This post was contributed by Michelle Everson, Professor of Law at Birkbeck. She has written widely on European Economic and Constitutional Law and has advised the European Commission, the European Parliament and the European Central Bank on matters of European Law.

Professor Everson is hosting a week long debate on ‘Europe at the Crossroads’ at Birkbeck (13-17 June). For details and to book your place, please visit the ‘European Law on Trial’ website.

Every day this week, Professor Everson writes for Birkbeck Comments, offering up her thoughts, opinions, and analysis on the EU referendum. Read part 1, part 2, part 3 and part 4 of her blog.

European borders: a paradoxical sting in the tail?

A couple of weeks ago, as we were stuck in Rome’s eternal traffic jam, an Italian Professor friend of mine told me a story I recognised, and not without a sliver of pain. In the early 1970s, his father, also an academic, took a sabbatical year at the University of London. Subject to his parents’ irrepressibly optimistic openness to the world, my friend found himself at one of the (little-lamented) Inner London Educational Authority’s finest primary school establishments in Richmond. He did so, however, without any local cultural knowledge, or indeed, being able to speak a word of English. The well-meaning school nonetheless stepped up to the European challenge and provided my friend with mentor, a little girl of mixed Italian-British heritage who might translate. The one problem in this arrangement was the fact that up until this time the little girl had done all in her power to hide her Italian heritage from her playmates, keeping her mother away from the school gates and denying all icons of culture that were not 100% British in origin. Her mortification was absolute. My friend’s embarrassment was total.

Being of much the same age and having grown up with a German mother in Chingford, I immediately recognised the pathology, though for some perverse reason (having a French name perhaps) I always followed a reverse psychology to dealing with the inevitable issues by flaunting my Germanness. No one who didn’t grow up in those grey and xenophobic days can truly understand the frustrations of living within the imagination-stagnation of a culturally-enclosed space, and worse still of a cultural space that seemed far past its sell-by date: Sunday afternoons of interminable repeats of British war films often found me pleading with the Luftwaffe Kommandant on the television not to give Douglas Baader his legs back. At a personal level, and even though I am sometimes shocked by lawlessness of the Italian-Polish mushroom wars now playing out in Epping Forest, I am grateful beyond measure that Europe is at home in London.

Yet, by the same tokens of location and age, I am also a middle-aged Londoner and wholly aware that the xenophobia of the 1970s and 1980s was not, or was not even primarily reserved for Europeans. As successive waves of immigrants from the Caribbean, from East Africa, from the Turkish communities of Cyprus, from Vietnam and from Latin America joined my world, the ineptitude of a UK television culture which persisted in a time warp that never allowed Germans to shed their Swastikas, paled into insignificance in the face of the ready offensiveness of British society towards what was perceived as the rest of the world. Those days are not yet over, but London is at least now more globally inclusive that it has ever been.

So what of Europe, with its by now painfully apparent, increasingly rigidly-enforced and often inhumane territorial borders? Is Europe now defining itself as a stagnant, culturally-enclosed space? This question is particularly relevant for a younger generation, with a heightened global outlook that makes little or any distinction between real or virtual friends in Sydney, Warsaw or Mombasa, or between market and cultural goods created in Beijing, Budapest or Rio de Janeiro. Is a concept of Europe a sustainable or even a just one in a globalising world? Within a social theory of European integration that identifies the only possible measure of a shared European culture as being that of the philosophical universalism which originated within the European Enlightenment, the question leads to the inevitably paradoxical conclusion that Europe can only ever be defined as Europe when it has dissolved itself in the success of its own universalising mission. Equally, from the altogether more pragmatic perspective of global economic development – or of the righting of the enduring structural wrongs of historically-engendered economic inequalities – is an ideational programme of European economic ordering a retrograde step and an act of global injustice?

Professor Michelle Everson

In this latter regard, I cannot overcome paradox, and can only answer within the realms of my own personal experience and outlook. For me, Europe is only an ideal and not a place. I do not belong to the Habermasian circle of democratic federalists. At the same time, I cannot but feel that, as in the case of EU Enlargement, a global market justice that is founded in the precept of competitive labour advantage, or the notion that I will correct my own disadvantaged position by working for less than you do, is not justice at all, but a recipe for the abasement of the whole of the human condition. If, in its tentative and messy mastery of the innate tensions between a human desire for economic opportunity and a human want for cultural security, the European Union manages to provide at least a hint of a new model for the globalised economy; if it reminds the world that markets must exist within rather than take dominance over society, it will have done more than we might ever have expected of it.

Law on Trial 2016: The European Union at the Crossroads, runs at Birkbeck from Monday 13 to Friday 17 June. Book a free place here.

