Where to now with Brexit?

I was in Dublin at the weekend; nothing unusual about that, it is my hometown and I go back regularly. On this occasion it was the 40th reunion of my UCD class of ’77. I know that I move in circles where everyone is both successful and well educated so their opinions may not represent a true cross-section of the Irish population however a few things were evident:

  1. The belief that Brexit would harmful to the UK was even stronger than the last visit.
  2. The belief that a hard Brexit and the UK walking away from the negotiating table if the terms were unfavorable is considered ridiculous, as the UK has far more to loose than the EU. However this will affect Ireland more than any other country.
  3. The belief that the UK is delusional both in hankering back to the old empire and in not realising that the pro-Brexit arguments were a tissue of lies. As Mark Twain said “It’s easier to fool people than to convince them that they have been fooled”.
  4. There was a general welcoming of the UK GE result however worry that the DUP would be involved in government. To misquote Seamus Heaney “When the male county England, invaded and raped the female country Ireland it left behind a bastard child which is the DUP”.
  5. There was deep concern for the North of Ireland and the border region within the Republic. Whereas only about 10% of Irish exports end up in the UK (it was 12% in 2015 but has fallen in percentage terms since then) the agri-food sector is very exposed and will be badly hit.

Dublin and the Republic of Ireland seem to be doing exceptionally well with economic growth back to a 4-5% trend rate. There seemed a general belief that this was just taking up the slack of the 2008 recession. Given however, the exposure of the Republic to the Banks and the non-sovereign currency (Euro) and the special measures imposed by the Troika; it highlights just how poorly the UK has been run over the same period. Indeed the prospect of the UK returning even to the 3% historic growth rate seems remote.

In 1801 when Ireland joined the Union with Britain, Dublin was the 2nd city in these islands in terms of importance and economic output. By 1922 when Ireland left the Union it was not even in the top 10 (and even 2nd to Belfast on the island of Ireland). Now it is easily back in 2nd place, with Greater Dublin well exceeding Greater Manchester, Birmingham or alternatively the combined cities of Edinburgh and Glasgow in terms of economic output. It shows. There is an economic vitality that is absent in any British city with the singular exception of London.

I argued using the Anna Karenina principle (“Happy families are all alike; every unhappy family is unhappy in its own way”) on Prof Richard Murphy’s blog TRUK last year that the Brexiteers deliberately kept the outcome of Brexit vague to maximise support. This theme was taken up by Martin Wolf in the FT two days ago (link to Irish Times version as it is behind less of a paywall).

“Among many defects was the failure to specify alternatives properly. There is no binary choice between Remain and Leave. There is a possible choice between Remain and many Leaves. Subject to agreement with the EU, these could vary from the softest – permanent membership of the Single Market and the Customs Union; to the hardest – no post-Brexit deal; or the chaotic – no deal at all.

Given how close the outcome was, Remain would almost certainly have defeated any specific version of Brexit in a two-way race. Yet in the end the UK can only have a specific version of Brexit. That is why it is democratically legitimate to demand another referendum between Remain and the negotiated version of Brexit (if any). Unfortunately, it might be difficult for the UK to withdraw its application to leave.

This foolish process has now set the UK on a path to a chaotic exit. Britain has long wanted to divide Europe. It is now uniting it against itself. That is a strategic disaster.”

What Wolf fails to point out is that the failure to pin down alternatives was deliberate strategy. I believe also that the Anna Karenina principle was used to devastating effect by the Trump team in the US.

On rescinding article 50 Macron seemed to think it was possible, but Guy Verhofstadt video here – indicates it would be on worse terms. Guy is always very entertaining (and an Alice in Wonderland reference a  bit reminiscent of Ken Clark’s Brexit speech).

Prof Simon Wren-Lewis uses the chess term zugswang. “The GE2017 result left the Conservatives in a position that chess players call a zugswang, which means whatever you do makes your position worse.”

The award winning journalist Fintan O’Toole writes in the New York book Review:

“But what do you do when your crowd-pleasing applause lines have to become public policy? The twenty-seven remaining member states of the EU have to try to extract a rational outcome from an essentially irrational process. They have to ask the simple question: What do you Brits actually want? And the answer is that the Brits want what they can’t possibly have. They want everything to change and everything to go as before. They want an end to immigration—except for all the immigrants they need to run their economy and health service. They want it to be 1900, when Britain was a superpower and didn’t have to make messy compromises with foreigners.”

