A further response to Dalibor Roháč: Why there is no libertarian case for the EU

About a year ago, I suggested that Mr. Petr Mach MEP write a response to Mr. Dalibor Roháč’s (then with the Cato Institute, now with the AEI) article arguing the case for the European Union. Mr. Mach did write such a response and Mr. Roháč responded again. I have immediately written this further response but somehow never got around to publishing it. Here it is, written as it was two years ago, with two minor updates:

Dalibor Roháč further argues his cause for the European Union (EU). His new piece concentrates mainly on three topics: trade protectionism, immigration protectionism, and Putin’s threat. Let me deal with them one by one.

Yes, Mr. Roháč is right when he calls out Marine Le Pen or Viktor Orbán as socialists and protectionists. And yes, there are many other left-leaning Euroskeptic parties and personalities. But all Europhile parties are left-leaning in the sense that they love the overregulated single market, the customs union, the price caps in some industries and ludicrous anti-trust policies in others, the subsidy bonanza and the like.

After the end of the EU, some countries will be more socialist and some would be more free-market. That is the logic of jurisdictional competition. It is not a flaw of decentralization; it is rather its best feature. As we can see in the case of European Free Trade Association (EFTA): Liechtenstein with its libertarian Head of State, in today’s world very libertarian Switzerland and rather-to-the-left protectionist Norway can be happily parts of the same EFTA.

Mr. Roháč is correct to point out that there are Red Ukippers, politicians and voters disenfranchised by the current Labour Party. But the party leadership and the party as a whole still stand for free markets as two libertarian defections from the Conservatives clearly have shown. Nigel Farage himself used to be a commodity trader and argues 24/7 for a free market outside the EU, unrestricted by harmful EU policies.

Could we have sovereign nation states albeit with a body overseeing the good flow of – in US terms – interstate commerce? Yes, we can have bilateral and multilateral international free-trade treaties, we can have an “EU light” or rather “EU zero” where:

“We sit down together, where we have a free trade agreement, where we agree minimum standards on work, on the environment. We can do all of these things without a European Commission, without a European Parliament and without a European Court of Justice,” says Farage.

As for immigration. Mr. Roháč is right that free immigration would alleviate poverty in the world in ways yet unseen. And the Czech Laissez Faire Magazine (of which I am the editor-in-chief) argues for it. But this is easier said in the think-tank world than done in real politics because free immigration is – and I’m sure Mr. Roháč knows it – very unpopular.

Even if UKIP says that “immigration is the number one issue,” UKIP does not want to close borders. They pledge to build the wall around the welfare state, policy suggested among others by Cato Institute’s Alex Nowrasteh, and introduce an Australian-type immigration system while still allowing for tens to hundreds of thousands of immigrants each year. It is not a textbook libertarian immigration scheme but a pretty liberal one nonetheless.

But maybe electorates in other countries are more opposed to immigration than the Brits. Is European free immigration the one issue that should outweigh all advantages? As Tyler Cowen observed, libertarians must acknowledge that some policies are package deals whether we like it or not. Is imposing immigration against the will of the people a good strategy for a libertarian world or is it something that is likely to backfire with massive demonstrations and rise of really nasty political parties?

And as the Euroskeptics must never tire of pointing out: The EU is not a free-trade area (it’s a customs union), it is likewise not a free-immigration area [update: the current situation rather proves me right on this topic, doesn’t it?]! Citizens from non-EU countries have to subject themselves to humiliating visa and work-permit procedures.

As for Putin. Mr. Mach has expressed his joy that Mr. Roháč’s first article did not slip to the usual right-wing fear-mongering: “Brussels, or Moscow.” Unfortunately, Mr. Roháč has made up for it in his rejoinder. This poorly thought-out false dilemma has been refuted time and time again but it still keeps popping up.

First, there was life before the European Union. The Czech Republic joined the EU in 2004 after fifteen years of market liberalization and unprecedented growth as a sovereign democracy, not as a Russian satellite. Croatia joined just two years ago also with what would seem no Russian influence.

Second, many EU states, the Czech Republic included, are members of NATO, the real guarantor of peace.

Third, the EU does not even have an army, at least as for now, is embarrassingly inefficient when dealing with any crisis (be it internal or external ones) and the Commission is full of communists: Mr. Barroso himself was a devoted Maoist, Mr. Kallas was a Member of the Supreme Soviet, Baroness Ashton ran Campaign for Nuclear Disarmament with close ties to the Communist Party of Great Britain, and many more including the Czech Commissioner). Trust me, nobody would entrust their life into the hands of this organization. [Update: The new Commission is as full of Communists as the previous one.]

Furthermore, I reject the whole Mr. Roháč’s idea that you can foresee unlibertarian consequences of a libertarian move and therefore argue that the libertarian move not be done. On these mistaken grounds, one could argue for a libertarian second-best in restricted free speech (socialists might convince people), in immigration (immigrants might vote socialist, a counter-argument to this was made by Don Boudreaux) or what have you. After all, liberalized China would be very likely to adopt populist tax hikes for the rich as the income and wealth inequalities are very high and millions of China’s millionaires are cronies or corrupt politicians. I can’t see libertarians arguing for the libertarian second-best China oligarchy by the communist politburo. And we know that decentralization and jurisdictional competition is the libertarian way of going about public affairs.

At the end of my article, I have to reiterate and hopefully clarify something Mr. Mach has said in his previous response.

Secession from the EU might in some countries come from political forces opposed to free markets. But over the long term, these countries should observe lower GDP growth and net emigration to more liberal countries which would push the local political class to adopt more sensible policies. And if not, then the people will be able to change jurisdictions to their benefit. It is impossible to do so in a centralized EU.

And while the socialist forces can for a moment win in some of the seceding states, in a jurisdictional competition they can only reign for so long. I must once again quote Nigel Farage as it seems Mr. Roháč is questioning with his free-market bona-fides:

“The strength of Europe is its diversity – of language, of culture, and of states.”