The European Union needs more political integration, not less

In yesterday’s FT former French president Nicholas Sarkozy suggests reforming the European Union, and then offering Britain the chance to rejoin it. This does not look a practical proposition, but it is a useful thought experiment. How should the Union be reshaped?

First of all, we must get past the current British obsession with Brexit. This is shaping the debate in an unhelpful way. Remain supporters are too uncritical of the current EU. Of course they say that the EU should be reformed, but their ideas about how are as sketchy and muddled as Brexit campaigners’ ideas about Britain outside the union. And the EU has much deeper problems than the sorts of things that were upsetting British voters. It is not the right place to start when trying to understand where the EU needs to change.

Indeed the EU is beset by three more serious problems than Brexit: the Eurozone, refugees, and populist governments. These are the issues that most concern Mr Sarkozy. He wants a separate governance structure for the Eurozone that will allow further integration of economic governance. He wants a more coherent immigration policy, with a consistent, contribution-based, system of entitlements to state benefits. And he wants to reduce the competencies of the EU Commission so that it bumps into national governments less often.

But we need to take a step back further than even that. Just what is it the we need the EU to do? Its foundation is the idea that European nations benefit from a degree of political and economic integration. There are two groups of overlapping benefits: political stability and peace; and higher material standards of living.

Political stability and peace remain solid achievements for the EU. That these should not be taken for granted can be seen from the wars involving the former Yugoslavia, and from the aggression emanating from Russia. Ethnic tensions can still lead to wars. States with powerful armies can still seek to get their way by force, allowing corrupt elites to perpetuate their power. Furthermore the EU has been part of a dramatic extension of constitutional, democratic government, firstly in Spain, Portugal and Greece, and then in the former Soviet bloc. But these gains are fraying. Populist governments in Poland and Hungary are undermining constitutional democracy. Other governments are failing to deal with corrupt elites. The EU struggles to confront external threats, because to do so it needs consensus – and weaker governments from smaller powers are tempted to use Russia’s aid in propping up their corrupt elites. Other countries are too far from the source of trouble to show much solidarity.

One striking thought emerges from this. To confront these problems the EU needs more political integration, not less. It needs a more powerful executive with more EU funds to allocate; it needs more power to police the use of these funds, and be able to apply sanctions to countries that fail to meet standards. It also needs to forge tough deals with such troublesome neighbours such as Russia and Turkey. It needs new institutions to confer democratic legitimacy. It probably needs integrated armed forces. The founding fathers of the EU (before it was even the EU) always foresaw this, but others, led by Britons, have been in denial.

Times have changed. The biggest political problem for Europe is posed by the rise of Russia, with its championing of old-fashioned corrupt elites and nationalistic politics. But Russia is incomparably weaker than the old Soviet Union. The latter could not be confronted without US leadership. The US is in retreat, but, nuclear weapons apart, Russia is not so strong that a politically strengthened Europe, based on Germany and France, cannot stand up to it. Russia’s attempts to undermine Europe provide the pretext to unite it. The smaller states of eastern Europe need to understand the choice between a Russian-aligned, weak and corrupt system, or joining the road to something much better. I suspect that they already do if you push them – and that gives a strengthened EU the basis for a mandate.

Economically though, the case for more integration is not so clear. Free movement of people and trade has surely been of enormous benefit. Some interesting work has shown how even brain drains can help the  countries losing workers – the emigrants are replaced, causing greater social mobility. But the pace of change has caused enormous stresses. And, in some countries at least, regional inequalities have become a major headache (Britain is perhaps the worst – if one puts Italy’s primarily down to weak institutions in the south).  This is a complex problem, but I think that greater regional and local autonomy is critical, and the union’s third great freedom – movement of capital – may need some hedging. I suspect that the real problem is not the balance of power between the EU and member states, but the balance of power within the larger nation states. But some of the EU’s single market rules are getting in the way – the limitations on state aid for example.

Then there is the Euro zone. This deserves, and will get, a post (or several) in its own right. Suffice to say that though most Anglo-Saxon commentators regard this project as the essence of madness, it is not dead yet. I believe that floating currencies tend to reinforce and increase inequalities – an argument I need to develop another day – but that fixed exchange rates and weak political governance are a toxic combination, as has been proved on countless occasions, in and out of the Eurozone. The political stresses brought about by the crises in Greece, Cyprus, Portugal and Spain show a degree of failure. (There are successes too: France and Germany have experienced steadier and more equitable growth than Britain has outside the Euro). Mr Sarkozy is right that some form of further integration of economic management is warranted, but a reconciliation between French and German approaches will be needed to make this work.

So where is all this leading? In the extreme France and Germany might lead a new United States of Europe, with much deeper political integration, based on a proper constitution, and, perhaps, a democratically elected president. This will no doubt be tied to the Euro currency area. This new federal state would be surrounded by a looser economic zone, with surrounding countries participating on an à la carte basis.

An interesting question is whether less extreme versions of this idea could unlock enough of the benefits to make it worthwhile. There would be a highly integrated core of countries, alongside a number of less integrated ones.

Where would that leave Britain? Much as I would like my country to be part of further European political integration, politically the country is completely unready for it. Brexit may even be helpful for Europe in the long term, as the country has been a major brake on political integration. If the country does join in, it must be on the basis of a project that is primarily political, not economic. That would be a sea change from how the EU and its forerunners were presented to the British public (by its supporters, that is; opponents have always painted it as a political project with the real goal of a super-state). More Britons are ready for that than used to be supposed, but they are still a minority. But as Britain finds that leaving the EU is no answer to its deeper political and economic problems, and more Britons equate the “good old days” with a suitably idealised membership of the EU (just as they do now with the days before membership) perhaps that might change. On the other hand, for Millennia inhabitants of our island have had some notion of special destiny, separate from our continental neighbours to whom we owe so much. For now we are destined to be observers rather than shapers.

 

 

 

Making America small again. Trump’s victory marks the decline of the USA

“Make America Great Again.” That was the slogan of Donald Trump’s insurgent campaign to take the US presidency. It resonated with many Americans. They felt that the US had been subject to serial humiliations in its international dealings, and that Mr Trump’s more robust and confrontational leadership would help to reverse it.

But politics is full of paradox. To exercise power is to diminish it. Power accumulates to those who understand restraint. In Britain English and Welsh voters took to heart the slogan of “Take Back Control” and voted for Brexit. The country is now basking in the thrill of exercising direct power in its relations with its fellow European neighbours. And yet the result will be a medium-sized power adrift in a friendless world, seeking to trade freely when everybody else is becoming more protectionist It will be more rather than less subject to the whims of foreign powers. Britons may prefer it that way, but they will come to understand that the keys to “taking back control” actually lie in Westminster and their local council chambers, rather than in Brussels.

So it is in America. Mr Trump’s supporters will revel in the assertion their country’s direct power. And yet he will exercise this assertiveness in order to carry out a retreat. The result can only be diminishment, relegating the US to the middle part of a medium-sized continent.

