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For a Civic and Constitutional Republic 


Issue No 67 Friday 20 May 2011

This Week

  • Immigration. Answering The Rise Of Europe’s New Right

  • Do the Scots really want independence?

  • Sign Up For Notification of London Meeting

  • Comments on Last Week's Newsletter from Subscribers

News Stories

Highlighting news stories important to the Civic Republican view, particularly those that are overlooked or little covered in the main media.


Immigration. Answering The Rise Of Europe’s New Right

Peter Kellow writes

Will Hutton wrote in last Sunday’s Observer.

It is hard not to be very uneasy. Every month, there is another milestone passed in the ever onward march of Europe's populist, anti-immigrant, anti-Muslim, nativist right. .. . Pia Kjaersgaard, leader of Denmark's People's party recently … got her way…Denmark is unilaterally to introduce border and customs controls on its borders with Germany and Sweden …The trouble is that the Danish People's Party is not alone. There are the True Finns in Finland, the Hungarian Jobbik party, the Dutch Party for Freedom, the Italian Northern League, the Austrian Freedom party, the Sweden Democrats and the National Front in France, led by the politically astute Marine Le Pen. All are on the rise, and it's not easy to see what might slow their progress.

If he is correct, right wing parties are being propelled forward by a wave of anti-immigrant feeling. People in many countries, rightly or wrongly, feel threatened by an increasing influx of immigrants, mainly from Eastern Europe and Africa, into their countries. What should the response of a modern European Republican Party be to this situation?

True Finns

We should start by doing what is rarely done by anyone (certainly not by Hutton in his article) and recognise that the immigration pressure we see in Britain and Europe (and the USA) results from a global situation. We need to stand back and take an overview. The basic problem derives from the vast differences in wealth that western Europe and the USA have in relation to poor countries of the developing world. There is a lesser disparity between Western and Eastern Europe which must be looked at separately and I will this leave aside in this article.

Put yourself in the place of someone living in a country in Africa with a family to feed and with an income the equivalent of two Euros a day or less. Your country has a lot of corruption and shows little chance of providing a prosperous future for any but a tiny elite. Free healthcare does not exist. Jobs are few. And there is Europe - not so far away and it looks like a Promised Land of work, money, public services and a relative lack of corruption. You see that some of your compatriots have made it there and have security. Your life plan is to do the same and follow them. This desire is humanly understandable and so the immense pressure on Europe is there and will not go away in a hurry.

The rightist way of looking at this problem is from the point of view of how we manage and resist the pressure whilst the leftist view (expressed by Hutton) is how we develop our country and its economy to absorb the pressure. These are both very insular reactions and ignore the fact that the pressure stems from global differences and global causes. If we are to get anywhere addressing the problem it is to these we must look. People want to emigrate because their own countries offer them little in the way of a future. If we can help these countries then the pressure on us would ameliorate. But how can we help them?

People often blame the poorer countries for their plight. It is said that they are inherently corrupt and dominated by oligarchic elites who exploit the country for their own ends cheating and stealing from the people. We saw a prime example of this in Tunisia recently when the ruling family was expelled from office and the country. We should not lose sight of if the fact that such autocrats maintain their power with the cooperation of the west. But there are however more fundamental ways in which the west contributes to the problem. It creates an economic environment that makes it very difficult for the poorer countries to improve their situation.

The harsh environment that the poorer countries experience is created above all by the fact that their currencies are weak. This is not something that is inevitable in the majority of cases. These countries of often capable of working themselves out of their problems but their are factors often outside their control that stop them from doing so. Let us look at why this is the case.

Poorer countries are encouraged to take loans from western banks. These may come via the IMF (the International Monetary Fund) or the World Bank but their ultimate source is private western banks. These countries thereby acquire debts in western currencies, invariably dollars, and these have to be repaid in dollars. The countries then have to earn dollars through exports as the western banks will not accept repayment of loans in their own currencies. But why won’t they do this?

It is not simply that these currencies are not stable (the dollar, the pound, etc are hardly that). An important factor is that the western banks and their clients amongst the global superrich want to be free to speculate on and manipulate these weaker currencies. This they can do as the reserves and trading positions that back these countries are tiny compared with their own assets. This allows them to massively influence the value of these currencies and so they can position themselves to make huge gains on currency fluctuations. Whilst the superrich line their pockets even more with these casino plays, the poorer nations are lead into more debt and the people of these nations are lead further and further into hopelessness and despair. Little wonder they want to leave the countries of their birth.

