Why Brexit is so important

In this dilemma, I think of U.K. citizens as a kind of stand-in for the human race. Per capita income and education in the U.K. are well above the global average and, more important, Great Britain has one of the most firmly established democratic traditions in the world. So if the U.K. cannot get this decision right, it’s pretty gloomy news for all of us. I am reminded of the scene in Ingmar Bergman’s “The Seventh Seal,” where the traveling knight has to play a game of chess against the figure of Death, and his life will be spared if he wins…

Paul Krugman opined recently that Brexit would likely cost the U.K. about 2 percent of GDP, a fair estimate in my view. But that is not the only thing at stake here. Humanity is on trial — more specifically, its collective decision-making capacity — and it is the U.K. standing in the dock.

I’ll be glued to my seat, watching.

Recommended!  Here is the full column.

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Historically Britain has been particularly incompetent over the past 150 years. I don’t see the U.K. as analogous to other nations generally. Island of dumb-dumbs.

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Brexit is essential. EU is a bunch of corrupt perquisite-consuming elites (been to Bruxelles?) who are letting in a tidal wave of stupid, dangerous migrants.

Yes. Originally sold as a common market to facilitate trade, the EU evolved into a political straitjacket designed to subordinate the political systems and cultures of the various European nations to the wishes of Brussels. Enough voters woke up in the UK to say no to the EU. They see what unfettered immigration from illiberal lands is doing to England and took a crucial step to halt it.

BTW, Krugman pulled his estimate of 2% GDP loss out of his "orifice". He has no idea of what the actual effect would be - no one does. If a chain reaction started by Brexit destroys the EU, the long-term effects could be sharply positive.

Indeed. More orifice than oracle with Krugman.

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The 2% is made up, but a good start of conversation. It's 2% one-time cost that will pay dividends for a very long time in the future. The UK will be luck if they get a way that cheap. All the costs seem to be made from EU vindictiveness.

It's going to be more than 2% as the UK and May's bargaining power dwindles and terms get worse with each passing day.

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Oy vey! Imagine if Brits and Americans start understanding what the French already do.

Oh good. Another Jewish conspiracy loser. Just what we need.

diminished dickler up here is compensating for an empty life. pitiable, really.

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I love the French right now!

Hey, NAZI--

didn't you hear the song? fuck off

Do you think that video was an anti-Semitic rant? I did not see it that way, but perhaps I am mistaken.

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Krugman pulled his prediction out of the same orifice where he found his Trump-election-effect-on-the-economy prediction.

Who cares what Krugman this is anymore? It is sad to watch what he has become - a waterboy for the Democrats.

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May should send a letter to the EU cancelling the "we're leaving" letter.
One of the aspects of a representative government is that representatives can ignore the will of the people.
1. Cancel
2. Join Schengen
3. Carry on

Fragile system, if the voters learn that voting isn't allowed to change the government. In that event, the representatives better make sure the military is well-paid.

+2.

These days, you will hear many people in the UK reasoning thus. "If not Brexit, then we are not a democracy. And if we are not a democracy...."

The smarter Members of the Elite see this and are horrified by where it may lead. But most of them are too narcissistic and unimaginative to perceive the risk.

Very well put - that's exactly what it's about.

The EU is not effectively accountable to any electorate, and England ain't standing for that any more.

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I think you are too sanguine about how a better deal was possible. At every stage of negotiation, the UK has had to make the big concessions, not to get a deal, but just to move on to the next stage. May's only strategy has been to bluff that the UK could accept a no-deal outcome, a bluff which the EU never considered falling for. The only deal the EU would do is this one, in which they get to put their preferred terms in their pocket as an unlimited mandatory backstop before the negotiations on the future relationship even begin. The UK as the smaller party, going it alone, bereft of trade deals with the rest of the world, the financial services centre of Europe, had no real bargaining chips outside of Brexiteer fantasy. Hence the truly awful deal May has struck, which would actually reduce the UK's sovereignty below what it has now: at least today we could leave the EU's system of customs rules unilaterally; after this deal we could only leave their backstop customs rules by joint agreement. May is at least honest in saying this is the only possible deal.

'At every stage of negotiation, the UK has had to make the big concessions,'

Well, actually, they did not need to make any concessions at all - they voted to leave the EU, after all, so as to enjoy all the privileges and benefits of being a non-member of the EU.

Except, for some strange reason, the UK still expected to be treated as if they were not a non-member of the EU, due to the UK's own democratically expressed will.

'a bluff which the EU never considered falling for'

Except, as of today, no deal seems to be the most likely scenario - and not because the EU has been too mean to a country that voted to enjoy all the privileges and benefits of being a non-member of the EU.