Let’s look at some specifics. Consider the Trans Pacific Partnership (TPP): the multinational trade deal put together by President Obama. This was a central element of his Asian diplomatic strategy, designed to collect a number of Asian countries into America’s orbit in trading terms, conspicuously excluding China. Mr Trump (along with many Democrats) denounces this as a bad deal and will scrap it. That leaves a vacuum into which China is ready to pounce. It plans its own version of a free trade area, involving most of the same countries. Mr Trump has also questioned the value of America’s military alliances in the region. The clear message to countries there is that they must acquiesce with China’s increasingly imperial ambitions. The Philippines’ President Duterte looks a little less eccentric in his pivot to China. The USA is suddenly a much less important country.

Mr Trump’s promised assertiveness in trade relations with China makes little sense either. It comes at an important moment in the evolution of China as a nation. It has built its economy on international integration, especially with the US, and developed a large trade surplus in the process. But there is nothing particularly beneficial in a trade surplus – it implies that a country’s citizens are consuming less than they could – an act of self-denial. A trade surplus has political advantages – it makes you less beholden to foreign creditors – but China is already powerful enough for this not to matter much. So it is in the process of carrying out an economic pivot to  develop its consumer economy, and away from integration with developed economies – though the scope for integration with less developed economies remains. An economic model where it exports less to America and integrates more with other Asian countries, and even African ones, suits it just fine strategically. Mr Trump means to hurry it along, but it will disrupt the US economy more than the Chinese one.

In Europe the issue is not so much trade. The proposed trade deal between the US and the European Union, TTIP, looks dead in the water without any help from Mr Trump. The main issue for Europeans is military and diplomatic support for the European countries against Russia in particular. Mr Trump has said that the current balance involves America in a disproportionate level of commitment. He has a point. If America steps back from its military commitments, and caves in to pressure from Vladimir Putin to create and extend a Russian sphere of influence, then it will put European countries in a very tough position. It is not very clear where this will lead – but one thing is very clear: America will be less important to Europe. This is not necessarily a bad thing for Europe, but it will be very uncomfortable.

And then there is economics. We are still guessing what will emerge from Mr Trump’s presidency – but there could well be a short-term lift for America. Some form of fiscal stimulus is in the offing. Mr Trump and his advisers hope to lure in US corporate profits that are stacked offshore for tax reasons, and to use the proceeds to fund infrastructure investment. Unlike many of his Republican colleagues, Mr Trump will be reluctant to cut state handouts, like pensions or healthcare – though health insurance is under threat. This could give a short term lift to the US economy . And, as this week’s Economist points out, much of this gain will be at the cost of other world economies.

That should please Mr Trump’s supporters. But the problems will start quickly. The stimulus is badly timed. In many aspects the US economy is running at close to potential output. All the stimulus might do is suck in imports and push up prices. But there may well be a lot of hidden potential in the US economy – more workers could be drawn into the workforce, and other workers could be made to work more productively. But if Mr Trump is serious about rolling back free trade and driving out foreign workers, then he will cut the capacity of the US economy when it needs to be increased. A financial crisis is in the offing.

The truth about the American economy is that, far from being taken for a ride and funding lavish lifestyles of foreigners, American consumption is being supported from abroad. This is what a trade deficit means. A transition to a more self-sufficient economy, as wished for by Mr Trump’s supporters, will entail economic shrinkage. Americans may rail at the loss of jobs in many industries, but they exchanged these for cheaper products, made abroad or with automated technologies, or both. Reversing that means reducing living standards.

Except that most Americans could still end up better off. If the country can share out income more evenly, with lower profits and higher wages, and more of those wages paid to middle and lower level employees and less to the top layer, then this shrinkage need not be painful to the majority. But what chance is there of a Republican administration, run by senior businessmen, achieving that? To Mr Trump exploitation is simply good business practice, and profits are reward for enterprise. There is no sign of a mindset that wants a different distribution of the fruits of economic success.

America and the world is in for a rough ride. But strategically it has been clear for a long time that American power, relative to the rest of the world, is in decline. That is not such a bad thing  – it results from a fairer distribution of the world’s wealth. After the diminishment of Europe, it is now America’s turn. Mr Trump’s victory marks a big step along that journey. But it should surprise no follower of politics that he is claiming to do the opposite.

The centre collapses. What should liberals do?

Unlike on 23rd June (the day of the British referendum on the EU) I went to bed with a sense of quiet foreboding on Tuesday night. And that foreboding was confirmed by the shocking news of Donald Trump’s victory in the US presidential election.

It is a bad year for liberals. Some liberals did support the British vote to leave the EU, of course, and persist in saying this was a good thing. Well, maybe, but the campaign was not fought from the liberal centre, it was fought and won by those who persuaded the illiberal to vote in their masses – which is similar to Mr Trump. Meanwhile, illiberal governments face no serious challenge in Hungary and Poland, and in Turkey President Erdogan is crushing all forms of opposition, liberal and otherwise, following the example of President Putin in Russia. It does not seem so far-fetched to imagine that Marine Le Pen will take the French presidency next year. There are major populist uprisings in the Netherlands and Italy.

All this points to a collapse in the political centre. What do I mean by that? The centre is a set of political assumptions about the way the world should be run which has become the conventional wisdom of our governing classes, and which is shared by many political groupings. Those who did not support this centre used to be branded as extremists and pushed to the margins. Or sometimes parties would talk as if they were challenging the centre, but quickly adopted its principles once in power – France’s François Hollande comes to mind. Centrist principles incorporate free trade, free movement of capital and free movement of workers – an unmistakably liberal combination. Globalisation, and the economic growth that went with it, were embraced. Social liberalism ran alongside these principles, with the promotion of diversity at all levels of society. In Britain, Tony Blair’s enthusiastic embrace of these centrist values was the key to his taking the Labour Party to three election victories in 1997, 2001 and 2005. The Conservative victory in 2015 largely came about because it persuaded electors Labour had turned away from the centre – though, in a portent, the avowedly centrist Liberal Democrats were crushed in the process.

But Mr Trump’s campaign was based precisely on a rejection of the centre. He painted a picture of a politically corrupt and complacent elite who had let people down, and imposed social liberalism onto unwilling subjects. This brought previously apathetic voters out of the woodwork, and persuaded many who had voted for the left in the past – blue collar workers in particular – to change allegiance. By comparison Hillary Clinton struggled to raise enthusiasm for her campaign; this apathy may actually have been more important than enthusiasm for the insurgents. It would be wrong to blame that on her personally. She was in fact a strong candidate, but she represented a ruling philosophy that people have lost faith in. President Obama may be more charismatic, but his intervention seemed to have little impact. He seemed to be part of the problem.

Could the left have achieved a similar success with its own anti-establishment campaign? This is what Democratic contender Bernie Sanders attempted; and it is what Britain’s Jeremy Corbyn seeks to achieve. Like all counterfactuals this is impossible to prove. Many of the criticisms against Messrs Sanders and Corbyn – their lack of so-called “credibility” – seemed to positively benefit Mr Trump. But I think the rebellion is about more than changing personalities and attacking the political elite. There are overlaps in policy; Mr Sanders wanted to clamp down on free trade and attack big business – just as Mr Trump  does. But he also stood for big government and social liberalism. These do not resonate with the disaffected. It might rally a lot of younger, urban people – but not the white working class. It would not have been hard for the Republicans to paint Mr Sanders as in fact being part of the liberal elite, who would bring with him socially liberal values, more interference in people’s daily lives, and higher taxes.

