The Eighth Corbishley Memorial
Lecture - 5th
July 1984
The Place of Sovereignty in an Interdependent World
By the Rt. Hon. Edward Heath
MBE MP
FOREWORD by Professor George Wedell
The Eighth Thomas Corbishley Memorial lecture was given by the Right Honourable Edward Heath MBE MP on 5th July 1984 at the Royal Society of Arts. In it Mr Heath explores the rise and decline of sovereignty as an appropriate concept in the ordering of the relation between nation states. He draws on his unrivalled experience, both of political responsibility in the United Kingdom and of international relations on a European and a global scale, to expound the ‘need to adapt our ideas of sovereignty and national power and influence to take account of the benefits of interdependence in the modern world’.
The Wyndham Place Trust is much indebted to Mr Heath for a lecture which is profound, closely argued and informed by firm convictions about the nature and destiny of man. The Trust hopes to establish a Commission to consider the practical steps which might be taken by present day nation states to achieve that adaptation of the idea of sovereignty for which Mr Heath calls. The Trust is indeed fortunate to be able to build on the conceptual foundations laid by this year’s Corbishley lecturer. August 1984
THE PLACE FOR SOVEREIGNTY IN AN INTERDEPENDENT WORLD
The traditional concept of sovereignty implies, at its least, that national decision-making should not be constrained by the laws and rules of external institutions. At its most, it holds that the national will should not be limited by forces and preferences determined outside the country. The Government policy should be shaped exclusively by political forces acting within national frontiers and not across them.
A dictionary definition of sovereignty is of ‘the supreme, unrestricted power of the state’. And indeed the notion of sovereignty is critically linked to that of power. Without power, the notion of sovereignty is without substance. Immediately the question is raised as to how much power any modern nation state has to enforce its will, or sovereignty, on itself and on others. That is a fundamental question for consideration.
When we speak of British sovereignty, we generally take this to mean the unrestricted power of our Parliament, one of the forces necessary to implement its decisions, freely arrived at. We understand this power to be legitimised in a number of ways; first and foremost by the democratic process as an expression of society’s collective will, known as the sovereignty of people, by law, by practice and tradition.
That the Queen in Parliament is supreme in national terms there can be no doubt. The right of Parliament to legislate in whatever way it chooses exists in constitutional doctrine. It is the extent to which Parliament’s wishes can be made effective that is open to doubt.
The traditional concept of sovereignty to which some romantically and wistfully hark back is of little relevance today. In part this is a consequence of changes in the world at large, and in part it is the result of change in the nature of Government and the scope of its authority.
The late nineteenth and early twentieth centuries witnessed a change in the nature of matters debated in Parliament. Before 1905, the larger part of Parliamentary time was devoted to constitutional and moral issues or to matters concerning foreign affairs. Today these occupy a much smaller fraction of the time available for debate. Social and economic issues continually predominate in the modern House of Commons.
It is in the nature of these matters that they do not lend themselves so readily to direct control by Parliament. Parliament can legislate to introduce the death penalty or bring in a harsher regime of sentencing for criminals, or to remove religious discrimination. It cannot legislate to increase national wealth, to raise our exports or to bring new prosperity. It can merely set a framework to encourage the optimum performance of our people through a mixture of rules and incentives.
This is in part due to the mechanisms of enforcement. Only totalitarian states have attempted complete control economic behaviour. They have scarcely been successful. It would be intolerable in a free society. Parliament has never sought to assert its sovereignty in this way and it is doubtful that it would secure the democratic consent to legitimise it.
Even in the religious and moral fields, there are limits to the extent to which the collective will can be enforced against individual preference. We can only speculate as to the extent to which Protestantism would have become established in an atmosphere of unremitting state hostility during the sixteenth and seventeenth centuries as the ideas of Luther and Calvin spread across Europe unfettered by political boundaries. Today it is proving difficult, despite legislation, to remove the consequences of racial discrimination and even religious intolerance in some parts of the United Kingdom.
But limitations upon sovereignty in the field of economic and foreign policy are mainly due to the increased interdependence of the modern world.
In opposing British membership of the European Community, Hugh Gaitskell defined what he meant by British sovereignty. He stated that it had two essential ingredients: that Parliament should be the sole law-making agency and that the exercise of Parliament’s will should be unfettered.
