Leaving the European Union won’t have a major impact on capitalist globalization, but it reflects the political rise of a xenophobic right that could soon undermine the remaining environmental, labor, and social protections in Britain, says political scientist Leo Panitch

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SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries, coming to you from Baltimore. This week UK’s Prime Minister, Theresa May, confirmed that UK will make a clean break from the European Union, honoring the Brexit vote of six months ago. The consequences of a complete break from the European Union are quite significant economically. The exit will also mean that UK will be free to pull out of the European Court of Justice, and make it easier to pull out of the European Court of Human Rights. The Prime Minister, herself has expressed her deep disdain for these institutions, especially on how it impacts on Britain’s immigration policies. THERESA MAY: Britain is an open and tolerant country. We will always want immigration, especially high-skilled immigration. We will always want immigration from Europe, and we will always welcome individual migrants as friends. But the message from the public, before and during the referendum campaign, was clear — Brexit must mean control of the number of people who come to Britain from Europe. And that is what we will deliver. SHARMINI PERIES: There is also the matter of environmental and consumer protections, which exist in Britain as a result of EU legislation. And of course, recently there has been pushback against mass surveillance from the European Parliament, and the European Court systems that has been largely absent from the equivalent British establishment institutions. So, what precisely will this mean for Britain from an economic, social and political standpoint? Joining us for this discussion is Leo Panitch. He is Professor Emeritus and senior scholar at York University. He’s the co-editor of, “The Annual Socialist Register,” and the 2016 volume focuses on the politics of the right. He was also the co-author of the book, “The Making of Global Capitalism, the Political Economy of the American Empire and the End of Parliamentary Socialism from the New Left to New Labor”. Thanks for joining us, Leo. LEO PANITCH: Hi Sharmini, glad to be back. SHARMINI PERIES: So, Leo there has been lots of concern about what Theresa May might say, and so let’s have a listen to what she actually said, during her speech on the plan for Britain. THERESA MAY: So, we do not seek membership for the single market. Instead we seek the greatest possible access to it, through a new, comprehensive, bold and ambitious free trade agreement. We are leaving the European Union, but we are not leaving Europe. And that is why we seek a new and equal partnership between an independent self-governing global Britain, and our friends and allies in the EU. We seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. No, the United Kingdom is leaving the European Union, and my job is to get the right deal for Britain as we do. SHARMINI PERIES: So Leo, the British voted for the Brexit by 53.4% in favor, but 46.6% voted to remain. Did the Prime Minister’s speech, or her plan, speak to those who voted against the Brexit? LEO PANITCH: To some extent, I think, the main thing she was speaking to, was the concern amongst British capitalists that the lack of certitude of how this was going to be done, would affect business in Britain. But she spoke broadly. I think one has to see that, and she did, I think, say some things that clarified matters considerably. She’s made it clear that there will not be a halfway house, that Britain will leave the European Union. One needs to remember it was already not… never had been, part of the Eurozone. And it will then try to seek a bilateral trade agreement, the kind that many countries have with one another, with the European Union. In order to facilitate that, Britain will incorporate all of European law, within its own law. The case she makes, is that what we want, is Parliamentary sovereignty. We don’t have a written constitution. Being part of the EU means we’re subject to the courts, in this case, of course, a court centered in Europe, the European Court of Justice. This is not what we want. We want our Parliament to control its own destiny, insofar as that’s democracy, and the British interpret democracy very narrowly in terms of that elitist type of parliamentarianism. And by saying that we will incorporate European law, she’s first of all, speaking to business. So, that they know, that the types of regulations that currently exist, will continue to exist until the British Parliament changes them. But secondly, she’s speaking to even the trade unions, in which she says that the legal requirements that Europe imposes on employers, with regard to labor rights, will also be incorporated. Now, she puts that in an interesting way. She says we may even improve on them, in light of changing labor market conditions. Now, you could mean… I think, she means by that that would lead to greater flexibilization. But she then throws them a further bomb — something that Mrs. Thatcher never would have done, and opposed vociferously — and says that she will sponsor the right of workers to have representation on company