China's Xi Jinping warns of new 'long march' as trade war with US intensifies [feedly]

China's Xi Jinping warns of new 'long march' as trade war with US intensifies
https://www.straitstimes.com/asia/east-asia/chinese-president-xi-jinping-warns-of-new-long-march-as-trade-war-intensifies

BEIJING (NYTIMES) - President Xi Jinping of China called for the Chinese people to "start again" and begin a modern "long march," invoking a turning point in Communist Party history as the country braces for a protracted trade war with the United States.

"Now there is a new long march, and we should make a new start," Mr Xi told a cheering crowd on Monday (May 20) in Jiangxi province as he started a domestic tour that is seen as an attempt to rally the nation as trade tensions with the United States escalate.

Mr Xi was accompanied by his top trade negotiator Liu He as he made the remarks at the historic site of the start of Mao Zedong's Long March of 1934. The Long March was a 6,000-km long military retreat by the Red Army, the forerunner of the People's Liberation Army,  that took more than a year and would ultimately lead to the ousting of the Kuomintang nationalists 15 years later.

While Mr Xi did not mention the trade war in his comments, they are the strongest signal yet that Beijing has abandoned hopes of a deal with the United States on the issue in the near term. Prospects of a deal faded this month when talks broke down between negotiators for the two sides and President Donald Trump accused China of breaking terms that had already been settled.

The Chinese state media has ratcheted up nationalistic rhetoric in the last few days, comparing the trade war to the Korean War, during which Chinese troops were in direct combat with US forces.

Over the weekend China's national movie channel, CCTV-6, ran back-to-back films about the Korean War, saying that the footage was "echoing present times." The takeaway from these films for many Chinese is that "there's no equal negotiation without fighting," Mr Hu Xijin, the editor of Global Times, a newspaper owned by the Communist Party, wrote on Twitter.

For months before the trade talks broke down, the Chinese state media had been more subdued, at times even delaying news of the worsening tensions. When Mr Trump first indicated that he would increase tariffs to 25 per cent from 10 per cent on US$200 billion (S$276 billion) in Chinese goods - and the stock markets swooned in response - there was hardly any mention of the threat in China, where the internet and other media are censored.



Rare earths are found in most of the electronics that the world uses every day, and China is the largest source of the minerals. China has used its control of rare earths to exert pressure before, most notably in 2010 when it halted all exports to Japan for two months over a territorial dispute.But after talks broke down between both sides, Chinese state media outlets changed their tone, saying that while China was prepared to resolve differences through negotiations, if the United States chose to fight, "we will fight to the end."

One of Mr Xi's first visits on his tour was to a rare earths mine in Ganzhou, which some observers saw as an attempt to remind Mr Trump of the leverage that China has when it comes to certain resources that the United States, and the rest of the world, depend on.
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Nancy J. Altman: Trump’s Sneak Attack on Social Security [feedly]

Trump's Sneak Attack on Social Security
https://www.nakedcapitalism.com/2019/05/trumps-sneak-attack-on-social-security.html

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By Nancy J. Altman, a writing fellow for Economy for All, a project of the Independent Media Institute, has a 40-year background in the areas of Social Security and private pensions. She is president of Social Security Works and chair of the Strengthen Social Security coalition. Her latest book is The Truth About Social Security. She is also the author of The Battle for Social Security and co-author of Social Security Works! Produced by Economy for All, a project of the Independent Media Institute.

Donald Trump's recent budget proposal included billions of dollars in Social Security cuts. The proposed cuts were a huge betrayal of his campaign promise to protect our Social Security system. Fortunately for Social Security's current and future beneficiaries, he has little chance of getting these cuts past the House of Representatives, which is controlled by Democrats.

So Trump and his budget director/chief of staff Mick Mulvaney, who has long been hostile to Social Security, are trying another tactic to cut our earned benefits. They are pursuing a long game to reach their goal. In a divide-and-conquer move, the focus is not Social Security. At least, not yet.

Last week, the Trump administration revealed that it is planning to employ the so-called chained Consumer Price Index (CPI) in a way that does not need congressional approval. "Chained CPI" might sound technical and boring, but anyone who has closely followed the Social Security debate knows better. It has long been proposed as a deceptive, hard-to-understand way to cut our earned Social Security benefits.

