A Level Economics 32: External Growth of Firms

Types of Integration/Mergers:

a. Horizontal Integration:

• Example: The merger of Ford and General Motors, two automobile manufacturers, represents a horizontal integration. By combining their resources and market presence, the merged entity aims to strengthen its competitive position in the automotive industry and gain economies of scale. This allows them to reduce costs, share technology, and increase market share.

b. Vertical Integration:

• Example of Backward Integration: A smartphone manufacturer acquiring a chip manufacturing company demonstrates backward integration. By owning the chip manufacturing process, the smartphone manufacturer gains more control over its supply chain, reduces dependence on external suppliers, and potentially lowers costs.
• 
  
• Example of Forward Integration: A clothing retailer acquiring a chain of retail stores illustrates forward integration. By integrating forward in the supply chain, the retailer gains control over its distribution channels, improves market reach, and potentially captures more profit margins by eliminating intermediaries.

c. Conglomerate Integration:

• Example: The acquisition of Pixar Animation Studios by The Walt Disney Company represents conglomerate integration. Disney, primarily known for its media and entertainment businesses, expanded into the animation industry through the acquisition of Pixar. This allowed Disney to diversify its portfolio, leverage synergies across different entertainment segments, and access new markets.

2. Evaluation of the Costs and Benefits of Growth/Mergers:

a. Costs of Growth/Mergers:

• Financial Costs Example: The costs associated with due diligence, legal fees, advisory services, and potential financing requirements can be substantial in a merger between pharmaceutical companies. Ensuring compliance with regulatory requirements and managing legal complexities require significant resources.
• 
  
• Integration Challenges Example: Merging two companies involves integrating their operations, cultures, and systems, which can be complex and costly. For example, a merger between two airlines requires aligning flight schedules, frequent flyer programs, and workforce integration to ensure a smooth transition and minimize disruptions.
• 
  
• Regulatory and Legal Challenges Example: Mergers and acquisitions may face regulatory scrutiny, especially when they involve companies with significant market share. For instance, mergers between large telecommunications companies may face antitrust reviews to ensure fair competition and prevent the creation of monopolistic practices.

b. Benefits of Growth/Mergers:

• Economies of Scale Example: A merger between two global manufacturing firms can result in economies of scale by consolidating production facilities, reducing duplication, and benefiting from bulk purchasing discounts. This allows the merged entity to achieve cost efficiencies and improve profitability.
• 
  
• Increased Market Power Example: When two leading beverage companies merge, they may gain increased market power, allowing them to negotiate better contracts with suppliers, secure premium shelf space in retail stores, and exert greater influence over pricing. This can enhance their competitiveness and profitability.
• 
  
• Access to New Markets or Technologies Example: A technology company acquiring a smaller startup with cutting-edge technology can gain access to new markets and enhance its product offerings. This provides the opportunity to tap into new customer segments and expand revenue streams.
• 
  
• Synergies and Innovation Example: In the merger of a pharmaceutical company and a biotech firm, the combined entity can leverage synergies by combining their research capabilities, expertise, and resources to develop innovative drugs and treatments. This can lead to improved product offerings, increased market share, and enhanced profitability.

It's important to note that the costs and benefits of mergers and growth strategies can vary significantly depending on the specific circumstances, industry dynamics, and successful execution of integration efforts. Each merger or growth decision should be carefully evaluated to ensure that the potential benefits outweigh the costs and risks involved.

How Hyderabad joined India

 

The commitment to EU integration must not be underestimated

Wolfgang Munchau in The FT

Aachen is close to the Dutch city of Maastricht, which gave its name to what is probably the most important European treaty of modern times. The treaty of Aachen, signed last week by German chancellor Angela Merkel and French president Emmanuel Macron, is of a different category. But you would be wrong to underestimate its significance. This treaty will set an agenda, just as the Franco-German Elysée Treaty did in 1963. And agendas matter in European discourse.

If you want to think of an analogy, consider the Werner Plan. In December 1969, in the twilight days of the Bretton Woods system of semi-fixed exchange rates, EU leaders held a summit in The Hague to set up a working group to study monetary union. It was headed by Pierre Werner, Luxembourg’s prime minister at the time. Economists were right at the time to dismiss the discussion of a future monetary union as pie-in-the-sky, just as defence experts today are right to dismiss talk about a European army. The Werner Report was an unrealistic road map to a single currency. But it nevertheless managed to put this hugely significant policy agenda on the table. It was another 30 years until the introduction of the euro. But without this first, failed step, it would never have happened. 

