Monday, 23 July 2018

The No-Deal Catastrophe

Looted shops. Burning buildings. Pitched battles with the police. No, not memories of the 2011 London riots but chilling images evoked by Amazon's contingency planning unit in the event of a no-deal Brexit, if reports are to be believed. The American tax-dodging, union-denying, worker-crushing behemoth does, after all, have an interest to declare. In the event of major disorder, an Amazon distribution centre might prove a tempting target for distribution of another kind. Though, to be fair and in their own terms, they're just being sensible. Because a no deal Brexit is increasingly likely.

Well, yes, you can expect me to say this. After all, the analyses made here don't provide cosy take homes. Especially when Theresa May's position, now modded by the tax haven mavens of the European Research Group, is incoherent and unlikely to fly in Brussels. But if I'm too biased a source for you, how about we listen to the new Foreign Secretary instead? Pathetically heaping blame on EU negotiators, Jeremy Hunt claims we face the very possibility of no deal "by accident". Yes, Jeremy. It was the EU's fault it took two years for your government to come up with a negotiating position. It is the EU's fault that Theresa May decided to trigger the process for leaving the EU without anything apart from a soundbite to rely on. And it was the EU's fault that the Tory majority she had, which wasn't ideal but better than what May has to deal with now, was pissed away by a hubristic general election she didn't have to call.

Nevertheless, Jacob Rees-Mogg has dismissed Amazon's concerns. They're absurd, he says. Who's right? Well, they're not as fanciful as Mogg supposes. Market economies might appear to be forces of nature, but they're not. Markets are the products of purposeful social activity by human beings and their machines much like any other field of social action. More than just transactional relations, the movement of commodities across a national territory, let alone a supranational entity like the EU, rests upon a legal infrastructure as essential to mature capitalist economies as physical infrastructure. What Mogg, the ERG, and the stupidity of the Prime Minister and her "team" are doing is seeding this infrastructure with demolition charges. At 11pm on 29th March next year, unless there is a deal in the offing so the UK can immediately transition to the, well, transition period, that legal infrastructure will be blown sky high. Protocols covering common standards, tariffs, contracts, the agreements that keep planes flying into and out of the UK, the boats, the ferries, the cars and passengers trundling off the Eurostar, the goods coming into and flowing out of the country, no deal means no deal for all of this. The bombs placed by the Tories in the legal infrastructure will go off and take years to rebuild and replace with new trade deals. The UK will be damaged just as assuredly as blowing up its ports, uprooting the rail network, and dynamiting the roads.

Asked about this on Andrew Marr, the new Brexit secretary Dominic Raab said the government had plans for all eventualities. Hardly reassuring noises. With a no deal scenario, trade can proceed but will be liable for hefty tariffs. Forget the fantastical gibbering of the hard Brexiteers, trade on WTO rules means the destruction of UK supply chains built up across the EU. And what goes up with them is the remainder of the UK's manufacturing base. And there is also the small matter of the UK's food supply. For well over a century these islands have been unable to feed itself, and so the sudden imposition of tariffs means rising prices - assuming they can get off at the ports in the first place.

This might not come to pass. Everyone except for the most degenerate of Brexiteers hopes it does not happen. But if, because of Brexit, we are facing food shortages. If the UK economy grinds to a halt. If the hard border returns to Ireland. If Britain's service industry, some 80% of its economy, cannot trade with the EU and the rest of the world on current terms, if the crisis in the Tory party ends up inflicting serious damage to living standards, forces rationing of any sort, and drives an exponential explosion of unemployment, it's just possible the contingency planning Amazon are undertaking might be very modest indeed.

24 comments:

Ian Gibson said...

Indeed. I've come to the thought that the current debate about a second referendum is the wrong one: what we actually need is to rescind Article 50 and enter a suitable period of preparation before re-triggering it. My hunch is that that would need to be at least 5 years. And my further hunch is that at the end of such a period, whether and how to proceed would be greatly more self-evident and less controversial, because it would be a debate rooted in pretty firm and demonstrable realities.

Speedy said...

I find it hard to believe, but it is all about belief these days - as demonstrated in 2011, it could all kick off, and now the police will be even less able to handle it, numbers-wise.

In the event of a perceived crisis, there will be a run on supermarkets etc and this could have a knock-on effect elsewhere. The "last minute" culture of the supply chain would certainly exacerbate this.

In the event of a "no deal" there is no real reason why the country should descend into chaos, but the general level of repressed hysteria, which is all apart of a consumer culture in which desire/ status is everything, could lead to an outbreak of anarchy. I would say there could even be troops on the streets, but I'm not sure there are even enough of them - maybe just enough to patrol the country estates of Rees-Mogg et al.

Anonymous said...

