Can the UK Brexit a Euro Cartel?

In 1976 a band from the United States, the Eagles, released what went on to become one of the greatest songs and highest selling singles of that decade, and the song and the band maintain iconic status to this day.  That masterpiece was Hotel California.  Perhaps one of the songs most famous lines; “…you can check out any time you like, but you can never leave!”, best describes the predicament in which the UK, as well as many other countries and states, find themselves today.  This is true not only in Europe, but the United States as well.  Is Brexit an achievable goal?  Is it, or can it be, an end goal?  Or, is Brexit the first step on a path to prosperity?  I believe the logical conclusion is that Brexit will indeed be difficult, but is achievable.  More importantly, however, this would only represent completion of an initial step in a two-step process.

Before I get to an article that prompted this post, we first must get to the heart of the matter when it comes to the European Union (EU).  The EU is a socialist government cartel, much the same way OPEC is an oil cartel.  The EU cartel is selling a form of government, the socialist welfare state, and OPEC is selling oil.  EU politicians, bureaucrats and vested and protected interests are growing rich at the expense of their European subjects the exact same way OPEC bureaucrats and oil interests have grown wealthy at the expense of their subjects.  Both, as well, use multiple forms of coercion, force and propaganda to forward the interest of their cartel members.  If we don’t understand or accept this from the outset, we are in denial of the facts, will completely miss the issues at hand and, ultimately, the solution.

You have recently seen, firsthand, what happened to the price of oil when OPEC lost control of its cartel in oil production.  Prices of their protected product have cratered and governments and industry executives are scrambling to control their members and, I have no doubt, have already attempted to or have made backdoor deals to turn off the spigots in oil producing countries.  We have already seen waves of financial and social upheaval and, if the price of oil does not go up sometime soon, we will see much more.  This issue of public-private partnerships and socialist government enforced cartels, by the way, is the primary driver of poverty and income and wealth inequality the world over.  The network of government and industry cartels is literally strangling the world economy to death.  But, what happens when a socialist government cartel goes belly up?

The EU is, and has been for some time now, on the precipice of losing control of its cartel members.  Governments, faced with decades of debt used to prop up their failed policies, are growing desperate with higher taxes, cash confiscations, more protectionism, witchcraft-like tax inversion trials (see Google), Negative Interest Rate Policy (NIRP), Quantitative Easing  (QE) programs and “fairness” programs designed to ensure that every country in the cartel maintains high tax rates, high labor costs and its vast welfare state.  Failure on the part of any EU member or partner, to maintain the high cost of government, labor and regulations, threatens the very existence of the cartel members and the wealth they have accumulated on the backs of their citizens.  The absolute last thing any politician or bureaucrat in Brussels, any of the European nation-state capitols, or establishment leadership in the UK wants to see is not Brexit, it is a repudiation of the socialist/welfare state.  This rejection of socialism would be to the EU government cartel what the rejection of fossil fuels, specifically oil, would be to the OPEC cartel; death.

What must be done in the collective UK, or within Wales, Scotland, England or Northern Ireland, if they choose to move forward separately, is what must be done in Greece, France, Spain, Portugal, and many other countries, in and outside of Europe; they must clean up their own mess first.  Frankly, asking whether or not the UK should Brexit is purely of a secondary nature.  If they Brexit and change nothing else, they will still be left with the legacy, the ball and chain, the dead weight of nearly a century of government control over the factors of production, socialism.  The same holds for Greece, if they exit, there is still no solution to the massive debts and unfunded liabilities.  Privileged bureaucrats, protected industries and businesses, labor union members, police, entitlement and welfare recipients can chase down the less fortunate, turn them upside down and shake them in an effort to dislodge any loose change, but it simply will never be enough.  Don’t get me wrong, the UK has nothing to gain by maintaining its current status in the EU and can stay there and go down with the ship if it chooses, but Brexit is only the first step.

