Moving Towards Socialism: Economic Reform, Popular Sovereignty and the Nation-State
28 August 2019
If the British left is truly serious about wanting to build socialism, it must support Brexit, implement sweeping economic reforms, and - just as importantly - recommit itself to popular sovereignty and commanding the levers of national power.
The revival of the Labour Party’s left wing under Jeremy Corbyn has raised hopes that not only will neoliberal austerity be ameliorated, as under previous Labour governments, but that a genuine social and economic transformation could be pursued. These hopes now hang in the balance, as conservative forces in the Labour Party are fighting to restore their grip. If the British left is serious about moving towards socialism, it must support a clean break from the EU: even modest social-democratic reforms will require vast policy changes that EU laws render illegal. But, just as important, the left will have to rediscover principles from which it all too often recoils today: democracy, popular sovereignty, and commanding the levers and institutional mechanisms of national power, which are the true foundations of socialism and internationalism.
A Full Brexit: Leave and Transform
As a member of the Greek parliament, I saw at first-hand what happens to governments that try to pursue radical alternatives to neoliberalism within the EU. Conditions in Greece were never mature enough directly to raise the question of socialist transformation. The debacle of Syriza established beyond dispute that Eurozone membership is incompatible with radical anti-neoliberal policies. There is no need even to mention that socialist policies would be unthinkable within the straightjacket of the euro. The European left, if it truly aims for socialism, ought to prepare for individual exit from the monetary union, as well as replacing the mechanisms of the common currency with a system that controls capital flows and stabilizes exchange rates based on solidarity. That was broadly the position of the left wing of Syriza, but it lost the political battle against the leadership of Alexis Tsipras.
Brexit has taken the political debate onto a higher level by openly posing the question of EU membership but also of socialist transformation. The broad outline of radical socialist reforms in Britain—and other European countries—can be sketched easily. These are reforms that would deliver a body blow to neoliberal capitalism, while changing the social balance in favour of labour and against capital, thus laying the path for socialist transformation. There is broad agreement within the left regarding their tenor, and elements of them can be found in the Labour Party Manifesto proposed by Corbyn in 2017.
Summarily put, the United Kingdom ought to definancialize its economy by reducing the weight, impact, and role of the financial system. To that purpose, it should also adopt a bold industrial policy that would change the sectoral balance away from services, strengthen growth, and begin to tackle the complex environmental crisis characteristic of contemporary capitalism. Industrial policy would be further accompanied by lifting austerity and abandoning the self-defeating policy of reducing the national debt. A basis would thus be provided for the recovery of public investment.
It cannot be overstressed that these policies require public property and sustained intervention by the state across a range of sectors, including transport, energy, water, and others (see Proposal #8 - Extend Public Ownership). Public property and control are also required over the financial system, creating public investment banks as well as introducing public control over key commercial banks. Controls would certainly be necessary over the flows of money capital across borders limiting the international activities of the City.
Furthermore, a socialist government would pursue income and wealth redistribution through wage and tax measures, dealing with the extraordinary growth of inequality of the last four decades. Redistribution would further be promoted by strengthening public provision in health, housing, and education, reversing the destructive privatizations of recent decades. Not least, a socialist government would be against free trade but without isolating Britain from international trade. The aim would be to establish a framework of regulated trade to support the restructuring of the British economy.
Implementing such a socialist program necessarily implies rejecting the single market and the four freedoms of the EU (see Proposal #2 - Quit the Single Market). There is no path to socialism without democratic controls over the flows of goods, services, and money, all of which are intrinsic to the measures sketched above. Much the same holds for labour. It is a dangerous fallacy that the freedom of movement of labour articulated in the Maastricht Treaty should be defended in the name of workers’ solidarity and internationalism.
The stance of a socialist government on migration ought to be determined by concrete policies defending immigrants, while also protecting the conditions of domestic workers. A socialist government in the UK would guarantee the rights of all resident EU nationals, while requesting equivalent rights for British workers in the EU (see Proposal #1 - Give EU Nationals Resident in Britain Full British Citizenship). It would negotiate reciprocal labour movement conditions with countries across Europe while providing full protection for workers who enter the British labour market from across the world. Importantly, it would help ensure rights of safe passage and abode for refugees. There is nothing exclusionary about policies of this kind. On the contrary, they are concrete steps based on socialist principles that are a world removed from the airy abstractions of Maastricht serving big business and creating Fortress Europe.
Popular Sovereignty and the Nation-State
What is required for Britain to adopt such policies is popular control of the national levers and mechanisms of power; that is, genuine popular sovereignty. The socialist transformation of society rests on social controls across all fields, including labour. From the perspective of the working class, controls are an integral aspect of freeing society from the rule of capital, as is apparent for controls over money, goods, and services. It is no less so for controls over labour, the most crucial component of human activity. The freedom of movement of labour outlined in the Maastricht Treaty, quite apart from excluding vast numbers of workers from outside Europe, offers no real freedom to those who lack full protection of wages and working conditions, as well as proper access to housing, social security, education, and so on. Conscious control of the functioning of labour, far from being divisive or a negation of freedom, unites workers and facilitates freedom.