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The UK should have prepared fully as if a hard exit would happen. That is the only way they could have any negotiating leverage. They did not do this.

Yep they didn’t prepare for the hard exit so now comes the hard cock

This is actually funny cuz its tru

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I know. I know....it's un-effing believable...the cost of serious Hard Brexit prep was/is slight compared to the overall stakes in this game. So obviously, yes, you prep for leverage.

Looking at the missteps over the "negotiations" though; getting the commission not the council as counter-party, front-loading the financial settlement, signing up to the backstop, ..... I can't believe a single member of Cabinet has sat a class in negotiation or game theory.

This outcome, given "Leave" won, was nearly inevitable, human nature being what it is. If the "Remain" people had got on board and created a unified front (contrary to human nature), the outcome would have been much different. Woulda, coulda, shoulda. I don't know if this is a harbinger of the End for the Western (liberal) Democracies, or an aberration, but TC's thesis that it applies to "the Human Race" is plain nonsense. It does show that popular decision-making can be, and often is, wrong. What do they say? To really foul things up, it takes a computer. Perhaps in the 21st Century, our civilization's complexity has reached to point where to really foul things up, all we need to do is subject the issue to a popular vote. So much for the wisdom of the crowd. The same stupidity that won in the U.K. is pervasive in the U.S. today (and has been since at least the mid-90's.)

How elitist of you! How do you know the leavers made a mistake? Maybe they know what they want and voted to get exactly that. That said, they may be thwarted.

The issue was immigration, control of their sovereign borders, and the preservation of what little social capital they have left, a la Putnam's "Bowling Alone".

Having lived through the sh*t-hole-ization of California over the last 40 years, I totally understand.

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It's almost as though they're not missteps, but rather a deliberate effort to magnify the pain so that the electorate would back down.

That's the slightly paranoid Behavioural Theory of Theresa May. Wish I could discount it.

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I don't know Tyler, I think you could have been more of a contrarian. You could have said that even if Brexit is not perfect, at least someone is doing something, and tensions aren't being swept under the rug like before.

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we Brits do not want brexit anymore. we were lied to. it's a clusterf***

But you guys were dumb to think it would go any other way. Classic British bungling nothing new here, and certainly not humanity on trial hahaha Tyler is such a clown too!

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'we Brits'?

I certainly do. I supported Brexit for reasons of democratic accountability, and expected some short term economic disruption. I would accept either May's deal or a WTO exit and be fine with either.

Sorry to be so unmercenary, but there are more important things in life than 2% of GBP

I guess the parallel in America would be the soy bean farmers willing to take a hit for .. sovereignty?

I don't agree entirely with Tyler that future GDP growth should the main goal in any society, but it is certainly right up there, and throwing national economic growth in the street seems like a bad idea.

I guess the parallel in America would be America continuing not to be in the EU

I'm pretty sure the EU was created in recognition of the economic power of the "United States."

Except the US is culturally, ethnically and politically rather homogenous (Protestant Christian and Anglo) and committed very much to the single-sovereign vision since 1865 (see the 1915 film, Birth of a Nation).

Europe is nothing of the sort. It's numerous discrete nations with their own separate, distinctive histories and cultures. Putting all that together into a single political union is a fool's errand.

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Then an American unsurprisingly knows little of why the EU was established.

"The European Union is a unique economic and political union between 28 EU countries that together cover much of the continent.

The predecessor of the EU was created in the aftermath of the Second World War. The first steps were to foster economic cooperation: the idea being that countries that trade with one another become economically interdependent and so more likely to avoid conflict."

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"there are more important things in life than 2% of GBP"

+100

Tyler's obsession with maximising GDP is pathological. There are limits to GDP as a representation of human welfare, damnit! Tyler would sell us all downriver if he thought it would raise GDP by 0.1% / year ("Well, as slaves, you won't waste so much consumption, and I'm sure your hours worked will improve too").

The 2% value is probably worse case, and neglects long-run effects from an open economy. I'd bet the real effects are much smaller; (look how well did the establishment's last set of Brexit economic predictions panned out - Terribly! ). Tyler is a very well educated man, but he shows his limits and motivated reasoning when his globalist values are rejected.

You need to read Stubborn Attachments.

It's on my Xmas list. I respect Tyler enough to listen to him, even when I strongly disagree.

Your assessment is correct. Further, the evisceration of white Christian Europe is a feature, not a bug, to Tyler and his paymasters. See Kalergi Plan.

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Agreed, Alistair. But Tyler did disagree with Scott Sumner just yesterday when SS made trade policy an absolute. Tyler recognizes it as a subset of foreign policy. FWIT, I'd say you take the 2% hit and then make it up within the next 5, then again the next 5, ect.

