The European Union

[GoodSarmatian]

It doesn't really matter to low skilled workers whether their jobs are replaced by Chinese people or European robots, or Chinese robots.
It also doesn't matter if all the wealth that's generated from increased productivity goes to domestic or foreign elites.
Even the dismantling of the EU and the complete isolation of most sectors of the economy will only postpone mass unemployment. At some point societies will run out of external scapegoats and descend into civil wars. The only way out is if we collectively decide that instead of letting all the gains go to shareholders, maybe we all work part-time hours for full-time wages.
The problem is getting to this state without (civil) wars, and that's far more easier for a larger economic entity than a few dozen smaller ones that can easily be blackmailed and played against each other by megacorps.

 

[Akka]

And the thing is, if you wish to COLLECTIVELY decide and actually enforce something... which one is going to have at least some chances of success ? Scattered irrelevant countries or massive union ?

 

[Mechanicalsalvation]

And the thing is, if you wish to COLLECTIVELY decide and actually enforce something... which one is going to have at least some chances of success ? Scattered irrelevant countries or massive union ?

It goes both ways. Is it easier to control half a billion people market and its resources through corruption of politicians composing one single political body or many divers political bodies constantly keeping each other in check?

 

[AdrienIer]

You mean diverse political bodies racing to the bottom right ? Because the smaller the country the more it wants to race to the bottom.

 

[Mechanicalsalvation]

You mean diverse political bodies racing to the bottom right ? Because the smaller the country the more it wants to race to the bottom.

You think that with disfunctional political, fiscal and millitary union runned by political elite detached from reality of the common people with increasing democratic deficit you arent falling to the bottom? Something tells me that between two bad option is better choose neither.

 

[AdrienIer]

Choose neither ? How does that work in practice ? Surrendering to our overlord Putin ?
Also that's not what you were saying in your previous post

Brexit already shows what happens when a country leaves the EU : it lowers corporate taxes to avoid the desertion of its companies. Which is litterally giving all the "saved" money to the rich and corrupt. You can close your eyes and pretend it's not really happening but it's not going to help you.

 

[innonimatu]

You mean diverse political bodies racing to the bottom right ? Because the smaller the country the more it wants to race to the bottom.

What examples do you have of small countries in Europe,e outside the EU, racing to the bottom? Because I have plenty inside the EU. And Microsystems (The Andorras or Monacos) shouldn't count, those are really not capable of being independent.
Has Norway raced to the bottom? Has Switzerland? Iceland? The first only slightly lowered its corporate tax rate. The second has different rates in each canton, but the really economical relevant ones have been keeping it steady. Iceland has raised its tax rate. Inside the EU you can also find countries that kept rates steady, others that lowered them. So this is a false argument: evidence shows that there is no direct correlation.

What being sovereign does is put into the hands of the electorate whether or not the country should engage in those races to the bottom. In an EU country the state no longer controls the tools necessary to exercise meaningful influence in its economy. It no longer controls competition, tariffs, or the supply of labuor. It is no longer able to make investments (even if it could get the financing) because of the fiscal compact and (in the eurozone) the perceived need to obey the ECB's stipulations in order to have its existing stock of debt rolled over. It most definitely no longer controls financial operations. Hell, the sole thing an EU member country seems to be able to do on its won is indeed racing to the bottom!

It doesn't really matter to low skilled workers whether their jobs are replaced by Chinese people or European robots, or Chinese robots.
It also doesn't matter if all the wealth that's generated from increased productivity goes to domestic or foreign elites.

Of course this does matter. National wealth can be subject to national laws. How it is distributed in society depends on the "rules of the game" set by national legislatures. Because there are no suck things as "free markets", every market is regulated and the more "developed" the greater the number of rules it seems. Stock holding, the public corporation, finance and banking, all those depend on numerous rules, could not exist without rules. And in every supposedly capitalist, free market nation those rules decide how the profits and ultimately the accumulated stock capital of the country ends up distributed. These rules can be created and changed by the national legislative processes of a country.
Foreign wealth, on the other hand is outside the reach of the democratic processes of a country.
If you think this distinction is meaningless... then again I say, quit believing in democracy altogether.

