The Future of the European Union
It is said that the union is founded on the following principle: free movement of goods, services, labor and capital — with a common vision of achieving a single market. In this article, Yumi Kim argues that the common vision, wrongly implemented, is hindering the progress of Europe. Instead of truly fostering free trade, EU regulations and directives hold back those who endeavor to progress; indeed such efforts are frowned upon. It is one thing to devise policies founded on egalitarianism but quite another to implement them as if they are based on the ideas of free exchange. FULL ARTICLE
Comments (21)
Bleh. If a member of the E.U. doesn't like the E.U. somuchso that it can withdraw from the Union then the E.U. is a voluntary entity and does not meet the defintion of Evil Statist Monopoly Organisation.
Published: May 3, 2007 9:18 AM
You argue that the being a member of the EU hinders the progress of Europe. I found several instances in your article with which I disagree.
I don't fully understand how you derive clear-cut advantages in the sort term for those Member States withdrawing from the EU. As you well say yourself, businesses in the withdrawing country will suffer due to the higher tariffs they will face as non-members. It will take time for those business to develp trade with non-EU members, as the EU was previously the market they traded most heavily. It will depend on so many factors, impossible to predict: how can you solidly argue that in the long-run the exiting MS will be better off? It's plain guessing. Faced with such uncertainty, better to stay inside the EU.
You say that the EU is 'envious' of Switzerland's low tax rates. The only reason the Swiss can set the tax rates so low is because of their economy is dependent solely on financial services: the amounts of world-wide savings locked up in Swiss banks is astonishing. Why? Total banking secrecy. No questions asked. Thus, all the dirty money of the world flows to the same place searching for a safe haven. Drug money, dubious fortunes, money stollen by the Nazis from the Jews: the Swiss will accept anything turning a blind eye! Their prosperous economy has as its foundations blood money and they know it. It is an inmoral State and the EU is right to attack it.
"In the pre-EU period, Europeans were unable to travel freely. This is untrue." What? This is totally true. You don't seem to have done much travelling yourself around Europe. How can you argue that it is the same now than before? No borders, no passports, no questions: that's not what used to happen at border crossings in the past.
I agree on your comments on CAP. But it depends what MS you're talking about. France would definitely suffer if it left, others wouldn't. You can't generalize.
I don't get it when you talk about confiscation, redsitribution by EU officials. What are you referring to? The EU has no tax-levying powers, so I guess you're not talking about tax, that's up to the Member States. As for the rules in the internal market, that's precisly what they are, rules. To creat a level-playing field and harmonize some standards. The whole internal market/free-trade concept behind the EU is totally and absolutely pro-capitalist and free-market. Create the rules for all to play, and the then trade and may the best man win! To think that the EU is some sort of 'socialist'/egalitarian scheme to uniformize its citizens is totally bonkers. Differences are fine, but you need rules and standards (also known as 'the law').
I don't know where you get this stuff...the Daily Mail maybe?
Published: May 3, 2007 10:10 AM
"Their prosperous economy has as its foundations blood money and they know it. It is an inmoral State and the EU is right to attack it"
Riiight... so the Germans whose parents were Nazis, the French who slaughtered hundreds of thousands in Africa, the British empire, the Italian fascists... are all nice peace-loving people but the Swiss are evil BECAUSE THEY TOOK THEIR MONEY! Funny how making money through peacefull trade is seen by some as more evil than killin' n stealin'.
Published: May 3, 2007 11:05 AM
This seems to support the view that "dissolving the power of states" is far more likely to clear the way to super-states which have greater and more concentrated power. In my view, far from dissolving states, participants should attempt to proliferate them, fragment them, divide them, and put barriers in place to their uniting. Once they are proliferated, their power and their danger is greatly reduced.
Published: May 3, 2007 11:52 AM
I couldn't disagree more with Mike Puente's post.
Hopelessly statist.
Published: May 3, 2007 12:02 PM
TLWP
"If a member of the E.U. doesn't like the E.U. somuchso that it can withdraw from the Union then the E.U. is a voluntary entity "
Not exactly, when talking about freedom "voluntary" is an individual rights concept, not a national rights one.
