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Well, if you have free movement of workers, goods and services and freedom of establishment and service, plus a monetary union, I don't know how you can restrict the free movement of capital. At this point freedom of capital is so much of a problem as the refusal to fix the broken monetary union with a fiscal union and a central bank with a sensible mandate including the end of the prohibition of monetary financing.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2014 at 05:31:50 AM EST
[ Parent ]
We only have legal free movement of workers. But of course there is considerable friction in that, it's far from as free as models would have it.

I'm not clear why free movement of capital could not be restricted at all even with perfect freedom in the other 3 and monetary union (for instance, since there are state subsidies to some companies, the state should be allowed to prevent the company moving its capital as soon as they end). But assuming that it is the case, then why should the 4 freedoms be considered an unqualified good thing to be spread as widely as possible?

Yes, within the EU the main problem is as you describe. But with the UK, that is less relevant as they are not part of the EU. Anyway, I was just pointing out that I had been under the impression that you were no fan of free movement of capital, and thus that you may not necessarily want to expand the 4 freedoms without restraints.

Actually, I'm not that sanguine about total free movement of goods and services if countries are allowed environmental and social dumping (or other externalities). It seems to me that those freedoms can only make sense with a somewhat consistent playing fields (and that means social, ethical, political consistency, if of course not identity). And the UK is often unhelpful in that way.

As an anectode, I remember a UK politician vigorously opposing environmental regulations because "dominant winds blow pollution towards the continent, so we should not spend a penny to fix a problem that is not ours". I thought that was rather blunt.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Thu Jul 17th, 2014 at 06:08:11 AM EST
[ Parent ]
But assuming that it is the case, then why should the 4 freedoms be considered an unqualified good thing to be spread as widely as possible?
Because as an individual European I want to have the ability to vote with my feet if my local oligarchy gets unbearable.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2014 at 06:34:32 AM EST
[ Parent ]
You are talking of only one of the 4 freedoms.
And not the one that is the most vividly real for the majority of the EU population. If it's free movement of people that you are so keen to preserve, then it's the spread of that freedom which is a good thing (and I would unqualifyingly agree). Not necessarily all four of them.

To be clear, I am quite conflicted about the issue, I'm not saying that the UK should go necessarily, however I would have thought, considering your other writings, that on balance you would have been fine with their leaving. I am quite unsure that I could make an as-informed-as-I-would-like call.

And, no, I don't expect the UK to be able to harm EU developments to a massive extent if they have left said EU. Although, of course, they would steel be part of WTO and thus not entirely unable to cause trouble.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Thu Jul 17th, 2014 at 08:50:06 AM EST
[ Parent ]
Long term - assuming that there is a "long term" for the EU - having a failed state sitting on our Western border would be Bad. Of course, so would having a failed state inside our border.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jul 17th, 2014 at 09:12:55 AM EST
[ Parent ]
Actually, I'm not that sanguine about total free movement of goods and services if countries are allowed environmental and social dumping (or other externalities). It seems to me that those freedoms can only make sense with a somewhat consistent playing fields (and that means social, ethical, political consistency, if of course not identity).
And that's why you have the 4 freedoms within a political space such as the EU, where the Commission can legislate through directives that apply to all member states, and not worldwide where you depend on bilateral agreements and goodwill.
And the UK is often unhelpful in that way.
And they would be more helpful outside?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2014 at 06:37:45 AM EST
[ Parent ]
Why don't you start a separate diary on the free movement of capital?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2014 at 06:39:40 AM EST
[ Parent ]
Or wait, I'll do it.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2014 at 06:40:32 AM EST
[ Parent ]
...done.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2014 at 07:25:18 AM EST
[ Parent ]
Migeru:
At this point freedom of capital is NOT so much of a problem as the refusal to fix the broken monetary union with a fiscal union and a central bank with a sensible mandate including the end of the prohibition of monetary financing.

Is that what you meant?

A lot of this so-called 'freedom of capital' is probably still-legal tax 'avoidance'. Shell companies, dummy offices et al. Better regulation (always stuck at the yapping-about-it phase) would cleanse those stables, which is why it's so soft-pedalled.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Jul 17th, 2014 at 06:47:33 AM EST
[ Parent ]
Yes, thanks.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2014 at 10:26:05 AM EST
[ Parent ]

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