One of the many reasons why the UK is leaving the EU has been a persistent tendency to underestimate such symbolism. Another is the entrenched belief that the golden era of EU integration is behind us. The widespread dismissal in the UK press of the Aachen Treaty is very much in that tradition. 

Being in denial about integration does not square with the facts on the ground. I have often criticised the German government’s handling of the eurozone crisis. But I have never had any doubt about Germany’s ultimate commitment to monetary integration. The Aachen treaty provides no concrete solutions, but at the very least it underlines that commitment. Germany and France say, essentially, that they will do whatever it takes. Like Saint Augustine before them, they just do not want to do it yet. 

But they may not be able to wait too long. The EU must make some fundamental choices on the future of its dysfunctional monetary union. In the decade since the financial crisis, many of the problems in both the real economy and the financial sector have been left unaddressed. The so-called banking union has failed in its principal objective to break the doom loop between banks and sovereign borrowers. Italy continues to bail out its banks. I expect Germany to do the same very soon. 

The latest economic indicators suggest that the downturn is going to be steeper than previously thought. If short-term interest rates do not rise above -0.4 per cent at the top of the economic cycle, you know you have a very sick underlying economy. The European Central Bank’s latest bank lending survey suggests that credit conditions are now beginning to tighten in Italy, while the Netherlands is suffering from a financial bubble. In other words, we are entering a period in which policy reform will soon be on the agenda. 

In the discussion on common defence, we may only be at the point where we were in 1969 on monetary integration. The external event to prompt a rethink in Berlin and Paris has been repeated threats by President Donald Trump that the US will leave Nato. Even in the unlikely event of this happening, Germany and France would not be in a position to create a joint army. Germany, in particular, is politically not ready; it spends only 1.2 per cent of its gross domestic product on defence, as opposed to France’s 2 per cent. The German constitution mandates that any decision to deploy troops has to be agreed by the Bundestag. Attitudes towards military engagement differ fundamentally between the two.  
Aachen will not shift German political views on defence. But I would not rule out that, over time, it could become more acceptable for a German government to raise defence spending targets — so long as this occurs in a European context. After the Werner report came a series of loose currency arrangements followed by the European exchange rate mechanism. The way to a common army is not only paved with good intentions but with many small steps, such as a pooling of defence procurement. 

In the preamble to the Aachen treaty France and Germany promise to take their “bilateral relations to a new level”. One day, while you are looking the other way, that will actually happen.

Britain’s immigration debate is not only about economics

Culture, identity and a sense of fairness matter just as much to many people writes  CAMILLA CAVENDISH in The FT

Last summer I was sitting in a café in Boston, Lincolnshire , interviewing Karol, its enterprising Polish owner. He arrived in England to pick lettuces ten years ago, worked his way up to factory packing, and then started this little restaurant on a side street. Sipping tea, he told me of his high hopes for the pierogi dumplings cooked by his wife. 

I had sought out Karol as an example of the kind of immigrant we want in Britain — friendly and hard-working. He was sheepish about his very limited English, though, and said that his wife and parents, who have joined him, barely speak it at all. Their customers, he said with a tone of regret, are almost all Polish, Romanian and Lithuanian. Here on the east coast of England, the old residents and the new arrivals are largely living parallel lives. 

 This was perhaps inevitable. The population of this little town grew at more than double the average rate for England and Wales in ten years from 2004. This followed the decision of the Blair government to open the UK to the eastern European accession countries without a transitional period. There was a 460 per cent increase in immigration. Unsurprisingly, Boston registered the highest Leave vote of the 2016 referendum: almost 76 per cent. 

Boston is an extreme example, but it is only one of many places I have visited where we have utterly failed to integrate people — including, sometimes, those of Pakistani and Bangladeshi origin. The government has been attacked for attempting to limit low-skilled immigration in this week’s white paper. But it is trying to respond to a deep malaise which is driving far-right populism in both Europe and the US, and even in previously moderate Sweden. 

As Britain tumbles towards a future which I still hope will see us clinging on to the EU, not crashing out of it, I am concerned that so many members of the establishment continue to paint anxieties about migration as purely economic, the misplaced rage of those “left behind” by globalisation and the financial crisis. 