Trump plans to switch to the chained CPI to index the federal definition of poverty. If he succeeds, the impact will be that over time, fewer people will meet the government's definition of poverty — even though in reality, they will not be any less poor. The definition is crucial to qualify for a variety of federal benefits, including Medicaid, as well as food and housing assistance. The announcement was written blandly about considering a variety of different measures, but anyone who knows the issue well can easily read the writing on the wall.

So, what does this have to do with Social Security? Like the poverty level, Social Security's modest benefits are automatically adjusted to keep pace with inflation. If not adjusted, those benefits will erode, slowly but inexorably losing their purchasing power over time. These annual adjustments are already too low, but they are better than no adjustment at all. The chained CPI would make these adjustments even less adequate. The top line of the following chart shows what a more accurate adjustment would look like. The line below it shows what the current adjustment does to benefits, and the bottom line shows what the stingier chained CPI would do:

Proponents of the chained CPI say that it is better at measuring "substitution," but don't be fooled. The current inadequate measure already takes into account substitution of similar items. This is the idea that if the price of beef goes up, you can substitute chicken. In contrast, the chained CPI involves what are called substitutions across categories. If your planned vacation abroad goes up, you can stay home and buy a flat screen television and concert tickets instead.

Of course, neither form of substitution is much help to seniors and people with disabilities whose health care costs are skyrocketing. There's no substitution for hospital stays and doctor visits. Those who propose the chained CPI are apparently fine with letting seniors who can't afford even chicken substitute cat food.

The idea of substitution within or across categories makes no sense for people with no discretionary income. If all of your money goes for medicine, food and rent, how does substitution make sense? If you are so poor that your children go to bed hungry, how do you substitute?

Back in 2012, President Barack Obama proposed a so-called Grand Bargain to cut Social Security using the chained CPI, in return for Republicans agreeing to increase taxes on the wealthy. The goal of this Grand Bargain was ostensibly to reduce the deficit, despite the fact that Social Security does not add a single penny to the deficit.

Grassroots activists around the country fought back, and Obama ultimately realized his error. He removed the chained CPI from his budget proposals and endorsed expanding, rather than cutting, Social Security's modest benefits. Social Security expansion is now the official positiono f the Democratic Party.

Yet Republicans have still continued to push Social Security cuts, including the chained CPI. Back in December 2017, they passed a massive tax cut for corporations and the super-wealthy. Afterwards, they used the predictable deficits their tax cuts caused as an excuse to call for cutting Social Security. Senate Majority Leader Mitch McConnell and other Republicans made well-publicized statements about the so-called "need" to cut Social Security. What was much more secret was a provision in the tax bill which replaced the measure used to index the tax brackets with the chained CPI.

Now, Trump wants to apply the chained CPI to the calculation of poverty rates. This will directly hurt many seniors and people with disabilities by making it more difficult to qualify for Medicaid and other programs many of them rely on, including food and housing assistance. It is also a long-term threat to Social Security itself.

The strategy is clear: Trump and his Republican supporters in Congress plan to apply chained CPI everywhere else, and then say that it is only common sense and indeed fair that we apply it to Social Security as well. We should be consistent, right?

Trump thinks that he can get away with executing this long-game attack on Social Security quietly, while the media and public are focused on his tweets, name calling, and scandals. But we must not be distracted. If we do not stop this attack in its tracks, our earned benefits will be next.

If you want to forestall another fight over cutting Social Security through the chained CPI, call your members of Congress, write to your local paper, and tell your friends: No chained CPI! No chained CPI for our earned benefits! No chained CPI for the most vulnerable among us!

This quiet effort to embed the chained CPI is a fight Trump does not want to have, certainly in an election year. But it is one we will bring to him. Grassroots activism defeated the chained CPI before. This time it will be harder because Trump can substitute the chained CPI without legislation. That means we have to simply fight harder. If we stick together, we surely will win. And we must. All of our economic security depends on it.

This entry was posted in Banana republic, Guest Post, Income disparity, Politics, Ridiculously obvious scams, The destruction of the middle class on May 22, 2019 by Jerri-Lynn Scofield. newsfeed

Paul Krugman : Don’t Blame Robots for Low Wages : "Participants just assumed that robots are a big part of the problem—... [feedly]

Paul Krugman : Don't Blame Robots for Low Wages : "Participants just assumed that robots are a big part of the problem—...
https://www.bradford-delong.com/2019/05/opinion-dont-blame-robots-for-low-wages-the-new-york-times.html

Paul Krugman: Don't Blame Robots for Low Wages: "Participants just assumed that robots are a big part of the problem—that machines are taking away the good jobs, or even jobs in general. For the most part this wasn't even presented as a hypothesis, just as part of what everyone knows.... So it seems like a good idea to point out that in this case what everyone knows isn't true.... We do have a big problem—but it has very little to do with technology, and a lot to do with politics and power.... Technological disruption... isn't a new phenomenon. Still, is it accelerating? Not according to the data. If robots really were replacing workers en masse, we'd expect to see the amount of stuff produced by each remaining worker—labor productivity—soaring.... Technological change is an old story. What's new is the failure of workers to share in the fruits of that technological change...  