It would seem the most logical and effective way to accomplish this first step is through a nationalist uprising.  And, that is exactly what is happening.  Movements are afoot in Greece, Golden Dawn, France, the National Front, the United States, the Tea Party, Donald Trump and Bernie Sanders, and the UK Independence Party (UKIP) headed by Nigel Farage, in the UK.  The nightmare for a powerful European socialist government cartel leader is a UK break as part of a nationalist uprising or hard turn toward policies held under a classical, true liberal, honest to goodness, free-trade, low tax, less government regime.  No doubt, any Brexit would encompass components of these two outcomes, and reject on many levels, the regional socialist cartel holding power, the European Union.  While I would not consider the UKIP platform a complete departure from socialism, it would serve to regain a large degree of independence and serve as a platform for additional reforms.  Further nationalist or (classical) liberal incursions within Europe, and the EU would crumble.  Keep in mind, socialism has failed and is straining under its own weight as it is, Brexit would simply accelerate this process.

This brings me to the following article from The Economist:

Unfavourable Trade Winds

It would be hard for Britain to negotiate good trade deals post-Brexit

Unless specifically identified, all block quotes are from this referenced article.

 

First, it is very difficult, after simply reading the title, to come to any other conclusion than this being a piece designed solely to intimidate, threaten and bully those that are leading the Brexit effort, and those that are considering support of their efforts.  I fully support any publications right to free speech, but I must also assert my right to identify what I feel is a title designed to instill fear and ultimately to effect the outcome of any planned Brexit referendum, now or in the future.  I happen to agree with the title, I believe it to be factual, no different than I believe Saudi Arabia would make it difficult for one of the smaller OPEC nations to cut deals if they decided to leave.  But, it would be a huge mistake for Brits to succumb to bullying and intimidation in a time of such national importance.

TRADE is at the heart of the European Union (EU). Indeed, many Brexiteers claim that in 1973 Britain joined a free-trade area that only later morphed into political union.

Let’s be more specific, and let’s not mince words, the Brexiteers are indeed correct.  It no longer is (and perhaps never was) trade that is at the heart of the EU, it is, as I have described above, protection of special interests that are at the heart of the EU.  If you boil the EU cartel down to its very essence, it exists to protect.

Leaving the union would not interrupt trade with the continent for long, they suggest, since a new free-trade deal could be swiftly agreed. Yet the EU’s single market is deeper than a free-trade zone. It dismantles both tariffs and non-tariff barriers involving standards, regulations or rules of origin. That explains why joining the EU boosted Britain’s exports so much—as the chart shows for former West Germany.

Yes, I believe it naive to think that certain remaining EU leaders would not want to proactively pound the UK economy back to the stone ages.  I believe they would use every form of force, coercion, pressure and sanction in an attempt to punish the UK leadership and citizenry.  Then they could say; “See, look what happens when you leave!”  If you Brexit, you will have a war on your hands.  That is what this is saying.

The EU is clear that non-members like Norway can have full access to the single market only if they accept most of the rules, including the free movement of people, and contribute to the EU budget. Switzerland has less access (its banks, for instance, are restricted in the services they can offer within the EU), yet it still accepts most rules and pays into the budget.

The United States operates in the same manner.  Sure, member states and partners can trade within the 50 states tariff free, as long as they agree to a long laundry list of laws and regulations related to import-export with foreign nations, labor and industry regulations, and, of course, agree to high and debilitating compliance and taxation.  This is exactly what people around the world are trying to escape and why nationalist movements are on the rise.  Obviously, relationships like this require submission and perhaps this is the right time for the UK and others to move on.

Brexiteers argue that Britain, as Europe’s second-biggest economy, would use its clout to get a better deal. They say Britain’s big trade deficit with the rest of Europe means the EU needs the British market more than the other way round. And if no deal were done on single-market access, they reckon relying on World Trade Organisation (WTO) rules or having a free-trade deal like Canada’s would be good enough.

Have you ever been in a relationship with a control freak?  One of those, “if I can’t have you no one will!”, types of of people.  That’s what this is.  Instead of saying, hey, I respect your decision, I hope we can still be friends, they instead want to destroy the rest of your life.  I don’t know, the EU socialist type seems to pride themselves on being progressive, tolerant and they are certainly open to refugees, but wanting to destroy anyone that does not agree with the way they govern seems to lack a certain amount of class and distinction.

