Referendums are often awkward terrain for socialists, because the terms of the debate are set by establishment politicians. The referendum on British membership of the European Union (EU) is a particularly tricky specimen. The mainstream arguments on both sides will be unpalatable.

The Yes campaign, to retain Britain’s EU membership, will be dominated by the Conservative and Labour leaderships, along with what’s left of the Liberal Democrats.

The extent of this political backing reflects the priorities of big capital. Three-quarters of large British firms told a recent survey they backed continued membership. The Confederation of British Industries and most members of the Institute of Directors take a solidly pro-EU stance.

Meanwhile, the tone of the No campaign is likely to be set by the UK Independence Party (Ukip), some of the nastiest elements of the Conservative Party and a motley array of smaller businesses. In other words, on one side we will face calls to support big business, on the other a little-Englander campaign steeped in racism towards immigrants.

To add to the confusion, the left is also split over this question. During the 1975 referendum on membership of the European Economic Community (EEC), which prefigured the EU, the bulk of the left, inside and outside the Labour Party, opposed entry.

Today things look quite different. The Labour left, despite the heroic efforts of Jeremy Corbyn, is a largely spent force. Frances O’Grady of the Trade Union Congress has called on David Cameron to exclude the “social chapter” from his renegotiation of the terms of EU membership so that she can persuade “blue collar workers” to join the Yes campaign.

Progressive

Many left-leaning people, particularly those of the younger generation, accept the notion that the EU is a progressive force, allowing the freedom to travel, work and study abroad.

There will still be a few socialists campaigning against EU membership. During the 2009 and 2014 European elections some left forces stood as No2EU. Unfortunately, its campaigns made dangerous concessions to the right over immigration, with one article on its website arguing that “‘free movement’ within the EU impoverishes workers in a race to the bottom”.

Despite all this, Socialists cannot afford to stand aloof as arguments rage about the referendum. But we should decide on our position not simply on the basis of where different pro-capitalist forces or sections of the left line up. We have to start from the nature of the EU itself. A project that has always been a profoundly capitalist one.

As capitalist firms grow, they face a contradiction. On the one hand, they are tireless in their drive to expand the scope of their operation, to obtain inputs, market their goods and exploit workers on the widest possible scale.

On the other hand, firms require a state, tied to a particular national territory, which can provide them with important infrastructure, ensure the right kind of labour power exists, and secure their interests at home and abroad, using force if necessary.

By the end of the Second World War each European capitalist class had, as Chris Harman once put it, “discovered in the most damaging and harrowing ways that the scale of capitalist production could no longer be contained within narrow national boundaries.

“The monopolies and cartels that dominated each national market found that to compete internationally they had to spread their scale of operations beyond state boundaries. But this meant clashing with rival capitalist enterprises operating from within other states. In the last resort such conflicts could only be resolved by the military forces which national blocks of capital had at their disposal.”

The EU and the EEC before it are how the European ruling classes sought to overcome this contradiction. Alone, even the biggest European economies are overshadowed by their rivals.

The largest, Germany, is responsible for just 5 percent of global GDP. The US weighs in at 23 percent, China 13 percent and Japan 6 percent. Yet taken as a whole the EU makes up 24 percent of the world economy.

The logic of the EU is to allow the major European powers to continue to play a role on a global scale. It secures for their capitalists a large domestic market and a big pool of labour to exploit, and, for those opting to abandon their national currency, it creates a form of money that can compete with the dollar.

European integration has always been somewhat dysfunctional. Most political decisions are still taken by particular states — there is no pan-European government, whatever the pretentions of the European Commission.

The recent economic crisis has also exposed the problems of a currency shared by countries with no common system of taxation and with only minimal redistributions of wealth between them. Nonetheless, for the bulk of capitalists the EU continues to offer advantages.

As a thoroughly capitalist project, the EU has always reflected the dominant ideas of the system. As Harman put it in 1971, “Entry into the Common Market will be used by the government as part of its overall strategy of trying to solve the problems of British capitalism by eroding workers’ wages and conditions… Once entry is completed, it can hope that the free play of market forces will achieve what would otherwise require government intervention.”