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Tim Taylor: Strengthening Automatic Stabilizers [feedly]

Latest thinking on: "are there automatic stabilizers for capitalism"

Strengthening Automatic Stabilizers
http://conversableeconomist.blogspot.com/2019/05/strengthening-automatic-stabilizers.html

For economists, "automatic stabilizers" refers to how tax and spending policies adjust without any additional legislative policy or change during economic upturns and downturns--and do so in a way that tends to stabilize the economy. For example, in an economic downturn, a standard macroeconomic prescription is to stimulate the economy with lower taxes and higher spending. But in an economic downturn, taxes fall to some extent automatically, as a result of lower incomes. Government spending rises to some extent automatically, as a result of more people becoming eligible for unemployment insurance, Medicaid, food stamps, and so on. Thus, even before the government undertakes additional discretionary stimulus legislation, the automatic stabilizers are kicking in.

Might it be possible to redesign the automatic stabilizers of tax and spending policy in advance so that they would offer a quicker and stronger counterbalance when (not if) the next recession comes? The question is especially important because in past recessions, the Federal Reserve often cut the policy interest rate (the "federal funds" interest rate) by about five percentage points. But interest rates are lower around the world for a variety of reasons, and the federal funds interest rate is now at 2.5%. So when the next recession comes, monetary policy will be limited in how much it can reduce interest rates before those rates hit zero percent, and will instead need to rely on nontraditional monetary policy tools like quantitative easing, forward guidance, and perhaps even experiments with a negative policy interest rate.

Heather Boushey, Ryan Nunn, and Jay Shambaugh have edited a collection of eight essays under the title Recession Ready: Fiscal Policies to Stabilize the American Economy (May 2019, Hamilton Project at the Brookings Institution and Washington Center for Equitable Growth).

In one of the essays, Louise Sheiner and Michael Ng look at US experience with fiscal policy during recessions in recent decades, and find that it has consistently had the effect of counterbalancing economic fluctuations. They write: "Fiscal policy has been strongly countercyclical over the past four decades, with the degree of cyclicality somewhat stronger in the past 20 years than the previous 20. Automatic stabilizers, mostly through the tax system and unemployment insurance, provide roughly half the stabilization, with discretionary fiscal policy in the form of enacted tax cuts and increased spending accounting for the other half."

Automatic stabilizers are important in part because the adjustments can happen fairly quickly. In contrast, when the discretionary Obama stimulus package--American Recovery and Reinvestment Act of 2009--was signed into law in February 2019, the Great Recession had started 14 months earlier.

In another essay, Claudia Sahm proposes that along with the already-existing built-in shifts in taxes and spending, fiscal stabilizers could be designed to kick in automatically when a recession starts. In particular, she proposes that the trigger for such actions could be when "the three-month moving average of the national unemployment rate has exceeded its minimum during the preceding 12 months by at least 0.5 percentage points. ... The Sahm rule calls each of the last five recessions within 4 to 5 months  of its actual start. ... The Sahm rule would not have generated any incorrect signals in the last 50 years."

Sahm argues that when this trigger is hit, the federal government should have legislation in place that would immediately make a direct payment--which could be repeated a year later if the recession persists. She makes the case for a total payment of about 0.7% of GDP (given current GDP of around $20 trillion, this would be $140 billion). She writes: "All adults would receive the same base payment, and in addition, parents of minor dependents would receive one half the base payment

per dependent." This isn't cheap! But a lasting and persistent recession is considerably more expensive. 

Other chapters of the book focus on a number of other proposals, which include: 

• "[T]ransfer federal funds to state governments during periods of economic weakness by automatically increasing the federal share of expenditures under Medicaid and the Children's Health Insurance Program"
• "[C]reating a transportation infrastructure spending plan that would be automatically triggered during a recession"
• Publicize availability of unemployment benefits when the unemployment rate starts rising, and extend the length of unemployment insurance payments at this time
• Expand Temporary Assistance for Needy Families to include subsidized jobs in recessions
• An automatic rise of 15% in Supplemental Nutrition Assistance Program (SNAP) benefits during recessions

The list isn't exhaustive, of course. For example, one policy used during the Great Recession was to have a temporary cut in the payroll taxes that workers pay to support Social Security and Medicare. For most workers, these taxes are larger than their income taxes. And there is a quick and easy way to get this money to people, just by reducing what is withheld from paychecks. 