Yes but this is Britian, they hardly have anything to produce. Their big engine was finance in the City which was largely based on their access to the EU. What else can they do to generate any kind of growth, they're laggards in almost everything and have been for well over a century.

A century is too long, even a Britain skeptic must admit that the Jaguar XKE was one of the finest things ever crafted by man.

None other than Enzo Ferrari called the XKE the most beautiful car he'd ever seen. But it wasn't "crafted" particularly well. In fact, it drover like a truck.

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Since 2000, the per capita growth rates of the U.S., the U.K., Japan and the EU have been similar:

US 1.0%
UK 1.1%
EU 0.8% (EU-19 0.5%)
Japan 0.8%

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This must be wrong. I am assured by many smart people that industry doesn't matter and service economies are the future.

Who?

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The last time the British were possibly an effective world power was during the Napoleonic Wars. Even during their golden "the sun never sets" period of the 19th century they were always a paper tiger who couldn't stand up to another industrial power.

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The UK still has London, through which much dark money is laundered.

There will always be a market for laundering money for the mafia, despots, oligarchs, and petro-savages.

Britain will continue to do well.

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"neglects long-run effects from an open economy..."

The EU certainly appears to be a declining trade block. It's not at all obvious why anyone would choose to tie one's future to it.

Put differently, Britain opted for free agency...And I'd certainly hope that the NAFTA block would immediately try to sign them. It's the trade opportunity of a lifetime.

Well they clearly aren't, if they were trying to get the UK to join NAFTA (which isn't called NAFTA now but the Canada United States Mexico Trade Agreement or CUMTA) then the UK would have a bigger bargaining chip now but no one gives too much of a shit about signing trade agreements with the UK now and so because they did such a typically British shit job of planning for Brexit they're in a much worse bargaining position.

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C'mon. Does Brexit even matter that much? One way or another, will the world, Europe, or even Britain itself look that different 50 years from now?

It's not like even without being in the formal EU, that Britain is going to turn itself into a Juche hermit kingdom. Despite political and populist machinations Britain is going to still wind up with close economic and cultural integrations with the rest of Europe. If not just for practical reasons.

It's not like the EU is some sort of amazing game changer. Europe isn't radically different from 1992. Nor are the non-EU countries like Switzerland, Norway and Iceland that different than EU countries.

Brexit is just a bunch of drama about nothing. It doesn't really matter that much in the long-term. I challenge anyone with strong opinions on the matter, pro or against, give me your most nightmarish plausible scenario if your side loses.

OK: here goes;

With Brexit defeated, the EU continues to integrate ever more closely, paying less heed to British objections than ever. Despite rhetoric of reform, protectionism, excess regulation and corporatism increasingly dominate it's economy. Growth continues to be sluggish by global standards, averaging 1%, and Europe increasingly looks like "yesterday's continent". Residual gains are concentrated in a transglobal elite in the major cities, large corporations, government, and a bloated 3rd sector; but rural, less educated, and poorer citizens get it in the neck. Inequality, broadly defined, continues a slow but inexorable climb.

Simultaneously, the Elite facilitates on-going and non-assimilating immigration from North Africa and the Middle East to provide both downward inflationary pressures on labour and a more pliant voter base, with just a hint of cosmopolitan virtue signalling for good measure. This gives a sense of a culture under siege does nothing to alleviate the concerns of the "left behinds". Sporadic Islamic violence is used to justify ever greater surveillance and public order laws, which is used to intimidate and scrutinise "right wing sympathisers" and "Islamophobes" as much as it is used to fight ISIS.

Attempts by the "left behinds" to address their concerns at the EU level are stymied by its anti-democratic power structures controlled by the technocratic/ academic/ media/ corporatist elite (which broadly despises them, in any event). Tensions continue to mount between national leaderships with some degree of democratic accountability and that trans-national elite. But the elite holds most of the cards, and reactionary national leaderships are subject to various degrees of political, judicial, and economic sanction. In an Elite attempt to maintain control, political dissension is increasingly labelled "hate speech" or "offensive" to be censored by technological means and the Overton window of public discourse collapses. Nonetheless, the voting centre continues to hollow out, with established social-democratic parties struggling against the margins. It doesn't matter; the EU ensures no meaningful decisions can be taken in Parliaments any more.

Lacking solutions within the formal power structures, populations turn increasingly to radical agents. Street protest turns to violence. Street violence turns to political killing. States of Emergency become... common. Eventually, an embryonic EU police force or army is despatched to deliver "support measures" to a member state experiencing significant civil disorder. It promptly becomes a target for enemies on all sides....

