Is the Labour manifesto ‘regressive’, and how?

Some very quick points about the claim that Corbyn’s Labour’s policies are ‘regressive’. This has become a common centrist critique of Corbyn’s Labour (occupying the discursive space vacated by “Corbyn’s leadership will condemn Labour to electoral oblivion”). But the basic point covers a range of different arguments. I want to typologise those arguments, very quickly and crudely, into three categories.

First – the argument that means testing of government provision is intrinsically better than universalism. This argument is bad and wrong – it grounds public provision of welfare and services in a social ontology which divides the deserving from the undeserving, and which can easily be repurposed for reactionary social policy (the deserving versus the undeserving poor); it leaves redistributive policy more vulnerable to rollback by failing to achieve upper and middle class ‘buy in’; and it bakes the oversight and disciplining apparatus of the administrative state into policy implementation.

Second – the argument that a policy which is not targeted at the poorest is intrinsically bad because of its regressive redistributive outcomes. I can’t do better on this argument than the excellent Policy Sketchbook blog, which addresses this category of argument in some detail in this post (as well as in earlier ones). Tl;dr: policies come in bundles, and it doesn’t make sense to call a policy ‘regressive’ unless you know what else is changing in the overall policy package to achieve it. A universalist policy (or indeed a middle-class-targeted policy) funded by highly progressive taxation is not regressive in any useful sense.

Third – the argument that given its budgetary constraints, Labour’s spending priorities are poor – that the money Labour plans to spend on university tuition fees abolition (to take the highest-expense new budget item as the example), would be better spent on other policy goals (for example, fully reversing Conservative and Coalition welfare cuts, or the NHS, or both.)

I think this last argument has a great deal of merit. Labour has imposed quite significant fiscal constraints on itself – McDonnell’s fiscal rule prohibits borrowing for day-to-day spending which is not balanced out by increases in taxation, and Labour’s 2017 manifesto proposed quite modest (in the grand scheme of things) tax increases, while actively ruling out a range of other possible tax increases. Moreover, any Labour government will almost certainly be inheriting a state with welfare spending significantly impacted by years of austerity budgets, an underfunded NHS, etc. etc. In this context, Labour’s spending priorities, in its 2017 manifesto, do seem strange. Labour’s university fees abolition policy is not – contra the centrists – regressive in any meaningful sense. However, the opportunity cost of this policy is extremely high, absent a budget with much larger overall spending increases than those currently proposed.

This problem could of course be fixed by increasing overall tax and spend. At present, however, Labour’s commitments are what they are. Unless and until those commitments change, I think the left should be quite seriously concerned about the policy implications of Labour’s platform.

Nicol’s ‘The Constitutional Protection of Capitalism’ – reading notes

Ok – this is a literal ‘notes to self’ post, in that I’m going to use it to record my reading notes on Danny Nicol’s ‘The Constitutional Protection of Capitalism’. Nicol is a professor of public law at the University of Westminster. The book is, if I have the right end of the stick, an argument that the UK’s participation in a range of international treaties and governance institutions has transformed the British constitution in far-reaching ways. Specifically, the relevant international treaties and law have ‘hard wired’ neoliberal policies into the British constitution, in a way that is heavily constraining of parliament’s democratic policy-making powers.

I’m reading the book because it seems to be the most-cited work by advocates of ‘Lexit’ (that is: left-wing Brexit) – and as I said in my last post, I think the Lexit position in general is under-represented in UK policy debates. The main goal of the post is just to make summary notes, but I’ll no doubt opine, as I go – I’ll try to be clear about what’s summary of Nicol and what’s my own opinion. I give myself permission in advance to read huge swathes of text without writing them up, or the book is never going to get finished. Likewise, this isn’t really the reading I ought to be doing, so I give myself permission to go months between updates here. I guess I’ll note updates here:

20/1/2018 (1) – pages 1-5.
20/1/2018 (2) – pages 6-11.
22/1/2018 (1) – pages 12-22.
22/1/2018 (2) – pages 23-31.
22/1/2018 (3) – pages 32-37.
23/1/2018 – pages 38-46
28/1/2018 – pages 47-81.
10/3/2018 – finished the book and wrote up a summary (at the end of the post below), but still lots of note-taking to do for the later substantive chapters.

Ok, here goes.

