Yet again, Peter Mandelson demonstrates his idiocy:
The European Union could allow governments to use "golden shares" to stop foreign governments taking control of key industries, the bloc's trade chief said at the weekend.
Peter Mandelson, trade commissioner, said the blocking tactic could be legitimate where foreign state-controlled funds sought to buy European companies in sensitive industries that the buying country protected domestically. "Maybe we could create European golden shares. But the aim must always be reciprocal market openness not reciprocal protectionism."...
"These shares must reflect the European interest, not the national one," he said.
Let's just savour the stupidity here:
1. The presumption that bureaucrats know what a "key" industry is. They don't. Markets - customers and investors - decide what's an important industry and what isn't.
2. The idea that openness must be reciprocal. Not necessarily. Unrestricted imports raise living standards by cutting prices. If (say) the Chinese are daft enough not to believe this, it's no case for Europe to think otherwise. As Joan Robinson - no fan of unfettered capitalism - said: "If your trading partner has rocks in his harbour, that is no reason to throw rocks into your own."
3. The notion that not only is there an unambiguous thing as a "European interest", but that this is to be decided by bureaucrats rather than markets or democracy.
4. The belief that this European interest is the interest of producers rather than consumers. Why else make foreign access to European markets dependent upon European access to overseas markets?
5. The belief that ownership should change merely to give bureaucrats more power. The thought that ownership might change for other reasons - to reduce inequality, to better control arrogant bosses or to empower workers - never seems to have occurred to Mandelson.
And here we see his lifelong consistency. Like all Communists, he wants central ownership and control not to liberate workers, but to satisfy his own lust for power over others.
Whilst you're undoubtably right in your emotion that the bureaucrats will bow to lobbying and protect some companies that don't deserve it, the notion of "sensitive industries" (please note, he doesn't say "key industries" the way you do) has little to do with economics and more to do with military politics.
It's sort of ironic, because you Marxists are supposed to be more aware of the influence of Power on relations than the average economist.
I don't doubt that some of the government worries about Gazprom owning our power infrastructure, or the Chinese buying the Eurofighter factory are overdone, but you need to put a better case than you have so far that international markets and consumers understand or even care about national/co-national regional power issues before you get on your high horse.
Posted by: Meh | July 23, 2007 at 11:28 AM
You seem to have missed the point - which is that these are foreign bureacrats taking control of companies. Would it be so wrong to pass a law saying no bureacrats should control them?
Posted by: Matthew | July 23, 2007 at 12:19 PM
This is the Wizard of Oz "Don't look behind the curtain" sleight of hand by which states pretend that the EU is responsible for anything they don't want to fess up to.
What is happening here is that Mandelson is bowing to pressure from individual states, it is they that will own the shares after all, to allow certain protectionist measures that would currently fall foul of EU law. His final coda is to say that he will only allow it if they aren't taken to prevent, say, a German or French power company from buying a Spanish one. The alternative here is for the EU to allow member states whatever golden share arrangements they want.
If you are going to blame Mandelson for something there it should be for not standing firmly enough but I don't see that he has any leverage to do better.
Posted by: Jack | July 23, 2007 at 04:04 PM
Here's one example of this kind of protectionism that you may be prepared to agree with Chris: The Cultural Exception:
http://en.wikipedia.org/wiki/Cultural_exception
The French do it in a way that annoys people. We Brits do it much more effectively, we're much more protectionist on cultural trade than almost any other country in the world - and we get a cultural output that we're very pleased with.
I suppose you do have a readership who are obsessed with two things - the EU Superstate and the BEEB's liberal bias. They're probably the only constituency who don't like UK cultural protectionism.
Posted by: Paulie | July 23, 2007 at 05:25 PM