boards, which the German Social Democrats have always been very proud of having. And which Brussels has embraced to a greater or lesser extent. So, you know, you can see what’s going on here. The main thing, of course, is that she says, we want to control immigration, and being part of the European Union does not allow us to do that. We have to be open to the free flow of labor and that’s not what we’re going to allow. Now, at the same time she says, we’re not breaking the globalization. She doesn’t endorse Donald Trump; saying that he hopes Brexit will be an incentive for other countries to leave the European Union. She explicitly denies that. She says she doesn’t want to encourage other countries to leave. She thinks it would be a disaster if they did, etc. So yes, she’s building bridges, while above all trying to settle the minds of British capital, and of foreign capital that operates in Britain. That trades with Britain that invests in Britain. That you know, that this can be a smooth, even if a protracted process. SHARMINI PERIES: Right. And so, it’s better than what most people expected in terms of what she could have said. But what is it specifically that she’s referring to, when she’s speaking of a free market agreement? LEO PANITCH: Well, you know, she’s saying she would like NAFTA. What she wants to have is a free trade agreement that would not bind Britain to the free movement of labor. And you have to remember that in the case of NAFTA, it doesn’t give a free movement of labor to Mexicans that come into the United States, although the consequence of it, of course, insofar as American corn producers wiped out so many corn producers inside Mexico. The big agri-business in United States wiped out so many small producers in Mexico. This inevitably led a great many Mexicans to try to illicitly cross the border. So, we would look more like NAFTA, rather than the European Union itself, which does go beyond merely a free trade agreement. That said, you know one needs to bear some things in mind, which I think we forget. Of course, Brexit was driven by the right. And it expresses the kind of xenophobic nationalist response to globalization that came into the vacuum when the left, the social democratic left, refused to be able to lead a progressive working-class reaction against capitalist, neoliberal globalization. In fact, that social democratic left embraced it. So, it’s the right that’s picked this up, and that’s what led the campaign for Brexit. This was not a campaign led by the British capitalist classes, the MNCs, least of all the financiers in the City of London. That said, you know one needs to take a pill. The center of gravity in Europe — in the European Union, in the Eurozone — which the British have never been part of, has always remained the nations states. Brussels is not a, you know, global state that imposes itself on Germany. It has the capacity to impose German policies on Greece, as we saw. But the center of gravity asymmetrically remains within the European nation states. So, you know, one needs to be careful about how significant this is. Secondly, as is becoming very clear to the financiers in the City of London, this isn’t a disaster for them. The fact that the American banks are located there, the fact that European bonds are traded there, even if they’re Eurobonds, reflects the depth of financial markets in Britain. The Europeans go there because that’s where the Japanese are. That’s where the Chinese are. That’s where the Americans are. And because of the great expertise the British have in dealing in financial derivatives, and so on. You know, there’s been some concern that Frankfurt, or Paris, would try to take some of this away, would impose restrictions on the trade and financial services. But, you know, I think people are beginning to see, and The Financial Times had a terrific piece on this last week, that that’s unlikely to happen. Largely because it’s not in the interest of capital to increase their costs, and they can get that stuff done more efficiently if they continue to do it in London. So, you know, it’s really not such an enormous impact on capitalist globalization. What one has to be concerned about, is that it was led by a xenophobic right in Britain, and it will reflect, I think, in the long run, a shift in the balance of forces in Britain towards that right. And that insofar as British law does get changed as a result, you can expect that in the environmental arena and the labor arena and the social arena, not that Britain has been any damn good in this respect — far from it — it won’t be any better. Because in Europe you have had a balance of forces which has been more positive towards labor, the environmental stuff, and so on, than has been the balance of forces in Britain. SHARMINI PERIES: Right. And coming to the issue of immigration, Leo, now in her address, the Prime Minister did say we will always welcome immigration from Europe, and we will always welcome migrants as friends. But a lot of the heat around the Brexit vote surrounded around the issue of immigration. Is she departing from that heat? LEO PANITCH: Yes and no, I mean, you know, she is effectively saying that in order to get into Britain now you’d have to have a work permit. In a more complicated way, maybe an industry would have to show that it’s