Chapter 1 – Transnational Regimes and the Constitution

Nicol starts with the basic thesis:

there has been a constitutional ‘transnationalisation’ that has introduced a far more severe ideological bias into the constitution than has hitherto existed, certainly since the ending of the veto power of the House of Lords in 1911; this in turn has seriously compromised British democracy… In particular, the free choice of economic policies – on such matters as state aid, public procurement, state regulation and, above all, the choice between markets and public sector monopoly – has increasingly been rendered constitutionally impermissible. Only the strength of neoliberal consensus amongst the present generation of politicians has served to conceal this democratic diminution. (1)

Nicol then moves on to defining neoliberalism. Following David Harvey, Nicol suggests that there are two definitions of neoliberalism. First, a utopian theory – “a model of social relations in which government regulation and social welfare guarantees are reduced in order to foster the play of market forces driven by private enterprises pursuing profit maximisation” (3 – he’s quoting Harvey). Second, “a political project designed to restore the power of economic elites” (3).

Again following Harvey, Nicol argues that the second definition is the most important one, and the first definition is typically just ideological cover for the second. Nicol quotes Antinori:

laissez-faire is a myth, and the question is never between government regulation of the economy and no government regulation: the question is always what type of government regulation. (4)

For what it’s worth, I think this is mostly right as far as it goes, but not quite right all up. It is definitely the case that neoliberalism is in significant part a class-driven political project – but that’s true for economic governance systems in basically every class society. It’s also definitely the case that neoliberal ideology serves as ‘cover’ for political-economic actions that conflict with their ideological warrant – but this is also very common, and it doesn’t necessarily mean that the ideology is contentless, but rather that it is partial. The fact that neoliberal practice doesn’t match neoliberal principles means that we need a better definition of neoliberalism as a bundle of economic practices than the ideological one offered by many of its advocates. But that definition should (in my view) pick out neoliberalism as a historically distinctive set of beliefs and practices within which and through which class power operates, rather than reduce the elements of neoliberalism that escape its ideological framing to straightforward elite class interests. I’m not really prepared to try to offer an alternative account of neoliberalism that achieves that, so these gripes are basically just vapourware – but let this serve as a marker of mild disagreement.

Having outlined these two conceptions of neoliberalism, Nicol then distinguishes between neoliberals who really believe the ideology (“free market principle neoliberals”) and neoliberals who are really only interested in the class interests of the elite (“class interest neoliberals”). Again, I’d argue that this distinction is a bit simplistic – though I guess you could counter-argue that analytic frames should be as simple as they can be while still serving their analytic function, which this probably does.

Still, the shortcomings of this analytic frame are clear on page 5, where Nicol writes:

Neoliberalism, as defined above, has in fact usually been the dominant governmental doctrine in Britain since the birth of capitalism itself. (5)

This is not true in any useful sense, in my view – it’s just conflating neoliberalism with economic liberalism in general. Probably doesn’t hugely matter for the analysis of the book, but again not quite right in my opinion.

In the next section, Nicol argues that constitutional law – which has traditionally focused on the nation-state as the locus of the constitution – would benefit from understanding international governance institutions as de facto determining elements of the British constitution. He writes a bit about the power of transnational corporations, but his focus is not corporations but transnational institutions – the WTO, the EU, and the ECHR.

perhaps we have reached the point at which, in ever wider fields, the most important element of Britain’s constitution (and indeed, the constitutions of other countries) is no longer Parliamentary sovereignty but rather transnational regulation. (8)

[As an aside, there may be a story to be told here about how British constitutional law has traditionally been able to regard the nation-state as sovereign because Britain was an imperial power that exerted legal force over other nations, rather than the reverse – and as Britain has declined to third-tier power status this has changed.]

Anyway, Nicol argues that the expansion of transnational influence over nation-states’ constitutions has been achieved via two mechanisms: “the scope of transnational regulation has expanded” (5) and “certain international law regimes have become more effective” (6).