The broader issues here, of course, is not about the details of specific actions, some of which are more attractive to me than others. It's whether we seize the opportunity now to reduce the sting of the next recession.

For estimates of automatic stabilizers in the past, see "The Size of Automatic Stabilizers in the US Budget" (November 23, 2015).

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Dean Baker: Trump’s Trade War With China Is Waged to Make the Rich Richer [feedly]

Trump's Trade War With China Is Waged to Make the Rich Richer
http://cepr.net/publications/op-eds-columns/trump-s-trade-war-with-china-is-waged-to-make-the-rich-richer

Dean Baker
Truthout, May 20, 2019

See article on original site

Donald Trump seems determined to double down and keep pressing forward on his trade war with China. He promises more and higher tariffs, apparently not realizing that U.S. consumers are the ones paying these taxes — not China's government or corporations.

While tariffs clearly impose a cost on people in the United States, this cost could be justified as a weapon to change a trading partner's harmful practices. During his campaign, Trump pledged to wage a trade war with China over its currency policy. He said he would declare China a "currency manipulator" on day one of his administration, putting pressure on China to raise the value of its currency against the dollar.

The value of China's currency matters, since it determines the relative price of goods and services produced in China and the United States. Ordinarily, the currency of a rapidly growing country with a large trade surplus like China would be expected to rise against the currency of a country with a large trade deficit like the United States. However, China's government intervened in currency markets to keep its currency from rising, thereby keeping down the price of China's goods and services.

This was ostensibly the behavior that Trump was determined to change in his China trade war. But now that we are in the war, the currency issue has largely disappeared from the conversation. According to the published accounts, the big issue is over China's respect for the intellectual property claims (i.e., patent and copyrights) of U.S. corporations.

The most bizarre aspect of this turn is that Trump's demands in this area have the support of economists and commentators across the political spectrum. We repeatedly hear the line that we have to stop China's theft of "our" intellectual property.

The problem with this argument is that it is not "our" intellectual property that Trump is protecting. After all, very few people have any patents or copyrights that we are worried about China using without compensation.

The intellectual property that Trump and his allies across the political spectrum want to protect belongs to major corporations like Boeing, Pfizer and Microsoft. Their goal is to make China pay more money to get access to technology these companies have developed. That's great for their profits — sort of like Trump's tax cut — but does not help the vast majority of people who do not own lots of stock in these companies.

In fact, if China has to pay more money to these corporations for their technology, it is likely to hurt most U.S. workers for several different reasons.

First, if companies like Boeing and General Electric don't have to worry about being forced to transfer technology to Chinese companies when they outsource to China, they will have more incentive to outsource to China. That's about as straightforward as it gets.

Second, the more money that China has to pay for the technology of U.S. companies, the less money they have to pay for other exports from the United States. This means that we will have a larger trade deficit in everything other than technology.

In the same vein, this is yet another policy the U.S. government is pursuing that will increase inequality. If we increase the returns to various technology sectors, then we expect that the highly educated people doing this work will see their pay rise relative to everyone else. As is more generally the case, it is not technology that creates this inequality in wages, it is the policy on inequality.

There is an argument that we should not allow China to just take, at no cost, the technology that we spent hundreds of billions of dollars to develop. That is a reasonable argument, but that hardly implies that we need to force them to respect patent and copyright protection.

We need to ensure that China and other countries share in the cost of developing new technologies. There are far more modern and efficient mechanisms than patent monopolies, which are a relic of the medieval guild system. While negotiating sharing mechanisms may be a difficult process, it is no more difficult than preserving the patent system. President Obama likely would have had the Trans-Pacific Partnership completed and approved by Congress before he left office if it had not been for haggling over terms of drug patent-related protections.

It is also important to recognize that we will likely have far more to gain from having access to China's technology than the other way around. China is already far and away the global leader in clean technologies, with as much installed solar and wind energy as the rest of the world combined, and an electric car industry that now produces as many cars as all other countries put together.