While these are clearly factors, this explanation overlooks the fact that the challenge is not merely an economic one, of wages and productivity — it is cultural, too. The Migration Advisory Committee, which has done so much to provide objective analysis of this fraught subject, has stated that migration from the European Economic Area “as a whole has had neither the large negative effects claimed by some, nor the clear benefits claimed by others”. Something else is going on: boiling resentment at years of being ignored by the ruling classes who have benefited most from immigration. 

Academics including Eric Kaufmann and Jens Hainmueller have shown that attitudes to immigration in the US and Europe are not as highly correlated with personal economic circumstances as many commentators assume. Many Leave voters and supporters of US president Donald Trump have been influenced more by deep fears about the impact on national identity. 

Economists will argue that consumers benefit from cheaper vegetables in the supermarkets. But Boston voters who might prefer to pay a bit more to preserve their sense of identity should not be lightly dismissed. If we do end up remaining in the EU, we must not simply breathe a sigh of relief and resume business as usual. 

This week’s argument over the proposed £30,000 income threshold for new arrivals will no doubt continue through the consultation period. So will the debate — vital for the NHS — over how to define a “shortage occupation”. But £30,000 was not plucked out of the air. It was based on the committee’s finding that EEA/EU migrants as a whole pay more in than they take out, in services and benefits — but only when they earn roughly £30,000 or more. 

This goes to the heart of what many people feel deeply: that no one should take out more than they have paid in. During David Cameron’s renegotiation of the terms of the UK’s EU membership in 2015-16, polls showed that many people were aware that British taxpayers were paying child benefit to children who lived in Warsaw and had never set foot in Britain. 

Mr Cameron bumped up against not only the theology of free movement of people, but also the incompatibility between Britain’s free universal healthcare and school systems, and contributory social insurance schemes in other member states which require far higher levels of prior contribution before getting entitlement to benefits. 

The white paper states that people who arrive speaking only basic English are required to become more fluent; but I have interviewed many people who have survived for over a decade with no English at all. It makes a nod towards reducing entitlements for short-term workers, but does not address the question of contributions from people who want to put down roots and bring dependants, beyond the blunt instrument of income thresholds. We must bring back the contributory principle to our welfare state. 

I would never argue that immigration was the sole factor driving the Leave vote in the 2016 referendum. Nor will it be the sole consideration in any “people’s vote”. But we ignore it at our peril. This week, it felt as though the debate had shrunk back into convenient tracks. 

I hope that my friend Karol will succeed. Of course, if we crash out of the EU on March 29, high tariff barriers to agricultural imports will probably bankrupt our farms — and his café business. If that happens, Boston’s problem will no longer be too many people, but too few. 

The struggle to be British: my life as a second-class citizen

Ismail Einashe in The Guardian

I used my British passport for the first time on a January morning in 2002, to board a Eurostar train to Paris. I was taking a paper on the French Revolution for my history A-level and was on a trip to explore the key sites of the period, including a visit to Louis XIV’s chateau at Versailles. When I arrived at Gare du Nord I felt a tingle of nerves cascade through my body: I had become a naturalised British citizen only the year before. As I got closer to border control my palms became sweaty, clutching my new passport. A voice inside told me the severe-looking French officers would not accept that I really was British and would not allow me to enter France. To my great surprise, they did.

Back then, becoming a British citizen was a dull bureaucratic procedure. When my family arrived as refugees from Somalia’s civil war, a few days after Christmas 1994, we were processed at the airport, and then largely forgotten. A few years after I got my passport all that changed. From 2004, adults who applied for British citizenship were required to attend a ceremony; to take an oath of allegiance to the monarch and make a pledge to the UK.

These ceremonies, organised by local authorities in town halls up and down the country, marked a shift in how the British state viewed citizenship. Before, it was a result of how long you had stayed in Britain – now it was supposed to be earned through active participation in society. In 2002, the government had also introduced a “life in the UK” test for prospective citizens. The tests point to something important: being a citizen on paper is not the same as truly belonging. Official Britain has been happy to celebrate symbols of multiculturalism – the curry house and the Notting Hill carnival – while ignoring the divisions between communities. Nor did the state give much of a helping hand to newcomers: there was little effort made to help families like mine learn English.