There are no doubt many aspects to the plight of poorer nations but addressing the problem of a weak currency is fundamental to any solution. Moreover there is a further way in which the knife is twisted to prevent their currencies ever having a value to match those of the developed world.

The Peruvian economist, Hernando de Soto, in the 1990s wrote an important and highly influential book called The Mystery of Capital and in it he expounded a relatively simple thesis that sought to explain why there was such a big gap between the First and Third Worlds. He argued that it is all down to property values. Property values depend on legal title and here lay the essential problem - legal title is not easily available in the developing nations of the world. He argued that although developing nations did not lack entrepreneurs, such people could not secure title on their properties and businesses and so effectively had no capital. Without capital they could not get credit and without credit they could not expand and develop their businesses. Their businesses in spite of all their hard work and skills had no capital value only a day-to-day profit for their owners to live on. Capital is never accumulated as happens in the west and so few become wealthy. Parents have nothing to pass on to their children and so the cycle of poverty continues.

There is surely a lot of truth in this thesis. However, de Soto does not take his argument far enough. He is looking at the problem from the microeconomic point of view, but we also need to see it from the macroeconomic point of view for in doing so it becomes clear that the lack of capital creates a major problem for the currency. The value of the currency of any country depends on a number of things but certainly a major factor is the capital value of the assets that make up that country. Imagine that all the property and the businesses of Britain had no visible quantifiable value because no one had a solid claim to ownership. Who would want to own pounds sterling? Not many. The poorer countries must find a way of realising and quantifying the undoubted capital value that exists in their countries. This will allow businesses to borrow and expand and will provide a basis for giving value to the currency. That way the country can make purchases from abroad using its own currency. This would serve to vitalise its economy at all levels.

These are fixes that have to happen within the poorer countries themselves but the richer countries have to major play a part. Indeed it is the rich countries that have played the major part in holding back the developing world and that are now reaping the “problem of immigration”. There are accounts on the Republican Party website on how the creation of the Republic must involve a revolution of banking practice in order to secure the wealth of the country and this revolution will include changing the way we deal with poorer countries. An immediate measure must be the forgiving of debt but this will not achieve enough on its own.

The west’s insidious practice of lending to poorer countries in dollars whilst simultaneously speculating on their own currencies cannot continue. But also we must address the problem of lack of capital values in poorer countries that de Soto identified. What these countries need for this to happen is law – good law. It is good law that means asset titles are good in, say, our Kingdom. As we take the pressure of debt and currency manipulation off these countries so at the same time they will be able to establish good property law and in this we can provide help.

The poorer nations need more open political systems for good law to be established and so one immediate form of help to them would be the abandoning of support for repressive dictatorships of the developing world. And whereas western leaders are fond of calling for more democracy in these countries, equally if not more important is the development of strong civil societies for this means the law can be guaranteed. Western countries could support lawyers groups and other professional with, for instance, reciprocal arrangements. We have to find a non-intrusive way in to bolster the civil societies in developing nations. It is no good just putting up immigration barriers and washing our hands of the poorer nations’ problems.

This approach will mean a huge difference between how we deal with poorer nations now and how we will do so in the future. At the present time IMF when it makes a dollar loan, it attaches major conditions to this loan. These invariably involve the debtor country implementing Neo Liberal policies such as opening up markets, austerity measures and, of course, privatization. The result of taking on the burdensome loan with its inappropriate conditions is that the debtor nations’ currencies are weakened releasing opportunities for free-for-all speculation.

In future we must forgive the existing dollar debts (which should never have been allowed in the first place) and at the same time help the developing nations develop bullet proof systems of title and asset ownership. If we do lend to developing nations that we should not shy away from buying bonds in the country’s currency that are then repaid in that currency. These measures would mean that these nations could develop the virtuous combination of a strong currency and strong capital ownership.

They would in turn mean that people with money in these countries would be persuaded to keep their money in the countries and not expatriate it in order to hold it in dollars, euros or Swiss francs as they so often do now. Thus wealth would stay within the borders to finance further development.

And in this effort we should not forget that Britain is particularly well placed due to its involvement in a major international institution that bridges between the developed and developing world - the Commonwealth. This is a ready made vehicle for the kind of broad cultural and legal initiatives discussed here.

