Tuesday, February 26, 2002
The Mital Affair & the National Interest.

Obviously the excuses offered by the government for this flagrant bit of back-scratching are not to be taken seriously. Nonetheless, they are instructive of the kind of conception of the national interest New Labour imagines people can be persuaded to believe in. Unsurprisingly, it is impossibly broad. Lubricating a deal in Romania on behalf of a foreign tycoon is held to be in Britain's interests on the grounds that Britain is a trading nation keen to do trade in Eastern Europe, a nation that will benefit more from that trade the more prosperous Eastern Europe becomes. Leaving aside the obvious point that there was another deal on the table that might have benefited Romania just as much as the Mital one, even leaving aside the respects in which Mital is acting in a way directly opposed to British interests, there are objections of principle to be made here. Insofar as international free trade is important to Britain, we are more likely to benefit from it when other countries' prosperity is increased in the usual way - i.e., through the operations of the market. Governments are notoriously bad at picking winners even in their own countries, let alone thousands of miles away. And insofar as international free trade is not quite as important to Britain as some would have us believe (80% or whatever it is of our trade is domestic), our government's time would be better spent on fostering the conditions in which domestic trade can flourish. But most importantly, the Mital principle implies that (ceteris paribus) anything that benefits another country benefits Britain. Why then distinguish between foreign & domestic affairs at all? Because the Mital principle is a nonsense. Success in one country does not automatically breed success in every other: very often that success is purchased at the expense of somebody else's. Or was the Mital deal also in the interests of the French?


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