Even the dismantling of the EU and the complete isolation of most sectors of the economy will only postpone mass unemployment. At some point societies will run out of external scapegoats and descend into civil wars. The only way out is if we collectively decide that instead of letting all the gains go to shareholders, maybe we all work part-time hours for full-time wages.
The problem is getting to this state without (civil) wars, and that's far more easier for a larger economic entity than a few dozen smaller ones that can easily be blackmailed and played against each other by megacorps.

I think someone deceived you into believing this, and you haven't thought it over carefully.

All societies keep changing due to technological progress. There is nothing new in this. But one very important thing is at which rate is that progress allowed to happen. This is a political decision. Try to "modernize" a country too fast and you can indeed cause a civil war and end up poorer and more backwards that you started with. There are numerous examples around the world of these extremes, Afghanistan the most stark. Or you may not get a civil war but political blow-back that leads to the opposite direction anyway, just not to complete catastrophe.
Societies need time to adjust. That is one of the reasons why enforced political unions are bad: different societies require different rhythms, depending on its present and past history, on the complexity of managing social groups and changes. The idea that one size fits all is political foolishness of the highest degree.

It is far easier to get to a state where we all work part-time hours for living wages, for a fair share of the economic wealth created in the country, by doing the political and economic changes necessary in each society separately, than it is to try to force it on many disparate societies at the same time. The idea of forcing homogenity on heterogeneous mixes of societies from above is a recipe for political disaster.

 

[innonimatu]

Very nice. Actually EU countries can't 'order' the ECB to do anything. Sort of like with any central bank. Secondly, the ECB doesn't support member states. Lastly, the EU can't and doesn't 'move factories'; it has no authority or power to. (And why wages across different EU countries should be 'the same' isn't quite clear either. Is there some economic law that says they have to be?)

This is bullcrap. States, through governments, do order their central banks do do whatever the government wants. It's either that or getting kicked out and replaced. Central banks are not above the law, indeed depend on the backing of the law, and a government with a majority in the legislature can change the law. That threat keeps the governors of central banks in line, whatever their statutes may say. The idea of "central bank independence" is a lie for public consumption, so that the voters don't start making demands from governments...
The ECB is a special case because it effective obeys only some governments of stanes that are part of the multinational currency union it oversees. But rest assured that if the german government actually screams jump Draghi will jump. There would have to be visible unrest for the ECB's board to be scared and go running to hind under the skirts of protective governments, but that is easy enough to allow to happen. Ultimately, keep in mind, all power rests on the barrel of a gun.

Not according to your quote. FWIW, the EU parliament has no means to 'rush' any treaties, and subjecting a proposed (not an actual) treaty to 'revision' by the ICJ is highly unusual, to say the least.

It is highly unusual, ergo it cannot be done? That is a false excuse. If the treaty were compatible with existing law there sold be no fear in asking the ECJ whether its provisions are legal before voting it. That is was not done is a rushing of the process, and it was not done because the ones pushing that treaty know full well that is is illegal under current law. I will not offer you evidence of this now because this move precluded an official judgement of the treaty, but I'm sure such evidence will emerge in the future when the treaty is actually evaluated in a court. If the EP serves to run over its own laws then it as a political body is corrupt.

Yes, really. No banks were bailed out by the EU.

They were bailed out under pressure by the EU. What do you call it when a country is put under financial embargo, as Cyprus was, unless it resolves its banks? What do you call this?

21 March 2013
The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013.
Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks.

I call it an illegal financial ultimatum designed to force the cypriot government to submit to the terms of the troika. The ECB was bound by law to provide liquidity to avert bank runs. Instead it deliberately engineered a bank run.

The EU parliament can 'decide' all it wants, it won't have any effect of individual governments deciding to yay or nay bail out a bank.

http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2014-0341
Many of those recent bailouts were indeed done by states, but currently the decision to bail out a bank or not is no longer in the hands of national governments. Follow the links and read the full text of the Single Resolution Mechanism.

China or India disintegrated 25 years ago? Oh, us blissfully ignorant who didn't notice...

You know fully well that I referred to the USSR, largest country always refereed to land area. But I already know it was useless to try to have a honest conversation with you. Go crawl under your bridge troll.