But in the last 15 years, citizenship, participation and “shared values” have been given ever more emphasis. They have also been accompanied by a deepening atmosphere of suspicion around people of Muslim background, particularly those who were born overseas or hold dual nationality. This is making people like me, who have struggled to become British, feel like second-class citizens.

When I arrived in Britain aged nine, I spoke no English and knew virtually nothing about this island. My family was moved into a run-down hostel on London’s Camden Road, which housed refugees – Kurds, Bosnians, Kosovans. Spending my first few months in Britain among other new arrivals was an interesting experience. Although, like my family, they were Muslim, their habits were different to ours. The Balkan refugees liked to drink vodka. After some months we had to move, this time to Colindale in north London.

Colindale was home to a large white working-class community, and our arrival was met with hostility. There were no warm welcomes from the locals, just a cold thud. None of my family spoke English, but I had soon mastered a few phrases in my new tongue: “Excuse me”, “How much is this?”, “Can I have …?”, “Thank you”. It was enough to allow us to navigate our way through the maze of shops in Grahame Park, the largest council estate in Barnet. This estate had opened in 1971, conceived as a garden city, but by the mid-1990s it had fallen into decay and isolation. This brick city became our home. As with other refugee communities before us, Britain had been generous in giving Somalis sanctuary, but was too indifferent to help us truly join in. Families like mine were plunged into unfamiliar cities, alienated and unable to make sense of our new homes. For us, there were no guidebooks on how to fit into British society or a map of how to become a citizen.

My family – the only black family on our street – stuck out like a sore thumb. Some neighbours would throw rubbish into our garden, perhaps because they disapproved of our presence. That first winter in Britain was brutal for us. We had never experienced anything like it and my lips cracked. But whenever it snowed I would run out to the street, stand in the cold, chest out and palms ready to meet the sky, and for the first time feel the sensation of snowflakes on my hands. The following summer I spent my days blasting Shaggy’s Boombastic on my cherished cassette player. But I also realised just how different I was from the children around me. Though most of them were polite, others called me names I did not understand. At the playground they would not let me join in their games – instead they would stare at me. I knew then, aged 11, that there was a distance between them and me, which even childhood curiosity could not overcome.

Although it was hard for me to fit in and make new friends, at least my English was improving. This was not the case for the rest of my family, so they held on to each other, afraid of what was outside our four walls. It was mundane growing up in working-class suburbia: we rarely left our street, except for occasional visits to the Indian cash-and-carry in Kingsbury to buy lamb, cumin and basmati rice. Sometimes one of our neighbours would swerve his van close to the pavement edge if it rained and he happened to spot my mother walking past, so he could splash her long dirac and hijab with dirty water. If he succeeded, he would lean out of the window, thumbs up, laughing hysterically. My mother’s response was always the same. She would walk back to the house, grab a towel and dry herself.

At secondary school in Edgware, the children were still mostly white, but there was a sizeable minority of Sikhs and Hindus. My new classmates would laugh at how I pronounced certain English words. I couldn’t say “congratulations” properly, the difficult part being the “gra”. I would perform saying that word, much to the amusement of my classmates. As the end of term approached, my classmates would ask where I was going on holiday. I would tell them, “Nowhere”, adding, “I don’t have a passport”.

When I was in my early teens, we were rehoused and I had to move to the south Camden Community school in Somers Town. There, a dozen languages were spoken and you could count the number of white students in my year on two hands. There was tension in the air and pupils were mostly segregated along ethnic lines – Turks, Bengalis, English, Somalis, Portuguese. Turf wars were not uncommon and fights broke out at the school gates. The British National party targeted the area in the mid-1990s, seeking to exploit the murder of a white teenager by a Bengali gang. At one point a halal butcher was firebombed.

Though I grew up minutes from the centre of Europe’s biggest city, I rarely ventured far beyond my own community. For us, there were no trips to museums, seaside excursions or cinema visits. MTV Base, the chicken shop and McDonald’s marked my teen years. I had little connection to other parts of Britain, beyond the snippets of middle-class life I observed via my white teachers. And I was still living with refugee documents, given “indefinite leave to remain” that could still be revoked at some future point. I realised then that no amount of identification with my new-found culture could make up for the reality that, without naturalisation, I was not considered British.