From America’s refusal to participate in the league of Nations in 1919, to Britain’s rejection of the Schuman plan in 1950 and de Gaulle’s withdrawal from tic military structures of NATO in 1965, the traditional concept of sovereignty has been responsible for the fallacy that participation in large international wholes can only reduce the influence of individual nations.
I believe that interdependence is now so irrevocable that our ideas of sovereignty should be changed to take account of the impotence which follows from isolation and the greater influence in the world that can be obtained from participation.
It is no coincidence that the rise of the new nation states and the emergence of the notion of national sovereignty was accompanied by the acceptance of the new economic doctrines of mercantilism and subsequently by the extensive practice of colonialism.
Mercantilism, the theory that the wealth of nations depends upon the possession of precious metals accumulated by the maximisation of the trade surplus and the fostering of national commercial interests, was the theoretical politico-economic basis of the nation state. Colonialism rapidly grew out of it as the burgeoning national states with their new-found concern for power based upon the wealth of the nation sought to minimise their vulnerability and maximise their strength by asserting direct control over the sources of their raw materials and the markets for their trade.
This was the prevailing spirit that emerged as feudalism and dynasticism declined. Government ceased to be the personal prerogative of the monarch and his courtly hierarchy. It became less concerned with religion and dynastic interests.
It moved out of the Court and became more truly the creature of the needs and moods of the country. It became national and material rather than personal and spiritual. Wealth, and with it the power of the nation became the supreme goal.
Today we find ourselves in quite different circumstances. The traditional concept of sovereignty is as much an anachronism as if applied to a Europe united under Charlemagne. National sovereignty in that sense is the doctrine of a period that has now passed.
Interdependence does indeed run deep in the modern world. World trade and international specialisation has developed to the point at which countries imported $1,680bn from each other last year. By the end of 1981, countries had had directly invested $482bn in one another. The foreign debt of non-OPEC developing countries is estimated to be well in excess of $600bn.
We in Britain export a third of everything we produce. We no longer exercise sovereignty over the bulk of the lands with which we trade as we did before the dismantling of our Empire. In this sense Britain and the other nation states of Europe are in a materially different position to that of the United States whose trade patterns betray greater economic integrity and self-sufficiency.
The relative freedom of capital movements in the 1980’s has made national interest rates dependent upon those of other financial centres. In turn, Central Banks have virtually given up attempts to manage their own exchange rates and the old system of international management has collapsed. No efforts are being made to restore it or replace it.
Even the super powers find their dependence upon the free flow and supply of commodities is growing. In Britain we are more aware of economic interdependence than most. Not only do we export in excess of 30% of our GDP, but many firms have located themselves in the UK precisely because we are members of the European Community.
Nor is economic interdependence the full picture. Britain cannot defend herself without her allies in NATO whose decisions critically affect us. Britain alone cannot influence world events to protect its own interests. In the era of the continental super powers, enjoying huge economies of scale, greater economic integrity and independence, our industries cannot compete, and we cannot isolate ourselves from the impact of the rest of the world economy.
We must act at two levels. First, we must build Europe, to constitute it as a major power bloc, through which we in Britain can maintain our prosperity, defend ourselves and speak to the world.
Second, in recognition of the increasing interdependence of the world generally, we must build the institutions of international co-operation so that collectively we can play our part in the attempt to shape our future. For not even super powers of continental scale can maintain their independence as the globe shrinks before modern technology.
Thus the regional power blocs will have to come to terms with one another. Who can refuse to acknowledge that unemployment in Britain and Europe is connected with the debt crisis in the developing world? Its inability to buy from us is fuelled by high oil prices, high interest rates and the burden of repayment of debt. The low demand for their commodities at paltry prices completes the vicious spiral.
We must shape our future together in an interdependent world. We cannot continue to sit back idly and think that all will be well in the end. It is, in my view, profoundly immoral to refuse to tackle the problems which blight our world today. It is a failure of the human spirit if we believe we can do no more than await the intervention of some mysterious invisible hand in righting our ills.