But for all that, the liberal left shares a disillusionment of the conventional centre with the conservative insurgents. They see the economic gains going to a lucky minority, while working class, and many middle class, people face increased insecurity – especially if they are young. The trouble is that the left lacks a convincing policy agenda to address it. Their solutions have a lot of the “same old” about them. And in particular they lack ideas on how to promote a thriving business environment, beyond more active demand management through fiscal policy, also promoted by Mr Trump, it has to be said.

So how to respond? Of course Mr Trump and his associates equally lack a convincing policy agenda to address the concerns of the left-behind. They will throw them some socially conservative red meat, but it is hard to see their economic policies making them better off. Meanwhile many social benefits, starting with health insurance, will come under threat. This gives the left the raw ingredients for a fightback. The developed world is becoming more socially liberal, so liberals must hold their nerve. And as conservative economic and foreign policies fail to gain traction, there will be more sticks to beat the conservatives with. Competence may come back into fashion.

But the left still needs a convincing policy agenda of its own. The old centrist agenda needs to be picked apart and put back together again. In my view this means a strengthening of local communities. Somehow a flourishing global economy needs to cohabit with flourishing local economies. Our hope must be that as Mr Trump as his conservative allies test their economic ideas to destruction, it will open people’s minds to fresh ideas. But those fresh ideas need to be fleshed out.

 

The same arrogance that created disaster in Iraq is behind Brexit

It is a very British piece of political theatre. Yesterday Sir John Chilcot published the results of his enquiry into the Iraq. It is exhaustive, scrupulous, but examines events that are now ancient political history. Historians will find it useful, but in the big picture it tells us little we did not know already. It will have changed no minds. No currently active political career is affected. The US State Department spokesman sounded very puzzled over the attention the affair is getting, given the pressing challenges facing the world. No doubt that puzzlement is felt by other foreign observers. What was the point?

All I can say to that is that it is just the British way. We like to produce weighty reports that achieve little. Some people find it cathartic. It is much easier to reflect on the mistakes of the past than to consider a very messy present. I particularly enjoyed this reflection by an anti-war leftist in the New Statesman (Thank you Martha Zantides). I have always felt that moral certainties are evasions; my views on Iraq have always been ambiguous, notwithstanding the clear stand made by my party, the Liberal Democrats.

But I think it is a good moment to reflect on the nature of political power and decision-making. The immediate concern of Chilcot is Britain’s role in Iraq. And the main point here is how the moral certainty of Tony Blair, our then Prime Minister, managed to subvert the checks and balances of institutional decision-making to throw the country behind an American project, over which British leaders had very little influence. In Mr Blair’s eyes Saddam Hussein was a vicious dictator and a threat to world peace, and needed to be removed. He encouraged the Americans to work to that end, and backed them when they took the project on. After that he and the British were helpless passengers. British military resources, also committed to Afghanistan, were overstretched and forced into ignominious retreat – a small fraction of the continuing catastrophe that enveloped Iraq. Could this sort of thing happen again? Certainly; our institutions still favour the executive – though our capacity to act, and willingness to embroil ourselves in foreign adventures, are now much diminished.

But the British dimension was a sideshow. The real disaster in Iraq reflects the US political process. This firstly led to a reckless drive towards war, and, more culpably, a massive mis-judgement of how to deal with the aftermath. Driving these disastrous decisions was group of officials and politicians with a clear, driving vision. The most notorious was the Defence Secretary Donald Rumsfeld; there was also Vice President Dick Cheney (who brought shadowy commercial interests into the picture) , and the highly influential Paul Wolfowitz, a real ideologue. Collectively these were known as the Neo-Conservatives, or Neocons.

The Neocons had a clear vision of the world and America’s role in it. They wished to push over dictatorships using US military power, and let the grateful people set up democracies and unregulated market economies in their place. They dismissed the legions of diplomatic and military types who made practical objections as being hidebound by old norms. They seized on small scraps of evidence that supported their case, and dismissed anything else. This was exploited by a group of Iraqi exiles, notably Ahmed Chalabi, who had no real political base, but told the Neocons what they wanted to hear about the country’s readiness to embrace American ways. This process, whereby an arrogant, visionary clique creates a simplified world view in the teeth of the evidence has been given a name: “groupthink”.  There are plenty of examples down through history. There are notable parallels within the ruling elites of Germany and Austria-Hungary before the First World War, for example. Democracies should not be as vulnerable as autocracies, as there should be more pluralism of thought, but Iraq showed that the US and British systems are not immune.

And in Britain we are now in the middle of another catastrophe brought about by groupthink – Brexit – though thankfully not one so threatening to human life. Amongst the supporters of Brexit in the British establishment we see the same ideological zeal, and the same unwillingness to get involved in the practical details. Chief amongst these is the Justice Secretary Michael Gove. This man is full of visionary zeal, but he seems unwilling to listen to experts. Indeed he publicly dismissed the usefulness of experts in the referendum campaign. This was evident in his stint as Education Secretary, when he dismissed the educational establishment as “the Blob”. Experts often lose the wood for the trees, and so must be open the challenge. But the answer is not to drive a bulldozer through them. Mr Gove’s term at Education achieved some good things, but was mainly a colossal waste of effort, which we are still picking up the pieces from.

Alongside Mr Gove sit, or sat, political opportunists like Boris Johnson and Andrea Leadsom, and anti-intellectual populists like Ukip’s Nigel Farage. And behind them there are a coterie of Brexit backers, a group of businessmen, financiers, think-tankers and retired officials who provide intellectual heft. These are united by a loathing of European Union institutions (admittedly not an inspiring edifice). These have created a construct of Britain outside the EU that is not dissimilar from the Neocon vision of Iraq after the US invasion. Hopelessly optimistic, and dismissive of the practical difficulties of achievement. These people are still popping up on Radio 4 to tell us all will be well after the first wobbles have been overcome. They have no concept of the pain that Brexit is inflicting on our very sense of self. It’s question of puling ourselves together and getting on with it. And if disaster ensues, it will be somebody else’s fault. Just like the Neocons in Iraq (and Tony Blair) who blame Iraq’s collapse on bad people, over whom they hold no sway.

Meaningful progress does not arrive through a visionary, revolutionary process imposed by a tiny elite. Neither does it emerge from a vacuum – the removal of the forces of order so that a new , more efficient system will emerge by market forces. It happens through a hard process of evolution, comprising a dialogue of bottom-up and top-down processes. It’s hard work and requires patience. Alas we have once more fallen victim to the impatient, who will walk away to leave others to clear up the mess.