Listen to Professor Everson on the topic of the EU referendum in the latest edition of Birkbeck Voices

This post represents the views of the author and not those of Birkbeck

Find out more

• Law on Trial 2016
• Courses at the School of Law

This post was contributed by Michelle Everson, Professor of Law at Birkbeck. She has written widely on European Economic and Constitutional Law and has advised the European Commission, the European Parliament and the European Central Bank on matters of European Law.

Professor Everson is hosting a week long debate on ‘Europe at the Crossroads’ at Birkbeck (13-17 June). For details and to book your place, please visit the ‘European Law on Trial’ website.

Every day this week, Professor Everson writes for Birkbeck Comments, offering up her thoughts, opinions, and analysis on the EU referendum. Read part 1 and part 2 of her blog.

The crisis in economic liberalism: A common ground for the fight?

To confirm the worst suspicions of Eurosceptics, I once met Gisella Stewart, acceptable face of the Brexit campaign, on a bit of junket in Vienna. Maybe I did fly Ryanair (into Bratislava), but I admit that I was also a touch squiffy on a sparking little Zweigelt when, in the hotel lobby, she voiced to me her concerns about the democratic futures of the Union. It was the time of the European Convention and ‘Gisella’ (if I may) was a UK parliamentary delegate to conferences preparing for the birth and unveiling of a shiny Constitution for the Peoples of Europe. Being then as now of a cynical frame of mind I was more relieved than upset by the eventual failure of the European Constitution and the subsequently functionalist approach taken by the European Commission and the member states in the redrafting of the constitutional draft as the Lisbon Treaty.

On the one hand, the sight of past leaders of France and Italy, Valerie Giscard D’Estaing and Guliano Amato (betimes in their battle bus) suborning the peoples of Europe to join them in a glorious democratic future, induced in me only a vaguely Brechtian feeling of alienation. On the other, in my travels around Europe, the only committed federalists I have ever met have been members of the Federalist party (go figure), and some (but definitely not all) EU employees.

In Puglia, Carla looks to the Regione when her vines fail, in Manchester, Martha collects plates of royal weddings, in North Germany, Christian rejoices when Werder Bremen avoids relegation. The daily experience of the vast majority of people in Europe is one of political, cultural and emotional attachment to the local, regional or national level. Although the visions of a democratically-federal Europe proposed, amongst others by great minds such as Jürgen Habermas, offer an obvious and immediate solution to problems of democratic deficit within Europe, the precipitate federalisation of the prisoner’s dilemma would only de-legitimate itself. Bismarck and Garibaldi are long dead: today, the only sustainable European federalisation would be one that felt in the soul as strongly as it is born in conviction.

Nevertheless, Gisella Stewart now makes a telling point. For the left, or so she argues, the European Union is a lost cause. The majority of European governments are formed by right wing or Christian Democratic parties, the European Parliament voted to be led by Claude Juncker, not by Martin Schultz. Fazit: the left can never defeat the dominant economic rationality of the right within the Union. Now, this is all perhaps true, but vitally so, only insofar as the dominant economic rationality that now governs the EU, as it does the globe, is a natural appendage to the right. And here, returning slowly to our much-maligned German ordo-liberals, we might state that all is not as it seems, or that Gisella Stewart is wrong to dismiss the potential for revolution within EU institutions. To the contrary: She is wrong because she has yet to understand the depth of a current crisis that is not simply a crisis of capitalism, but is rather a crisis that challenges the entire political-social edifice of economic liberalism. Seen in this light, the left might yet have common cause with the right within the European Union.

In the years since financial crisis, I have found myself with some strange debating bedfellows; not just the usual cast of well-meaning Germans and culturally-exhausted Italians, but rather also chairs of global insurance companies, heads of compliance within multi-national banking corporations, Christian Democrats of many national hues, community organisers, small-scale entrepreneurs and anxiously-overburdened technocrats. Our shared ground, however, has been a desire to consign the rhetorical usage of the catch-all-hate-term ‘neo-liberalism’, to the dustbin: blindly hating capitalism, or those facets of capitalism we feel are bad does little to extricate us from economic malaise.

