still have access to the EU from outside, as others such as Norway and Switzerland, within the European Free Trade Area (EFTA). However these countries were never within the EU so had the advantages when negotiating their trade treaties. If we were to withdraw who is to say that the EU would be so generous with the UK, after all what benefit would be in it for them?; many EU countries appear to believe that the UK’s membership brings more trouble than value. Why would they not create a punitive system for us, having lost £7bn in revenue? It should be noted that EFTA states and other countries with trade agreements with EU all have to adhere to EU legislation, with no say in what those laws are. As many of the Daily Mail-brigade wrongly criticise the EU for much of our business regulations how would having less say in the design of EU legislation help us, when we would still have to abide by it?

*For more details on the implications for trade I suggest you read this excellent article in The Economist entitled Making The Break.

Cost

In 2012 the EU cost the UK taxpayer around £7bn after the infamous ‘Thatcher rebate’. The government’s total expenditure was £695bn, so it was around 1.01% of the total. In comparison we paid £48bn in debt interest and £460m to the Arts Council! While it would be nice to save the UK taxpayer £7bn there are in my opinion higher priorities to tackle first within the government’s portfolio.

Non-Representative

There is a frequent argument used against EU-membership that we have ‘foreigners imposing laws on us’. Well there are UK MEPs that are elected to the European Parliament to make these laws, ironically Nigel Farage of UKIP is one. And if you’re into ‘democracy’ they’re elected by a system that’s arguably more democratic than our First Past The Post (FPTP) domestic system.

The UK joined a free-trade zone (the ‘common market’), which was a brilliant post-war reaction to the planned economies and state socialism prevalent in the Axis powers. Although ‘we did not vote for political union’, our democratically-elected government has signed all of the same treaties (e.g. Single European Act, signed by Margaret Thatcher, Maastricht, signed by John Major and Lisbon, signed by Gordon Brown) as the other member countries.

It’s inconsistent to say “we want to be governed by a democratic government here, not a democratic government there”, when it was the democratic government here that voted for all of the powers the democratic government there has! You either back the democratic decision of the UK government or you don’t.

Euro and Cyprus

One argument thrust at me was “the EU has shown it will devastate property rights in Cyprus if it wants”. Yes it has and that’s appalling, but if you’re borrowing from the lender of very last resort then you can’t complain about the terms. Nobody forced Cyprus to join the Euro, they did their own cost-benefit analysis and thought it was advantageous for them; now they want some other countries’ taxpayers to fund their profligacy. While the ‘haircut’ inflicted upon savers in Cypriot banks is devastating for them I don’t see how this contradicts caveat emptor. Many UK investors lost millions in Icelandic banks due to their greed and lack of risk awareness, do the anarcho-capitalist think that’s wrong? I don’t.

Conclusion

So, to be clear, I’m not saying the supra-state EU with its goal of political union is a good thing; it’s not, obviously. In my opinion all states are bad, but I struggle with the arguments that this particular one is any worse than our own (after all it enlisted us to every EU treaty).

What I am saying is that I have yet to be convinced that withdrawing at this stage will bring us more benefits than costs; while that may actually be the case, I’ve yet to see any convincing argument that goes beyond UKIP’s ridiculous knee-jerk colonel-blimp rhetoric.

Mine is a pragmatic stance on the cost and impact on the UK economically (and, less-so, politically); it’s game theory at the state level, if you like.

With a currently unconvincing case for a net advantage to the UK withdrawing I’d rather we were inside this particular tent at the moment.

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2 thoughts on “The EU: to leave or not?

  1. The EU is more a tariff club, not a free trade area. It keeps out goods. Witness the latest move to hobble sales of Chinese solar panels, or recent moves to do a similar thing to CFLs to protect Osram. The end result is higher costs to the individual.

    The MEPs cannot propose new legislation, only vote on it. The Commission reserves that right. While democracy is flawed, this cosy club is flawed still further.

    The EU, if anything, sounds a little like some religion, where you can be treated equally and gain access to friends and potential partners if you are in, but anyoen from outside who tries to get involved will be punished and don’t attempt to leave. If you are not in, you are treated differently, as second class.

    Good points on the perfidy of our own govt., though. Not sure what advantages will be lost of the EU was still, and remained, a trading organization only.

    I think the general creeping authoritarianism of the whole construct repels me. The unelected Commission, a “parliament” that works to have “consensus” and monoculture instead of a plurality of views.

    Yes, the death penalty is very wrong. War is very wrong, but the argument for the EU has parallels to the argument to be a farm animal and not free. Yes, you are fed, housed, cared for, free to roam within the farm without territorial disputes, but then you are de-horned and chattel.

  2. “It should be noted that EFTA states and other countries with trade agreements with EU all have to adhere to EU legislation, with no say in what those laws are.”

    Oh, for heaven’s sake! this old canard—again?

    The EU largely implements general legislation from higher bodies, e.g. the WTO. Switzerland and Norway have seats—and a veto—at the WTO. We, on the other hand, are represented solely by the EU.

    DK

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