Thread: The fiscalisation of the eurozone and the end of nationalism's economic illiteracy

Peter Oborne redeemed his reputation somewhat in his piece in the Telegraph today on yesterday's fateful step towards fiscal union in the eurozone. (By redeemed, I mean one might perhaps now look past what he thinks about the soon-to-be-fired Baroness Warsi:

Baroness Warsi was right to speak out: Hatred of Muslims is one of the last bastions of British bigotry – Telegraph Blogs

... and "Islamophobia":

If you're looking for Islamophobia, try the comments under my article about Baroness Warsi – Telegraph Blogs)

Because his take on the future for the EU is very clear-sighted indeed and undoubtedly accurate:

The euro crisis will give Germany the empire it

The faith of leading European politicians and bankers in monetary union, a system of financial government whose origins can be traced back to the set of temporary political circumstances in the immediate aftermath of the Second World War, and which was brought to bear without serious economic analysis, is essentially irrational. Indeed, in many ways, the euro bears comparison to the gold standard. ... European politicians have developed the same superstitious attachment to the single currency. They are determined to persist with it, no matter what suffering it causes, or however brutal its economic and social consequences.

... it is almost impossible to overestimate the importance of the decision which European leaders seemed last night to be reaching. By authorising a huge expansion in the bail-out fund that is propping up the EU’s peripheral members (largely in order to stop the contagion spreading to Italy and Spain), the eurozone has taken the decisive step to becoming a fiscal union. So long as the settlement is accepted by national parliaments, yesterday will come to be seen as the witching hour after which Europe will cease to be, except vestigially, a collection of nation states. It will have one economic government, one currency, one foreign policy. This integration will be so complete that taxpayers in the more prosperous countries will be expected to pay for the welfare systems and pension plans of failing EU states.

This is the final realisation of the dream that animated the founders of the Common Market more than half a century ago – which is one reason why so many prominent Europeans have privately welcomed the eurozone catastrophe, labelling it a “beneficial crisis”. David Cameron and George Osborne have both indicated that they, too, welcome this fundamental change in the nature and purpose of the European project. The markets have rallied strongly, hailing what is being seen as the best chance of a resolution to the gruelling and drawn-out crisis.

It is conceivable that yesterday’s negotiations may indeed save the eurozone – but it is worth pausing to consider the consequences of European fiscal union. First, it will mean the economic destruction of most of the southern European countries. Indeed, this process is already far advanced. Thanks to their membership of the eurozone, peripheral countries such as Greece and Portugal – and to an increasing extent Spain and Italy – are undergoing a process of forcible deindustrialisation. Their economic sovereignty has been obliterated; they face a future as vassal states, their role reduced to the one enjoyed by the European colonies of the 19th and early 20th centuries. They will provide cheap labour, raw materials, agricultural produce and a ready market for the manufactured goods and services provided by the far more productive and efficient northern Europeans. Their political leaders will, like the hapless George Papandreou of Greece, lose all political legitimacy, becoming local representatives of distant powers who are forced to implement economic programmes from elsewhere in return for massive financial subventions.

While these nations relapse into pre-modern economic systems, Germany is busy turning into one of the most dynamic and productive economies in the world. Despite the grumbling, for the Germans, the bail-outs are worth every penny, because they guarantee a cheap outlet for their manufactured goods. Yesterday’s witching hour of the European Union means that Germany has come very close to realising Bismarck’s dream of an economic empire stretching from central Europe to the Eastern Mediterranean.

History has seen many attempts to unify Europe, from the Habsburgs to the Bourbons and Napoleon. This attempt is likely to fail, too. Indeed, a paradox is at work here. The founders of the European Union were driven by a vision of a peaceful new world after a century of war. Yet nothing could have been more calculated to create civil disorder and national resistance than yesterday’s demented move to salvage the single currency.

Oborne ends where nationalism enters the debate - on the question of national existence and sovereignty, and the re-assertion of the people's will. There is an historic opportunity here for nationalist parties across the eurozone to become the sole voice of their people. It's a real gift. Marine Le Pen is ahead of the game, and has been presenting a choice to the French electorate between her party of the popular will and an anti-democratic, anti-French, pro-internationalist and elitist Establishment ever since her acceptance speech as leader of FN.

But British nationalism cannot present quite such a stark choice to the electorate here because Britain is not in the single currency, and will not be part of a fiscalising eurozone - regardless of Cameron and Clegg's clear enthusiasm for the project. Enough national sovereignty still attaches to Sterling for the Establishment parties to claim representation of the national interest, and thereby to block that strategy.

