The EU is the Wrong Tool to Defeat Nationalism

I am very much an individualist. As such I have always despised nationalism. I am convinced that we need to overcome this ideology if we want to live in a free world. One could think now that, since I hate nationalism, I probably should like the EU. The core political agenda of the EU has always been to defeat the nation state. And it seems to work to some degree. All nationalists that I know, have a passionate hatred for the EU. And it is nationalists who are very much behind the campaign to get the UK out of the EU.

But I have to say that I have always mistrusted the logic of ‘the enemy of my enemy is my friend’. As much as I dislike nationalism, I also dislike the EU. The EU is simply the wrong tool to defeat this ideology. Neither do I think that it will succeed in defeating nationalism, nor do I think that if it did, it would replace it with something better. The opposite might very well be the case.

The biggest problem with nationalism is that it is married to the state. I cannot think of any coherent theory of how to identify a nation that does not involve a state like political structure. So strong is the connection that every nationalist movement seem to automatically aim for a sovereign nation state. That is why we are seeing all European nationalists cry for an end of the EU, which threatens the sovereignty of their beloved nation state. In addition to that, we of course also seeing all kings of national liberation movement within the accepted nation states, which just goes to show how arbitrary the concept of a nation is.

But of course, nation states are a big problem in and of itself. When Europe only consisted of nation states, these states all insisted of putting up trade barriers between them. Even, worse, very often they saw each other as threats and fought wars all the time. These type of politics were very destructive for the well being of Europeans.

However, what was the problem? The problem was states. Ordinary people have better things to do than trying to stop each other from making trade deals or killing other people, who they have never met, in foreign countries. It is states who organise and facilitate these crimes. So it does make perfect sense to try to do something against these nation states.

Enter the EU. The EU tries to solve the nation state problem by putting an even bigger state on top of all the nation states. That way, so the idea goes, this more powerful big brother state can stop the nation states from committing crimes.

This seems to work to some degree. We have not seen any war between the members of the EU. And trade barriers, including migration barriers have fallen. However, the fundamental problem with the EU is that it is itself a state. And if states are the problem, then how is a bigger state going to solve it? It seems we are just trading one problem for others.

We have some precedents for what the EU is trying to do. Take Germany for example. Germany once was split up into dozens of small, independent states. And it had the same problems as Europe. These states were putting trade barriers up and fought wars against each other. Finally, Prussia, one of the two big kingdoms (the other being Austria) united all the small states into one big state.

And sure enough, there were no trade barriers within Germany anymore and the different ex-states, have not fought wars against each other ever since. But that is not to say that Germany did have free trade with the world and ended every kind of military engagement. The opposite is true. The destruction caused by this new state just got bigger. It got involved, and was arguably responsible, for two world wars and massacred millions of its own citizens. Yes, little German statism had its problems. But uniting Germany into one big state, in hindsight, looks like the worst possible solution for it. In fact, it was no solution at all. And yet, strangely, although everyone seems to agree that the history of a unified Germany is very problematic, few people would even suggest that the solution was faulty. The belief in the alternative of ever bigger statist solutions seems unlimited.

The US is another bad example. It first had a constitution, the articles of confederation, that did not have a central government above the individual states. But they quickly had a counter revolution that succeeded in installing a central government. And now we have a gigantic state that is running the biggest empire in human history. It is bullying everyone on the planet to bow to their demands. And no, it is not a good deal for its own citizens either. They are tax slaves even if they physically leave the country. And they have a very hard time to escape the law, if the US wants them. We just saw this with Edward Snowden, whose only possible refuge was Russia of all places. That is because the US Empire is big enough to enforce their laws and regulations, no matter how bad or silly, far beyond its borders. And lately, it even started to charge people huge exit fees in case their dare to say no to its citizenship.

The EU is on its best way to become like the US. If we know one thing about states, it is that they grow and grow and grow. Short of a revolution, nothing seems to be able to stop them from doing just that. We already have a European police that makes it hard to hide from the legislature of the individual states, no matter how unlibertarian it is. If the EU continues, we will soon see the establishment of a European army. This will be the beginning of another european imperialism, only this time American style. And of course sooner or later they will have a centralised tax policy that prevents the currently existing tax competition.

Many people will say, well this cannot happen. Every single member state would need to agree on this and there will always be someone in opposition. Yes, sure, there are some barriers. But, again, states always grow. They eventually overcome these barriers. The problem is, they can try as often as they want, they only have to succeed once. They may fail 20 times. But then the 21st time, there will be a special historic situation in which suddenly everyone does agree. At that point a new government department will be established. And of course, once established, it will be impossible to get rid of.

The Euro is a good example of this. Just like the EU, most criticisms of the Euro seem to be ill informed. No, you do not need a common fiscal policy to use the same currency. No, it is not the fault of the Euro that people in many Euro states are voting for socialists that are expending the welfare state to unaffordable levels. And no, these countries are not better off leaving the Euro and inflating their way out of it. Inflation has never made any economy richer.