 

The EU referendum: the arguments that count

Britain’s vote on EU membership tomorrow (23 June) has produced a lot of emotional polemic, and very little dispassionate analysis. I was persuaded yesterday to click through to this article by Professor Alan Johnson (not to be confused with his namesake, the Labour politician) on the basis that “it was the most compelling case for Leave that I have read”, to find that it was anything but compelling, as it jumped off from premises that are highly flawed in my eyes. And it made no real attempt to persuade people of an alternative view either. Of course, I am guilty of polemicism too, for Remain. But I try to stand above such things, as well. So on the eve of the vote I will assess the arguments that I think hold water.

I will do this based on the three substantive arguments for Leave: that the EU project is fatally flawed; that free movement of people within the union is too high a price to pay; and that rejecting the EU would give a needed shock to the country’s political and economic system. I will then say something about the benefits of EU membership.

A flawed project?

First is the flawed nature of the EU project; this lies at the heart of Professor Johnson’s case. What is the EU? It is an association of sovereign states that have agreed to bind themselves by treaty to hold to common standards in a wide variety of areas, to act jointly in others (most importantly in trade negotiations), and hold the whole thing together with a system for developing common policy and resolving disputes. Some of the Union’s founders saw this as an intermediate stage towards a United States of Europe, on a similar basis to the USA, and some of the language of the treaties (“ever closer union” ) was drafted with that aim in mind. But it lacks the wherewithal to make such a transition without the consent of the peoples of the member states. Unlike the early USA, there is no federal army to bring dissenting states to heel. Nor can there ever be.

But that leaves the project with some serious problems. Staying within the Union binds member states to a whole series of standards on a take it or leave it basis. Individual countries have little ability to opt out of the bits not to their taste – just opting out of the whole shebang, as Britain now contemplates. That is because it is a carefully balanced whole, and opt outs would be seen by other member states as trying to gain an unfair advantage. But it isn’t very democratic. Much ire is raised by, for example, the way Irish voters have been bullied into accepting treaty changes in spite of initial rejection (Professor Johnson aerates about this). But neither is it democratic for Irish voters to impose their will on all the other member states.

This leaves a dilemma at the heart of the project. If you want to make the EU more democratic and accountable, you have to make it look like a more conventional state, taking decisions as a whole union, reducing the autonomy of individual states. If you allow member states to vary treaty terms at a whim, then the whole project collapses.

This dilemma is at its most acute with the imposition of a common currency – which, of course, does not include Britain. Its implementation has been flawed, leading to ugly disputes between debtor and creditor nations. Many say that the only way to make the currency workable is to promote political integration. I don’t happen to agree with this, but further integration of the Eurozone could make Britain’s status within the union untenable – but we haven’t got there yet, and can act accordingly if we do.

There is really no easy answer here. You have to weigh the benefits of joint action against the losses to autonomy. I will come back to those benefits, but there is one clear area of lost autonomy that upsets a lot of people: free movement of people.

Free movement: too high a price to pay?

Our rights within the union to travel to and work in other member states mean that member states have little control over immigration from other member states. Very large numbers have come to Britain from other EU countries, especially the new states of eastern Europe. This is not Britain’s biggest immigration issue – which comes from other migrants, who are more numerous and who integrate less easily – but there is a feeling among many that Britain is “full”, with excessive stress on housing and public services. Many Britons, especially less educated ones, sometimes feel like foreigners in their own land as they pass through districts settled by people of foreign origin. There is little evidence that European immigration has caused pay levels to fall, but it may have stopped wage rates in some jobs from rising.

Leaving the EU, and its single market, would allow Britain to put quotas on migrants from all sources. This would be popular amongst most of the population. It is Leave’s most powerful argument.

The main counterargument is that this would either make less difference to migration than most people suppose, or cause even more stress to services than it saves. Unemployment in Britain is low. Jobs are being created as fast as migrants come in to take them up. Our workforce is shrinking as more of us retire.  So if those migrants did not come, who how would be find people to do the jobs that need doing? The government would be under huge pressure to let the migrants keep coming. We can see that this has happened for migration from non-EU countries – which the government has tried to limit, but which remains high.

There are other arguments. The rights of Britons living in other EU countries (and there are many) would be endangered; the system for administering immigration (an Australian-style points system has been suggested) would be a bureaucratic nightmare; there may be an intractable problem on the border between the Irish Republic and Northern Ireland. And would the politics of immigration controls make the country a less tolerant and open-minded place?

It’s messy, and it comes back to the same balance between the benefits of autonomy over the benefits of being part of the union.

A shock to the system

There is also an angry argument. This says that Britain’s governing institutions have become complacent and need to be shaken up. There are two groups of complaints, which are not necessarily consistent with each other. One is that the “elite” ignore the social and economic tensions in communities outside the metropolitan South East of England (or devolved Scotland). A second, from businessmen, is that they are overregulating the way we live and work,  and holding back creativity; nothing much is being done to rectify a large trade deficit. There is substance behind both of these complaints. And a vote to leave the EU would constitute a massive institutional shock.

The trouble is that the results of that shock are incalculable. The British trade and government deficits leave the country vulnerable. A prolonged period of political and economic uncertainty would be extremely damaging.; it is not inconceivable that the country would have to call in the IMF, and face economic conditions much more severe than anything the EU imposes.  And who would take political control in the wake of a Brexit vote?

It really depends on how much risk you are prepared to run, and how likely you think that what emerged on the other side would be better than what we have now.

So what are the benefits of the Union

A decision on which way to vote may be affected by a worries about the short-term chaos that may or may not arise from a vote to leave. But the main factor behind any decision must be a view on the longer term benefits of the union – to weigh against the loss of national autonomy. There are three important ones: the single market, extended personal rights, and the Union’s political project.

The single market is the most talked about of these, and the most important – it was why, after all, that Margaret Thatcher was initially happy with the trade-off, though she changed her mind later. The important point here is that in order to have a true single market, in which businesses can sell to each other across the union on a playing field that is rather more level than otherwise, you have to go way beyond the absence of tariffs – which is implied by the idea of a “free” trade area. Barriers to trade  are about much, much more than this. It is about standards, regulations and subsidies. Is it fair that one country can undercut another through lower environmental standards, inhuman working conditions, or state subsidies? But addressing these issues is intrusive. Most of the power of the US federal government arises from its constitutional power to regulate interstate trade.

The EU single market is an imperfect compromise, inevitably, but it has taken the idea much further than any other association of sovereign states. The economic studies I have seen have shown that it has largely worked. Trade between the EU states has increased massively since the single market was developed (and not by diverting it from the rest of the world) – it has been much more effective in this that the single currency, which has had little measurable impact. There is bound to be a significant economic cost to withdrawing from it. It makes Britain a much riskier place to build a car factory, for example. This is why economists and businessmen so overwhelmingly support staying in.  The Leave campaign have resorted to quoting the same two: Andrew Bamford and James Dyson over and again; Remain can call on hundreds.

A second benefit is extended personal rights. We get these when we travel abroad, and, especially, when Britons live or work abroad. These are imperfect, of course, but life is much easier for us than, for example, for Australians. This will be irrelevant for those that don’t travel – but many of us do, if only to holiday in other EU countries.

