The Third World War: August 1985

It is possible that within ten years an even more tempting weapon for such quarantining may become available to countries with the technological capability of the US and Japan. They may be able to announce the setting up of a telecommunications ‘ring fence’, for the state of the art will then permit those capable of developing the appropriate technology to take charge by telecommunication of the guidance system of any missile in flight and redirect it at will. This would mean that any country launching a missile could find it reversed upon a reciprocal course and turned back to land and detonate at its point of launch. The advance in telecommunications during the technological spurt caused by the threat of war, even more than in the brief duration of the war itself, has been greater than in any other technology except that of energy.

4 It is therefore important for us in the EEC to see that the sort of Europe we rebuild during this peace should not be one liable to ‘tribal wars’.

5 The rest of Europe, both East and West, will be frightened if the two Germanies unite. They would then form too dominant a European power. It is therefore important that each Germany should be a member of the EEC, and be united within the EEC to the same degree as France and West Germany are, but no more than that.

6 The same applies to all the former communist states, including the European states of the former Soviet Union. The EEC now needs to extend its boundaries in the way that Charles de Gaulle once envisaged. The European Economic Community should become a Europe from the Atlantic to the Urals.

This document was accepted at Copenhagen with some relief by the governments concerned, including that of the Federal Republic of Germany. Charles de Gaulle was now seen in retrospect as a prophet, where in life he had more often been regarded as a prickly and tiresome man. Two new issues were strenuously discussed at Copenhagen. One concerned the best rules and aims for the new, enlarged EEC; on this there was a note of innovation, excitement, enthusiasm and intellectual daring — an attractive throwback to the European spirit of the late 1950s which had seemed to be sleeping since. The second issue was what on earth to do about the politico-strategic problems on the long southern border of the new EEC; on this there was a note of near-despair.

First, the governing mechanism of the new EEC. It was recognized that free trade in goods, though to be continued, was likely to be much less important to rich countries in the future than freedom for international and transnational telecommunications. Now that factories (except in low wage areas) were bound to become more and more automated, people in the rich northern one-third of the world would mostly be in white collar jobs where they would be working with their imaginations rather than their hands. But people in such jobs would not necessarily need to live near their workplaces. What should be the nationality and tax position of a Belgian dress designer who lives in Monte Carlo and St Moritz in the winter, at Stratford-on-Avon in the spring, and Corfu in the summer, and does his work by daily telecommunication through a portable console to colleagues and computers at the largely automated textile factory at Volgograd where he works — who becomes, in fact, a tele-commuter?

The EEC ministers at Copenhagen began to grope towards the concept that the European citizen of the future would need what the West German Chancellor called ‘triple nationality’, but the Luxembourg Prime Minister significantly called ‘triple tax status’. Let us use the Luxembourg terminology; it is more novel and, for that reason, in this fast-changing world, easier to understand.

First, each.citizen would have to pay some taxes to the area in which he lived; this would maintain purely local government services there. There is here the obvious danger that all the rich might then choose to live together in areas with low social security costs (because there were few local poor around) and thus low tax rates, while the poor might find themselves huddled together in areas which needed a lot of social expenditure but with no local rich to pay the taxes. In order to avoid this ‘ghettoization of continents’ in the telecommuting age, the ministers at Copenhagen were beginning to realize that much wider governments (in this case, a central government of the EEC itself) would probably have to become responsible for what might be called the ‘welfare’ or ‘transfer incomes’ roles performed by national governments in the pre-telecommuting era.

Otherwise, rich folk would all take off to tax havens, and telecommute from there. So there would probably have to be a set schedule of income tax rates across Europe: perhaps a maximum marginal rate of not more than 55 per cent for the richest and a negative income tax for those falling below a minimum level, so as to set a floor income for the poorest Europeans.