Contemporary crisis has its roots in very many distinct movements, not just in unbridled and unprincipled rent-seeking on the part of private actors, but also – in a term coined by the political scientist, Colin Crouch – within a ‘privatised Keynsianism’ promoted by Governments of the left and of the right across the globe, which is predicated on substitution of a putatively endless supply of self-generating private capital for the fiscally-engendered revenues of the now economically-castrated nation state; a process which still continues, albeit now subject to Central Bank oversight of private money creation within a new, but still very vaguely-defined, technocratic function of macro-prudential supervision. Neo-liberalism, when used to denote a rampant and uncontrolled state of market nature, first misses the immediate point that the systemic failure of capitalism is not only being overseen, but is also being promoted, within an exponential growth of regulatory oversight that is dedicated to the service of the chimera of efficiently-perfected competition. Secondly, however, and far more importantly it also misplaces the fatal underlying alienation of all of our dominant economic rationalities from our political and social mores.

If one thing unites the disparate strands of our dominant economic rationality, it is their social amorality, or a denuded worldview that is exhibited either in their belief that man is no more than an economic animal (homo economicus) flourishing or failing in a state of market nature in which not even God finds a place, or in their contrary reification of ‘scientifically-constructed’ and market-fostering regulation, and concomitant denial of any (Hayekian) uncertainty in the affairs of the market or of man: ‘if only we can identify the right logarithms, Capital will always beget more Capital, Amen.’

This is all so very far from a first incarnation of the term neo-liberalism in 1930s Paris as a moral response to the communist and fascist challenge then being made not simply to free markets, but also to the liberal framework of social constitution within which classical economic liberalism had always suspended them. It is also light years away from a first and enduring clarification of this defensive liberalism in the Berlin of 1938. It is a world away from the rebirth of a cornered but still battling economic liberalism by the (anti-) heroes of German ordo-liberalism who sought to secure an ordered, economic constitutionalism within the nation’s highest laws. It is a travesty of the work of academics, steeped in Lutheran tradition, such as, the economists Alexander Rüstow and Walter Eucken, the latter of whom, also bravely resisted Martin Heidegger’s determined attempts to Nazify the University of Heidelberg, as well as the lawyer, Franz Böhm.

For clarity’s sake, I am of the left, and consequently cannot but disagree with vast tracts of ordo-liberal writing. Reading this work often sends me screaming into the garden. Nonetheless, it is not the individual precepts of ordo-liberalism that are at issue here, but rather its idealised view of the economy within society, a model more recently enunciated by one last living link with the beginnings of the movement, the Hamburg Law Professor, Ernst-Joachim-Mestmäcker.

The Economic Constitution:

‘constitutes the political potency of the economic realm … but not with an eye to offering up this realm to the democratic regime; instead, it does so in order to place the democratic regime in a position from which it might disinterestedly achieve its tasks of securing justice and social welfare. The role of the Economic Constitution is not one of securing the priority of the economic realm. Instead, its role is one of enabling the exercise of independent state action in a framework of respect for the economic and political autonomy of citizens.’

In his very final lectures at the Collège de France, Michèl Foucault distinguished ordo-liberal thinkers from what he termed ‘anarcho-liberals’ (read Milton Friedman). Ordo-liberals, so he argued, had an abiding fear of social forces and hence sought to suppress all revolution and reaction by means of their pre-emption within a constraining narrative of constitutionalised freedom. And, indeed, for a radical or collectivist left, this distinction must inevitably mutate into a critique of the forces of conservatism with a small ‘c’ which would similarly deny socialist governments the full use of the political potency of the economic realm.

Professor Michelle Everson

Yet, today, in the face of socially- and politically-alienating economic rationalities that have simply forgotten, or choose to ignore the fact that the market exists within society, the painful irony of the left enjoining in a battle to overcome the crisis within economic liberalism is perhaps ameliorated. In its ordo-liberal form, the moral language of economic liberalism is one that we can recognise and engage with. Far more importantly, it is a moral language of political self-restraint which has proven itself accommodating to the demands of counter-posing forces of social tradition and of the left. The success and stability of Germany’s post war economy – and social settlement – was not the work of ordo-liberals alone, but rather the graft of ordo-liberals who fought with but similarly adapted themselves to other world views.

The reforming economic zeal of Ludwig Erhard was open to its tempering within the traditional politics of (Catholic) corporatism pursued by Germany’s first post-war Chancellor, Konrad Adenauer. In turn, the forces of social democracy, embodied by Willi Brandt and Helmut Schmidt, also shaped a now sadly-unravelling composite variety of German capitalism – a sometimes frustrating, but always democratic, culturally-rooted and socially-embedded capitalism.

Law on Trial 2016: The European Union at the Crossroads, runs at Birkbeck from Monday 13 to Friday 17 June. Book a free place here.

Listen to Professor Everson on the topic of the EU referendum in the latest edition of Birkbeck Voices

This post represents the views of the author and not those of Birkbeck

Find out more

• Law on Trial 2016
• Courses at the School of Law

This post was contributed by Michelle Everson, Professor of Law at Birkbeck. She has written widely on European Economic and Constitutional Law and has advised the European Commission, the European Parliament and the European Central Bank on matters of European Law.