A third benefit, on the other hand, is very indirect: the EU’s political project. This has been to spread the standards of democracy, the rule of law and good governance across the continent of Europe – to say nothing of making warfare amongst the nations unthinkable. From its initial core of countries the union has been the leading force in democratising first southern Europe, and then post-communist central and east Europe. This is reaching its limits. New members may be brought in from the former Yugoslavia and Albania, but Turkey and Ukraine look like steps too far. More important, there is much work to do to consolidate democratic standards in the post-communist members, especially in Romania and Bulgaria, but in most of the others too. This worthy project would be weakened if Britain left, even if we individually feel little impact. Closer to home the EU has also a vital part of the fudge required for the Northern Ireland peace settlement to stick; leaving would add to the already big headaches there.

In conclusion

I was going to mention the host of spurious arguments that have been put up in the campaign, mostly be the leave side (such as the one about the EU’s economy being weak, as if that would not be just as much a problem if Britain was out of the EU), but I’ve been going on for long enough.

It will be clear from the above that deciding the best way to vote means making some tricky judgement calls, balancing the costs and risks either way. This does not mean that the choice is marginal or unimportant – it would make a big difference to what this country becomes. In these tricky circumstances we are guided by value judgements.

If you are angry about the restrictions European treaties place on our politicians, that will point you towards Leave. If you are reasonably happy with the status quo, and want any change to be gradual, that points to Remain. If you feel that in order to make our way in an interconnected world the countries of Europe need to take joint decisions; if you are happy with the idea of Europe as an extension of “home”; if you don’t mind that so many of your neighbours are from other European countries; then that points to Remain also. Which doesn’t mean that you should be happy with the way things are, but that Britain leaving the EU would be a step backwards, not forwards.

And me? I was just to young to vote in the 1974 referendum – but I was a very keen supporter of Britain’s membership at the time. It has been a defining part of my political outlook ever since. I wanted to be part of something bigger than Britain, much though I love it. I still do, though I have fewer illusions about what is going to be possible. So for me voting Remain was an easy decision. For most of my compatriots it may not be.

 

 

Britain after Brexit: Singapore, Switzerland or Japan?

What would Britain become if it left the EU after the Referendum on 23 June? To most campaigners for Leave this may seem an unfair question: they are not a government in waiting. To them EU membership is inherently bad, and we should sort out what the country is to become one democratic step at a time once we have decided to leave. But to many Remainers it is the lack of a coherent and convincing alternative vision for Britain that is one of the strongest reasons for staying in the EU. So it helps to think it through. One way of doing that is to look at the example of other countries.

One of the early alternative visions put forward by Leave advocates was Singapore. This is especially popular amongst businessmen. Singapore broke free from the Malaysian Federation in 1965 (it was expelled) and has prospered as an independent state. It now counts itself as part of the developed world, unlike the continuing Malaysia, which has advanced not nearly so quickly. Singapore made itself an easy country to do business in, and developed as a trading entrepot through, for example, very efficient port facilities. Meanwhile Malaysia became bogged down with the politics and corruption of a larger state, notably engaging in the politics of ethnicity.

Likewise Leavers say that Britain is bogged down with the politics and inefficient regulation of an entity that is too big and complicated to be efficient. Why can’t we be something nimbler and more entrepreneurial, like Singapore? There are many problems with this idea, of course, which is no doubt we don’t hear so much of it now. First is that in size and complexity Britain looks more like Malaysia itself, rather than Singapore, while the EU looks nothing like the Malaysian Federation, with its autocratic leadership. The second is that Singapore is run very autocratically itself: a firmly-led one-party leadership forces through its pro-business agenda in a way that Britain’s government can only dream about. What stops Britain from being like Singapore is less the restrictions of the EU, and more its own raucous and vibrant democracy. A common complaint of Leave campaigners is that the EU is not democratic; following the example of Singapore suggests that it is in fact too democratic.

Enter a second possible exemplar: Switzerland. Switzerland is prosperous and European; it is also probably the most democratic country in the world. Referendums are a very regular occurrence; Swiss people are constantly consulted. And they rejected joining the EU (and the EEA, a diluted version that includes Norway) exactly because it threatened its democratic standards. But the Swiss example throws up a couple of interesting problems. First, the country has found that the only way to make a proper democracy work is through a level of local devolution that is alien to Britain’s freewheeling ways. The central government is weak; most of the action occurs at cantonal level. This level of local government is actually quite intrusive; woe betide anybody that runs their washing machine late at night. A number of years ago many London firms threatened to migrate to Geneva in reaction to intrusive financial regulation; they did not follow through as their staff found the city a difficult place in which to live.

Well that is more interesting than a decisive argument over Britain’s choices. It may show that many Brexit campaigners have mixed feelings about democracy, but Britain can still choose to runs its affairs differently. The second problem is more difficult: in order to prosper, Switzerland has found it necessary to participate in EU structures to secure its part in the single European market. It must comply with many EU regulations, allow the free movement of EU citizens and even pay into the EU budget. There is a tension between these things and Switzerland’s democracy (especially over allowing EU nationals in to work), but Switzerland has been forced to compromise. The Leave case to the voters is based heavily on stopping the free movement of people and on stopping EU budget contributions; it follows that the country could not follow the Swiss compromise, and would sacrifice much of its prosperity as a result.  Indeed the Swiss compromise makes little sense – why not accept the EU structures and participate in their management in a way the Swiss are unable to? it is not as if we have such democratic traditions to protect. Indeed we might find some of the European structures useful to protect our citizens from our own government, elected with very unconvincing democratic mandates.

I think a third exemplar fits much more closely with where Britain would head if it left the EU: Japan. Japan is an island nation positioned just off a continent with which it has difficult political relationships. It values social cohesion beyond economic prosperity, which means that it maintains strict controls against immigration, even though its aging population is creating a crying need for younger workers. It would rather seek solutions in robotics. It is democratic, though not in the free-wheeling way that Britain has become used to.  But a post-Brexit Conservative Party could establish the dominance that Japan’s Liberal Democratic Party has achieved. The result would not be the business-friendly wonder of Singapore, but an even denser thicket of regulations and bureaucratic meddling than Britain has now, which helps to preserve social cohesion and stability, and protect the interests of established major businesses. In principle I think most of Britain’s voters would settle for this, even as they might moan (the Japanese do that too).

The problem for Britain is that Japan’s economy is based on a strong industrial base. This is a historical oddity that would be very hard for Britain to replicate starting from where it does now (though would perhaps have been feasible starting from where it was in the 1950s). The businesses at the core of Japan’s success are mature ones, like Toyota, which has become the world’s leading motor manufacturer, alongside Germany’s Volkswagen. These businesses are not growing – indeed Japan’s economy has been in the doldrums since the 1990s, but they nevertheless provide Japan with financial security. Japan’s government is not dependent on foreign investors as Britain’s is. To replicate Japan’s success would require a rebalancing of Britain’s economy, led by a substantial devaluation of the pound, and several years of pain as living standards were squeezed.