Yet the atmosphere post-Brexit would be frosty. The EU would have a big incentive to be unhelpful, for fear that other countries might copy Britain in leaving. Even at the best of times, the EU finds it easier to deal with small countries; protectionist interests within Europe resist deals with bigger ones. Any trade offer from the EU requires the approval of all 27 other member countries, plus the European Parliament.

It’s that kind of relationship where, when it ends, you have to move to another country, change your name, and the authorities place the rest of your family in a witness protection program.  If you view this Brexit issue for what it really is, it is laughable, the complete lack of confidence in their own system and complete unwillingness to let their subjects freely buy and sell products and services with whomever they like.  If they were so confident in what they had to offer, no deals, agreements or protection would be required.

A free-trading Britain, say Brexiteers, would no longer be held back by protectionist EU members. But other countries’ trade negotiators might find the British market of 65m consumers less alluring than the EU’s 500m. The top American trade envoy, Mike Froman, has said his country would not be interested in a bilateral deal with Britain. Agreements that China has signed with Iceland and Switzerland are lopsided towards the Chinese.

Are you scared?  No?

There are also practical problems. Because Britain has been in the EU for over 40 years, it has little experience of bilateral trade negotiations. The rules for exit say a trade deal with the EU should be done in two years, yet this is optimistic—the Canada deal took seven years and is still not ratified. Uncertainty over future trade pacts is a big reason why economists think Brexit would damage the British economy.

How about now?  You must be scared!  No????  And, this is not supposed to be a propaganda piece designed with the specific intent of producing a “No Brexit” vote?  That’s funny.  The only thing The Economist has accomplished with their article, effectively, is to expose the maximum amount of intellect required to publish something under The Economist banner, the intellect of a parrot.

A former EU trade commissioner, Lord Mandelson, says free-trade agreements “do not come free, do not cover all trade and take ages to agree.” He adds that trade deals are “started by liberals but finished by protectionists”. His conclusion is that a post-Brexit Britain would end up with fewer and worse trade deals than it has now.

I do agree with Lord Mandelson that protectionists tend to have far too much influence on trade deals, which is why negotiated trade deals are not free trade deals, they are protected trade deals and should be soundly rejected by the citizens of any country.  It is ultimately the average citizen that suffers from any form of domestic or foreign trade restrictions and occupational protections and supporters of these deals are simply not fit to represent the public at large.

I have covered most of the referenced article and I recommend you read it for yourself.  In the end, maintaining ones independence is a powerful strategy not only for an individual, but for states and nations as well and that is exactly the course the United Kingdom should take.

It is the fool who always rushes to take sides.  Do not commit to any side or cause but yourself.  By maintaining your independence, you become the master of others – playing people against one another, making them pursue you.

Robert Greene, The 48 Laws of Power

Robert Greene, in The 48 Laws of Power, points out that, far from invoking anger, holding back your commitments invokes respect.  This does not mean saber rattling as one despotic ruler of North Korea has perfected, but opening up relationships with many would be cooperative partners and remaining accessible and within reach at all times.  Commit to only one partner or group, however, and your power is gone.  You, as they say, get taken for granted.  You are their possession now and your suitor can move on to other pursuits.  Personally, I don’t know about you, but I do not think a rank of doormat or mistress is a position the citizens of England, Scotland, Wales or Northern Ireland should accept, do you?

As a final footnote, and to repeat, while I do consider nationalist movements to indeed be a first step in breaking from hegemonic regional and international socialist regimes, I want to further emphasize that they are not an end goal or a solution in and of themselves.  Nationalism is a way forward for individual states or countries to independently deal with debts and unfunded liabilities and ultimately to rehabilitate personal freedom and failing economies.  Citizens should, as a whole, reject outright, any protectionist and high-tariff agendas, and favor further advancement towards limited government, enhanced civil liberties and freedom of occupation and trade as in independent member of a global community.  Failure to achieve this outcome will lead to new, different, problems, and not completely solve old problems.


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