 

[AdrienIer]

What examples do you have of small countries in Europe,e outside the EU, racing to the bottom? Because I have plenty inside the EU. And Microsystems (The Andorras or Monacos) shouldn't count, those are really not capable of being independent.
Has Norway raced to the bottom? Has Switzerland? Iceland? The first only slightly lowered its corporate tax rate. The second has different rates in each canton, but the really economical relevant ones have been keeping it steady. Iceland has raised its tax rate. Inside the EU you can also find countries that kept rates steady, others that lowered them. So this is a false argument: evidence shows that there is no direct correlation.

What being sovereign does is put into the hands of the electorate whether or not the country should engage in those races to the bottom. In an EU country the state no longer controls the tools necessary to exercise meaningful influence in its economy. It no longer controls competition, tariffs, or the supply of labuor. It is no longer able to make investments (even if it could get the financing) because of the fiscal compact and (in the eurozone) the perceived need to obey the ECB's stipulations in order to have its existing stock of debt rolled over. It most definitely no longer controls financial operations. Hell, the sole thing an EU member country seems to be able to do on its won is indeed racing to the bottom!

Norway has oil which gives it a significant boost, so there's less need there for drastic reforms. Iceland I agree is apparently capable of doing reasonably well on its own, perhaps due to their isolation from the rest of the world. Switzerland though is a great example, which I'm surprised you brought up. Switzerland is literally one of the reasons why Europe is in so much trouble. Their power comes from taking everyone else's money and not giving a crap if it's legal money or the worst kind of illegal. The Swiss morality is exemplary

But as I said, the British government's first announcement after the Brexit referendum was that they would probably lower corporate taxes. That's a clear example of leave EU -> move towards the worst of capitalism.

If Renzi calls for early elections after the referendum and loses them, we may end up next year with the 6 biggest countries in the EU (Germany France Italy UK Spain Poland) controlled by the right wingers that are favorable to the terrible EU policies that you describe. Of course, when the people democratically elect those who enact terrible policies, then terrible policies will be enacted even on the EU level. Even more so when they have done it for so long (I don't recall seeing more than 2 of the big 5 being governed by leftists at the same time).

 

[innonimatu]

Switzerland is literally one of the reasons why Europe is in so much trouble. Their power comes from taking everyone else's money and not giving a crap if it's legal money or the worst kind of illegal. The Swiss morality is exemplary

End unsupervised cross-borders flows of capital and you have that problem solved. The sole reason large-scale tax dodging exists is governments that allow it to exist. Those billions are not being smuggled into Switzerland in the old-fashioned way, it would take truckloads of bank notes. They're wire transferred and there are tracks.
What has free flows of capital, the abandonment of the Bretton Woods system, done of positive for us anyway?

But as I said, the British government's first announcement after the Brexit referendum was that they would probably lower corporate taxes. That's a clear example of leave EU -> move towards the worst of capitalism.

The british government may well change in the near future. And they have a genuine left there competing, for a change. That, having a party capable of moving froth with a leftist programme, would not even be possible in a country that resigned itself to be a protectorate of some nebulous supra-national entity, where the "local government" could not make any meaningful economic policy changes. Inside the EU all leftist parties that do reach government are doomed to be Syriza.

If Renzi calls for early elections after the referendum and loses them, we may end up next year with the 6 biggest countries in the EU (Germany France Italy UK Spain Poland) controlled by the right wingers that are favorable to the terrible EU policies that you describe. Of course, when the people democratically elect those who enact terrible policies, then terrible policies will be enacted even on the EU level. Even more so when they have done it for so long (I don't recall seeing more than 2 of the big 5 being governed by leftists at the same time).

It seems that I just have more faith in democracy than you do. And I already see Renzi as right-wing. So long as people content themselves with "lesser evils" things will continue to steadily worsen.

 

[Farm Boy]

Tangent, and possibly off topic, sorry. Can somebody explain to me why corporate tax rates are the important bit? The corporation itself is a legal conception designed to accumulate wealth and distribute it to human individuals. If corporations have too much power to compete, why would the solution not be either a) making access to the legal conception easier b) placing the taxes most onerously at the points where corporations jettison wealth to human individuals specifically from those individuals so that taxes aren't paid "equally" by minimum wage employees and board members nor do they make smaller businesses vulnerable to payroll taxation or c) both?

 

[Agent327]

Tax evasion - if that's what you're referring to - is virtually possible in any country, so long as countries exist that have 'preferential treatment' for box office firms.