The story of human progress and the essence of human dignity is the attempt of man, as distinct from all other animals, to understand and then sympathetically modify the world in which we live. We have made mistakes. We will continue to make them. But fail to try because of fear of failure is to acquiesce in a degrading and dehumanising fatalism.
The dynamic forces of international trade are tearing down the old regulatory regimes by which the nation states regulated their economies. The expansion of world trade in the post-war era has, in welcome contrast to the interim period, between the wars, allowed the world to add greatly to its prosperity.
From 1963 to 1973 world trade grew by 8% per annum on average. World output grew 6% annually. In 1975 and 1982 the growth of both world trade and world output were negative for the only years in the post war era. A return to a steady growth in world trade is essential. In many poorer nations a minimum of 22% growth is needed if living standards are not to fall while populations increase. In the developed world, new technologies and an increase in the numbers of those in the labour market mean that already unacceptably high levels of unemployment will increase even though it may be somewhat offset by a slow rate of growth.
Men of vision have in the past grasped world problems and striven to construct solutions. General Marshall and Lord Keynes are but two examples. They did not despair of the difficulties of easing the transition to a post-war order after 1945. They framed solutions in the light of the problems they faced. Both recognised the interdependence of the various groups with which they were dealing. For them sovereignty was not the major factor in the equation.
We must attempt to find the answer to the problems of today. We must construct the international mechanisms that will enable trade to flourish for the prosperity of us all. At the same time we must not allow the demolition of national economic controls to be followed by violent extremes of unfettered laissez faire which would be a recipe for social chaos and the rise of a new generation of dictators from right or left.
Democracy as we practise it today is less than a century old. In some countries it is more deeply ingrained than in others. We should not be complacent about the future of our system of Government. It is only just fifty years since the social tension and strife created by the Great Depression and the unresolved antagonisms of the First World War pulled down democracy in Germany and Italy and plunged Europe and the World successively into war.
It was in this spirit that the founding fathers created the Community. It was to prevent Europe from tearing itself apart again in War as it had done three times in the preceding seventy years, in 1870, in 1914 and in 1939. They aimed at durable solutions that tackled the fundamental problems rather than at papering over the cracks as had been done at Versailles in 1919. They were faced with six nation states each with a long history, separate modes of Government and proud traditions.
Today we are ten in the Community. Soon we shall be twelve. That war between the nations of the Community is now inconceivable is a tribute to the founding fathers and to their creation. Yet for the future, the Community has an equally important purpose. It is to preserve the prosperity of Europe and its place in the world. As a result of technological changes which place a premium upon size, we in Britain cannot compete with the United States whose home market is more than four times as large as ours, or with Japan, whose home market is more than twice our own.
We in Europe can compete. We can ensure that contribution of our continent to civilisation is a living contribution, not one cut off prematurely in the last quarter of the twentieth century as our economic decline sapped our influence, vitality and prestige. We must never forbear to learn from others, but we should remember that Europe’s long experience in international affairs places us in a unique position of understanding the world’s problems and puts upon us a comparable responsibility.
The European Community is a remarkable experiment. It is an attempt to create a continental power from a dozen or so countries proud of their respective traditions and deeply individualistic. These countries share many interests; above all they share a commitment to democracy. It is this commitment that binds them most closely. It binds them for the protection of their Parliamentary democracy. It binds them for the maintenance of their prosperity, to which their social cohesion is inextricably linked. In the future, it will I hope, link them in their own defence as Europe grows to fulfil a larger role as the effective second pillar in President Kennedy’s vision of the two tall strong pillars on which the prosperity and strength of the West would be based.
Of course membership of NATO and membership of the Community place fetters upon the independence of action of our own Government and Parliament. Treaties always have done so. The constitutional doctrine has always been that Parliament cannot bind its successors. Yet when a Government signs a Treaty on behalf of Britain pledges our word as a nation, we are and always have been bound by its terms. In that sense, sovereignty has always been qualified, unless we were prepared to break the treaty. In that case there would be no means of ensuring any form of international order.
As interdependence and the co-mingling of peoples have increased, of necessity the bilateral agreements embodied in treaties have gradually been subsumed into a delicate tissue of international law that is still in its infancy. If the Community and NATO existed and we were not members of them, they would take decisions to which we would have to respond, even though we had no part in taking these decisions. If they did not exist at all, the medium sized nations of Western Europe would be forced constantly to manoeuvre according to the new tides flowing out of Washington or Moscow, without the complex web of relationships which enables us to influence American policy and without the vestigial European unity that gives us more clout in that process.