China currently spends roughly the same share of its GDP on research and development as the United States. Its economy is already 25 percent largerthan the U.S. economy and will be more than twice as large in less than a decade. Rather than focusing on bottling up U.S. technology, a forward-thinking trade agenda would be focused on ensuring our access to Chinese technology.

Unfortunately, trade policy is not crafted in the national interest, it is crafted with the goal of making the rich richer. This is what Trump's trade war is all about. And, as is the case with so many other wars, it is about working-class people being forced to sacrifice by paying high tariffs to advance the goals of the rich.

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There’s a revealing puzzle in the China tariffs [feedly]

There's a revealing puzzle in the China tariffs
http://larrysummers.com/2019/05/15/theres-a-revealing-puzzle-in-the-china-tariffs/

On Monday, China announced new tariffs on $60 billion of U.S. exports, and the United States threatened new tariffs on up to $300 billion of Chinese goods. These actions were cited as the principle reason for a decline of more than 600 points in the Dow Jones industrial average, or about 2.4 percent in broader measures of the stock market. With the total value of U.S. stocks around $30 trillion, this decline represents more than $700 billion in lost wealth.

This was not an isolated event. Again and again in the past year, markets have gyrated in response to the state of trade negotiations between the United States and China.

The market sensitivity to threats and counter-threats in the trade war is quite remarkable. Monday's announcement by the Chinese, for example, would be expected to raise China's tariffs by about $10 billion. Much of this will show up as higher prices for Chinese importers, and some of it will be avoided by diverting exports of goods such as liquid natural gas to other markets, so the impact on U.S. corporate profits will be far less than $10 billion. Meanwhile, U.S. tariffs are likely to raise corporate profits as higher import costs push some business to domestic producers.

There is the further consideration that reasonable market participants should not have entirely discounted the possibility of tariff increases Monday and that there surely remains some chance a trade deal will be reached. So, in fact, the market should not even have moved in full proportion to the change in corporate profitability associated with new tariffs.

There is a revealing puzzle here. Events whose direct impact on corporate profits is a few billion dollars seem to be driving market fluctuations that change the total value of corporations by hundreds of billions of dollars. To be sure, there would be many ways of refining my calculation of the profit impact to recognize various feedbacks, and certainly the imposition of tariffs increases uncertainty, which in general depresses markets. But with any plausible calculation of the direct impact of tariff changes on profitability or uncertainty about profitability, it is not possible to justify the kinds of changes in market value we observed Monday or on many other days when there was news about the status of the U.S.-China trade negotiations.

Part of the answer to the puzzle, I suspect, lies in markets' tendency to sometimes overreact to news, especially in areas where they do not have long experience. This idea is supported by the tendency illustrated by the market's Tuesday rally, which took place without any particularly encouraging U.S.-China developments.

A larger part of the answer probably lies in the idea that the current trade conflict is a possible prelude to a far larger conflict between the two nations with the largest economies and greatest power for as far as can be foreseen. When it appears less likely that a conflict over well-defined and ultimately not-that-difficult commercial issues can be resolved, rational observers conclude that it is also less likely the United States and China can manage issues ranging from 5G wireless technology to North Korea, from the future of Taiwan to global climate change, and from the management of globalization to the security architecture of the Pacific region.

A world where relations between the United States and China are largely conflictual could involve a breakdown of global supply chains, a splinternet (as separate, noninteroperable internets compete around the world), greatly increased defense expenditures and conceivably even military conflict. All of this would be catastrophic for living standards and would also have huge adverse effects on the value of global companies.

It is, I suspect, the greater risk of catastrophic medium-run outcomes, rather than the proximate impact of trade conflicts, that is driving the outsize market reactions to trade negotiation news.

This carries with it an important lesson for both sides: It is risky to turn the pursuit of even vital national objectives into an existential crusade. Rather, even when nations have objectives that are in conflict, it is important to seek compromise, to avoid inflammatory rhetoric and to confine rather than enlarge the areas where demands are being made. Establishing credibility that promises will be kept and surprises will be avoided is as or more important with adversaries as with friends.

As the Trump administration carries on the trade negotiations, and as the presidential campaign heats up, Americans will do well to remember that there is no greater threat to the success of our national enterprise over the next quarter-century than mismanagement of the relationship with China. It is not just possible but essential to be strong and resolute without being imprudent and provocative

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Piketty Europe and the class cleavage [feedly]

the costs of neglect of the class question from the eminent Piketty

Europe and the class cleavage

Thomas Piketty blog
http://piketty.blog.lemonde.fr/2019/05/14/europe-and-the-class-cleavage/

Three years after the referendum on Brexit and on the eve of the new European elections, the scepticism about Europe is still as strong, particularly amongst the most disadvantaged sections of society.