Surely it is up to the UK whether it has import tarrifs. If the UK simply doesn't have any and doesn't errect barriers at the Irish border then any disruption is the fault of Dublin and/or the EU. This might still very bad but the political implications would be different.

Ben Wallbank said...

Ask why Amazon and other global corporations are so anti Brexit and are resorting to such hyperbole. A tariff is just a form of taxation. Tax raised by tariff can be used to lower other taxation or be used (as can any other tax) for the NHS or welfare spending. Global corporations are exploiting the free movement of capital and labour to reduce their tax and labour cost to a minimum. (Amazon a fine example). Unlike other taxation, tariffs are unavoidable, providing a market with taxation directly in proportion to the amount of trade being done by a business. The business has two choices pay the tax or locate manufacturing within the market (bringing other benefits).

Jim Denham said...

Very sound analysis and good commentary Phil: can I re-blog (with link etc) at Shiraz Socialist (Second Run)?

Phil said...

Of course!

Boffy said...

The Tories are bigging up No Deal, because in their deluded minds they think that the EU will be forced to save them, by agreeing to a deal rather than face disruption. Its fantasy. The inconvenience to the EU's $18 trillion dollar economy, of 500 million people will be nothing compared to the devastation would befall the $2 trillion UK economy.

If the UK Tory minnows think they have a bargaining hand in those conditions, then the reality is that the EU is likely to respond to Raab "So, are you feeling lucky? Go ahead punk, make my day." The UK as the historical enemy of European integration, and vehicle for US imperialism, will get severely weakened, and sooner or later have to plead for readmission, on much reduced terms.

However, the last 24 hours have raised another interesting question. The Tories are reintroducing capital punishment by stealth. UKIP have already said they would hold a referendum on it. We all know that such a referendum would result in a large majority for reintroduction. So, should Labour then commit itself to "respecting" such a reactionary policy, as you propose with the Brexit referendum?

Dipper said...

The referendum was approved 6:1 by Parliament. It is implicit in granting a referendum that all outcomes are viable as to put an option to the people that was not viable would be criminally stupid, so by 6:1 parliament approved leaving the EU as an option.

Again, it is implicit that leaving the EU may involve simply walking away and dealing with the consequences, as if no deal is not viable then leaving with a good deal is not viable, so by 6:1 Parliament implicitly approved walking away with no deal as an option. So Parliament really needs to understand what it is they committed to by 6:1

All those on here who think we should just do an about turn or accept whatever the EU mandates are simply not thinking ahead. What do you imagine comes next? Having spent two years loudly screaming that we are powerless against the EU, what kind of future do you think awaits us if we concede to their demands? Do you think your voice will count for anything at all? If the EU mandates we have the Euro, what power are you going to magic up to stop that happening?

And from what I can tell on the no-deal hysteria, we will have a national food shortage and farmers will be in trouble as they will not have a market for their produce. Does anyone actually believe this nonsense?

Boursin said...

We all know that such a referendum would result in a large majority for reintroduction.

No we don't. Opinion polling fairly consistently shows a tiny majority for it at most, and probably a mere plurality.

Dipper said...

so, all you folks who think we need to stop all this. what is your deal for the fishing industry and all those fishing towns who have suffered under the EU? Are you going to magic up a decent deal out of nowhere for them? Or are you just going to let them fester so you can enjoy some benefits?

And don't even start about they are actually getting great deal. they aren't

the thing about a nation, is that it gives those governing it a responsibility to look after everyone in it. We've lost that in the EU. I voted to get this back. Some small hiccups at the point of exit will be no inconvenience in the long run.

Boffy said...

@Dipper,

"All those on here who think we should just do an about turn or accept whatever the EU mandates are simply not thinking ahead. What do you imagine comes next? Having spent two years loudly screaming that we are powerless against the EU, what kind of future do you think awaits us if we concede to their demands? Do you think your voice will count for anything at all? If the EU mandates we have the Euro, what power are you going to magic up to stop that happening?"

But, that is precisely what will happen eventually as a result of Brexit! It shows the insanity of the idea that the Brextremists pushed of gaining sovereignty. The effect of Brexit will be a significant loss of sovereignty, not an increase in sovereignty. Britain has a range of opt-outs and benefits currently as a member of the EU. They will lose all of them if they leave and reapply.

Its not a question of the EU placing demands on the UK but of the UK placing demands on the EU that they have absolutely no bargaining power to achieve, and that will be true with any other larger economic power they come to negotiate with.

Boffy said...

Dipper,

You assume that the will is equal to the deed. The UK actually gained the ability to make economic decisions that benefited its people by joining the EU. As socialists we might seek to make that even clearer, so that say the people of Greece would not have got screwed by the ECB, but even the people of Greece were wise enough to know that however bad the austerity imposed on them, if they left the EU, the austerity their own government would then have had to impose on them would have been ten times worse!