It would be impossible to claim that interdependence has been without its problems. Attempts by the super powers to negotiate mutual restraint have often become the focus for disputes themselves, rather than for their resolution.
Within NATO the US has considered itself to be over-burdened, whilst the Europeans have felt underprivileged. In the Community, the definition of common purposes has been dogged by the pursuit of unilateral national advantage.
The problems of economic interdependence are well known. Such problems as do arise are, however, essentially to do with the failure to find the right mode of managing an interdependent world. Nations take decisions which are individually rational but collectively irrational, such as deflating at a time of international recession to obtain a larger share of a stagnating export market. Nations take decisions with only their own immediate concerns in mind but with no assessment of how other countries will be affected, or of how they themselves will be affected at second remove.
Indeed, a strong case can be made out for greater interdependence at several levels and a decision-making process coextensive with the international dimensions of the problems facing the world today. The issues too are interdependent. The common interest in arms control is reinforced by the enormous pressures on the budgets of the Western Allies and on the Soviet bloc.
Co-operation involving a limitation of sovereignty is the only way to tackle these problems. Sterling’s instability could be mitigated by entry into the European Monetary System, which might in time form part of a restructured international financial system based on the groupings of the major trading currencies.
Effective action to restore demand and thus jobs in the world economy is only possible by a general strategy that is sensitive to the conditions of individual national economies. Otherwise nations are inhibited by concern about their currency, the balance of payments and real wage competition. It was the attitude of devil take the hindmost that prompted the competitive deflation that preceded the slump in the late seventies and early eighties.
This cannot be left entirely to the forces of the market. Action is needed to stabilise currencies and interest rates. In recent years real currency rates have varied almost as much as nominal rates. Thus fluctuations have not merely been an adjustment to differential rates of inflation. Currencies have overshot, or undershot, what is generally reckoned to be an equilibrium and have then remained in disequilibrium for a long time.
Periods of sustained misalignment between currencies have strengthened the forces of protectionism when producers consider themselves unfairly disadvantaged by the undervaluation of competitors’ currencies. Fluctuations have created uncertainties which must have deterred exporting industries from making investments at home which are dependent on their view of what the world will be like economically several years ahead.
We must join the EMS at once. EMS rules have required national governments to examine national economic policies in the light of the common aim of achieving economic monetary stability. Close c’>operation and monetary discipline have raised effective defences against pressure on the exchange rate and prices. Our absence reduces Europe’s weight in the discussion on the state of the international monetary system. We can barely influence these discussions ourselves, any more than we can carry sufficient weight alone in the GATT to protect our own trading interests.
Greater European political co-operation is greatly desirable too. We have a contribution to make to the solution of world problems. We have important interests in the Middle East and unrivalled experience of it.
In the Atlantic Alliance, the disproportionate responsibilities and powers vested in the US were regarded as a temporary, an accidental outgrowth of the devastation of post-war Europe. It was assumed that an unbalanced alliance would not be permanently workable. It would be incompatible with the self-respect of European nations. It ran the risk that the US might one day tire of carrying so much responsibility for the defence of the alliance.
On the one hand, the US dominates the decision-making process; the West’s policy towards the East; the choice of weapons and deployment, and the negotiations of arms control. On the other the US bears the burden of providing most of the West’s nuclear strategic defence, and plays the most important role in defending the West’s interests away from the European theatre. Only Britain amongst America’s allies spends more than 5% of GNP on defence, thereby approaching the 6.9% spent by the US. Whilst the US has been increasing its defence expenditure by around 7% per annum, even Britain is abandoning the commitment to 3% real growth after 1985. Henry Kissinger is right to suggest that Europe should co-ordinate itself more closely to assume more responsibility for the defence of its own theatre.