The World Trade Organisation is a less benevolent force. The current Doha round of free trade talks under the WTO aim at reducing all trade tariffs to zero. The question of world trade is a complex matter but simply opening all borders to free trade is almost certainly going to benefit the rich countries and disbenefit poorer ones. Also free trade leads to big western monopolies having the power to manipulate commodity prices and to the practice of buying up land and capital items in poorer countries cherry picking the jewels of the economy.

The policy described above of helping poorer countries, of course, provides much more than an answer to the “immigration problem”, it addresses many other problems and injustices, but it is the kind of approach we need to have if we are ever going to see a reduction of immigration pressure. Only a broad approach will ultimately make a difference. Hutton (who incidentally whole hearted supports the WTO free trade agenda) expresses the usual narrow leftist “solution” which totally ignores the fundamental global reasons for the pressure on our borders. He writes

To stop this [rightist] movement becoming a stampede, the European left has to find a more certain voice. It must argue passionately for a good capitalism that will drive growth, employment and living standards by a redoubled commitment to innovation and investment. It must spearhead the case for new international rules of governance that can make citizens believe that globalisation is not a terrifying threat.

The rightist parties are able to exploit immigration fears because no current party has a real policy to improve the situation. The real answer to rightist politics lies in altering global banking practice and in finding ways to bring developing nations properly within the internationally recognized legal framework. The current politicians may or may not understand this but in any case they have accepted the bankers shilling so often that they will not betray their benefactors for the sake of improving the lives and welfare of poor people in distant lands.

Recommended article of the week


  • Do the Scots really want independence?

The polls say no. The situation is always going to be fluid, but mostly they suggest only around a third of voters would actually go for it were there to be a referendum. Perhaps they've noticed that independence would come with a slug of the national debt chucked in. Given that, you might think it odd that the same voters voted in the Scottish National Party. But it isn't really. Why? Because in times of difficulty and uncertainty, voters shift away from their main parties if they can.

Read Article


  • Sign Up For Notification of London Meeting

A Pre-inaugural Public Meeting of the Republican Party will be held in London in 2011. It will be on a Saturday afternoon in September. Wherever you live please attend. Please sign up now to say you hope to come. Help make this a great event!

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Last Newsletter


  • May Elections - How They Could Point to a Federal Republic of Autonomous Regions

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Comment from Ben Dyson
I enjoyed reading this, very well thought out. I do like the regional idea you suggested. I wonder if Kent, Cornwall and Birmingham would mess together as 'The South' or whether it'd need a South East and South West region, but I haven't looked at the population distribution so no idea if that tallies up.

Reply from Peter Kellow
Thanks for your comments, Ben. I realise that once a federal organisation
becomes a possibility, there will be claims from numerous smaller regional
entities. I think there we have to keep an eye on the principles I enunciated. Otherwise we end up with a hotchpotch again. A federation gives real weighty power to regions and so the shear administrative burden cannot be born by smaller entities. I have studied the German system (which is probably the best) and believe me this aspect has to be taken seriously. Although the first principle was that the region must mean something we must not become too romantic in deciding entities. The thing has got to work.

Comment from Richard Middle
At the moment, it looks as if the long-term trend in Scotland will be
towards independence. In the short term [2011-2016], the Scottish
Government will be given more powers [eg control of corporation tax or
possibly a local income tax, to replace council tax].

The SNP may try to stir up trouble with Whitehall, to create resentment
and increase support for a "Yes" vote in the referendum (which will be
held in 2015 or thereabouts). I think that the Con-Dem Government will
give in and that the SNP, knowing that a "Yes" vote isn't likely until the
2020s, will be quite happy with "Devolution Plus".

Scotland is striding ahead because there is widespread support for Scandinavian-style, social-democratic policies. The SNP is an
old-fashioned political party with principles and real ideology (although
it isn't perfect). Where England has anti-politics, fuelled by dogma and
self interest, Scotland has real politics. [It will be interesting to see
what happens, now that the SNP has an overall majority, Will it end up
like all other parties and start accepting bribes from Big Business? The
furore over bus re-regulation, a few years ago, suggests that it might.]

English attitudes are infantile. Then they complain when Scotland has better schools, better public transport, better hospitals, more green power projects, free university tuition etc. Little Blighty-on-the-Down has come to life!

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