Professor Everson is hosting a week long debate on ‘Europe at the Crossroads’ at Birkbeck (13-17 June). For details and to book your place, please visit the ‘European Law on Trial’ website.

Every day this week, Professor Everson writes for Birkbeck Comments, offering up her thoughts, opinions, and analysis on the EU referendum. Read part 1 of her blog here.

What can we learn from European malaise?

In my time, I have been patronised by the very best of them, including in the late 1990s, Horst Krenzler, an eminence grise of the founding European Commission and, at that time, Chair of a working group on the Eastern Enlargement of the EU. Acting as Rapporteur for a mixed group of functionaries and academics, my frustrations with the – to me – all-too-perverse implications of sealing the liberated futures of newly re-instated nations by requiring them to submit wholesale to the established (and already vast) EU economic rule book, boiled over into the high-pitched question: ‘Why can’t we just give them a Marshall Plan?’ An outburst of general laughter followed, and then, ‘Young lady [I was young then], no-one will pay for it!’

A perception that latter-day surrender of the Union to economic rationalities of market utility dates to, and was precipitated by the unforeseen geopolitical earthquake that followed the fall of the Berlin wall, has much to recommend it. The final surrender of the Deutschmark to long-resisted plans to create a European currency within the Treaty of Maastricht of 1992 was the price that the Federal Republic had to pay for German reunification. By the same token, the EU’s decision to alter the rules of the game of accession to the Union by requiring the nations of Eastern Europe to adopt all European market regulation prior to beginning membership negotiations, cemented the enduring paradigm, whereby Eastern Europe is required to compete itself to economic parity with Western European States.

Not for Poland or Hungary, the long process of adaptation to European rules afforded to the privileged post-dictatorial nations of Portugal and Spain; a break with tradition that also has as its flip-side in an inevitable pressure on wages and social provision in Western Europe, as Eastern workers make full use of their competitive labour advantage. And finally, as Germany – under pressure both from unfavourable Eurozone interest rates and from the financial burdens of reunification  emerged in the early 2000s as the sick man of Europe, economic conditionality first made itself felt when the then socialist Government bequeathed to us all the first lodestone of subsequent austerity regimes in its brutal curtailment of national welfare provision and simultaneous establishment of a debt brake on national expenditure.

If full truth be told, however, the destructive potentialities of economic rationality had already begun to afflict the European Economic Community a decade earlier as the rhetorical dominance of Thatcherism and Reagnomics extended throughout the Continent, colonising market integration logics to lever out distinct varieties of European capitalism from complex national patterns of sometimes corporatist, and sometimes welfarist economic-political organisation.

Campaigners for Brexit are obsessed to the point of absurdity with the safeguarding of a national sovereignty that is a simple chimera in our contemporary world of global economic interdependence. They pay little if any attention to the historical paradox that, whilst the then European Court of Justice had established its doctrine of the limitation of national sovereignty as early as the 1960s (in the now legendary cases of Van Gend en Loos and Costa v ENEL), a palpable loss of national territorial control only emerged with the success – originating at national level – of programmes of new economic liberalism in the 1980s. Far more than the Single European Act of 1986, establishing majority voting in the Council of Ministers for measures creating the Single European Market, it was this new predominance of the liberalising economic-political mind that created a beginning of the end of human self-determination, be that self-determination national, European or global.

That markets are never simply markets became very clear to me with regard to my then field of study: the integration of private insurance and finance markets. Comparing German with UK provision, I was left disquieted by the happy coincidence between demands for the capital-generating efficiency promised by a single European finance market and the concomitant integrative unravelling through legislation and case law of decades-long schemes of regulation with all of their underlying interest accommodations between consumers, industry and national economic policy. Certainly, in this case the already-liberal UK was not to be an immediate looser as the axe fell instead upon a largely stagnant scheme of German financial regulation, which had escaped the reformist zeal of the Federal Republic’s economically-liberalising post-war Finance Minister, Ludwig Erhard, and which seemed instead to serve more corporatist interests within a controlled economic policy of inward investment.

Yet, as the 1980s progressed into the 1990s, which also brought with them a sea-change in European competition policy away from range of market offer and towards economic efficiency, with its concomitant prising out of Germany’s local investment banks (Landesbanken) from their restrictively-controlled role of (state-supported) structural financing, we were all soon to pay a very high price indeed for the rolling out of a level competitive field by means of the flattening of distinct, nationally-embedded economies.