Now Nicol asks: “What brought about this constitutional transformation?” (12)

He periodises (I think accurately enough) post-war transnational economic ‘constitutional’ history into two stages: from 1945 through the 1970s there was “an intensification of institutionalisation” (GATT, the EEC), but “these organisations were characterised by the toleration of a variety of capitalisms and had relatively weak enforcement processes”. From the 1980s a neoliberal consensus emerged, with corresponding changes in “transnational constitutionalism” which bound states much more tightly to a neoliberal policy framework. (12)

Nicol locates globalisation at the heart of this process. Following Held et al., he distinguishes three different concepts of globalisation: hyperglobalist, sceptical and transformationist. Hyperglobalists, for Nicol, think that the nation state is basically obsolete; sceptics think that globalisation is basically a myth; transformationism is the ‘goldilocks’ option that argues globalisation is real but unclear in its future direction and potentials. For transformationists:

the powers of the state are not necessarily diminished by globalisation; rather, states are being reconstituted and restructured in response to a more interconnected world. (13)

Nicol adopts this ‘transformationist’ perspective. In Nicol’s narrative, from the 1980s a range of world leaders gained power who adhered to neoliberal ideological tenets; these leaders implemented neoliberal policy not just at the national level, but also at the transnational, binding national states’ democratic decision-making within a neoliberal policy framework. Nicol argues that this is not a conspiratorial perspective:

when neoliberal leaders were called upon to make constitutional choices, they naturally enough opted for constitutional arrangements that benefited the attainment and retention of their own favoured policies. (18)

Nicol draws on Hirschl to argue that three categories of elite were influential in this process: political elites (trying to achieve their policy goals), economic elites (trying to promote their interests), and judicial elites (trying to increase their power relative to democratic decision-making). Nicol argues that political elites are the most influential of the three. These constitutional transformations, Nicol argues, have, moreover, been concealed by political consensus.

the transnational constitution can be perceived as a kind of insurance policy guaranteeing the preservation of a particular variety of capitalism. Its object is to lock in place a system of privatisation and commercial liberty, so that things will not change very much when new governments are elected. Thus the new constitutional law serves to guard against the possibility that future governments might abandon the creed of private enterprise. (19)

Along the same lines:

The real purpose of transnational constitutionalism is to ensure the stability of policy in the event of today’s neoliberals being succeeded by politicians of a different ilk. Was the insurance policy really necessary? It is in the nature of insurance policies to guard against eventualities that are unlikely but nonetheless possible. Perhaps the strength of neoliberal ideological hegemony is such that neoliberalism does not really require constitutional protection. But one never knows.(20)

Now Nicol turns to questions of democracy and legitimacy. Nicol suggests (perhaps not entirely convincingly) that his book is not concerned with the question of whether neoliberal institutions are ‘just’ or ‘unjust’ – rather, its normative import is focussed on the question of their relation to democracy.

Thus the book will question whether the constitutional constraints ushered in by legal globalisation make Britain more or less democratic. (21-2)

Nicol will suggest that:

Britain’s pre-globalisation constitution offered a superior degree of democracy than is available under today’s more globalised arrangements. (22)

Nicol focuses on three attributes of democracy: “contestability, ideological neutrality, and accountability. Assessed on this basis, it can be argued that Britain’s pre-globalisation constitution offered a superior degree of democracy than is available under today’s more globalised arrangements.” (22)
Taking these attributes of democracy in turn:

Contestability:

Contestability means that since people disagree about everything, there can be no universal or self-evident truths that can be enshrined as supreme law. Accordingly, everything that government does needs to be democratically contestable. This should be the case irrespective of the issue involved. Thus, policies and decisions should be contestable regardless of whether they involve basic liberal political rights, the fundamentals of economic policy or social rights. There is no principled basis on which these different aspects of policy can be disentangled from each other… The bottom line is that there can be no entrenchment of favoured policies, since entrenchment would cocoon such policies from the full rigour of contestability… There should therefore be no division between ‘ordinary’ politics and ‘constitutional’ politics. Moreover, the constitution should guarantee the permanence of contestability. All in all, therefore, the democratic constitution should not privilege substantive outcomes but should represent the structure for reaching collective decisions in a democratic way. (22)

Ideological neutrality:

The idea here is that the political sphere is a space where differing ideological perspectives contest for policy influence, and that the goal of a constitution is to mediate that contestation in a neutral manner:

the constitution’s enduring ideological commitment must be to democracy itself, thereby permitting the country to be drawn in whichever political ideology reflects the will of the political community. Such a constitution should be preferred over one with an inbuilt bias in favour of one substantive political creed at the expense of others, since this would detract unacceptably from the power of people to determine their own future.(23)

Accountability:

