Matt Ridley: A bright global future for Britain

I was just too young to vote in the 1975 referendum. I would have voted “Yes” to the European Community and I think I would have been right to do so. It had contributed to European peace by blurring French and German economic sovereignty. It was a free trade area in a world of high tariff barriers, albeit within a protectionist wall that excluded other countries and continents. It helped to halt Britain’s disastrous obsession with central planning.

Two decades later, the European project stopped being about economic growth (to this day it still has no trade deals with America, China, Japan, Brazil, India, Canada, Australia and Indonesia) and embarked on the drive for monetary and political union, embodied in the treaties of Maastricht, Amsterdam and Lisbon.

The result has been horrible. Unlike every other continent, Europe stagnated for the best part of a decade after the crash of 2008. Monetary union in the eurozone without fiscal union gave Germany an undervalued exchange rate and southern European countries an overvalued one, and so produced rocketing levels of unemployment.

Far from promoting peace, the European Union now increasingly foments fury in many of its member peoples. War within its borders, though still unlikely, is no longer quite so inconceivable as we had hoped. Its ambition of trying to make a country out of a continent without preceding linguistic, cultural or economic equality, without even the ability to share wealth from the richer to the poorer regions, will be a painful one. In a world where trade is increasingly free, where global economic and regulatory co-operation is miles better than it was in the 1970s, I think this regional unification project is a red herring at best and fool’s errand at worst.

America made a country out of a continent by beginning with linguistic and cultural unity and by building a hyper-democratic structure in which the executive and legislative branches were both subject to frequent election. The federal government assumed the debts of the states (in exchange for moving the capital south), so ensuring automatic fiscal transfer between the richer and the poorer parts of the country.

Yet it also built in a crucial bulwark against over-centralisation, to allow local experimentation and diversity by giving huge power to an elected senate representing the states. Even so, it took a civil war to forge a united nation.

Germany became united through Bismarck bullying a lot of undemocratic regimes that already shared a common language and culture into a customs union, which then became a state under a centralised and militaristic regime with the barest veneer of democracy.

Yet it took three wars and a revolution (in 1989) before Germany’s borders were settled and its regime became democratic. Nation-making is a dangerous business: France and Britain had done it centuries before with just as much pain.

Be in no doubt that if we vote to remain on Thursday, turning the continent into a country is the path we are on. The Five Presidents’ Report of last year is admirably candid in this respect. David Cameron’s renegotiation of Britain’s membership terms made a crucial concession to get French agreement to some of his demands: that in future the EU institutions are at the beck and call of the eurozone in its quest for further unification.

True, Britain and Denmark may remain outside the euro for now (the other non-euro countries are committed to joining it), but future European summits will be all about making the eurozone work.

If the continent is not to be crucified on the cross of a currency, then it must become a country. It must have a single government that automatically transfers tax revenue from the productive to the less productive parts of the country.

The EU has created an ancien régime ruled by unelected commissioners with the sole power to initiate legislation, with a court able to overrule the elected parliaments of member states.

A regime whose corridors of power are swarming with lobbyists for big business, banks and pressure groups, all intent on getting bureaucrats to stifle innovation to protect their monopolies — and to harmonise the hell out of regional diversity.

This flies in the face of all that we have striven for and shed blood for over centuries, especially in Britain: that laws cannot be passed and taxes cannot be raised except with the consent of the people through their elected representatives. I say again: is this worth it? What is so fearful about the world today that we feel it necessary to be absorbed into such a risky project?

Now that the World Trade Organisation has brought tariffs to an all-time low, the decline of violence has brought deaths in warfare to low levels and the internet and budget airlines and container shipping mean that geographical proximity has never mattered less, we can all feel citizens of the world.

Islands that freely trade with the world, enthusiastically elect their own governments and willingly join alliances are thriving as never before: Japan, New Zealand, Australia, Hong Kong, Singapore, Mauritius (one of Africa’s countries with the highest GDP per capita). They see no need to be enmeshed in the top-down unification of their nearest continents.

In the 1840s at a time when war was common and slavery and autocracy were everywhere, Britain felt confident enough to try an ambitious bottom-up experiment: unilateral free trade. Richard Cobden finally persuaded a Tory prime minister to repeal the corn laws (170 years ago this Saturday) and he would shortly persuade a Liberal one to dismantle tariffs of all kinds.

France followed suit and the world began a race to the top, embarking on a period of unprecedented prosperity.

It was Bismarck’s punitive reparations demands in the wake of the Franco-Prussian war in the 1870s, leading to the “iron and rye” tariffs to protect German industry from the effects of an overvalued exchange rate, that began the 60-year race back to the bottom of protectionism, contributing eventually to the fatal calculation of 20th-century dictators that conquest could trump trade.

The best way to unite the nation is for the British people to turn out on Thursday in large numbers and express the wisdom of their crowd and for us all to embrace that decision. I hope we choose the world, not just a continent.