British nationalism must have clear intellectual and policy boundaries or it cannot make politics. For us, then, this great question of national existence, sovereignty and will has to take a step back into more fundamental consideration of economic purpose. The current problem with the BNP's anti-EU, anti-globalisation stance is that it is not a policy at all. It is just a few manifesto gestures in the direction of past worker's movements, stretched over an intellectual void by people for whom theoretical thinking is an alien and unnecessary thing. Voters must be brought to regard British nationalism as the natural place to turn for a coherent and distinctive and important alternative to the Establishment and its economic model.

Among the questions of economy we need to theorise are:

1. Does nationalism require the development of a different economy, for example one owned by the workers (Distributism), or is Capitalism reformable?

2. If the latter, what reform beyond the current financialisation, globalisation and hyper-consumerism is needed? And how are those three abnormalities to be addressed?

3. How does nationalism approach the problem of fiat, the debt model, and the power of the financial aristocracy?

4. Is protection of our economy only available via surcharges on goods at the borders, or can nationalism, by means of its capacity to cohere interests and unify the people, pull together an effective community preference?

5. Is protectionism even necessary if faith in the national genius, and a willingness to free it and invest in it, obtains? In other words, can we outwit China and India, out-invent, out-engineer them (as Germany believes it can).

I suspect that the developments in the eurozone now will kill off UKIP because the federal fear-factor on which UKIP trades is dead. Britain will remain a semi-detached member of the EU. UKIP will become pointless, as it is on all other questions of national politics. It does not have the sheer political meaning to develop a more fundamental economic Weltanschauung as we do. And we must to continue to oppose the Establishment, and to meet our appointment with history in the next decade and a half.

It will not happen, of course, if the Griffin Party persists in its role of the dog in the nationalist manger.

Excellent post Henry, if nationalism wants to progress in this country we do need to have a clearly defined economic policy. Your post raises many questions, for now I will stick to point 4. This issue of prime importance anyway, as I believe that there can no talk of either sovereignty or national independence without dealing with it. The simple answer to the question is that the financial aristocracy MUST be striped of all of its powers. I will leave it to two other people to justify this assertion, the first is Sir Josiah Stamp, Director of the Bank of England in 1940. He stated:

'Bankers own the earth; take it away from them but leave them with the power to create credit; and, with the flick of a pen, they will create enough money to buy it back again.... If you want to be slaves for bankers and pay the cost of your own slavery, then let the bankers control money and credit'

There you have it straight from the horses mouth. The second person is Thomas Jefferson. Although he is speaking to the American people this applies equally to us. He states that:

If the American people ever allow private banks to control the issuance of currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered'

Does that sound familiar to any one else? I would also like to add nation less, as is the case of the Greeks, who are now effectively ruled by bankers and their proxy politicians. There can be no compromise on this issue, we must have control over the creation and issuance of money. Without it there is little point in talking about preserving the British people. Preserving them for what? So that they can continue to be debt serfs for the bankers? NO THANKS!

Originally Posted by Appian

There can be no compromise on this issue, we must have control over the creation and issuance of money. Without it there is little point in talking about preserving the British people. Preserving them for what? So that they can continue to be debt serfs for the bankers? NO THANKS!

There is no doubt that a true nationalist party would seek the repatriation of the power to issue our own money. Self-issue is currently banned under Maastricht, but the BoE has been doing it anyway with QE. Brussels has turned a blind eye - it's impotent to stop it anyway.

The bond markets claim that when they loan a few billion at interest to some government the sum is self-cancelling on repayment, and only the interest services the market's costs and profits. It seems entirely honourable to me to repay the favour of the basic sum by the same means as it is created - that is, a few strokes at a keyboard followed by the magic mantra "this is money!" It would be nice if we could then pay the loan interest out of taxed income. But I'm pretty sure the interest is already running at vastly higher than our repayment potential. So the keyboard and mantra would probably have to be pressed into service there too.

The two little drawbacks with such a Smashing Idea are:

(i) The original loan sum less interest remains in the economy, and becomes inflationary at the point when the assets it has bought are re-sold.

(ii) The ratings agencies would declare the New Pound to be double-junk, so it would be somewhat challenging until such time as the spasm passed and the power and solidity of a debt-free economy became attractive - if, of course, that stage could be reached given the difficulty of trading food, energy and raw materials. The answer would be for other nationalist governments to be in power and committed to the same strategy, thereby presenting the agencies, exporters and commodity markets with a customer base too big and important to reject.

Maybe.