Thursday, 14 July 2016
How I might be disappointed by Brexit - and why this doesn't matter
In settling this matter some of us are going to be disappointed. This is because - as everyone has noticed - there's a divide in the world of the leave supporter. On the one hand we have the 'sunlit uplands' team who talk about an independent, free-trading country, a sort of giant version of Singapore. And on the other hand we have the autarchs, protectionists and nativists who want a sad, declining (and probably white) nation crouching from the nasty world behind barriers to trade, movement, investment and choice.
Now I'm a sunlit uplands sort of chap - I didn't vote to end 'free movement' but rather to leave behind a dated, tariff-based and protectionist customs union and go for free trade. As I say again and again, trade isn't something that's done by governments, it's a simple reflection of that human desire to maximise value by exchanging things with other humans. What governments have done is create barriers to trade - everything from bans and sanctions through to tariffs and regulatory constraint. All the state does is make trade more difficult and then, through tortuous negotiations, trim away some of those constrainsts to trade thereby allowing bigger, more open and more free markets.
I also don't know which of those acronyms and rejected Robert Ludlam titles is the right approach to leaving the EU. I know that the GATT rules and the WTO mean that, for most trade, the impact of us being outside the single market is negligible. But I also know that a big chunk of our economy isn't covered by those rules - not just agriculture but important sectors like finance, law and advertising where the UK is a dominant player. So it's not enough to simply sit back on WTO rules in trade if we want to make sure important export sectors perform.
I'm pretty sure too that imports - consumption - are more important than exports - production. So it's too easy to dismiss the argument that we simply have no trade barriers (beyond the physical and logistical) other than those contingent on domesitc standards set by the UK parliament. What we don't know is whether such a radical approach really does what the theorists say - reduces prices and costs allowing the glorious benefits of opportunity to drive economic growth.
Looking at what our new prime minister has done, I get a feeling that I'll be disappointed. There does seem to be an assumption that some new sort of immigration model - more restrictive, more limiting - will be imposed and that, free from EU state aid restrictions, we'll see a rash of supports and interventions that use taxpayers money to prop up inefficient industries. This sort of protectionism - in capital and labour - is politically popular with that constituency making up a sizeable portion of the leave vote and especially the provincial, suburban working class that tends to vote Labour.
So I'll be disappointed. The Brexit model chosen won't be the best one, will probably be rushed a little, and will focus more on protecting the British working class from the realities of the world's economy than on riding that economy as a route to riches. For sure, there'll be trade deals galore with each new one rammed down the throats of Remain advocates. But these will be technocratic deals - dropping a tariff here, a regulation there and a loophole over there, all washed down with state-sponsored grand deals in defence, technology and infrastructure. We won't have markedly changed from the system we enjoy - if that's the right word - within the EU (with the exception of replacing Romanian fruit pickers or Polish care workers with Indian, Chinese and African ones).
Now, dear reader, not only could I be wrong but, just as importantly, my disappointment doesn't matter (any more the does the disappointment of Faragist enthusiasts for a crypto-fascist autarky) for one simple reason. We - that's you and me as voters - can change it. If the chosen Brexit model doesn't work, we can seek a different approach. The people can elect a different bunch of politicians with different ideas to see if they can get it to work. We can have robust arguments about the options and choices available to government and then elect an administration with a fighting chance of implementing one or other of those choices. This is the real change that brexit brings - yes, I think we'll benefit economically if we get it right but next to regaining the power to choose where we go with our economy this is as nothing. So long as we remember the curse of democracy - sometimes the wrong people get elected. As democracy's blessing - we can kick those wrong people out when they screw up.