At 16, I took my GCSEs and got the grades to leave behind one of the worst state schools in London for one of the best: the mixed sixth form at Camden School for Girls. Most of the teens at my new school had previously attended some of Britain’s best private schools – City of London, Westminster, Highgate – and were in the majority white and middle-class.

It was strange to go from a Muslim-majority school to a sixth form where the children of London’s liberal set attended: only a mile apart, but worlds removed. I am not certain my family understood this change. My cousins thought it was weird that I did not attend the local college, but my old teachers insisted I go to the sixth form if I wanted to get into a good university. A few days after starting there, I got my naturalisation certificate, which opened the way for me to apply for my British passport.

Around the time I became a British citizen, the political mood had started to shift. In the summer of 2001, Britain experienced its worst race riots in a generation. These riots, involving white and Asian communities in towns in the north-west of England, were short but violent. They provoked a fraught public conversation on Muslims’ perceived lack of integration, and how we could live together in a multi-ethnic society. This conversation was intensified by the 9/11 attacks in the US. President George W Bush’s declaration of a “war on terror” created a binary between the good and the bad immigrant, and the moderate and the radical Muslim. The London bombings of 7 July 2005 added yet more intensity to the conversation in Britain. 

Politicians from across the spectrum agreed that a shared British identity was important, but they couldn’t agree on what that might be. In 2004, the Conservative leader Michael Howard had referred to “The British dream” when speaking about his Jewish immigrant roots. After 2005, he wrote in the Guardian that the tube attacks had “shattered” complacency about Britain’s record on integration. Britain had to face “the terrible truth of being the first western country to have suffered terrorist attacks perpetrated by ‘home-grown’ suicide bombers – born and educated in Britain”. Many commentators questioned whether being a Muslim and British were consistent identities; indeed whether Islam itself was compatible with liberal democracy.

Howard defined a shared identity through institutions such as democracy, monarchy, the rule of law and a national history. But others argued that making a checklist was a very un-British thing to do. Labour’s Gordon Brown, in a 2004 article for the Guardian, wrote that liberty, tolerance and fair play were the core values of Britishness. While acknowledging such values exist in other cultures and countries, he went on to say that when these values are combined together they make a “distinctive Britishness that has been manifest throughout our history and has shaped it”.

For me, at least, becoming a British citizen was a major milestone. It not only signalled that I felt increasingly British but that I now had the legal right to feel this way.

But my new identity was less secure than I realised. Only a few months after my trip to Paris, the Blair government decided to use a little-known law – the 1914 British Nationality and Status of Aliens Act – to revoke the citizenship of naturalised British persons, largely in terrorism cases. Before 1914, British citizenship, once obtained, could only be given up voluntarily by an individual, but that changed with the advent of the first world war. According to the Oxford politics professor Matthew Gibney, the 1914 act was a response to anti-German sentiment and fears about the loyalty of people with dual British-German citizenship. A further law, passed in 1918, created new and wide-ranging grounds to revoke citizenship.

In theory, since 1918, the home secretary has had the power to remove a naturalised person or dual-nationality-holder’s British citizenship if it was considered “conducive to the public good”, but a 1981 law prevented them from doing so if it made the person stateless. Since 9/11, that restraint has been gradually abandoned.

In 2006, the home secretary was given further powers to revoke British citizenship. At the time, the government sought to allay concerns about misuse of these powers. “The secretary of state cannot make an order on a whim,” the home office minister Angela Eagle had said when the law was first proposed, “and he will be subject to judicial oversight when he makes an order”.

Although the post-9/11 measures were initially presented as temporary, they have become permanent. And the home secretary can strip people of their citizenship without giving a clear reason. No court approval is required, and the person concerned does not need to have committed a crime. The practice is growing. Under Labour, just five people had their citizenship removed, but when Theresa May was at the Home Office, 70 people were stripped of their citizenship, according to the Bureau of Investigative Journalism. Yet these near-arbitrary powers have caused remarkably little concern.

 

‘Before, citizenship was a result of how long you had stayed in Britain, but now it was supposed to be earned through active participation in society.’

