If there is a sense of flux in British politics this week, that is because all the forces are aligning towards two antagonistic projects: those who want to intensify the economic dislocation, and those who want to minimise it. I am in favour of minimising it, and there is a very clear vehicle through which to do so: the European Economic Area – the single market in which Norway and Iceland participate. In the battle to succeed Cameron, the first question for the Tory party (and Labour) should be: EEA or not?
An application to remain inside the EEA should be the touchstone of all those who want Britain to save globalisation while ditching neoliberalism. It keeps us in a single market; it forces us to define our new immigration policy inside the EU free-movement laws, not against them. We could fight for – and gain – considerable flexibility on which single market rules we follow, and for a timeout or partial opt-out from free movement. We might, of course, fail. But it is worth trying. [...]
In the 1930s, economic nationalism meant stealing what growth there was from a rival country, or empire, through aggressive state intervention and trade rivalry. But we have no model, and no case study, for what happens if you pursue economic nationalism when there is system-wide stagnation. That is, where there is a guaranteed negative sum at the end of the game.
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