The need for power-holders to compete for re-election is what makes them responsive to the public. Thus the idea of democratic accountability – that it is possible to replace political office-holders through elections – is one that has great resonance. It is fundamentally important to us that those who rule in our name are in the end answerable to us…. Whilst the language of accountability has expanded in recent years to embrace weaker forms of public dialogue not involving the possibility of sanction, there surely need to be compelling reasons of principle (such as the independence of the judiciary) to justify a weakening of accountability in the case of those who wield very substantial government power. (23)

Nicol divides the British constitution, conceptually, into “internal” and “transnational” aspects, and argues that the internal dimension of the constitution gives expression to these three principles (“however imperfectly”) while “the transnationalisation of the constitution has fatally compromised our constitution’s adherence to these three attributes” (24). In the next three subsections Nicol will therefore look at each of these attributes in relation to the internal and transnational dimensions of the British constitution, as he defines it. Going through these categories again, then:

The British model and contestability:

Nicol argues that because of parliamentary sovereignty, the British constitution has a high degree of contestability.

Dicey famously defined parliamentary sovereignty as meaning that parliament enjoys ‘the right to make or unmake any law whatever; and, further, that no person or body is recognised by the law of England as having the right to override or set aside the legislation of Parliament.’ (24)

Now,

This traditional view of parliamentary sovereignty whereby Parliament cannot be bound in any way whatsoever is to be contrasted with the so-called ‘new view’ of ‘self-embracing sovereignty’ whereby, although Parliament cannot bind itself as to the substance of future legislation, it can bind itself as to the manner and form by which future legislation is to be enacted.(27)

British participation in transnational governance institutions like the WTO and the EU obviously, in Nicol’s eyes, binds parliament in this way, reducing contestability.

The British model and relative ideological neutrality:

Nicol quotes Jack Straw’s expression of this principle: “the constitution doesn’t belong to any one party and should not be used as a partisan tool.” (31)

Nicol makes the same basic argument here as in earlier sections:

the internal constitution operates in a way that shows a reasonable, if imperfect, degree of ideological neutrality. By contrast, the transnational constitution – with its rigid ethos of ‘capitalism first, democracy second’ – limits us to one particular ideology, so that even if it were to become discredited, we would be stuck with it. (32)

Nicol contrasts this element of the British constitution with the US constitution, whose framers “had a definite substantive ideological agenda.” (32-3):

The transnational constitution resembles the American more than the British model, insofar as it is widely perceived as being tied to a particular substantive ideology based on its own particular vision of the good life, namely market liberalism. (34)

The British model and accountability

This is quite a load-bearing section. Nicol argues that transnational constitutional institutions reduce democratic accountability in two ways (I’m reversing Nicol’s order of presentation here):

First, they transfer power from democratically-elected elites to non-democratically elected elites:

On this reading, there is less difference than might be supposed between, say, the European Court of Human Rights, the panels of the WTO, the European Commission and the European Central Bank. All are unaccountable bodies to which government power has been transferred. (36)

Second, they disperse democratic accountability mechanisms across different processes, which can potentially conflict, resulting (in Nicol’s view) in a de facto reduction in accountability:

It is tempting to assume that more institutions and more elections mean more accountability, but this is not the case. A surfeit of institutional checks and balances can be inimical to accountability. In a piece entitled ‘A Plethora of Parliaments?’ Harlowe has drawn attention to the way in which a superfluity of accountability mechanisms tends to reduce the centrality of any one of those mechanisms, with the consequence that a democratic deficit is brought about by a ‘democratic surplus’ or fragmentation of power. (35)

[As an aside, I have substantial disagreements with the arguments Nicol makes in these sections, but I’ll postpone discussion of those until I’ve at least finished the chapter.]

In the next section, Nicol argues that current transnational economic institutions can usefully be seen as efforts to realise the vision of constitutional government outline by Hayek in his ‘The Constitution of Liberty’. My main takeaway from this section is that I badly need to finally get around to reading ‘The Constitution of Liberty’. In my version of Nicol’s summary, though, Hayek is in favour of strict constitutional limits on government action, in a way that constrains (what is in Hayek’s eyes) coercive state power. Since for Hayek the state is the major threat to political freedom, constitutional restrictions on state power preserve freedom, while granting states sufficient ability to enforce the rule of law, etc. Specifically, on Nicol’s account:

Hayek therefore canvassed a supranational form of government that would prevent states from regaining unfettered sovereignty in the economic sphere by being able to veto their economic policy measures. (39).