People have largely accepted these new powers because they are presented as a way to keep the country safe from terrorism. After 9/11, the public became more aware of the Islamist preachers who had made London their home in the preceding decades. Abu Hamza, who was then the imam of Finsbury Park mosque, and became a notorious figure in the media, was, like me, a naturalised British citizen. For several years as a teenager, I attended the Finsbury Park mosque. It was small; I remember the smell of tea, incense and feet that greeted you every time you walked in. I also remember the eclectic mix of worshippers who visited – Algerians, Afghans, Somalis and Moroccans. Unlike Muslims of south-Asian background, few of these people had longstanding colonial ties to Britain. Most had fled civil war in their home countries, while some of the North Africans had left France because they felt it treated Muslims too harshly. The mosque was not affiliated with the Muslim Association of Britain, and its preachers promoted a Salafi form of Islam.

I remember Abu Hamza as a larger-than-life character, whose presence dominated mosque life, especially at Friday prayers when he would go into very long sermons – usually about the dangers of becoming too British. Attending this mosque was like being cocooned from the realities of modern life. I recall Abu Hamza once going off about how, as young Muslim teens, we were not to follow the “kuffar” in their habit of engaging in premarital sex. For much of my teens, this mosque held a kind of control over me, based on fear. That changed when I moved to my new sixth form and felt able to start exploring the world for myself, and began to realise that I could be secular, liberal and humanist.

I went in one direction, but other people I knew chose different paths. Before 2001, I don’t recall many women wearing the niqab, but as the years wore on it became a more common sight on the streets of London. My sister even began to wear one – contrary to media stereotypes of women being coerced, she chose to, as did many of the young women I had gone to school with. The way that young Muslims practised Islam in Britain changed, in line with global developments. They dropped the varied cultural baggage of their parents’ versions of the religion and began a journey to a distinct British Islam – something that connected the Somali refugee and the second-generation Bangladeshi, the Irish and Jamaican converts.

Some of the white working-class kids I grew up with converted to Islam. Daniel became Yusef and Emma became Khadija. Before I knew it, they were giving me advice about how Muslims should behave. I observed this role reversal with amusement. One boy in particular would preach to me while incessantly saying “bruv”. I also saw the young men I had grown up with move away from a life sat on bikes wearing hoods under bridges in Camden listening to grime, to practising their Islam more visibly. Out went the sneaky pints, spliffs and casual sex. Now it was beards, sermons about the faith and handing out Islamic leaflets on street corners. But I did not heed their words. When I was 16 I stopped attending the mosque and I began to question my faith.

Mahdi Hashi was one of the young men I grew up with. Hashi was another child refugee from Somalia. As a teenager he used to complain that he was being followed by the British security services. He said they wanted to make him an informant. Hashi was not alone. In 2009, he and other young Muslim men from Camden took their allegations to the press. One said that a man posing as a postal worker turned up at his door and told him that if he did not cooperate with the security services, then his safety could not be guaranteed if he ever left Britain.

For most newcomers, citizenship is not just confirmation of an identity, it is also about protection: that you will be guaranteed rights and treated according to the law. Hashi lost that protection. In 2009, he left for Somalia because, his family say, of harassment by the security services. In June 2012, his family received a letter informing them that he was to lose his British citizenship. Later that summer Hashi turned up in Djibouti, a tiny former French colony on the Red Sea. He was arrested. He alleges that he was threatened with physical abuse and rape if he did not cooperate with authorities in Djibouti – and he alleges that US officials questioned him. In November 2012, he was given over to the Americans and taken to the US without any formal extradition proceedings. In 2016, Hashi was sentenced in New York to nine years in prison for allegedly supporting the jihadist group al-Shabaab. He will be deported to Somalia upon his release.

Hashi’s case is not unique. Bilal Berjawi, who came to Britain from Lebanon as a child, had his British citizenship revoked in 2012 and was killed in a US drone strike on the outskirts of Mogadishu. His friend Mohamed Sakr, who held dual British-Egyptian nationality, was also killed by a drone strike in Somalia after he had been stripped of his UK citizenship. Together with a third friend, the two young men had visited Tanzania in 2009 on what they claimed was a safari trip, but were arrested, accused of trying to reach Somalia and returned to the UK. The third friend was Mohammed Emwazi, now better known as the Isis executioner “Jihadi John”.

The war in Syria, and the attraction that Isis and other jihadist groups hold for a small minority of British Muslims, has led to a further increase in citizenship-stripping. In 2013 Theresa May, who was then home secretary, removed the citizenship of 13 people who had left for Syria. The government has a duty to protect people, but the tool it is using will have wider, damaging consequences.

