Brexit – Reasons for Resentment

Following the suggestions for the reasons to remain a summary of the reasons to leave the EU might also be useful, though I would suggest there are not, in fact, any compelling reasons to leave, and so I prefer reasons for resentment.

They seem to comprise three basic ideas: the democratic deficit, too much red tape and too much immigration.

Although there is arguable truth in all of them I suggest none of them is strictly honest, and the problems are more home grown than EU based.

For the first, there is bound to be a democratic deficit for the UK when it comprises just 10% of the EU population. When this view is propounded by people who see no problems whatsoever with the UK’s first past the post electoral system, where it is possible to receive a minority of votes cast but still have a majority of seats in Parliament, it seems all the more surprising that reform does not start at home.
Second, the inferno of the Grenfel tower is a monument to inadequate red tape. At least the EU strives for one variety of red tape and not different tape for every country. Red tape can level the playing field and be our friend.
Third, there is more immigration from outside the EU than from within it and this is completely controlable by the UK government. Even EU immigration is much more controllable than Theresa May ever bothered with as Home Secretary. So it is another reason to start reform at home.

The reasons to leave the EU seem simply to be a case of what psychologists would call projection.

The economist, Steve Keen, is well known as favouring Brexit, largely, as far as I can tell, because leaving the EU would shake up the EU Neoliberal consensus. He is certainly right to criticise the Euro and the European Central Bank for being unaccountable and supporting Bankers and Germany, in that order, and pretty much nobody else  – and especially not Greece. He also points out that much of EU immigration to the UK is a significant result of failed Euro policies causing youth from the poorer Euro countries to seek employment in more prosperous countries elsewhere in the EU.

He should not forget that the largest EU migration to the UK is from Poland which doesn’t use the Euro! Nor that the UK is not part of the Euro and unlikely ever to become so. Fortunately we are largely excluded from that particular nightmare. Leaving the EU on the basis of ‘nightmare sympathy’ with those suffering in the Euro is, I suggest, taking European solidarity rather too far.

And the UK has delivered the shock to the EU Neoliberal consensus by voting out, once. If we should decide to stay then the sword of Damocles of another referendum – and the EU losing UK money again – would surely be sufficient to keep the bureaucracy circumspect.

Steve has also written a recent paper indicating that it is wrong to suggest that the the UK will experience significant economic losses thanks to the reversal of the gains of specialisation, based on Ricardo’s law of comparative advantage. Now I’m not aware of anyone who has suggested this, but the UK’s only specialist industry is finance, so I will indulge him. In fact it must be finance because further down he says “the gains from specialisation [have] not been widely shared”.

In the same article he goes on to point out that the statistics show that a diverse non specialist economy is more successful than a specialist one – and that should be obvious – if your specialism goes down the tubes your country risks doing the same . When you are not specialised you do not have the same vulnerability.

Proximity is also important for creating new industries and ideas (and I’m sure this was how collateralised debt obligations were created!) but better ideas come from industries that sometimes find common ground but are not quite so similar.

He goes on to say that fungible monetary capital and non fungible physical machinery (or indeed people) are less important than control of access to the domestic market. Objectively this is true and goes against the EU single market idea (created, as I’m sure Steve Keen would love to point out, on Mrs Thatcher’s watch).

Yet historically Britain has always been a relatively open economy – probably as a result of deconstructing an empire. And protectionism isn’t realistically compatible with a UK bordering contiguously the Republic of Ireland or lying just 21 miles off the continent of Europe. Or one which has to import a large percentage of its food to exist at all. Effectively we must trade to eat, so we are much more vulnerable to protectionist ideas than many countries (Australia comes to mind!)

Then interestingly, Steve Keen chooses Germany as his example of an economy that works much better. This is a country that is also close to the UK and is the same Germany that is prospering in the same EU that Britain is supposed to leave. So if Germany can be so economically prosperous within the EU (and that prosperity existed even before the Euro) then it rather suggests that Britain can too.

The fact that Britain is not economically prosperous throughout its territory is due to the mismanagement of the economy at home, and nothing to do with the EU.

Britain certainly does over specialise in finance, which is really not an industry at all – it is an overhead.

So the diversity in the UK population needs to be reflected in the diversity of its industry – the UK has really had no industrial policy for a generation and needs to start one. Austerity has crippled the economy since 2010. It needs to stop.

The wrong party is in the dock. The EU is not guilty. The UK government is.

Instead of projecting their faults onto Europe, our Brexiteer politicians should be taking a hard look in the mirror.

 

Comments

  1. Sean Danaher -

    Thanks Peter

    I am still very annoyed by Brexit. Both the way the referendum was set up and the vacuous way it was conducted still leaves a mental scar. The Leave EU campaign should have been required to produce a 750+ page document outlining exactly how it was to be conducted in meticulous sector by sector detail as in the Scottish Independence Referendum (though there was a gap there regarding currency which will need to be properly thought out if there is a 2nd referendum). Instead they did not even have a set of back of the envelope calculations.

    Wild and often contradictory promises were made and appeal to the worst instincts of the Daily Mail reading sector of the British public. Fantasy politics is rapidly coming up with harsh reality.

    Steve Keen’s take is interesting, he is someone I take seriously and indeed his book “Debunking Economics” was our Book of the Month for June. He is right about the Euro and the neoliberal consensus needing a shakeup but I am not remotely convinced that the gains for the UK will outweigh the losses after Brexit.

    As our Foreign Secretary said when he was Lord Mayor of London (he is nothing if not totally inconsistent, but for once I agree with him):

    “If we left the EU, we would end this sterile debate, and we would have to recognise that most of our problems are not caused by “Bwussels”, but by chronic British short-termism, inadequate management, sloth, low skills, a culture of easy gratification and underinvestment in both human and physical capital and infrastructure.”

    I am also very resentful about the effect Brexit will have on both Northern Ireland and the Republic; though ironically the current main worry in Dublin is about the economy overheating.

    What I find annoying also as pointed out by John Bruton (former Irish PM) in the Guardian: “It is important for UK negotiators to remind themselves, every day, that Brexit is a British initiative. Because it is the initiator, the chief responsibility for making Brexit work for the 27 remaining EU countries rests with Britain. If Brexit damages the rest of Europe, Britain has a primary responsibility to find a way to mitigate that damage.”

    He is exactly correct here I think and yet the framing in the UK is insular and antagonistic.

    Probably unreported in the UK is Justin Trudeau’s current visit to Ireland which is going predictably well. From the Irish Times Bromance blossoms as Fanboy Slim meets Justin Biebeau
    “Clearly of the view that comparisons are not always odious, the two were happy for the not-too-subtle message to go out that they represent twin bulwarks against buffoonery on both sides of the Atlantic. In North America, Trudeau steps forward as the antithesis of Trump. In Europe, Varadkar sides with the European Union against Theresa May’s Brexit tomfoolery”.

  2. Peter May -

    Thanks for that fact packed comment! Had no idea that Johnson has expressed such contrarian views. I’m sure he’s very knowledgeable about sloth. For me that was his principle attribute as London Mayor.
    John Bruton is spot on.
    Interesting that Italy’s minister for the EU says they’ve discussed what happens when Brexit is reversed. (The first time I’ve ever linked to the Daily Express)! I really hope it is.
    http://www.express.co.uk/news/politics/823554/Italy-s-EU-Brexit-reverse-David-Davis-Theresa-May

Comments are closed.