The example of insurance and finance markets may be a small one, but it was replicated across the Single Market, and also gains in vital significance when seen in the light of sovereign debt crisis and the EU’s own austerity regime imposed in order to shore up the Euro. A powerful analysis squarely lays the blame for the anti-democratic and economically self-defeating regime of New Economic Governance within the Eurozone on the shoulders of a German theory and ideal of ‘ordo-liberalism’. Working with the powerful mantra of ‘never again’, ordo-liberalism, it is said, seeks still, in its unfortunately-displaced act of memory politics, to fight the bogey of hyper-inflation experienced in Germany in the wake of the 1929 Wall Street crash, asserting its supreme goal of the constitutionalisation of monetary stability throughout the Eurozone within new European technocratic crisis law.

Contrary to the explicit terms of the European treaties, financial succour may be given to the debtor nations of the Eurozone, but – with the full blessing of the Court of European Justice (Pringle) – will necessarily be subject to the imposed brutality of an economic conditionality which makes even the International Monetary Fund think again. The hands of the European Central Bank will be tied by the constitutionalised principle of monetary stability, such that it cannot engage in the inflationary policies that might save the Eurozone without imposing unbearable pain upon its weakest members.

Finally, the air of permanent austerity is cemented within the Eurozone and far beyond as its members are required to constitutionalise a debt brake, and its non-members, or their politicians, seize on the rhetorical powers of financially self-restraining government to garner votes from a public bludgeoned in to believing that there is simply no alternative. Germany reaps and Greece weeps: German history, its painful remembrances, dictate the rules of the Eurozone game such that all Greeks – and with them all Europeans – who dream of a different way of doing things are left bereft, devoid of political voice in their vain battering against a tight mesh of legal and technocratic inevitability.

So far so German, but a slightly more nuanced tale may also be told: ‘Zutiefst unDeutsch’ is my ungrammatical and increasingly exasperated cry each time I stagger out of a Ryanair flight in Berlin, Frankfurt or Munich. This is all so unGerman. All those things that used to irritate me as much as I prized them: the ridiculously restricted shopping hours nonetheless balanced by service from an assistant who knew, after years of apprenticeship, exactly which vegetable peeler I might need to tackle my slightly woody asparagus; the sense of innovative ambition frustrated by centuries of craft and guild tradition counter-posed in equal measure by continuity and security.

All gone, or going, in the blink of an eye, or in the 30 years of an equalising and disembedding bastardisation of capitalism that has seen German financial institutions ejected from their drearily-constructive roles of fostering engineering enterprises in Dresden, Dortmund and Detmold and unpreparedly-launched instead upon a global financial market ruled by a myth as insane as it an opiate for the masses who have been ejected from their economic vocations, to now flit instead from zero-hours contract to zero-hours contract: Capital will beget Capital, world without end, Amen. Take a look at the destructive role played by WestLB, once the proudest and most constant donators of venture capital to Wolfgang in Wuppertal, in the Irish housing, and ask yourself this: did Germanness or unGermanness cause financial crisis in the first place?

Professor Michelle Everson

So what have we learned from Europe? That it is bad, or that it is good? In its ideological substance, it is neither, but it has been held captive for the past 30 years by an economic rationality that was born and nurtured at national level, is now dominant on a global stage, and is often seized upon by equalising institutions as a short cut to European integration. Yet, within the EU, we do at least have institutions – institutions that have betimes resisted bastardised capitalism, the extraordinarily measured European Court of Justice of the 1980s being a case in point. It is this that distinguishes Europe from the still-uncivilised global stage; meanwhile, European institutions provide us with the best framework within which we can begin the fight back.

Brexit campaigners would have us believe that with its sovereignty restored, the UK will bestride a global stage, operating autonomously and serenely within the World Trade Organisation here, and calmly concluding bilateral trade agreements there. The delusion is absolute: neither the WTO, nor international treaties possess ameliorating institutions; the Investor Protection principle – now being successfully resisted by the institution of the European Parliament within bilateral trade negotiations between the EU and the US (TTIP) – is not only the sine qua non of all existing bilateral trade agreements, but also the final bonfire of the vanity of national sovereignty, establishing the absolute primacy of all trade interests and requiring signatory states to compensate economic forces who have been so sadly inconvenienced by their (social as well as economic) regulatory protections.

Law on Trial 2016: The European Union at the Crossroads, runs at Birkbeck from Monday 13 to Friday 17 June. Book a free place here.

Listen to Professor Everson on the topic of the EU referendum in the latest edition of Birkbeck Voices

This post represents the views of the author and not those of Birkbeck

Find out more

• Law on Trial 2016
• Courses at the School of Law