I couldn’t blame the Irish for feeling schaudenfraude. My only hope is that the DUP will prove so toxic that even the Tories won’t be able to work with them (a bit of fun here) and that a second General Election will produce a working progressive coalition which can undo the “fine mess they have gotten us into” to  paraphrase Laurel and Hardy.

Comments

  1. Bill Hughes -

    Sean, you have summed up the situation succinctly and accurately. The decline of the British Empire which started with the Boer war in 1900 and has continued ever since. The post war period gave some relief but the Tories coming to power in 1979 sealed our fate as the Blair years and Iraq war continued our delusion that Britain was a “great power” – seat at the UN Security Council and possessing nuclear weapons! while the economy continued to go down the pan. Brexit is the final nail in the coffin – the UK weak and the laughing stock of the world!

  2. Allen Bell -

    Well done to the Republic. Of course you would be a neoliberal fool to think the success of the country was connected to actually having some early spending cuts, operating a free market economy, having a planning system a lot less restrictive than the NPPF and its successors, and low corporate taxes. Equally you would be a nasty conservative to notice that it is beneficial to have a much smaller socialised health sector ( A&E plus a few extras ) than the behemoth that is the NHS in the UK.
    But I am curious about one thing? I can name around 9 self-governing territories in Northern and Western Europe that are not EU members. Are Dubliners any better than Londoners at naming those which are worse off than their nearest EU neighbours?

    1. Sean Danaher -

      Sorry for the late reply I was up at my KWSC sailing club yesterday. I think Tacitus said something similar first but “success has 1000 fathers failure is an orphan”. There are many factors at play and it would be fantastic as a physical scientist to have say 100 Irelands, UKs and Germanys and run them slightly differently adjusting one factor at a time.. The factors you point to may have some influence but my own belief is that they are fairly minor. The major factor is having a very highly skilled population and running a skills surplus, particularly in areas like science for most if not all of the past 50 years. Ireland is an outlier in that it easily produced over the last half century more science graduates per capita than any individual country in the rest of the EU, though in the wider technology area it is matched by Sweden. I’m not sure if this is still the case. It would be interesting to do a detailed analysis but a bit of quick checking indicates that in 2001 for example Ireland was producing 4 times as many science graduates per capita as the UK. When I arrived in the UK in 1981 the difference was closer to a factor of 10; I was somewhat shocked by both the quantity and quality of the students I had to deal with in England. At the time (1980) something like 20-25% of the Irish population were studying to degree level (and about 20% in the sciences) and the UK figure was about 9% of the population with only 5% in the sciences.

      This looked like a failing strategy in the 1980s where many of the brightest and best emigrated, but paid enormous dividends in the 1990s when many multinationals relocated to Ireland very often with companies with now senior Irish graduates on their boards etc. The IDA puts skills as the number one factor and the items you list are fairly low down.

      On your question regarding comparative knowledge re Londoners and Dubliners I don’t know. the Irish in general are vastly less insular than the English so I would expect Dubliners to be more knowledgeable than the UK as awhole but London is also an outlier.

  3. Peter May -

    Article 50 is triggered in accordance with the departing country’s constitutional arrangements so can be and should be withdrawn by the UK.
    Guy Verhofstadt is in my view just wrong.
    Then I’d like to see the EU offer some meaningful reform (some of which even Macron wants). I think the EU would play ball as they need UK money.
    Then it would be up to the Brexiteers, if there are any still left! to say exactly where they propose we go from here.

    1. Sean Danaher -

      Hi Peter
      yes I certainly hope Verhofstadt is wrong in that regard. He is however very good at showing up Farage for the idiot he truly is. Keeping to the Irish theme there is an appetite for reform and the Dublin launch of Yanis Varoufakis’ DiEM25 which was about a week before the reunion was widely publicised and discussed. There is still a lot of anger about the banks and the 2008 crisis and hunger for EU reform.

      Regarding Brexit negotiations Ian Dunt is not hopeful and the whole think is likely to blow up as the hard Brexiteers are apparently threatening to run a stalking horse challenge to May http://www.telegraph.co.uk/news/2017/06/17/secret-plot-oust-theresa-may-ministers-threaten-stalking-horse/

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