The people of Cuba have "sovereignty", but has it helped them deal with their problems, and develop their economy faced with much bigger economic and political players that, in the real world, they have to negotiate and contend with? Absolutely not. Its why Marxists reject the reactionary nationalist idea of "Socialism in One Country".

Anonymous said...

"Some small hiccups at the point of exit will be no inconvenience in the long run".

Rees Mogg reduced to trolling left websites under the pseudonym "Dipper"

Bob Mortimer said...

Aye, chicken dipper!

George Carty said...

Dipper, it wasn't the EU that buggered up our fishing industry, but our loss in the Cod Wars (which happened before we even joined the EU) along with Thatcher's policy of attaching the EU quotas to boats (which could be sold to foreigners along with the quotas) rather than to ports as was done by every other EU country.

Brexit won't actually help UK fishermen that much as they currently export most of their catch to the EU anyway (as Brits tend to prefer the kinds of fish caught further north: in Norwegian and Icelandic waters).

Dipper said...

@ Boffy. 1. not answering the question. Which in the context of 2 is quite relevant. Not sure what your point is; are Canada and Australia imagining being independent?

@ George Carty - the fishing industry is keen on Brexit, and I will take their word on it.

Anonymous said...

UK stopped arguing with Iceland about sovereign control two hundred miles offshore ("territorial waters") when North Sea oil appeared and they realised it would be a new norm that would be usefull to UK. I remember.

Anonymous said...

The Cubans look like they are doing well with health care and education etc. Despite their difficulties it would still be a better option than just being another third world country that the West is trashing.

Boffy said...

@ Dipper,

No, they are politically independent. The point is that political independence does not equal economic independence, and smaller economies do worse than larger economies, precisely because no economy is economically independent, and those that attempt to achieve it, via autarky, end up impoverished, as with North Korea. The 50 states of the USA, for example, realised that they have more real independence, as part of the USA than they would have as individual separate states.

@ Anonymous

You have really disproved the point you were presumably trying to make. All of those other Third World countries that you describe as getting trashed, are themselves politically independent countries! Its why, across the globe, such countries are coming together to create larger economic blocs, similar to the EU! They realise the point that Lenin and the Communist International realised a century ago that political independence is not the same as economic independence, so its necessary to pool political sovereignty, so as to gain economic sovereignty, which itself tends to be the foundation of real political sovereignty.

CCAAC said...

It should be pointed out that the UK trades with no one, UK companies trade with companies of other nations, and rules are set down to reduce the anarchy of this trade.

When Boffy talks of socialism in one country what he means to say is capitalism in one country, because no political party in the UK is proposing anything like socialism in one country. So what Boffy is arguing is that Britain will become an island of capitalism in a sea of capitalism.

So the question comes if the Uk becomes a capitalist island in a sea of capitalism how will the land bridge be constructed, what will come to dominate, the economic or the political?

This neatly brings us onto how abstract these arguments are, people say damage to the UK, people say trade will be hit hard. But this is too abstract for Marxists, as Marx pointed out population is an abstraction because it says nothing about the class structure of that population. The same can be said for the debate about Brexit.

The committee advise that political parties representing the working class forget about a second vote and simply state their programme includes a commitment to re-enter the EU, with a promise to fight for ever greater integration and with the express aim of fighting for a socialist united Europe. So socialism in one continent!

The committee recognises that Britain being in the EU may not actually be good for the EU, after all Britain has played a decisive role of curtailing the full integration of Europe and has played a huge role of watering down some of its more progressive policies. So Britain being in the EU could do more harm than good and strongly advocating for a return of Britain to the EU based on current conditions could actually harm the EU project.

The committee recognises that the current wave of populist right movements, based primarily on Islamophobia and anti immigrant sentiment and absolutely nothing at all to do with anti Semitism in any way whatsoever, is a very real threat to the EU project.

The committee recommend a couple of points here:

1) Pro imperialists and their servile apologists must take responsibility for the rise in the far right and for Brexit. The movement should regard all such apologists as the direct enemy.
2) Russophobia, a by-product of this imperialist criminality, must be stopped and sense must prevail. Russia should be lauded for their actions in Ukraine, though lightly criticised for not doing enough to protect the people of Eastern Ukraine. The EU should be pressured into seeing Russia as a full partner and not an enemy.

These proposals are obviously supplementary to the macro proposals, for example disband NATO and impose travel bans for Americans who are either registered democrats or republicans. (The ban to be reviewed every 5 years based on objective principles – found in our white paper).

“So, should Labour then commit itself to "respecting" such a reactionary policy, as you propose with the Brexit referendum?”