No, Le Pen wants a referendum on leaving the EU where she would lead the leave side

I see. I doubt there will be much enthusiasm for such a referendum in France, but I noticed a similar idea being 'launched' by our Dutch right extremist Wilders. (Unfortunately for Mr Wilders there is no legal cause for such a referendum, but Mr Wilders isn't known for the practicality of his ideas.)

This is bullcrap. States, through governments, do order their central banks do do whatever the government wants.

Name some examples. No wait, name one example.

It is highly unusual, ergo it cannot be done? That is a false excuse. If the treaty were compatible with existing law there sold be no fear in asking the ECJ whether its provisions are legal before voting it.

That it is unusual means that's not how court systems work. They check afterward, not during.

They were bailed out under pressure by the EU. What do you call it when a country is put under financial embargo, as Cyprus was, unless it resolves its banks? What do you call this?

Who is 'they'?

http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2014-0341
Many of those recent bailouts were indeed done by states, but currently the decision to bail out a bank or not is no longer in the hands of national governments. Follow the links and read the full text of the Single Resolution Mechanism.

One may argue about whether that is a good idea or not, but that wasn't your argument.

 

[Kyriakos]

This is bullcrap. States, through governments, do order their central banks do do whatever the government wants. It's either that or getting kicked out and replaced. Central banks are not above the law, indeed depend on the backing of the law, and a government with a majority in the legislature can change the law. That threat keeps the governors of central banks in line, whatever their statutes may say. The idea of "central bank independence" is a lie for public consumption, so that the voters don't start making demands from governments...
The ECB is a special case because it effective obeys only some governments of stanes that are part of the multinational currency union it oversees. But rest assured that if the german government actually screams jump Draghi will jump. There would have to be visible unrest for the ECB's board to be scared and go running to hind under the skirts of protective governments, but that is easy enough to allow to happen. Ultimately, keep in mind, all power rests on the barrel of a gun.



It is highly unusual, ergo it cannot be done? That is a false excuse. If the treaty were compatible with existing law there sold be no fear in asking the ECJ whether its provisions are legal before voting it. That is was not done is a rushing of the process, and it was not done because the ones pushing that treaty know full well that is is illegal under current law. I will not offer you evidence of this now because this move precluded an official judgement of the treaty, but I'm sure such evidence will emerge in the future when the treaty is actually evaluated in a court. If the EP serves to run over its own laws then it as a political body is corrupt.



They were bailed out under pressure by the EU. What do you call it when a country is put under financial embargo, as Cyprus was, unless it resolves its banks? What do you call this?



I call it an illegal financial ultimatum designed to force the cypriot government to submit to the terms of the troika. The ECB was bound by law to provide liquidity to avert bank runs. Instead it deliberately engineered a bank run.



http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2014-0341
Many of those recent bailouts were indeed done by states, but currently the decision to bail out a bank or not is no longer in the hands of national governments. Follow the links and read the full text of the Single Resolution Mechanism.



You know fully well that I referred to the USSR, largest country always refereed to land area. But I already know it was useless to try to have a honest conversation with you. Go crawl under your bridge troll.

I think that a better still typo for "states" would have been "stains"

 

[AdrienIer]

The british government may well change in the near future. And they have a genuine left there competing, for a change. That, having a party capable of moving froth with a leftist programme, would not even be possible in a country that resigned itself to be a protectorate of some nebulous supra-national entity, where the "local government" could not make any meaningful economic policy changes. Inside the EU all leftist parties that do reach government are doomed to be Syriza.



It seems that I just have more faith in democracy than you do. And I already see Renzi as right-wing. So long as people content themselves with "lesser evils" things will continue to steadily worsen.

You indeed have more faith than me. I don't have faith in the British people to vote for a good candidate in the near future for example.
And I view Renzi as a centrist that can be worked with to reform the EU. In Italy he's literally a lesser evil, in that the other candidates are really awful and he's kind of not-too-terrible. The main thing is that he doesn't seem too opposed to doing good if pressured.

 

[innonimatu]

Tangent, and possibly off topic, sorry. Can somebody explain to me why corporate tax rates are the important bit? The corporation itself is a legal conception designed to accumulate wealth and distribute it to human individuals. If corporations have too much power to compete, why would the solution not be either a) making access to the legal conception easier b) placing the taxes most onerously at the points where corporations jettison wealth to human individuals specifically from those individuals so that taxes aren't paid "equally" by minimum wage employees and board members nor do they make smaller businesses vulnerable to payroll taxation or c) both?