Just like nation statism in general, monetary nationalism is a big problem. It makes trading across state borders more expensive and risky. And it gives the control over a currency to a single government, that can then use it politically without any opposition. Compared to national currencies, the Euro looks a lot better. It reduces the cost of trading within the Euro zone significantly. And it makes it difficult to instrumentalise the currency for political purposes.

Difficult, but not impossible, as we are seeing at the moment. Yes, for a while it looked like the Euro was working well. States that got into trouble had to cut spending and deflate their economies. That is because there was a lot of opposition to money printing. But eventually, this opposition was overcome. Now, the ECB is engaging in huge money printing programs and has set its interest rates below zero. But since the Euro is now covering a much bigger area than the national currencies, the damage being caused by this money printing is much bigger. In other words, as bad as national monetarism is, the Euro has now proven to be the wrong solution.

One interesting aspect about the fall of the Euro is that the Euro had a no bailout clause as a core part of its design. This clause was suppose to prevent the Euro to be used as a tool to bailout bankrupt states within the Euro zone. Had this clause been observed, the Euro would still be a pretty good currency. But it was not. The interesting thing about this is, that the clause was actually never repealed. Technically it is still the law in the Euro zone.

This is a phenomenon that we see over and over again with states. If there is a law in the books that is supposed to stop the state from growing, this law is simply ignored when it becomes inconvenient and cannot be formally removed. This is so common that markets, from the very beginning bet against the no bailout clause. This bet turned out to be a very lucrative trade. It is simply naïve to believe that states can be limited by written laws. It is precisely this observation that made me an anarchist.

So what is the right solution? The answer is, we need to get the government out of money. In other words, letting the market choose its own currency. However, political solutions like the Euro actually make this real solution more difficult. Because the real solutions will have to compete with the political ones. And the political ones have a lot more physical force on their side.

And that is true for the EU as a whole. Other then the official leave campaign suggests, the problem with the EU is not that it is undemocratic. It actually looks more democratic than the UK. But democracy in general simply does not work. Westminster will listen just as little to ‘the people’ than Brussels will. And it is just as capable passing tons of regulations. So to give Westminster more power is something completely different for demanding self determination.

Brussels simply has a PR problem. That arguably, actually makes it a more attractive government than Westminster from a libertarian point. A government that is seen as legitimate is much more dangerous than an illegitimate one, as people are more likely to obey its command. In other words, Westminster can probably get away with a lot more tyranny than Brussels can at the moment.

But, we really need to get rid of both, Westminster and Brussels. The way I see it is, if we get rid of Brussels we have one down, one to go. The real solution to the nationalism problem is global markets. But the EU is actually not helpful for that goal. First of all, since Brussels is loathed, it gives the national parliaments a much higher legitimacy. The governments of the nation states increasingly discover that they can just blame all problems on that other government in Brussels. So it is actually backfiring in the fight against nationalism.

But more importantly, nation states are not capable to deal with a globalised world. Today, more than ever, people and companies vote with their feed if they dislike the politics of a state. The more states exist, the more they are competing for productive people. And the more they are competing the less power they can actually exercise. The market can play divide and conquer with them.

Of course, there is a great need for international rules. If we destroy the state solutions for providing these rules, the market will come up with private ones. If on the other hand, politics provides them, the market for these products will be damaged or even destroyed.

That is not to say that we should oppose treaties that break down trade barriers. Ever treaty that fuels the competition between states should be welcome. But these treaties should not come from international governments like the EU. As soon as we establish institutions like the EU, whose purpose is to regulate, then that is what they are going to do, whether it is useful or not. Single treaties can be accepted or rejected one at a time. And there is no international political body that immediately goes to the next regulation once it has signed the last one. I cannot see, why there could not be a treaty like Schengen, which gets rid of all these, highly destructive, border controls, without having an international government.

We will need to crush the nation state eventually. But we have to do it with the means of the free market and not of politics. If we use ever bigger states as the solution, we will solve one problem and get 10 new ones in return. The EU, just like a bunch of other international institutions, are the wrong way to do it. We need to get rid of them.

The UK leaving the EU will probably be a big step into that direction. Of course, it will be very disruptive. All the talks about new, favourable deal with the EU after a Brexit are nonsense in my view. The EU is a political and not an economic project. I would be surprised if there is any deal at all. Since when do traitors get good deals? They get hanged publicly, to deter all other potential traitors. The most likely offer will be that the UK can re join the EU as a full member at any time, if it comes to its senses. Until then, out means out. There will be no deal whatsoever.

This will be the most likely outcome, because if the UK got any deal that is at all attractive, a lot of other states will then demand the same. And that would be the end of the EU. Not negotiating with Britain is pretty much the only way they can rescue this political project after a Brexit. And even then, they might no succeed in rescuing it. But to me, the chance of the EU blowing up completely is even more reason to leave. It might be disruptive in the short term, but in the long term, Europeans will most likely be better off.