For Nicol, transnational institutions like the WTO and the EU can reasonably be seen as partial realisations of this Hayekian ambition.

Now Nicol moves on to more recent neoliberal international relations theorists, some of whom I have read. He summarises Keohane, Macedo and Moravcsik’s ‘Democracy-Enhancing Multilateralism’. These theorists are making the case that transnational institutions do not diminish democracy but rather enhance it. First they offer three ‘conventional’ arguments, then some new ones.

The three ‘conventional’ arguments are that:

– Transnational institutions are directly accountable to their member states and thus indirectly to the publics who elect the representatives of those states.

– Powers democratically delegated to transnational institutions could also be democratically rescinded.

– Even if democracy is reduced by delegation of powers to transnational entities, the ends justify the means.

Keohane, Macedo and Moravcsik add to these arguments the claim that transnational institutions “actually improve the functioning of domestic democracy” (40). The argument here is that:

whilst popular elections are essential to democracy, democratic systems above all required constitutional rules and institutions to constrain the power of governments and temporary majorities…. Competing public institutions and a system of checks and balances, including politically independent courts and agencies with specialised expertise, can help ensure that policy choices are defended against robust criticism and that errors are identified and corrected…. They insist that transnational decision-making helps to achieve this sort of democracy in three ways: by combatting special interests, by protecting rights and by fostering robust public deliberation. (40-1)

As Nicol says, this approach – “a Madisonian conception of ‘deliberative democracy’ based on the American model of constitutionalism” (42) – is clearly incompatible with Nicol’s characterisation of the democratic principles informing British constitutionalism.

Nicol goes through each of Keohane et al.’s three Madisonian sub-arguments in turn, and presents counter-arguments. I may return to these in a later post, but I think the basic lines of the debate are clear enough already here for summary purposes. Finally in this subsection, Nicol briefly summarises Habermas’s ‘The Postnational Constellation’, and rather curtly dismisses it:

Habermas openly favours reducing the importance accorded to votes and accountability and increasing the weight given to ‘the procedural demands of communicative and decision-making processes’. But he admits that the transnational edifice he is seeking to construct would depend on whether a cosmopolitan consciousness would arise on the part of national electorates. It will be readily apparent that Habermas’ hopes for democratic revival depend not only on the materialisation of this elusive consciousness but, much more importantly, on redefining democracy out of all definition. (43)

In my own view this is unfair to Habermas, for whom I have a lot of time, whatever his shortcomings – but again this is not the place for working through these complicated issues.

Next up, Nicol discusses the argument that market mechanisms are themselves a sort of democratic decision-making, if you squint a bit – the argument (in my own rephrasing, using Hirschman’s terms) that market exit is a superior substitute for democratic voice. Nicol doesn’t have much time for this position, and neither do I, so I’ll move on. He then discusses France a bit, to say that different countries under the same transnational institutions must be analysed differently, but that this is not a comparative work. Then he sums up, and we’re done with Chapter One.

In terms of own thoughts – I’ve made some comments as I went, above, but I also have some quite large disagreements that I don’t want to get into here in any depth. I’ll probably write up a separate blog post on some of these issues, once I’m done with the read-through. To summarise very briefly: although, like Nicol, I have a range of criticisms of Hayek, I am at base much more sympathetic to liberal constitutionalism than Nicol is in this book. I think Nicol is being much too blasé here about the risks associated with reducing institutional checks and balances on a democratically-mandated executive. It’s clear from the framing of Nicol’s book that his core objection to the transnational institutions he’s discussing is the way they bake neoliberal economic policy into legal constitutions. I think that is an appropriate thing to object to. But the actually argument Nicol makes, in this chapter, is much stronger than this position: Nicol objects to any politically substantive constitutional constraint on a democratically elected political decision-making body. In my view, this position provides no legitimate method to constrain a democratically-mandated state from riding roughshod over the rights of at the very least a large minority of its citizens. The liberal principle that there are human rights which cannot legitimately be disregarded by state power, even if that power has received a democratic mandate at the ballot box, is a good one that we should fight both to preserve and to more fully realise, in my view. Nicol’s constitutional theory does not give us any mechanism to do either.