It is a question worth answering. The corporation is a legal concept to designed primarily to serve two purposes: allow owners to evade some responsibilities (limited liability, there are other legal forms that allow this) and to turn property into a form of easily to trade wealth (stock publicly traded on an exchange). Back in the day "captains of industry" like Carnegie had trouble converting their huge wealth into actual money, because no single individual was wealthy enough to buy their firms, only banks could finance such a sale. The corporation solved this problem, allowing stock to be held by innumerable investors. The idea, with some changes, goes back to the big trading companies of the exploration age (or even further back in some places) but these were always the two main reasons for what we now know as corporations.

Corporations are taxed for the sake ob obtaining fiscal revenue, more than anything else. The solutions you propose to replace taxation a) does not address that goal; b) allows for easy tax evasion, because non resident owners cannot (easily) be taxed. And in any case it's simpler to tax the corporate profit than to go after possibly many thousands of owners.

There is also one oner reason to have corporate taxes, rather than only income taxes that would apply to dividends. Governments may want to tax retained profits. That is usually not done, but you probably heard of the corporate stashes of funds that have been accumulated by some companies. Apple supposedly has the largest one and operates it as a kind of hedge fund for financial investments, based on Nevada. These were retained profits that were not used for investment in the strict sense of the word, to grow the company's operations. And should have been taxed even though they were not distributed as dividends. But the corporation maintains a fantasy that they are "overseas profits" and postpones indefinitely the obligation to pay taxes on it. Nor do the stockholders pay any tax either, they just have their stock value rise. It wold be easy to force corporations that use these tricks pay taxes on yearly profits, but political will has been lacking...

 

[Farm Boy]

Thank you! I don't have a response, other than I appreciate the information to chew on.

 

[christos200]

Being a Greek, I would have to dispute the notion of innonimatu that the EU is to blame for Greece's failure. It is a nice fairy tale to blame "bad foreigners" for Greece's problems. Lets begin with some stats:

1. The OECD data shows that the burden of government spending is now 53.1 percent of economic output.
   
2. Greece’s score is 6.93 in Economic Freedom Index (#86 in the rankings), which is terrible for European countries. Source: http://www.freetheworld.com/2016/economic-freedom-of-the-world-2016.pdf
3. Greece also has far too many public servants in relation to its population.
   
4. The debt problem was caused not by the EU, but by the socialist government of Andreas Papandreou (1981 - 1989, 1993 - 1996) who followed a statist policy, expanded healthcare and social benefits and increased the number of civil servants in public sector and the government of Karamanlis Jnr who expanded the public sector.
   

So, the economic crisis in Greece has nothing to do with the EU and has everything to do with statism and the failure of the Greeks themselves to vote rational politicians who would make reforms. The only thing for which the EU can be blamed is accepting tax rises instead of budget spending and not pushing hard enough for free market reforms.

 

[Snorrius]

EU is nothing more than a bunch of European Soviet Socialist Republics. No wonder UK decided to leave this ludicrous monstrosity.

 

[christos200]

Socialists accuse EU of being neoliberal and right wingers accuse it of being socialist.

But really, how is EU socialist? In Greece, Portugal, Cyprus and other countries, the EU has pushed for more free market reforms and fiscal responsibility. That is not what I would call socialist. It is true that the EU has not pushed for free market reforms as much as I (and many others) would have wanted, but calling it socialist is exaggeration.

 

[Agent327]

You've mentioned these 'market reforms' twice now, but that really isn't anymore accurate than labeling the EU 'neoliberal' or 'a collection of Soviet republics'. Market reforms are a result of privatization, a policy adopted by various EU countries (and yes, this might be termed neo-liberal). But this is not 'EU policy'. The mere fact that something is adopted by multiple EU countries' governments doesn't yet make it EU policy. The only financial EU policy formulated that I'm aware of would be in the form of budget control, and even this is followed with some laxity. (And again, this is not a EU-wide policy, because it rests on a voluntary agreement between.the governments involved.)

In the case of Greece the blame might fall on EU officials for.not checking the figures provided by successive Greek governments. I say might, because the primary fault lies of course with these governments themselves for deluding both their voters and the EU in general with trumped up statistics.