Indeed, Margaret Thatcher, remembered today as a Eurosceptic, was an enthusiast for the removal of barriers to competition across the continent. It was in this spirit that she signed the Single European Act in 1985.

Of course, it would be quite wrong to see nationalism as a barrier to attacks on living standards, as some on the Labour left did. But it made sense to oppose the EEC and EU just as we would oppose any other tool used to attack workers.

The increasingly neoliberal approach taken by the EU has always been combined with rhetoric about a “European social model”. This was proclaimed most loudly in the 1990s, just as the budget deficit limits imposed by the 1992 Maastricht treaty triggered a wave of unemployment and welfare cuts across the continent.

Recent events demonstrate even more clearly the EU’s neoliberal character. During the first decade of monetary union weaker European economies were subjected to a wave of cheap credit from banks of the most powerful states. When the global crisis erupted, banking bailouts, rising social spending and sharp declines in tax revenue sparked a debt crisis in countries such as Greece, Portugal and Spain.

Troika

The EU responded by doing what the International Monetary Fund (IMF) has been doing to indebted Third World countries for decades. The European Commission is part of the hated troika of institutions seeking to foist the most brutal austerity on Greece and doing everything it can to tame or depose the Syriza government.

Breaking Syriza is about maintaining a system of austerity across the region, an approach now enshrined in the European Fiscal Compact, which limits state spending across the eurozone.

Another example of the neoliberal essence of the project is given by the secretive negotiations for the Transatlantic Trade and Investment Partnership (TTIP), a free trade deal the EU is brokering with the US. TTIP will further prise open sectors such as education and health to the multinationals, and equalise environmental protection and workers’ rights at the lowest level across the two regions.

The most compelling argument by those left forces calling for a Yes vote is that the EU secures free movement within its borders. We do not, of course, want to see Poles and Bulgarians, or Belgians and Germans for that matter, deported, and we will continue to campaign against immigration controls.

However, the EU’s support for free movement is based on its desire to create a European-wide labour force that can be profitably exploited by capital. It is not motivated by humanitarianism or anti-racism.

The point when EU states began to harmonise immigration policies in the late 1990s also saw them launch intensified attacks on “outsiders” — unleashing a new wave of detention and deportation on those from Africa, Asia, Latin America and the Arab world.

Just as the “freedom” of those from Yorkshire to live and work in London does not negate the horrors of British border controls, so freedom of movement in the EU does not diminish the reality of Fortress Europe.

There is no greater indictment of the EU than its treatment of those making the desperate voyage from North Africa. Here the policies being promoted across Europe amount to drowning as a deterrent — which has been the fate of 1,800 migrants in the first five months of this year alone.

The ideology of “Europeanism” that underpins Fortress Europe draws its ingredients from the same racist myths that support traditional nationalism, and in practice the existence of the EU has proved no obstacle to the rise of far-right anti-immigrant forces within its borders, from the Front National in France to Golden Dawn in Greece.

It is mass campaigns from below that can truly undermine racism. We should take no lectures on this topic from the leaders of the Yes campaign. Cameron’s last government was responsible for an Immigration Bill that promoted racist status checks by landlords and employers. Today he is touring Europe trying to secure new restrictions on even the limited free movement afforded by the EU.

Our role in the referendum is to try to carve out a space for an internationalist No campaign. There are times when socialists put forward simple arguments and rally large numbers of people around them. There are other times when we have to provide clarity by making complex arguments to relatively small groups of people. The EU referendum is an occasion for the latter.

Opposition to the EU follows from our principles. Our tactics in advancing the argument, though, flow from the overall balance of forces.

That means we must begin by emphasising our anti-racism, clearly distinguishing ourselves from others campaigning for exit. Likewise we have to express our solidarity with Greek workers, who face their own struggle with the EU.

Only on this basis can we go on to explain that support for the EU is no bastion against racism or neoliberalism. We want a genuine internationalism forged from below. That means an internationalism that is not wedded to the neoliberal EU, and one that does not stop at Lampedusa or the Hellespont.