The right of newcomers to be considered fully British has been a long struggle. The first border controls of the 20th century were introduced to stop the movement of “alien” Jewish refugees from eastern Europe. In 1948, the British Nationality Act gave citizenship to anyone who had been a subject of empire, but those black and Asian migrants who took up the offer – indeed, who often thought of themselves as British – were met with shocking racism: with “no Irish, no blacks, no dogs”. The 1962 Immigration Act began to limit the citizenship rights of people from the non-white colonies, and by the 1982 Act it was all over.

Now we are caught in a paradox, where the state is demanding more effort than ever on the part of the migrant to integrate, but your citizenship is never fully guaranteed. Fifteen years on from the events of 9/11, gaining British citizenship is a much tougher process. And becoming a naturalised citizen is no longer a guarantee against the political whims of the day: you are, in effect, a second-class citizen. Citizenship-stripping is now a fixture of the state, and it is defended in the usual vein, which is to say: “If you have not done anything wrong, you have nothing to fear.” The usual caveat is that this concerns terrorists and criminals – a red herring that masks the true purpose of such laws, which is to empower the state at the expense of ordinary people. The philosopher Hannah Arendt memorably described citizenship as “the right to have rights”, but for people of migrant background such as myself, this is being eroded. We are not a small group: according to the 2011 census, there are 3.4 million naturalised Brits.

As I was writing this piece, Donald Trump issued his executive order that bans people from seven majority-Muslim countries, including Somalia, from entering the US – even if they hold dual nationality. I happened to be visiting New York at the time, and the ban has left me wondering if I will ever be allowed to again. Despite assurances from Britain’s government, it remains unclear whether the ban applies to people who hold a British passport, but were born overseas. Trump’s ban did not happen in a vacuum: there is a thread linking the anti-terror policies of western governments and this extreme new step.

Today, I no longer feel so safe in my status as a naturalised British citizen, and it is not just the UK. In other liberal democracies such as Australia and Canada, moves are under way to enable citizenship-stripping – sending people like me a clear message that our citizenship is permanently up for review.

Some History of Monetary Unions

Making friends the shared currency way

Greece is falling out with its neighbours over their common currency - just as it did about a century ago. But forging closer bonds through shared currencies rarely works for long, says historian David Cannadine.

The continuing travails of the Greek economy and the threat they represent to European Monetary Union may both seem novel and unprecedented, but in several significant ways, we've been there before.

Far from being a recent innovation, there have been monetary unions for almost as long as there has been money. But across two and a half millennia, and whatever varied forms they may have taken, few of them have endured, which helps explain why they've been so easily and so largely forgotten.

On earlier occasions, too, the part played by Greece has been pivotal - sometimes positive but sometimes negative. And history has recently been repeating itself in other ways, for the present single currency is not the first such European scheme from which Britain has held aloof.

It's no exaggeration to say that European history is littered with the ruins of earlier endeavours. The most immediate predecessor to the EMU was the 19th Century Latin Monetary Union, which attempted to unify several European currencies at a time when most circulating coins were still made of gold or silver.

It came into being in August 1866; its initial members were France, Belgium, Italy and Switzerland, and they agreed that their national currencies should be standardised and interchangeable. There was no shared, single legal tender, but the currencies of the member countries were pegged at a fixed rate with each other.

Two years later, the four founding nations were joined by Spain and Greece and in 1889 the union was further enlarged by admitting Romania, Bulgaria, Venezuela, Serbia and San Marino. Thus the enlarged Latin Monetary Union lasted until World War I, which abruptly brought to an end the global financial system based on the gold standard. The result was that the LMU effectively came to an end in 1914, although it lingered on as a legal entity until its formal dissolution in 1927.

Negotiations to bring such a union into being had started in 1865, and Britain had initially been part of them. But two proposals were made, which proved to be a major stumbling block: the first was that the UK must reduce the amount of gold in its sovereigns, albeit by only a tiny amount, to make one pound sterling the exact equivalent of 25 French francs.

The second was that Britain must give up shillings and pence and decimalise its coinage to bring it into line with the other European currencies. Neither of these proposals was deemed acceptable, and so then, as in 1999, Britain stayed out, and left the continentals to their own devices. It also showed no interest in another and even more grandiose scheme floated by the French in 1867, for what was termed a "universal currency", which would have been based on equivalent gold coins to be issued by France, Britain and the United States.