I want to quickly note a couple of specific ‘tension points’, then move on. On page 23, Nicol suggests that an independent judiciary is sufficiently important as to warrant a weakening of the general principle of accountability. I agree with this point – but it’s unclear why this logic could not in principle apply to other independent elements of the state apparatus (such as some substantive elements of the constitution). Nicol’s position is therefore a bit more ad hoc than it might appear at first pass, in my view.

Finally, on page 43, Nicol criticises Habermas for his (as Nicol sees it) unrealistic idea that European citizens’ sensibilities can be transformed in a more cosmopolitan direction. Nicol might be right in his suggestion that this is an unrealistically utopian hope, on Habermas’s part – but if Nicol is right about this – if, that is, we should in fact be more pessimistic about the possibilities for shifts in public sensibilities – then this could, against Nicol, be seen as an argument for caution around constitutionally unconstrained power for any given democratically elected government.

Put differently: the thing about Habermas, which I think is insufficiently appreciated, at least by many of his critics, is that his core project – the bedrock motive for the entire apparatus – is anti-fascism. Habermas is, for fathomable historical reasons, intensely interested in establishing a governance system and broader polity in which fascism cannot succeed. When Habermas wants constitutional constraints on an executive such that state power cannot be wielded without limit, and such that those constraints on state power themselves cannot easily be undone, the perspective informing these goals is that of somebody who grew up in Nazi Germany. These liberal political principles can of course also be used for other ends – such as the constitutional enforcement of a neoliberal economic framework – but Habermas’s basic rationale for the value of institutions of this kind should in my view be taken very seriously.

From my point of view, then, Nicol errs in making a general argument against substantive constitutional constraints on any and all political action, when his true target is – or should be – substantive constitutional enforcement of neoliberal economic policy. I’ll probably blog more about all this in another post – but this concludes my notes on chapter one.

Chapter 2 – The World Trade Organisation and the sanctity of private enterprise

Ok. Chapter one dealt with the theoretical and normative perspective of the book – the next three chapters deal with the substance. From the table of contents I gather that chapter two is focussed on the WTO, chapter three on the EU, and chapter four on the ECHR. Start with the WTO then. I’m going to try to take notes much more sparingly on this chapter than the last.

In Nicol’s words, chapter two is about:

the question of whether the World Trade Organisation (WTO) gives constitutional protection to the private sector. (47)

Nicol starts with a brief history of the establishment of GATT, post-WWII, and the development of the WTO out of GATT. The most important innovation of GATT, Nicol argues, was the ‘most favoured nation’ (MFN) rule:

The MFN rule requires states to extend to every GATT country the most favourable trade treatment accorded to any country, the most favoured nation.(56)

GATT also “permits a customs union to be treated as if it were a single contracting party” (57). For this reason, European nations could, in 1957, establish a common European customs union, and thereby maintain differential treatment of European and non-European trading partners.

When Britain joined the Community in 1973, therefore, there was a transfer of authority for trade relations from Whitehall and Westminster to the EEC Commission and Council. Thus trade policy to a considerable extent ceased to be a matter of British politics. (57)

The primary goal of the WTO, on Nicol’s account, was to have more effective enforcement machinery than GATT. The WTO Disputes Settlement Understanding (DSU) was more legalistic and binding than the previous GATT process. Moreover, because the WTO was founded at a point when neoliberalism was in the ascendent, its ‘constitutional’ role gave more weight to private enterprise. In Nicol’s words:

The fundamental difference between the DSU procedure and its predecessor lies in the inability of states to veto the judicial process at its various stages. Previously, crucial decisions – to establish a panel, to adopt its report, to authorise the remedy of suspension of concessions – had to be taken by consensus, which meant that losing states could in effect veto unfavourable decisions. Under the WTO regime, by contrast, the procedure progresses through these stages automatically unless there is a consensus against doing so. In practice this makes the adoption of all three stages automatic.(62)

Moreover, the private sector plays a major role in WTO decision-making:

Both the European Commission and the US Trade Representative rely on industry initially to kickstart litigation by drawing attention to obstacles to free trade, and then to sustain that litigation, by providing convincing factual information and legal argument (64)

In Nicol’s view:

Private companies have thereby been accorded a privileged institutionalised position from which to challenge the legislation and policies of states. (64)

So, Nicole argues that the WTO gives private companies a central role in de facto constitution-formation, and moreover has stronger enforcement mechanisms than GATT. In addition to these innovations, the WTO also expanded its remit, relative to GATT, bringing not just trade in goods but also services within the ambit of transnational constitutional constraints:

