The Corner

At Liberty2014, a Stirring Defense of the Nation State

Conservative opposition to the European Union is well established. But those on the right are often quicker to defend corporations and large private businesses. Is this a mistake? Is it possible that both outfits are in fact antithetical to liberty? Certainly, portions of both the tea party and Occupy Wall Street movements think so.

Others, too. In a panel titled “The EU and the Big Corporations: are they ganging up against liberty and its protector, the nation state?” John O’Sullivan, Charles Moore, Daniel Hannan, Richard Epstein, and Michael Wohlgemuth tackled the question of the EU in general, and, more specifically, how it interacts with business. In his opening remarks, moderator John O’Sullivan lamented a “lost sense of liberty,” citing the “apparently irresistible onward march” of the state, the growing scourge of political correctness, and the “drift of power from institutions accountable to people.” This lattermost complaint was a common theme. The first speaker, Daniel Hannan, began by quoting Hemingway’s inquiry, “What right have you, a foreigner, to come to me and tell me what I must do?” This, Hannan, said was a “good question,” and one to which his answer was clearly “none.” His task today, Hannan said, was to “make the case for patriotism,” which he joked many of his colleagues in the EU consider to be the “most unforgivable of all human attributes.” In doing so, he delivered a stirring defense of the nation state, notably the futility of ”trying to create a functioning democracy where there is no demos.” What matters, he argued, is that those within the polity have an “affinity” that pushes them to accept the results of elections, help one another out, and agree to submit to taxation and to common rules. This affinity might be the product of “language,” “religion,” history, or even “happenstance.” But there must be one. “If you take the demos out of democracy,” he suggested, “you are left only with cracy“—”power.” The practical consequences of loss of sovereignty is that people can “no longer decide their own destiny.” 

Hannan also addressed the role of business in the usurpation, observing that large lobby groups have “jumped on” EU institutions as a way of “circumventing the power of the nation state” and seeking rules that they “couldn’t get through nation states.” A prime example of this, Hannan suggested, is Big Pharma’s use of Europe-wide regulations to ban vitamin supplements. Because the people were so remote from those making the rules, nobody could do much about it. ”Be very scared,” he warned, “of any institution that seeks to circumvent the nation state.”

Speaking next, Professor Richard Epstein drew a parallel between the problems with the European Union and the problems with American federalism over the last 75-80 years – namely that in both cases the central authority had become too powerful, involving itself in areas where it did not belong and becoming subject to capture. The best solution for both Europe and America, Epstein concluded, was to go back to a system of “competitive federalism” – that is, to have a federal free trade area that helped member states to communicate and allowed the free movement of private actors. Regulations, he suggested, should largely be left to the smaller states. This would permit private actors to follow their own interests. If the rules in one state became too onerous, businesses might move. This way, power would be fractured and the chances of any one institution becoming too powerful would be diminished. Joking that he wanted to put Dan Hannan out a job, Epstein finished by arguing that he wanted to get rid of the European Parliament completely. (Hannan agreed, noting that he would be a happy “Samson in the temple as it came crashing down around him.”)

Next up, Professor Michael Wohlgemuth asked why classical liberals and libertarians were not more popular. His answer: That the public considers them to be “pro-business.” Instead, he said, they should be clearly and loudly pro-market — in Hayek’s words, the “opponents of all privilege.” There is a “big difference” between the two positions, he suggested, in large part because ”big business likes and promotes big government,” the two sharing “a common goal, which is centralization and collusion of power.”

Mrs. Thatcher’s biographer, Charles Moore, observed that the European Union would never start to move in the direction desired by the other panelists unless its charter removed the promise of “ever closer union” from the preamble. What is needed, he said, is a substantial “change of purpose.” Where currently its architects are trying to create a “United States of Europe,” the ideal would be an area of free trade. At the root of this centralizing instinct, Moore suggested, was a fear of “competition between markets,” the EU’s aggressive regulatory behavior serving as an “anti-market measure masquerading as a market measure.” Europeans complaining about London speak of “unfair tax competition,” Moore noted. But in Britain, he said “we call this ‘tax competition.’” 

Having made a case that he believed the audience would uniformly agree with, Moore used the remainder of his time to “challenge” them. Discussing the crash of 2008, Moore asked what the implications were of having “great global companies [that] are global in life but national in death”? There is a growing sense, he argued that we are all “hostages to the fortunes of the banks.” He observed that the banking lobby had bankers put in charge in Greece and Italy, and wondered whether capitalism was damaging the nation state. “What does word ‘capitalism’ mean to people who don’t have capital or who are threatened by the world order”? Moore asked, suggesting that we might well be in a “pre- revolutionary situation.” Moore concluded by asking what the relationship was now between the “nation state and where power really lies”? “Different times” require “different challenges,” he said. The problem now is that “Thatcherism has been subject to ‘user capture.’ This is a serious problem. What is the relationship between liberty and capitalism in the 21st century?”

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