Are Britons really up for this? The country has already advanced far further down the road of multiculturalism than Japan could conceive of – a legacy of its Imperial history rather than of EU membership. Britons have got used to their holidays in the sun, and the country’s relationship with its continental neighbours has always been more integrated than that of Japan’s with China and (to a lesser degree) Korea.

But if Britain votes for Leave – which is having the better of the referendum campaign so far – they may find themselves following the Japan road, with much less benign results than Japan has been able to achieve. That is a good reason to vote Remain.

Cuba: a lesson in the successes and failures of socialism

Australia CubaA week ago I returned from a two week holiday in Cuba. As always, there is a limit to what you can learn from a holiday, which tends to focus on the positive, and where deeper analysis is not the point. But there is nothing like seeing a place to get a clearer picture of it. So, what did I learn?

Cuba is a socialist country, following a Soviet economic model shortly after its revolution in 1959. The state dominates all activity; private businesses are allowed, but only in highly restricted contexts, such as tourist services. The state places a huge emphasis on universal services: health care, education, and a system of basic rations intended to ensure that everybody has the bare necessities. The government claims that homelessness and unemployment are rare – though overcrowding and underemployment is another matter. There is no commercial advertising; instead the are political slogans everyway, often featuring the revolutionary icon Ché Guevara, and also Fidel Castro and the late Venezuelan president Hugo Chavez. These slogans generally claim that socialism is eternally victorious. It is not just the paintwork that is looking tired.

For jaded westerners, it is easy to see the positive aspects of this. Social welfare looks a lot better than for most poor countries. The universal services are certainly popular, and confer legitimacy for the regime. When comparing the country to its Caribbean or Central American neighbours, it is easy to see the bright side. The worst effects of poverty are ameliorated, including with very low levels of crime (compare that to Jamaica or Guatemala), though policing does not seem heavy handed (underemployment does not mean hordes of armed men everywhere, like in Egypt, for example). Health services are reputed to be better than many richer countries.

But a second reaction leaves you confronting the fact that the country remains very poor. The sight of people occupying crumbling buildings in Havana is quite shocking. Most rural dwellings have hardly moved on from shanty-towns. And the flip side to that is that productivity is woeful. We saw ploughs still being pulled by oxen, and horses were a common means of transport in rural areas. Every toilet has its attendant to hand out meagre supplies of toilet paper (and expecting a tip); workmen always came in groups; guards, often scarcely awake, watched over things that hardly needed guarding.

And the productivity is much worse than the use of too many people to do simple jobs. Whole businesses have collapsed, most visibly in agriculture. Perfectly viable land is untilled; factories are derelict. We visited a sugar plantation (called Australia) that has ceased to function as anything other than a tourist spot, offering short rides on steam trains. (That’s where the picture is from, of people sitting outside a derelict factory building – quite a good metaphor for the Cuban economy, I thought). Those trains were the only functioning ones we saw – yet there were plenty of railways.

Agriculture, infrastructure and industry are not the only places where work is not being done. Many apartment blocks in Havana look close to collapse – though many were clearly once magnificent. And new homes are not being built. A country that has a vaunted system of education, that can turn out good quality medical staff in quantity, can surely do much, much better than this?

The official blame is heaped on America, and its extensive system of sanctions that make it very hard for any western business to trade with it. That excuse is not without merit. Doubtless many critical bits of equipment or services became unobtainable directly, and indirectly through lack of foreign currency from exports. For a couple of decades the Soviet Union was able to partially make up for this – but its products were sub-standard, except for weaponry. When the Soviet Union collapsed, Cuba nearly followed it. It says much for the strength of the Cuban regime that it has survived.

Survival in the 21st Century, in the face of US sanctions (which remain as the Congress must approve their lifting) has become much easier, however. China has developed an economy which is not beholden to the US, and Cuba has taken advantage. Our perfectly functional and modern tourist buses were Chinese made. China has also enabled many other parts of the world economy become less beholden to the US – and the influence of other countries (notably Spain) is visible.  There is a viable non US eco-system.

But Cuba clearly wrestles with a much deeper problem: the complete failure of a non-capitalist system to be able to do more than a very few things at a time well. It is to Cuba’s leaders’ credit that, unlike the Soviet Union, they chose universal health care over weaponry as the state’s top priority, but that only gets you so far.

The Cuban state must embrace capitalism if it is to improve its citizens’ lot. There are already role models out there: China and Vietnam, which show that you don’t have to scrap the socialist planned economy at the same time, contrary to western conventional wisdom of the 1990s. (Experts used to say that an economy couldn’t be half capitalist like a woman could not be half pregnant; Russia followed that advice with catastrophic consequences; China ignored it). And Cuba has started to do it, allowing the tourist industry, in particular, to grow. Private bed and breakfasts, restaurants and tourist shops abound, and show that Cubans have plenty of commercial flair. Less than vibrant, but successful enough, the Cuban government has set up joint ventures with commercial companies to build and run large hotels (though it must be added that individual members of hotel staff were generally very helpful, even if the system as whole never quite worked as it was supposed to).

But these developments need to go much, much further. They must embrace large enterprises, in the building industry, and export industries, including agriculture. Of course, Cuba needs to be careful here. Big multinationals can hollow countries out with soulless plantations that add very little human value while syphoning away most of the cash. But the country still needs commercial efficiency on a large scale. Which means less government interference. The government seems divided on how to go forward.

Would an embrace of capitalism lead to a political opening? China and Vietnam seem to show that this not necessarily the case. My guess is that the success of universal services (surely at least as good as China’s?)  will leave the communist regime with enough political legitimacy to survive, so long as these do not fall into decline.  That will be a challenge, of course, as rates of pay in public services will have to rise as the private sector competes for jobs. Medical professionals are paid pathetically little. Cuba’s populace, like China’s, may have grown out of the communists’ political rhetoric, but neither would they see a compelling need to rock the boat if the economy was successful.

It would, of course, be much better if Cuba could embrace political reform too. While they have much to learn from China, no doubt, they should also cast a glance to Costa Rica, much closer in size and geography. That country has shown the virtue of keeping the Yankees at arms’ length, while adopting many of their ways.

And as a holiday destination? Thoroughly recommended. It is a beautiful country, much of it unspoilt; its people know how to make you welcome; notwithstanding the dead hand of government, it is a cheerful and vibrant place. But think about the time of year. In May it was already getting a bit hot and sticky. February is probably best, but that is also peak tourist time.

 

 

The Oregon protest shows how different America is from Europe

What if a group of armed citizens seized a bird reserve in the Lake District and proclaimed their right to cut down trees and graze cattle on public land for free? It is actually unthinkable, on so many levels. And yet this is more or less what has happened as a militia group led by Ammon Bundy seized the Malheur National Wildlife Refuge in Oregon on 2 January. They’re still there, as the law enforcement agencies deal with them gently, letting pressure from local residents undermine the occupiers’ resolve. Such incidents are rare in the US, but not unthinkable, and that reveals a lot about the difference between our nations.