First, there should be more common European procurement. So great is the duplication of effort in an area where economies can only be secured over long production-runs, that the overheads’ of European defence efforts have been estimated as being as high as 40%. Absence of common procurement also reduces the operational effectiveness of NATO’s defence. NATO has been described by Henry Kissinger as a hodgepodge of different weapon systems. For instance there are five different types of tank. The problems this entails for the building up of durable stockpiles and for their re-supply in time of hostilities, reduce the number of days during which a conventional defence is possible. This brings forward the point at which a choice has to be made between conventional defeat and nuclear response.
More co-ordinated procurement could also help Europe reduce the 8: 1 US advantage which will grow if Europe is unable to develop a unified defence market, large enough to support the development of the new weapons technologies.
A common approach to procurement would allow Europe to do more for its own defence without necessarily increasing overall government expenditure, or diverting resources from welfare.
Second, European nations should have a more effective role in determining the policies of the alliance: decisions on deployment, weapon systems, targeting and arms control.
There are some who fear that such a programme would be used as an excuse by the US to scale down the extent of their commitment pari passu with any increase in European - responsibilities. This is to misjudge the US. The US is well aware that the coupling of its defence interests with those of Western Europe has a greater deterrent value than the figures alone would suggest Indeed, the evidence is that the US would be more willing to maintain its commitment in the event of increased European efforts.
Greater interdependence of European defence efforts would lend authority to the development of a European foreign policy commensurate with our distinctive interests.
NATO is an excellent example of mutual interdependence. It fulfils the ambition of inter-war politicians who recognised that European stability could only be secured by coupling US defence interests to those of Europe. The deterrent value of NATO is a fine illustration of how interdependent nations acting in concert can be greater than their parts.
It is true that NATO is essentially an organisation for regional security. But just as monetary systems based upon the ECU, the Yen and the Dollar might be the elements of a new international economic order, so arrangements for regional security could be coalesced to give the basis for collective global security.
After all, it would take the most temperamentally out of touch General Secretary of the Communist Party to deny that the super powers are embarrassingly interdependent after all. If missiles can create permanent winter, if Russia must buy US grain, if Russia must sell oil through the European pipeline, to pay for their grain, who can deny this reality? These are but a few illustrations. We must not allow old fashioned prejudices to frustrate human advance.
From a philosophical perspective, the creation of international organisations may be seen as the parallel of that process by which the individual saw the advantages of living as a social being and pooling his rights to make society workable to its members’ mutual advantage.
From this philosophical point of view, there is no problem of nations coming together to form supra-national organisations. This can be represented on one hand as a pooling of sovereignty for mutual advantage parallel to a pooling of rights. On the other it can be seen as the merging of societies into a new Community arriving at a new workable balance between different interests, including national interests within a Community for mutual benefit. And the changing nature of the world demands that this be brought about based on a recognition of common needs and interests which will, I believe, continue to converge.
As communications improved with technological advance it became possible to talk realistically of the creation of an international society. We should not shudder at this prospect, cowering behind an antiquated notion of sovereignty. We should welcome the challenge and thoughtfully prepare the policies to meet it.
The only alternative is the impotence of isolationism, the closing off of our nation from the currents of the world trade and development, ending up in fact with less influence over our destiny. The logical conclusion is the attempt to isolate Britain from the changing intellectual climate of the world beyond.
The traditional concept of sovereignty should not be held sacrosanct. It was, itself, shaped by the international realities of its time. The nineteenth century required that each state in the multipolar balance of power should move freely to preserve the equilibrium against other states. The influence of other states over its domestic politics, or constraints upon its national will, could thwart the balancing process. Thus the functioning the nineteenth century system required brought about fully sovereign states.
Just as the traditional concept of sovereignty of the nineteenth century was related to the international system which then prevailed, so we now need to adapt our ideas of sovereignty and national power and influence to take account of the benefits of interdependence in the modern world.
National sovereignty exists to be used, used in the best interests of our future citizens, That we are already doing in the European Community and in NATO by pooling it with our partners. For the future we shall best use it not for narrow nationalistic purposes but to enable Britain and our European partners to develop our prosperity and influence together. Nineteenth century conceptions of sovereignty became obsolescent after the Second World War and will be obsolete by the end of the century. For the Twenty-First Century we should look to joint endeavours only made fully effective by the progressive pooling of elements of sovereignty. In this the political and diplomatic skills and experience of the British people should enable us to play a role no less worthy than we have performed successfully in the past.