Mike Puente,
"Their prosperous economy has as its foundations blood money and they know it. It is an inmoral State and the EU is right to attack it"
If someone does an evil deed to gain money. The evil is in the act of the deed, not in the hiding of the money, or respect of peoples pricavy. Likewise the solution is in attacking and investigating the act of the deed, not in attacking privacy. Besides, face it, the real reason that people put their money in swiss banks is to escape unjust taxes. If the EU was truely about free trade, they wouldn't mind this so much.
"the EU is totally and absolutely pro -capitalist and free-market. Create the rules for all to play, and the then trade and may the best man win! "
If your econonomy has a bunch of microregulations on free activity, and it has bunch of social programs that redistribute wealth, having a common currency isn't going to make those problems magically go away. Granted, the countries that have historically had less monitary self-dicipline cant lie to people about the value of their money as much.
I guess the real question: is the EU about free trade or is it about cooperative microregulation of people, industry, and currency controls. Given European attitudes about free markets and free trade and the fact that the most free countries (UK and Swiss) decided to stay out - it does not look promising. I think when the US dollar goes to hell, it will create incredible pressures on the EU. Time will tell.
Published: May 3, 2007 12:11 PM
Clearly, the EU is far from being purely free-market. They have a central bank, fiat currency, subsidies to agriculture, and other such interventionist policies. By pure conviction, a country truly devoted to free-market principles should not join the EU. I am sorry that all the problems with the EU I named above are some of the same problems we have here in the U.S.
I disagree with the assessment regarding borders, though. It used to be much more difficult to travel between the different countries in Europe. To claim that just because people still crossed the borders before the EU must mean there was no issue is clearly erroneous. It is much easier to cross a border with no questions asked than to have to stop and show passports and other such documentation. I would say that this is a positive benefit of the EU. Imagine if we had to show a passport in between every U.S. state. People would *still* travel from state to state, but it wouldn't be easy.
Published: May 3, 2007 12:27 PM
They don't need to create an organization to enforce voluntary rules, but given the way of the world it may be inevitable that they will form some kind of organization. The question is just how powerful that organization gets. If it is a barrier breaker, forcing member states to open up, it is a positive, much as the Federal Government can turn the U.S. into a national market. As someone from a state with terrible car & health insurance laws, I wish they'd do more to break down barriers between states.
However, it appears they are putting up barriers inside as well as outside, so the fix is in.
Published: May 3, 2007 3:04 PM
"the Swiss will accept anything turning a blind eye! Their prosperous economy has as its foundations blood money and they know it. It is an inmoral State and the EU is right to attack it."
Long live Switzerland! It is a beacon of hope in Europe: the last free nation.
Published: May 3, 2007 3:47 PM
I'd like to address a number of issues raised above.
1) How do we know if folks will be better off by withdrawing from the EU?
We cannot foresee what will happen if a country withdraws. We also do not know that member states will prosper by staying in the EU. The idea that life will be more secure by being in the union is also plain guessing.
2) I was in Switzerland just last weekend. A businessman was talking about the art market in Switzerland and one thing struck me as distinctly libertarian (trust me, I didn't script this):
"Most of the Swiss I deal with understand that both parties have to gain from a business transaction."
I believe that such understanding is behind the success of many Swiss folks and in fact, of any good businessman.
3) Travelling: "No passport" does not apply to all situations. In fact, Britons flying to Spain or Italy, for instance, have to carry their passports. This is not so much different from a Japanese travelling to these countries.
4) "EU has no tax-levying powers."
EU revenues come from treasuries of each member state plus payments from those that belong to the European Free Trade Association (Iceland, Norway, Switzerland, and Liechtenstein). It is hardly a 'free' club and treasuries of course pay these fees from taxes and other means. http://ec.europa.eu/budget/budget_glance/index_en.htm
5) There are many articles on the 'level-playing field' argument at the Mises.org
6) I am not a statist as I do not have much faith in any state.
7) The only paper I read is Metro.
Published: May 3, 2007 3:55 PM
@TLWP Sam
Actually, there are no provisions in the European Union law on how a member state can actually withdraw from the Union.