Of course Oregon is not like the Lake District. In the US West the Federal government owns huge tracts of land, and regulates, and charges for, its use by farmers and loggers and many others. In our National Parks the government places onerous regulations on private landowners. But that is even worse, probably, from the point of view of the Oregon protesters. They are building their case on an American idea that citizens should be self-sufficient, and that government agencies are violation of basic rights and freedoms.

That idea, of course, comes from America’s frontier history. Back in the 19th Century, and earlier, the settlers mostly did have to be self sufficient. The whole appeal of film dramas such as Westerns builds on this.  These frontiers have only formed a minority of the American nation, of course, and yet they command a special place in the American soul, for those of European (i.e. white) heritage. We may imagine how those of native American or African, and even Hispanic heritage work on a different version of how America came to be what it is. The European settlers came out to America to be free of oppressive governments. It is hardly a coincidence that movements like the Oregon protestors are white, and tend to have racist tinge.

Descendents of the Europeans who stayed behind have an utterly different outlook – though that racist tinge is there too, overlaid by an often intense nationalism, which has been subsumed by American nationalism in their descendents. For us government is part of our everyday lives. For some it represents the democratic will of the people; for others it a perhaps regrettable necessity. But we crave the order governments create, and feel that such things as welfare safety nets are part of what it means to be civilised.

And this is as true of the English as it is of their French and German cousins. Some English like to think that they are culturally apart from the rest of Europe (a delusion that their Scots compatriots in Britain tend not to share). We hear talk about common law and Anglo Saxon freedoms. And it is true that the English and British are different in many ways from other Europeans. But then so are the French, the Germans, the Danes, the Spanish, the Czechs, and so on. The idea that the British are uniquely different is a misconception. And a huge amount of history and culture binds us together as Europeans, and separates us from the United States in particular. Our attitude to the role of the state demonstrates that more clearly than anything else. Remember that many Americans feel that free ownership of military weapons is a fundamental right, and a vital protection. Europeans think that’s nuts.

That gulf between Europe and the US is clearly seen in US politics. Republican politicians only have point to Europe or Canada (which follows many European attitudes) to scare their supporters. To them these places are self evidently awful places to live in. Which puzzles, Europeans and Canadians profoundly. What is so wrong which lower levels of poverty, better health outcomes, longer holidays, and a lower chance of dying a violent death? We (and they) just don’t get it.

But two notes of caution for Europeans. First is that the US is not monolithic. I have already pointed out that many Americans do not share this anti-state vision – and the proportion of non-whites in the country is rising. That, perhaps, explains much of the violent polarisation in the country’s politics at present. Most Americans think that the Oregon protestors are crazies; that includes most people who live near Malheur. It’s always a good rule to avoid national generalisations; that is as true of Americans as it is of anybody else.

The second note of caution is that there is a positive side to this American idea of self-sufficiency, alongside its delusional aspect. It makes Americans more entrepreneurial and innovative. Americans can rightly point to their extraordinarily strong economic performance. And I think it helps to question what state agencies do and what they are for – though, I should add, I don’t think that US government agencies are any less inefficient than European ones.  Closer scrutiny does not necessarily lead to improved performance.

But personally, I am very comfortable in my European skin, much as I admire so much about America. And those Oregon protestors sum it up why quite nicely.

High morals v low pragmatism: what on earth to do about Syria?

Do we let British forces join their US and French allies and intervene in Syria against the forces of Islamic State (IS)?This is now the biggest issue in British politics.  it is not an easy question.

So often we are urged to take such important decisions based on high moral principle. In this case, do we attack those who have, in effect, declared war on us on principle? This seems to be the French view. Or do we rule out the use of violence, outside strict self-defence, on principle? If such moral principles are your guide, then deciding about foreign interventions becomes much easier. Take your moral stand, and if it doesn’t go well, then it is somebody else’s fault. And if the place of the intervention is remote it is somebody else’s problem too. Such reasoning is commonplace amongst the politically engaged – but it is a cop out. Actions (and non actions for that matter) have consequences, and we can’t escape responsibility for them as far as they are foreseeable.

And, of course, the closer we get to the place of intervention, the muddier it all seems. For us the big issue in Syria is the progress of IS. And yet, with the exception of the government of Iraq, this is not top of anybody else’s agenda. This can be seen from last week’s episode with the shooting down by Turkish forces of a Russian bomber aircraft. The story presented by neither side is convincing. The Russian bomber looks as if it was attacking a Turkomen force that is nothing to do with IS, but which is resisting the official Syrian government of President Assad. The Turkomens seem to have the covert support of the Turkish government. Russian actions have been high-handed and directed at supporting the Assad regime, under the cover of fighting “terrorism”. The Turks seem to be telling them to keep away from their protégés in the only language the current Russian regime seems to respond to.

To my mind it is the conflicting agendas of the local middle-ranking powers that is the most frustrating aspect of the Syrian situation: Turkey, Iran and Saudi Arabia in particular. To them IS seems to be of rather tangential importance, whose main use is as a hook to draw in Western powers on their side, taking the pressure off them to resolve the conflict. The West still suffers from a post imperialist idea that it is the world’s policeman, and that the local powers should be treated as unruly children rather than accept responsibility for the maintenance of peace and order in their neighbourhood.

It doesn’t get much better when you look at IS itself. For some reason this organisation likes to project an image of undiluted evil. It seems to help it draw in foreign recruits to its cause – who see moral clarity where we see evil. But its support base is clearly much wider than that. The local Sunni populations, in both Syria and Iraq, have lost faith in their official governments, and with good reason. Rule by IS seems preferable, and nobody is offering a credible alternative. Remember that the standard Western answer that you set up a democratic government has been tried in Iraq – only for it to be abused by unscrupulous power brokers intent on their own enrichment. Why should it work better next time?

All this fog points against the high moral case for Western intervention, and so against further British involvement. How can it be effective? And arguments of this type are seized on by opponents of intervention. But they too strike a high moral tone. They organise protest rallies; Jeremy Corbyn justifies his stance on the basis of the opinion of political activists, and urges these activists to lobby their MPs. Such tactics can only be driven by high moral purpose, not by a pragmatic weighing of the options.

This high moral purpose seems to be driven by a loathing of two things. The loathing of the use of military force in pretty much any capacity. And the loathing of Western capitalist governments, and especially that of the US, and all their foreign interventions. How these two loathings balance varies widely between individuals. But such moral arguments are clearly suspect. In Syria we have had years of non-intervention, or limited intervention, by Western powers. That has left the country in an appalling stalemate, which has now created a refugee crisis that is placing huge strains on European civic society. Surely this threatens Western interests sufficiently for some kind of intervention? Are we being too dismissive of intervention, and using the clear practical difficulties as cover irresponsible inaction?

Building a pragmatic case for intervention runs something like this. The US and France are already heavily engaged. By joining them as a full member of that alliance (Britain already provides  support in Iraq) may not make a huge difference to that joint effort immediately, but a three country alliance would have considerably more diplomatic weight than the current incomplete one. Britain’s current half-hearted contribution is almost useless on that basis. This alliance of Western nations, which joins up with local Kurdish forces, would then be able to bring pressure on other actors to work towards a new settlement of the Greater Syria region (i.e. Syria, Iraq, Lebanon and Jordan) than can form the basis of future peaceful development.