The committee note that while they are opposed to capital punishment, especially opposed for so called terrorists, they are amused that a guiding principle of Boffy, namely winning the battle for democracy, has been conveniently ditched because it suits his purpose. The committee would like to point out that they do not accept the principle of winning the battle for democracy, not because the committee is against democracy, just that the principle is nonsense and is another one of those principles that has never been defined, agreed or written down anywhere. It is just part of Boffy’s subjectivist ideological claptrap.

George Carty said...

@Dipper - has it not occurred to you that much of the anti-EU campaigning associated with fishing might be driven by those boat owners who got rich quick (at the expense of their communities) by selling their boats and quotas to foreigners, and who are now looking to distract from their own treachery?

I'm reminded in the way in which the Nazis in the Baltic states recruited former Soviet collaborators (who were looking of course to erase their guilt for their treason in 1939) to do their dirty work of helping them kill the Jews.

@CCAAC - I don't believe that the UK is significantly more Islamophobic or anti-immigrant than other European countries. While Islamophobia and nativism certainly contributed to Brexit, it also required a slew of other factors:

* David Cameron's weakness in promising a referendum out of fear of UKIP splitting the right-wing vote and letting Labour in,
* The Brexit press's mendacious conflation of freedom of movement for EU citizens, with non-EU immigration, and
* The way in which many English people (unlike continental Europeans or even Scots) defined their very national identity in opposition to the EU

And as for your attacks on "Russophobia", have you not noticed that Russia is now the de facto head of the Far-Right International? (Probably because Russia is a cold fossil fuel exporter and therefore fears any effective action to stop climate change?)

It was the refugee crisis caused by Putin's toady in Damascus that was the straw that broke the camel's back where Brexit was concerned.

Anonymous said...

The trashed third world countries are not politicaly independant because they are subject to extensive inteference from the West, unlike Cuba.

Boffy said...

"The trashed third world countries are not politicaly independant because they are subject to extensive inteference from the West, unlike Cuba."

Which simply shows that a) nominal political independence is never anything of the kind, and the smaller the state, the less real independence it has when operating in the real world, b) you haven't been keeping up to date with events in the real world for the last 60 years, or probably been to Cuba (which I have), or you would be aware that Cuba has been suffering during all that time from a US imposed economic embargo, that it was not allowed to station soviet nuclear missiles on its territory, and its attempt to do so nearly provoked WWIII, in 1962.

Its why these smaller states are combining together in larger blocs like with the EU. The UK's $2 trillion economy is a minnow compared with the $18 trillion EU economy, or the US economy or the Chinese economy. Even as a national economy, the UK will within the next 10 years rank only about 12th., behind economies like Mexico and South Korea. Already compared to other economic blocs, like Mercosur, with which it would have to negotiate trade deals, it is small.

The UK's small economy means it has no leverage in such negotiations, as shown with the EU, and it would face the same problem in any other negotiations with larger economic blocs, and states.

CCAAC said...

George Carty’s claim that it is Russia that broke the camel’s back must go down as one of the most sickening pieces of imperialist apology to date, given the war in Iraq led to 1.5 million Iraqis felling into Syria to escape Western humanitarian liberation. This coupled with enforced neo liberal economics placed upon Syria directly led to where we are today. Add to this the influx of refugees from Libya and we can see imperialism’s dirty hands all over Brexit.

The idea that the far right is a creation of Russia is just an expression of this Russophobic paranoia, The idea that the most nationalistic part of the population are taking orders from a foreign power is ludicrous. The far right are responding to the opportunity afforded by the immigration from imperialist slaughter and supremacy. Your claim that all the imperialist crimes amount to nothing and that it is Russia who are to be blamed for this is as we already noted, sickening.

Russia it is true does see a threat from the EU simply because the EU along with the USA has pushed it into this corner. So Russia understandably wants to weaken its opponents any way it can, but it is pure paranoid delusion to think Russia can affect elections in the West. The attempt to blame Russia is simply projection, simply the old ruse of blaming the foreigners for the ills of society. Instead of asking why did 63 million Americans vote for Trump, instead of blaming those 63 million the paranoid delusional liberals had the convenient answer, it was Russia. Why did the liberals play this card, because if there is one thing Trumps base or more fanatical about than the liberal base, it is nationalism and the liberals are indirectly saying to this nationalistic base, supporting trump is support for Russia.

The committee have it on record that Russia’s support for the Syrian people against the white forces of imperialism and its fanatical Islamic foot soldiers’ is an act of heroism in the face of bestiality. Though the committee lightly criticises Russia for not going far enough in its support for the Syrian people, but understands that when faced with a rapacious out of control beast caution can be the wisest road.