The Price Britain Pays for Europe
Making the case against Brexit, the Economist has published a good editorial and supporting article on what the U.K. has gained in economic terms from its membership of the European Union and what it might lose if it quits. On those points the analysis was thorough, and I agree with the argument as far as it goes. But the articles had very little to say on the issue that most animates the people opposed to EU membership: loss of sovereignty.
I've reluctantly (oh so reluctantly) concluded that Britain should indeed vote to stay. The costs of exit probably outweigh the benefits, I've argued, partly because it would be in the EU's interest to prove exit doesn't pay. But the cost of diminished sovereignty is no figment of the exit campaigners' imagination. It's real, and ought to be given due weight.
Here's what the Economist had to say on the subject:
To some Eurosceptics these hardships [following exit] would be worth it if they meant reclaiming sovereignty from Europe, whose bureaucrats and judges interfere with everything from bankers’ bonuses to working-time limits. Yet the gain would be partly illusory. In a globalised world, power is necessarily pooled and traded: Britain gives up sovereignty in exchange for clout through its memberships of NATO, the IMF and countless other power-sharing, rule-setting institutions. Signing up to treaties on trade, nuclear power or the environment involves submitting to regulations set jointly with foreigners, in return for greater gains. Britain outside the EU would be on the sidelines: notionally independent from, but in fact still constrained by, rules it would have no role in formulating. It would be a purer but rather powerless sort of sovereignty.
It's true of course that governments pool and trade power; it's true that treaties usually involve surrendering some freedom of action in return for some advantage. But this doesn't make any and every treaty commitment either necessary or a good idea, as that paragraph invites you to think. NATO and the IMF are doubtless splendid undertakings, but power-sharing, rule-setting institutions aren't good or bad in themselves. Everything depends on the terms of the exchange -- what you give up and what you gain.
The loss of self-governing power entailed by Britain's EU membership is greater than the loss required by all its other treaty commitments combined. Indeed, it's of a wholly different order. EU membership doesn't just involve specific commitments under specific circumstances. It requires submission across a wide range of policies to a supranational legislature, executive and supreme court -- submission, in other words, to an external and self-actuating law-making authority.
Being part of the EU is not just like being a member of the IMF, only more so.
And I can't believe that this substantial loss of sovereignty doesn't matter much in practice, as the Economist seems to think. Plainly, no government is ever free to act entirely as it might wish. Circumstances ranging from geopolitics to the laws of arithmetic narrow down policy choices -- but rarely to zero. It's better to have choices subject to constraint than no choice at all. That fine distinction, after all, is the difference between democracy and dictatorship.
The EU requires a surrender of sovereignty that seriously weakens the lines of accountability that ought to run from citizens to the people in power. These ties matter, even in those cases where the constraints on government action narrow choices down to nothing. Legitimate government is government by consent; it requires citizens to be consulted and engaged. The EU's record on this is far from exemplary. This failing is no mere academic abstraction. Brexit aside, Europe's current travails over economic stagnation and migration are, in part, a crisis of legitimacy.
Granted, Britain is a voting member of this supranational order, and so has a voice in the decisions that may be imposed upon it. Nonetheless, it's just one country in a union of 28. I don't see much evidence for the suspiciously nostalgic view that Britain can be disproportionately influential, leading other EU members to the outcomes it wants. And by the way, doesn't the desire to be disproportionately influential run counter to the spirit of the whole enterprise? Which countries do the Stay campaigners have penciled in for disproportionate lack of influence?
In the end, as I say, I come down on the Economist's side in believing the U.K. should stay. Sadly, many of the exit campaigners are delusional about Britain's short- and medium-term prospects outside the EU. Nonetheless, concern over loss of sovereignty shouldn't be so blithely dismissed. It's the price the U.K. pays for remaining a member -- and a high price too.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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