particularly low on a particular type of labor, you know, as is the case in Canada for instance. So, you know, Indian technicians will be able to get in, insofar as there is evidence, as is the case in North America, that the type of skills they have, there’s a shortage of. So, you know, you’ve got… that’s what is effectively going to happen here. The whole thing was a ruse to begin with. I mean, the notion that the demise of the welfare state in Britain, the appalling state of public services, the gross inequalities regionally, as well as in class terms, that exist in Britain, have happened because, you know, 5,000 Polish immigrants here, or 2,000 Romanian immigrants there, was of course absurd. But it was the way that the right was able to ensure that the class, and regional resentments, against globalization and the European Union, would not be turned against capital. Would be turned against fellow workers. And that, you know, that’s the effect of, or the myth of, the whole thing of course. SHARMINI PERIES: Right. And earlier, Leo, you said that, you know, that her speech appealed to the British business class. And by saying that Britain was going to adopt the European policies, as well as it appealed to labor, because she said that Britain was going to adopt the European labor regulations. LEO PANITCH: For the time being, she’s saying we would have the right to amend them. But for the time being, you can be sure that, you know, you will know what laws you’re operating under, until we decide to amend them. SHARMINI PERIES: Okay. So, given that scenario, and what she had spelled out in this speech, what can we expect in terms of economic repercussions in the economy, and in terms of labor? LEO PANITCH: We don’t know. I mean, one has to say that — and everyone has admitted this, including the people in the Bank of England who were predicting disaster — one has to say, that so far it has not had the kind of effect that people were screaming it would. I mean, it was actually ridiculous, and disturbing to see Hilary Benn, Tony Benn’s son, on the BBC the night before the referendum, expressing his opposition to leaving Europe entirely. In terms of the effect it would have on big business. The effect it would have on foreign investment. The effect it would have on the stability of the City. In other words, speaking for the capitalists, and that was a general card, of course, that was played. And that’s not to say capital wasn’t concerned. Capital hates risks and the big MNCs, you know, didn’t want this disturbance. Just as the big MNCs didn’t want Donald Trump, but they will live with it. And what they’re learning is that it’s not nearly as disturbing as the scaremongers said it was. And they’ll be able to live with a globalization that doesn’t allow for the free movement of labor. Especially if they can get the types of regulations that allows them to get whatever skilled labor, high tech labor, that they want to get from anywhere in the world — at the expense of a country like India, that educates them — I must say. SHARMINI PERIES: Right. So, Leo finally, politically where does this leave Theresa May, and particularly in opposition to labor? LEO PANITCH: I’m afraid it leaves her in a good place. I’m afraid it leaves her in a good place. That is not to say that the line that Corbyn’s been delivering, which I think was the correct line, that wait a minute, the European Union, while it had some positive human rights aspects to it, some relatively positive protections of labor, not many, was primarily a neoliberal set of institutions. In some ways, the European Union had neoliberalism in its DNA, going back to 1958. It was always oriented to eventually getting to free trade, and free capital movements, and certainly since 1985, and the steps that were taken towards European economic and monetary union, the establishment of the Euro. We’ve seen how neoliberals set up the institutions that Europe is. I mean, just look at what they did to Greece in the name of neoliberalism. But in general, what they’ve done in terms of flexibilization of labor markets, etc. That said, there is a balance of forces in some European countries, which does provide a more favorable set of protections for labor. For the environment and so on. And yes, some aspects of human rights, or some aspects, are more protected, including the rights of dissent, the rights of protection from surveillance, but not much. And so, Jeremy Corbyn’s line has been, well on balance, we don’t see the point of leaving, especially when it’s being led — the case for leaving — is being led from a xenophobic right-wing perspective. But you know, I don’t think that it’s going to be enough to offset May’s attempt to settle people down here. And I don’t think she’s going to be seen by the far right as having stabbed them in the back either. So, given that most of the Labour Party, despite Corbyn’s leadership, is not in favor of breaking with neoliberal globalization from the left. I don’t see that the cards are there, for something that the left can look forward to in the next couple of years, should there be an election in Britain. SHARMINI PERIES: All right, Leo, I thank you so much for joining us today. LEO PANITCH: Happy to talk to you Sharmini. SHARMINI PERIES: And thank you for joining us on The Real News Network. ————————- END