The problem is deep and long-standing. In all the referendums for the last 25 years the working classes have systematically expressed their disagreement with the Europe presented to them, whereas the richest and the most privileged classes supported it. During the French referendum on the Treaty of Maastricht in 1992, we observed that 60% of the voters with the lowest incomes, personal wealth or qualifications voted against, whereas the 40% of the electorate with higher incomes voted in favour; the gap was big enough for the yes vote to win with a small majority (51%). The same thing happened with the Constitutional Treaty in 2005, except that this time only the top 20% were in favour of the yes vote, whereas the lower 80% preferred to vote no, whence a clear victory for the latter (55%). Likewise for the referendum on Brexit in the UK in 2016: this time it was the top 30% who voted enthusiastically to remain in the EU. But, as the bottom 70% preferred to leave, the leave vote won with 52% of the votes.

What is the explanation? Why are votes on the European Union always characterised by such a marked division of social class? This outcome is all the more puzzling as the structure of the vote for the different political parties has long since ceased to be so clearly marked by the class structure, with the three dimensions of social division (qualifications, income, personal wealth) all pulling in the same direction. Since the 1970-1980s; the most highly qualified have swung distinctly towards the left wing parties in both countries, whereas those with the highest incomes and personal wealth continue to tend to support the right-wing parties, which are themselves undergoing change. On the other hand, during the votes concerning Europe in 1992 (French referendum on Maastricht Treaty), 2005 (French referendum on constitutional treaty) and 2016 (UK referendum on Brexit), the intellectual and economic elites in both instances found themselves supporting the EU as it existed, whereas the less privileged categories on the left and on the right rejected it.

The reason for this, according to those who are better off, is that the working classes are nationalist and xenophobic, perhaps even backwards. However the xenophobia of the less well off is no more natural than that of the elites. There is a much simpler explanation: the European Union, as built in recent decades, is based on widespread competition between countries, on fiscal and social dumping in favour of the most mobile economic actors and functions objectively to the benefit of the most privileged. Until the European Union takes strong symbolic measures for the reduction of inequalities, for example a common tax which impacts the richest, enabling the taxes of the poorest to be lowered, this situation will continue.

This opposition between several visions of Europe is not new, and it gains by being set in a historical perspective. In 1938, young militants launched the Federal Union movement in the United Kingdom. They were soon joined by academics like Beveridge and Robbins; it was the inspiration for Churchill's proposal in June 1940 to create a Federal Franco-British Union; this was refused by the French Government, in refuge in Bordeaux at the time, and which preferred to give full powers to Pétain. It is interesting to note that a group of British and French academics met in Paris in April 1940 to study the working of a possible federal union, in the first instance at Franco-British level, then enlarged to European level; they did not come to an agreement. Hayek defended the vision the most permeated with economic liberalism. He wanted a purely commercial union based on competition, free markets and monetary stability. Robbins defended a fairly similar approach, while at the same time envisaging the possibility of a federal budget and, in particular, a federal inheritance tax in situations where the free market and free movement of persons were not sufficient to spread prosperity and reduce inequalities.

Other members of the group had visions much closer to democratic socialism; in the first instance, Beveridge, an enthusiast for social insurance, along with the sociologist, Barbara Wooton who proposed a federal income tax and a federal inheritance tax, at a rate of over 60%, along with a system of income limit and a maximum inheritance. The participants in the meeting separated in the acknowledgement of their disagreement on the social and economic content of the federal union envisaged. All these discussions concerning the Federal Unionmovement resonated throughout Europe. For example, in 1941 they inspired Altiero Spinelli, a militant communist then imprisoned in the gaols of Mussolini, to draw up his Manifest for a Free and United Europe, or Manifeste de Ventotene(the name of the island where he was imprisoned).

However, there is no reason why present-day Europe should remain imbued with a Hayek-type vision. Today the European banner serves the interests of those whose aim is to impose their class politics. But it is up to us to remind people that Europe could be organised in a different manner as was already the opinion of Wooton, Beveridge or even Robbins almost 80 years ago.

PS: about the Federal Union movement, see the fascinating book by Or Rosenboim, The Emergence of Globalism. Visions of World Order in Britain and the United States 1939-1950, Princeton University Press, 2017

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