Published: May 3, 2007 8:39 PM
Degeneration of Emu - by Niall Ferguson and Laurence J. Kotlikoff
From Foreign Affairs, March/April 2000
To date, the successful launch of Europe's single currency has proven the euroskeptics wrong. But over time, the euro will be gravely threatened if the countries in the eurozone do not put their fiscal houses in order. Generational accounting, a careful analysis of long-term trends, paints a bleak picture: unsustainable spending will bury future generations under mountains of debt. Most governments using the Euro must either endure deep budget cuts, swallow sharp tax hikes, or be forced out of the eurozone.
... But generational imbalance does not simply imply that European states will run deficits. This method already assumes that they will. Rather, it points to an inevitable need to raise taxes, reduce expenditures, or print money to meet a rising burden of debt interest. But what happens when states like Austria, Finland, or Spain reach a political impasse on fiscal reform? Bond markets can absorb only so much debt before demand starts to wane. Legally, withdrawal from EMU is impossible. But history shows there is always an exit. If a country’s only viable option is to print money and inflate away some of its liabilities, and if the European Central Bank abides by its “no bail-out” rule, then secession will almost certainly be considered. The question is what the costs would be.
... history offers few examples of successful adjustments on the scale necessary in certain European countries today. What it does offer are several examples of monetary unions disintegrating when fiscal strains became incompatible with the unpleasant arithmetic of a single currency. In this respect, conventional measures of fiscal balance like debt and deficit ratios to GDP understate the magnitude of the eurozone’s problems. Generational accounting suggests that EMU could degenerate — not overnight, but within the next decade.
Link
HTML Link
Published: May 3, 2007 9:41 PM
It's interesting to note that the English historian A.J.P. Taylor, not normally considered a right winger, was quite a euro-skeptic and most of his predictions for the future of the EU were quite dire. Some of AJPT's euroskeptical predictions are summarised here.
Published: May 3, 2007 11:18 PM
The argument of tax competiton will be resolved when the people will realize that the income tax is due only to give the monetary seigniorage to those old families that are completely unable to do an honest work to gain their living.
The only question is: how much time to have a critical mas of people aware? Anyway, also former US Treasury officers begin to understand that matter. See for example: An Emergency Program of Monetary Reform for the United States - by Richard C. Cook, Global Research, April 26, 2007
http://tinyurl.com/2lubby
Believe me, as soon as the critical mass is averaging the critical number, it is better to leave any management work in any banking institution... I suggest emigrating to Mars.
Published: May 4, 2007 2:04 AM
Vote online about a Constitution for Free Europe at www.FreeEurope.info - open also for non-Europeans. One liner: "Human development in its richest diversity" (Wilhelm von Humboldt, John Stuart Mill)
Published: May 4, 2007 2:39 AM
I wonder how much Hong Kong “gained” in “joining” China?
My point is that if a country is small or large does not out of a true economic perspective make any difference. If China and Hong Kong independently were free market economies or if they politically were united under a common government and pursued a free market policy, does not make them richer or poorer.
What does matter is politics such as black mail “if you do not join the EU we will put tariffs and trade restrictions on your export products.”
So the political construction that is the EU justifies itself only in its own right and not because the EU concept by itself is increasing productivity and prosperity.
Björn Lundahl
Published: May 5, 2007 4:24 AM
The EU will PUNISH members for leaving ENTIRELY at the expense of its members. The punishments will probably be in the form of massive tariffs and restrictions on that country's products in member states. The EU is not a trade organization but a psuedo-government. Governments hate it most when its minions decide they would be better off without them. This is the same as a state in the USA leaving.
Just wait for the EU-Constitution. When a member state tries to leave then the EU could, will react violently.
Published: May 7, 2007 8:15 PM
Interesting piece and nice to see.
But, the Court of Rights is not part of the EU structure.