If the great institutional achievement of the WTO is dispute settlement, then its great substantive breakthrough is the General Agreement on Trade is Services (GATS). (70)

The institution design of the WTO, Nicol argues, has a ‘ratchet effect’, whereby members can commit themselves to greater liberalisation but cannot easily undo those commitments:

As in the case of GATT, the cardinal principle is that a WTO Member is never able to reduce its general level of liberalisation. (72)

This applies, Nicole argues, to public procurement…

The GPA… obliges government entities to provide, on request from any unsuccessful tenderer, relevant information as to why its tender was not selected, as well as the identity of the successful tenderer. The challenge procedure represents a profound development in terms of effectiveness of remedies for breaches of an international agreement. (77)

… and subsidies:

The WTO Agreements include a Subsidies and Countervailing Measures (SCM Agreement) … Under the SCM Agreement, only two types of subsidies are prohibited per se – export subsidies and import substitution subsidies. The vast majority of subsidies, by contrast, are ‘actionable’: they can be challenged if they cause adverse effects to the interests of another WTO Member. Such adverse effects may consist of injury to the Member’s domestic industry; nullification of GATT benefits; or serious prejudice to the interests of another Member.(78)

In sum:

Negotiating the schedules to the various agreements essentially involves a series of one-way-only, once-and-for-all decisions: states can elect to ‘ratchet up’ their commitment to market access and therefore privatisation, but there is no scope for negotiating in the opposite direction, in favour of extending public sector provision. The WTO can thus be seen as a ‘commitment device’ in which states hold themselves to their initial preferences by tying the hands of government for the future. It has created a rule-oriented landscape, fashioned to reduce ‘risk premium’ for private enterprise. (80)

These notes are brief and don’t adequately summarise the relevant WTO rules and enforcement mechanisms – but I’ll leave things here for now, and move on to chapter three.

Summary

Ok, I’ve finished reading his but am badly behind on my note-taking. Just to quickly summarise my ‘take’:

1) The book makes an strong case that transnational institutions (particularly the WTO and the EU) are significantly constraining on British democratic decision-making in economic policy, in a way that effectively writes elements of ‘neoliberal’ policy into the UK ‘constitution’ (in the sense of placing these elements of economic policy beyond the reach of parliament).

2) It makes in my opinion a less strong case that this is also true of the European Court of Human Rights (Nicol’s argument about the ECHR is largely – though not exclusively – that it is vulnerable to being pushing in this direction in the future).

3) Nicol argues that this is an unacceptable ‘democratic deficit’ – that parliament should be sovereign, or at least much more sovereign than it is now.

4) For my political tastes, Nicol makes this latter case too strongly. Nicol is broadly sceptical of constitutionalism, because he sees constitutionalism as undemocratic. He is of course right about this, in the sense that constitutionalism places areas of policy outside the (easy) reach of democratic decision-making, but I think he is wrong to suggest that this is always bad. Obviously these matters can be debated, but I myself have very little problem with core human rights being protected by a judicial apparatus that is difficult for democratic processes to override.

5) The strength of Nicol’s position, in my view, is in his argument that too much substantive economic policy has been shifted into this sphere of transnational legal decision-making. Nicol’s book seems to me to make this case very well indeed – if I get round to writing up the later chapters in more detail I’ll summarise some of the examples Nicol gives.

6) As with a lot of ‘Lexit’ arguments, Nicol seems to underestimate the extent to which transnational constraints on local economic sovereignty have been a feature of the capitalist world-system for much of its history. The reason they haven’t been a feature of British law for much of that history is that Britain was the dominant capitalist power for a long period, and has only recently again been on the receiving end of transnational constraints on sovereignty rather than the imposer of them.

7) Related to this last point, the book doesn’t really have an adequate sense of the difference between different forms of capitalist ‘laissez faire’, identifying (wrongly, imo) neoliberalism (a specific form of recent economic governance) with laissez-faire in general. This isn’t a huge issue, it’s just another example of the book’s perhaps too narrow historical perspective.

8) Again for my political tastes, the book is also excessively sceptical of forms of economic governance beyond national democratic processes. Nicol’s argument in the conclusion is that national (and, secondarily, sub-national) sovereignty is the only realistic form of democratic governance – there’s a case to be made for that, but it’s in my view a somewhat pessimistic case. The book’s political-normative standpoint is intrinsically a non-internationalist one.

