Reading the columns by Conservative eurosceptic MEP Daniel Hannan in the Telegraph is a somewhat masochistic pleasure: I suppose the reason why I do it is that I have become fascinated by the degree to which I systematically disagree with absolutely everything he says and advocates. Daniel Hannan is a champion of British free-market conservative chauvinism, which is quite admirable for somebody who grew up in Peru. He lashed the NHS on Fox News, saying it’s a 60-year mistake, declared Enoch Powell was his political hero, he’s been advocating a pact between the Conservatives and UKIP, he says that the decline in foreign language learning in Britain is a totally rational “market response” (even if he himself, of course, speaks French and Spanish) and claimed that Shakespeare was “the greatest imaginative intelligence evolved by our species” because he was British, the greatest civilisation of all, as he argued in a book that Niall Ferguson had already written. It is a bit like eating broccoli: I eat it from time to time just to remind me of how I hate it. Sometimes I wonder if that’s because all his political positions are really diametrically opposed to what I think, or if I oppose them because they’re voiced by Daniel Hannan. If he advocated the protection of kittens, I would perhaps want them drowned.
Yesterday, Daniel Hannan wrote a piece titled “Euro-federalists have created precisely the angry nationalism they kept warning against”, essentially blaming the EU bureaucracy and regulations for the rise of eurosceptic and xenophobic parties. Following this logic, you can also blame black people for the apartheid, jews for the Holocaust, and foreigners for racism. What is interesting is that Daniel Hannan is the kind of libertarian eurosceptic that considers the EU as a socialist superstate and want a freer market instead: less state, more market, the global race and all that. I think that believing that freer markets and less EU bureaucracy would lower support for populist and nationalistic parties is completely wrong. If you consider for a moment that support for Eurosceptic parties is really directed against the EU, it is directed against its market-making dimension, and notably the free movement of labour, rather than its political dimension. People don’t care about the EU politics or bureaucracy: they don’t see it and probably don’t know it exists. What they may care about is industries closing down to go to cheaper places elsewhere in the EU, large corporations not paying their taxes because of profitables tax arrangements in Luxembourg or the Netherlands, or people with better skills or ready to accept lower jobs coming into Britain. Now the kind of libertarian world that Daniel Hannan advocates would precisely feed this kind of sentiment rather than appease it, just like the period of unregulated markets in the early 20th century fed fascism and communism as a mode of protection against markets.
This is especially interesting because Daniel Hannan has a somewhat funny conception of the free market. In a previous column, he justified why he abstained in the vote of the abolition of mobile phone roaming charges in the European parliament, while a very large majority of MEPs voted in favour (UKIP voted against). He basically said that abolishing roaming charges will benefit people who travel, while telephone companies will have to increase domestic prices to make up the shortfall: “Teenagers on housing estates in Sheffield will end up paying higher bills so that Cleggie can have cheaper roaming when he’s in Brussels or Spain”. Daniel Hannan, the Robin Hood of modern times. This argument is plain stupid. It would make sense if roaming fees were a real service whose cost had to be passed on from one category of consumers to another, as Hannan implies. However, roaming fees are just a big rip-off. They are essentially a private tax on other operators imposed by large players with a stranglehold in the market, and their amount do not correspond to any real operating cost. A good way to understand when you’re being charged for thin air is when the same service can drop in price very quickly, or varies tremendously across countries in an industry where labour costs don’t factor much. I once went to Portugal with a German and a Swiss phone, and received a message on both indicating the roaming costs: 46 cents on the German, 1.40 on the Swiss (remember Switzerland, that country outside the EU?). How could prices vary so much if they really represented the costs of connecting my phone abroad via the same network? How can you decide to scrap these charges overnight without increasing prices? How can roaming cost just a fraction of the price if you subscribe to a plan? The answer is: that’s because they’re a fee imposed on you because operators can, and not a cost that operators have.
For once, there is one market-enforcing European regulation that really benefits people, and Daniel Hannan opposes it. He prefers large telecoms oligopolies extracting fees from consumers for no real reason. So much for the free market, Daniel Hannan.
One response to “The man who is wrong about everything, and especially the EU”
Alex, the problem of cross-national price discrimination is a state-created one. Governments claim ownership of mobile spectrum than license or auction it off to big players, treating radio spectrum like its some sort of ‘national’ resource. If instead, we had (more) radio spectrum anarchy, like we do for Wifi, we would have lower prices (and probably more mobile service providers) and national borders would be ignored. The problem is that state regulation always creates unintended outcomes that necessitate yet more state regulation 🙂