In the conclusion section, you state :'With the egalitarian ideology at its core, the EU is heading in a direction that is opposite its original destination.' Where is the egalitarian agenda, could you mean 'Determined to lay the foundations of an ever closer union among the peoples of Europe' (recital 1, preamble, Treaty of Rome 1957), but surely not the affirmation of its Economic and Monetary Policy, see Article 102a: 'Member States shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Community, as defined in Article 2, and in the context of the broad guidelines referred to in Article 103(2). The Member States and the Community shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article 3a.' The Treaty, as revised, really has not departed from these sentiments, which the Left attack as too Liberal.
Maybe the answer lays somewhere in the middle?
Regards,
Aaron
Published: May 8, 2007 6:49 AM
Dear Aaron,
The European Court of Human Rights does not in fact belong to the EU as you say, my apologies.
The Treaties of course state they are all for free trade within the zone. However a closer look at EU regulations and directives and their applications shows how arbitrary and business/consumer-unfriendly the legislation is.
Take Articles 81 and 82 of EC Treaty, for instance, on the EU competition law (Article 81 deals with issues such as collusion, Article 82 deals with a dominant position of a company and the abuse of its dominant position).
If a company is ‘unlucky’ (and I use this word as the application of the law often seems arbitrary), the EU Commission can pay a surprise visit for inspection as in this case:
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/163&format=HTML&aged=0&language=EN&guiLanguage=en
Then look at Article 82. Prima facie it is not against the Article for a company to have a dominant position in its relevant market. If a market is narrowly defined (e.g. stationery market – writing instrument market – fountain pen market – luxury fountain pen market etc) a company’s market share would be greater than it would otherwise be. If the Commission believes that the company has a dominant position and is ‘abusing’ its power (the ‘abuse’ hear is again unclear), the company will be fined. This damages the company (waste of resources put into proceedings) and raises the EU revenue, but does not do much to consumers.
I think they have an odd idea of 'free market'.
Published: May 8, 2007 9:31 AM
Sorry, 'hear' above should be, of course, 'here'.
Published: May 8, 2007 9:39 AM
In 1994 I voted against Sweden’s membership of the European Union. This despite of the fact, as Sweden is a much regulated country that a membership might lead to in the short run, fewer regulations. Before deciding on this issue, I did not know what to support. “If we join, we will have fewer regulations because of this and that reason but still we would live under a super state and “short run profits” are therefore of no concern.” Logically I therefore also voted against the adoption of the €. Sweden joined the EU in 1995 but rejected the € in 2003.
Today I am very happy that I voted against a membership of the European Union and I really hate it. I can also see powerful tendencies which this super state is imposing on “big businesses” and therefore, also, on consumers.
Because of the influence of the writings of Hoppe, I voted against the EU.
I work for a landlord and my job is to rent out all commercial facilities, write leases and so on. My last lease is to a company named “Lek & Buslandet”, translated it would be something like “The land of Play & Mischief” (quite sweet, really); it is a play centre for kids between the ages of about 5-13 years:
http://www.lekobus.se/
Anyway, according to the tenant, the range of the facilities, are after the investments have been done by the tenant (of nearly 3 000 000 $), about 5000 square meters (53 819,332 square feet). Mainly the job was done by Polish workers. Once a week during the rebuild I went there to see how the work succeeded, and I saw that they worked very hard. They lived there during the rebuild and I can tell you that, it did not seem to be in accordance with the “Swedish tradition of labour laws and labour unions.” The conditions were good but not as high as the “Swedish standard”. I asked the owner: “How much do they earn on a monthly basis? Well, quite well actually, after tax about 1785 $.” A Swedish carpenter would probably, after tax, make nearly 3000 $. Their union is quite strong. This investment would probably not be done if the owner was forced to hire Swedish workers and the Swedish consumers, workers included, would have suffered. But still this is a very un-Swedish thing to do, to hire Polish workers for less pay, but a very good thing too. Why has this happened? The reason is that a membership in the European Union forces Sweden to live by its rules. So here we have an example why a membership in the European Union promoted a more libertarian approach.
A common currency would also increase trade and decrease calculation chaos.
But there is no doubt that the EU is a very, very bad thing and that this kind of “short profits” for the economy and for individual liberty, are of no real concern whatsoever.
Björn Lundahl
Published: May 9, 2007 2:08 AM