But any such settlement must face up to the central challenge of what can replace the current IS regime? Neither the Assad regime, nor the Iraqi one looks up to the job, though changes in leadership might help. Trying to create new government institutions from nothing is what went wrong in Iraq. Everybody says that it would be impossible or immoral to negotiate with the IS regime, and looks a fair judgement based on its current leadership. But might a successor emerge from within, amongst its clearly highly competent military leadership, with whom negotiation might be possible?

So there you. The pragmatic arguments against intervention have real weight. There is no clear game plan to bring matters to resolution. But the Syrian war is causing damage at continental level. Can we really just walk away and hope for the best?

To understand the politics of Islam you must look at its history

Islam has become one of the hottest topics in politics worldwide.  And yet the religion is little understood by non-Muslims. Instead ill-informed narratives gain currency, even amongst the better educated. It is a hard subject to get a grip on, but BBC Radio 4’s The World This Weekend, on Sunday broadcast an excellent item on combating Islamic State (IS). Each of the three introductory interviews was illuminating, but that with Washington Islamic history expert Haroon Mughal made things a lot clearer to me.

As with most areas of current politics, we need to get a historical perspective. Most educated people will know that Islam has two main denominations, Sunni and Shia, which arose from a split in the 7th Century over who was the prophet Mohammed’s successor as caliph. That, of course, remains an important fault-line, as followers of the two sects (and variations within) are intermingled in Iraq, Syria, Lebenon, Saudi Arabia, the Gulf and Yemen, to name the main hotspots. The split may be compared to the Christian split between Catholic and Orthodox, but geographically it is much messier. Apart from in Iran and, to a lesser extent, Iraq Shias are in the minority – but they are politically more coherent because there have reasonably clear hierarchies and, perhaps, they are used to a greater level of challenge.

The Sunni realm too used have clear hierarchies and orthodoxies, sponsored, in early-modern times, by the Ottoman Turks, who held sway across most of it; there was even a (nominal) caliph, until the Ottoman Empire fell in 1922. But this orthodoxy was subject to challenge, and a Reformation of sorts took place in the 18th Century, led in particular by Muhammad ibn Abd al-Wahhab. Like the Christian Protestant Reformation, it urged a back to basics creed, that rejected the corrupt ways that orthodox Sunni religion was practised. There are two key things to know about Wahhabism, which is now the orthodoxy in Saudi Arabia. It emphasises the separateness of true-believing Muslims; others are condemned to hellfire and not worthy of consideration. The second is that it takes inspiration from the customs of early Arab days, most notably in its strictures on sex, women and crime.

Mr Mughal’s critical insight was that, unlike for the Christian Reformation, there was no Counter Reformation – a reinvigoration and counterattack by the orthodox. At this time the Ottomans were on the wane, and the orthodox structures were too weak to mount such an effort. That leaves a vacuum at the heart of Sunni Islam. There is a huge amount of scholarship which can be used to counter Wahhabism, but efforts to do so are weak and disjointed. Imams tend not to be up for the sort of intellectual challenge required. Meanwhile the Wahhabists have a clear message and are expanding their appeal. The ground has been prepared through official Saudi sponsorship of mosques and schools, which has spread throughout the world, and undermined orthodox teachings. Now more sinister forces are promoting Wahhabi ideas to the disaffected, in ways that a re socially corrosive.

There are two important groups of Wahhabist derivatives, both of which have a clear political agenda, that some refer to as “Islamism” . There are the violent ones (I don’t want to call them “Jihadis”, since it is important to preserve non-violent aspects of jihad, just as there are non-violent uses of “crusade”, a very similar idea), promoted by terrorist movements like al-Qaeda and IS. They have a millenarian interpretation of the scriptures: that the end of the world is nearing. They extend the Wahhabist ideas of separateness to the practice of violence against non-believers, not least Muslims that do not share their binary world view.  There are enough sacred texts and historical episodes from Islam’s formative years to allow a coherent narrative – even if their practices go against a mass of Islamic scholarship. This narrative of violence has a clear appeal to the disaffected looking for some kind of heroic way out of their dead-end lives. The second group is known as Salafists; they share much of the millenarian credo of the terrorists – but they are non violent. They advocate the withdrawal of believers from any non-Islamic political structures. Salafists are much more numerous than the terrorists, with a lot of strength in Egypt and Tunisia, but their doctrines of withdrawal reduce their political weight. Some politicians have tried to play them off against the terrorists, since they are able to argue the case for non-violence from a Wahhabist perspective. But this serves to entrench the basic, and socially corrosive, ideas of Wahhabism.

The critical question is whether orthodox Sunnis can organise themselves into putting together a vigorous, international counterattack on Wahhabism, and to win back the battle of ideas. The hope is that a confident, cosmopolitan orthodoxy can be established that offers a middle way between a godless  materialism that denies Islamic heritage, and the backward looking ideas of Wahhabism. This seems to be what Mr Mughal was advocating.

But such a Counter Reformation faces formidable challenges. The first comes from political power. One group that would love to promote such a “respectable” version of Islam are the military backed regimes of Arab countries, like Egypt. And yet the incompetence and corruption of these regimes is one of the things that gives the Wahhabist creeds a lot of their appeal. Any Counter Reformation has to keep its distance from such willing official sponsors. Another challenge, of course, is the rejection of Saudi sponsorship; we may hope that low oil prices will reduce this malign influence.

But the biggest challenge surely is to develop ideas that are compatible with the modern, cosmopolitan world. This means rejecting the paternalism of the current order -allowing young people more freedom to consort with the opposite sex and choose their own marriage partners, and to offer women more freedom and power all round. To say nothing of more tolerant attitudes to gay sex. This is a huge jump for many, older Muslims. To them the paternalist ways are something worth fighting for, and their religion is bulwark against dissolute modern ways.

Is their anything to learn from what has happened to Christianity? In Europe established churches are fighting a losing battle with materialism. They cannot find a viable middle way between an empty modernism and being perpetually behind the Zeitgeist. They remain the standard bearers for socially conservative values – which is perhaps why they have a strange obsession with sexual morals. This has parallels with modern Islam.

Still, in America it is a different story. Somehow American churches are able to find compatibility between traditional beliefs and the modern world. We may associate them with conservative strictures on abortion and gay sex, but they have moved on in the question of love and marriage, and the empowerment of women. American churches are fragmented and highly competitive. They have no choice but to adapt to the modern world, or else they will lose out to neighbouring churches, constantly juggling a mix of social conservatism and modern values. To my knowledge Muslim imams and mosques haven’t taken on such a competitive approach – but I don’ think there is any institutional barrier to it. This bottom-up way offers more hope, surely, than some kind of top-down institutional one based on learned scholars and high level conferences.

But, assailed by an ultimately futureless and destructive Wahhabism on one side, and the temptations of godless materialism on the other, orthodox Sunni Islam must change itself somehow.