9) Nevetheless, with all these hedges and criticisms, the core case of the book is made very strongly indeed, in my view. I don’t have the knowledge to independently assess Nicol’s discussion of ECJ legal decisions, and so on, but it’s hard to think, having read the whole thing, that he doesn’t have a point about transnational constraints on left wing democratic policy-making. I think defenders of the EU really need to accept the merit of this basic position, and defend these institutions on the grounds that their benefits outweigh their costs, rather than deny the existence of the costs altogether (as seems to be the current favoured stance among EU advocates in the UK).

Schematising Labour’s Euroscepticisms

As I discussed in my post on ideologies of Brexit, there are a range of different left attitudes to the EU and Brexit. In this very short post I want to focus on just one category of left attitudes to Brexit: euroscepticism in the Labour party.

Basically everyone in Labour understands that trade with the EU is of great economic value. Disagreements come over what other elements of EU membership are desirable, or undesirable. I think you can usefully schematise those disagreements along two dimensions: whether EU constraints on national-level economic intervention are on balance good or bad; and whether free movement of labour within the EEA is on balance good or bad.

Schematised into a good old two-by-two matrix, the basic positions are as follows:

Although this is an extremely simple schema, it is still has one more dimension than a lot of UK public sphere debate about Brexit. A lot of debate over Brexit is stuck in the spectrum of ‘hard’ through ‘soft’ Brexit. Likewise, a lot of liberal analysis is attempting to frame political debates in terms of ‘open’ versus ‘closed’ politics.

In my view debates over Brexit outcomes are better reconceptualised by assuming that we are negotiating over some variant of single market membership (or ‘access’, if one prefers), and getting clear on which if any bits of the current single market rules we most want to negotiate exemptions from. Those exemptions might not be achievable, given the EU’s own negotiating position and the UK’s likely unwillingness to trade off too many other EU benefits, but we would at least be clearer about where we stand.

For Bennites (or Lexiters), the answer to this basic question is clear: EU economic governance rules significantly constrain national, democratically elected governments’ industrial policy and/or interventionist economic decision-making. Corbyn and McDonnell want this to end, to the extent that this is achievable, and this is their major substantive (as opposed to tactical) objective in their Brexit positioning.

For many others in the Parliamentary Labour Party, the answer is equally clear: the public has rejected free movement of labour within the EU – we must listen to these Very Real Concerns and do what we can to reduce immigration. Whether this position is held sincerely or not, a lot of the PLP regard free movement as politically toxic, and don’t want Labour to be associated with it.

Although current Labour Brexit policy is still one of ‘constructive ambiguity’, the eurosceptic messages Labour is sending are currently a synthesis of these two basic positions. The leadership has chosen to triangulate on immigration, in the belief that this will appease both anti-immigration voters and Very Real Concerns factions in the PLP. Against this, a lot of liberals are making the economic case for single market membership – often together with a quieter advocacy for negotiated exemptions from freedom of movement, as in Tony Blair’s recent interventions.

There’s a lot that can be said about all this, but the main point I want to make is that, of the four quadrants of this simple matrix, the bottom left quadrant – ‘open borders Bennism’ – is severely underrepresented in current public sphere debate. There is plenty of advocacy for full ongoing EU membership; for single market membership with negotiated exemptions from freedom of movement; and for ending both freedom of movement and EU government constraints on UK economic interventions, in one way or another. There is much more limited advocacy for preserving – and extending – EU-wide free movement rights, while also undoing constraints on national-level government economic interventions.

Schematised still more simply, the EU and its related institutions offer four freedoms within the EEA internal market: of goods, services, capital, and labour. Almost everyone in the UK Labour Party wants to minimise disruption to trade in goods and services. But there is significant debate over whether to retain or constrain the power of capital, and whether to retain or constrain the rights of labour.

At this (rather unwieldy) level of abstraction, I think a good case can be made that the ‘correct’ left position is to give democratic governments within the EU greater power relative to capital, and at the same time to maximise freedom of movement for citizens within the EU. This position – ‘open borders Bennism’, if you like – may be impossible to achieve in practice, and may be an electoral non-starter regardless, but I wish it had more and more prominent advocates in current left debates.