It is astounding that much of the British and the European left believes that EU membership would pose no fundamental obstacles to a truly transformative socialist program of this kind. It is equally astounding that, when the subject of the entrenched neoliberalism of the EU is raised, the answer often is to Remain and Reform. This is no more than a catchy slogan devoid of content. The EU is beyond radical reform in the interests of workers and the poor; indeed, it is impervious to democratic pressure from below. It is not accidental that, when it comes to the Reform part of the slogan, there is a marked paucity of concrete suggestions regarding the putative changes to EU institutions, mechanisms, member state alliances, and so on. For, there is not the slightest chance that a socialist government, even in a powerful country such as Britain, would be able to implement radical institutional and democratic changes within the rigid machinery of the EU.
To be a little more specific, any fundamental reform involving changes in the treaties (the primary law of the EU) would require consensus among all governments of member states, including those of the authoritarian right. Any reform of secondary law (regulations, directives, decisions) would require the consent of the Commission, which has the exclusive right to initiate legislation, plus the majority of the governments and the majority of the members of the European Parliament. If all that was somehow achieved, the reform would still have to satisfy the European Court of Justice, the ultimate guardian of the four freedoms underpinning the neoliberal transformation of the EU. Remain and Reform is simply a hopeless task (see Analysis #23 - The Folly of “Remain and Reform”: Why the EU is Impervious to Change).
There is no doubt that, to move toward radical socialist transformation, a British government would inevitably have to break from the EU. In pursuing a radical path, a socialist government would face the unrelenting hostility of its own domestic ruling bloc attempting to maintain the closest possible links with the single market and relying on the power afforded by EU law and institutions. Rupture with the EU would immediately pose the question of democracy but also of popular sovereignty that is integral to democracy. Socialism has always presumed democracy as a fundamental political principle, implying the ability to regulate the fabric of civil and political society according to popular will and through popular power. This is the ultimate source of popular sovereignty and a prerequisite for socialist transformation.
It cannot be overstressed that, in contemporary capitalism, the initial terrain for popular sovereignty and democracy is the nation-state. Democratic politics require the presence of a demos with its own class divisions and associated political parties. Political contestation takes democratic forms only when the interests of workers and the poor are expressed in political parties. But there is neither a European demos nor a European working class. Political parties in the European Parliament are unstable party alliances engaging in horse trading based on crude national interests. Democratic class politics in Europe are always and without exception national.
This is not at all to deny the importance of international movements uniting workers across Europe and elsewhere on a broad range of issues, including labour rights, environmental protection, opposing war, and so on. However, the transnational space of the EU is natural terrain for big business to thrive, democracy to be bypassed, and hegemonic states to limit national sovereignty. The workers and the poor of Europe have never accepted the transnational mechanisms of the EU as their own, and their class instinct has been right.
Command over national space is a requirement for transition to socialism. As a bare minimum it includes command over the institutional mechanisms of tax, central banking, health, education, and housing, not to mention control over the justice system, the security services, and so on. This has nothing to do with nationalism or the negation of international solidarity among workers. On the contrary, popular control over the national levers of power is the bedrock of true internationalism. Socialism is certainly meaningless if it is not international, but it is equally meaningless without worker command over national space. For socialism to be more than wishful thinking, there must be command over national apparatuses of power as the foundation of internationalism. At the very least, this entails rupture with the neoliberal transnational mechanisms of the EU.
The European left is in a state of weakness and confusion, as clearly demonstrated in the European elections of May 2019. The first task is to grasp the fundamental need for rupture with the EU and the EMU. The second and even more difficult task is to construct a political organization capable of expressing the internationalist character of rupture and the prospect of genuine solidarity among European peoples. This is the lesson of Brexit and the true challenge for twenty-first-century socialism in Europe.
 This is not nearly as difficult as many imagine it to be, provided that the left was prepared to control footloose and speculative financial capital. Europe does not need a common currency and there are even politically moderate proposals on how to replace it. For example, see Fritz W. Scharpf, There Is an Alternative: A Two-Tier European Currency Community, MPIfG Disucssion Paper 18/7 (Cologne, Germany: Max-Planck Institute for the Study of Societies, 2018).
 See Labour Party, For the Many Not the Few: The Labour Party Manifesto 2017 (Cramlington: Potts, 2017).
 A fallacy exemplified by Alex Callinicos, “Shambling Towards the Precipice”, International Socialism 162, April 8, 2019, in an otherwise excellent article.
 Supported by those who ought to have learned something useful from their own disastrous confrontations with the EU: see Democracy in Europe Movement 2025, A Manifesto for Democratising Europe (DiEM25, 2016).
About the author
Costas Lapavitsas is Professor of Economics at the School of Oriental and African Studies, University of London, and a former member of the Greek parliament. He is author of The Left Case Against the EU (Polity, 2018).
This article represents the author's view only. It is adapted from Lapavitsas’s “Learning from Brexit: A Socialist Stance Toward the EU”, forthcoming in the October 2019 issue of Monthly Review as part of a debate on his book, The Left Case Against the EU.