Here were signs and portents aplenty of recent British attitudes and behaviour.

As Walter Bagehot, the essayist and editor of The Economist, put it in the late 1860s, there seemed to be a real danger that, "Before long, all Europe, save England, will have one money, and England will be left outstanding with another money."

If this happened, Bagehot went on, "We shall, to use the vulgar expression, 'be left out in the cold'. If we could adopt this coinage ourselves without material inconvenience, I confess I, for one, should urge our doing so."

But Bagehot believed that the practical difficulties of such a step were "simply insurmountable". He feared more generally that "the attempt to found a universal money is not possible now", and the unhappy fate of the Latin Monetary Union would later bear him out. Yet with the establishment of the late 20th Century European Monetary Union, it did seem as if the state of affairs, which Bagehot one day envisaged - and feared - had come very close to realisation.

But in 2001, Greece joined the European Monetary Union, and the rest, as they say, is history - but a history that is not yet anything like being over.

Ever since it gained its hard-fought independence from the Ottoman Empire in 1832, Greece has been plagued by recurrent budget crises, frequent state defaults and long periods during which it's effectively been cut off from the international capital markets.

So while it was one of the earliest nations to join the Latin Monetary Union, its membership soon became more a cause of concern than celebration, for its chronically weak economy meant successive Greek governments responded by decreasing the amount of gold in their coins, thereby debasing their currency in relation to those of other nations in the union and in violation of the original agreement.
So irresponsible and unacceptable did Greece's behaviour become that it was formally expelled from the Latin Monetary Union in 1908. As a result, some effort was made to readjust the nation's
monetary policy and Greece was readmitted to the Union two years later. But by then, the whole enterprise was increasingly fragile, its future looked increasingly uncertain, and the outbreak of WWI was only four years off.

The Latin Monetary Union was not the only one of its kind in Europe during the 19th Century. A German monetary union was created in 1857, which replaced the many different currencies of the many different German states with a dual system based on the north German thaler and the south German gulden. It proved to be a rare success story among such ventures, surviving until German unification in 1870, when political union was effectively aligned with monetary union and five years later the two separate currencies were replaced by the reichsmark.

Less successful was the Scandinavian Monetary Union, established between Denmark and Sweden in 1873, which was joined by Norway two years later. The aim was to do for Scandinavia what the Latin Monetary Union was attempting more broadly for Europe as a whole but it, too, effectively ceased to function on the outbreak of WWI and it was formally brought to an end in 1924.

Such efforts to create common currencies during the 19th and 20th Centuries are only the most recent examples of a process that's been going on for almost as long as coinage itself has existed. It's an intriguing historical irony that among the pioneers of these endeavours seem to have been none other than the ancient Greeks.

One of the earliest examples of such a union occurred sometime about 400BC, along the western coast of Asia Minor, where seven Greek states allied themselves and produced a coinage that directly foreshadowed later European monetary unions. On the front of the coins was a common design of the baby Heracles strangling a snake, and the first three letters of the Greek word for alliance. On the reverse, each state placed its own particular image. All these coins were minted to the same weight and formed a unified currency, which was the tangible symbol of the seven members' economic alliance.

No-one quite knows why or when this early effort at a monetary union collapsed but 200 years later, the ancient Greeks had another try, organised through what was known as the Achaean League, an alliance of territories and city states covering the whole of the Peloponnese that had been formed about 280BC.

Once again, their shared currency had a common obverse design, in this case the head of Zeus, and reverse patterns that were specific to the individual issuing authority.

The result, according to the historian Polybius, was that the Greeks "had not only formed an allied and friendly community but they have the same laws, weights, measures and coinage, as well as the same officials, council and courts of justice". Here was a level of integration, which the most ardent and ambitious Eurocrat of today might envy and this may help explain why, unlike the Latin or the Scandinavian monetary unions, the Achaean League lasted for well over 100 years.

Its eventual dissolution, in 146BC, was not because the members of the league fell out with each other, over the currency or anything else but was the result of an external shock in the form of a crushing military defeat by the Romans at the Battle of Corinth. Which leaves us with the following paradox: the ancient Greeks were pioneers of monetary unions and were quite eager to keep them in being.

Modern Greece, by contrast, has been a threat and a danger to any monetary union that it has ever joined.