Wednesday, June 29, 2016

The Truth About the EU and What Should Be Done

By Sascha Klocke
On Tuesday, during a somewhat raucous session of the European parliament, Nigel Farage gave his post-Brexit “victory speech”. Besides his trademark taunting of his pro-EU colleagues, Mr Farage made animportant point, suggesting:
Why don’t we be grown up, pragmatic, sensible, realistic and let’s cut between us a sensible tariff-free deal and thereafter recognise that the United Kingdom will be your friend, that we will trade with you, cooperate with you, we will be your best friends in the world.
This statement, like most of Mr Farage's speech, was greeted with jeers. While the reaction could simply be regarded as being due to Mr Farage's earlier taunting and to the emotional nature of the post-Brexit debate, it seems to hint at a deeper issue, which has been brought up on the Mises Wire several times:  That the European Union is not primarily about free trade for mutual benefit, but about political integration and economic harmonisation, in which free trade is just the reward for going along with the political ambitions of Brussels.
This alternative explanation seems to be confirmed by comments made by the president of the European Commission, Jean-Claude Juncker, in May, including that “deserters will not be welcomed back with open arms,” and yesterday, by German chancellor Angela Merkel, who said in front of the German Bundestag
We'll ensure that negotiations don't take place according to the principle of cherry-picking ... It must and will make a noticeable difference whether a country wants to be a member of the family of the European Union or not. Whoever wants to leave this family can't expect to do away with all of its responsibilities while keeping the privileges.
Is leaving the European Union with its plans for ever-greater harmonisation leading to a political, fiscal, and social union really “desertion”? Is the desire to be an independent, sovereign country, yet still participate in free trade with some of the world's largest economies, cherry-picking? As Murray Rothbard has pointed out, “genuine free trade doesn’t require a treaty”,  and if it does not even require a treaty, it is quite clear that it certainly does not require a political union that harmonises away the competition responsible for many of the benefits of free trade.
This, however, seems lost on many politicians and bureaucrats in the EU, as well as many of its intellectual supporters at universities and newspapers across Europe, even when they did make the effort to mention the common market as a major benefit of remaining a member of the union.
A friend noted with regard to these post-Brexit days that “divorce is so emotional”. And indeed, politicians like Mr Juncker and Mrs Merkel speak of the European Union as if it were a marriage or a family, to which one is bound by some transcendental duty. Perhaps it would be better to again return to the notion of federations as voluntary (and reversible) associations between friends, pursuing a (specified) common goal, and not as codependent marriages that get abusive as soon as one party wants to get a divorce.
The above originally appeared at

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