Yeah, but this is the trajectory of the world with or without Brexit. It's the trajectory in the US today which has nothing to do with the EU. Yes growth is faster in the US but the major gains are still going to the globalist elite there too. Britain outside the EU will also provide a nasty place for people who didn't go to Oxbridge and don't work in the City.

Broadly agreed. The challenges to Liberalism predate Brexit and are partly independent of it .

But a failure of Brexit would remove perhaps the last "safety valve" alternative to the above; an opportunity for the continent to relapse into a more stable configuration of competitive and culturally/ethnically cohesive national states.

Without Brexit and its descendants, a single supranational EU hegemon, accountable only to the elite, is far more likely to screw things up than a constellation of independent states.

Indeed a successful UK after Brexit will be a profound lesson for the world on the limits of Government. I am surprised Tyler, as a libertarian, isn't more supportive of Brexit for that reason. A good example of how Brexit might work is the exit of Poland from the Warsaw Pact at the end of cold war. Poland's economy was well integrated at that point with the old communist block. There was a period of adjustment and then their economy started to grow much faster. I think the UK will experience the same.

Tyler is increasingly Benthamite utilitarian rather than libertarian. He's out to maximise cardinal utility....oh, sorry, "GDP"; as the best of all possible worlds.

I suspect he may be an emergent artificial intelligence disguised as a geeky professor. He has just the right amount of calculating monomania going on behind the polymath spiel.

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Well said!

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At the end of the day, everything goes down to character. President Captain Bolsonaro, Brazil's new leader, has recently been awared a military award. It has been revealed that, in 1978, he saved a soldier from drowning. This sums up nicely the moral difference netween Brazilians and Amsricans: Brazil has elected national hero, America has elected a reality show star. Brazil admires and rewards grit, courage, moral integrity and idealism, Americans admire and reward selfishness, narcissism and dishonesty. While Trump supports Red China and the Arabs, President Captain Bolsonaro takes a bold stand against them.

President Captain Bolsanaro sounds a bit like bufón, does it not TR? His Excellency President Captain Commodore Bolsanaro Bufon, República Federativa do Brasil...

H eis not a buffoon. He is a national hero, he prevented a soldier from drowing. He has a distinguished military carreer behing him. He has vowed to fight crime, reform the economical system, oppose Red China, the Arabs and the EU and oppose environmentalists. He has promised to block key Chinese investments in Brazil. He has vowed to allow every honest Brazilian to buy guns and hundreds of bullets. He has fought against corruption.

Good knob polishing there, bro. Want to polish mine next?

Sad.

If Bolsanaro had any real ambition he'd take the title of Cuckmeister-General of Brazil. Only then will he be truly respected.

That is not true. He is a national hero and very respected.

I guess he's a bit like Colonel Quadaffi in that despite being the national leader he doesn't take the higher-ranking title.

He is a very humble, down to Earth.

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The mumblings of Chris Dillow help. Brexit is bad but but no the catastrophe Tyler suggests. Mr. Dillow is much clearer when assessing the issue, read him. https://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2018/12/chaos-under-ed-miliband.html

Anyway, summarizing: Brexit will cost x % of GDP in the short term and y % in the long term. However, it may be a loss well-distributed among all the population. Therefore, the relative incomes of the rich and the poor will stay more or less the same. Thus, no major population unrest because the social order doesn't change.

Using the Marxist axiom of "The purpose of politics in capitalist society is not to provide good administration. It is to ensure the power and prosperity of the rich." Brexit is not that big failure since the rich will still be powerful relative to the poor. So, politics under the Marxist perspective are working very well in the UK.

Tyler pitches Brexit as a big narrative, as a trial for collective decision making , AKA democracy. With democracy some mistakes are made sometimes. Being a bit cynic Brexit has not triggered a war or a civil war, so a bad decision but not so bad consequences.

I'd say the pendulum of power tilted a bit too much to the conservatives in the UK. They just need to be put in check. Not defeated, that would break the equilibrium.

'so a bad decision but not so bad consequences'

I'm guessing you don't know anyone that will be personally effected. Though I am pro-Brexit personally, I know an easy dozen people whose lives are likely to be seriously effected, both in Germany and in the UK. The smarter ones who will not be affected became German or Irish citizens in the last 18 months, and do not live in the UK.

Basically, Brexit is likely to impact hundreds of thousands to millions of lives directly. That many of them are not British means that the British political system does not care about them, of course - even when they are parents of British citizens.

(A couple of the more bitter UK remainers I know in Germany are looking forward to when Spanish health care becomes unavailable to all the Leave supporters in Spain - uncharitable, admittedly, but at least the people who supported Brexit will be able to enjoy the fruits of their victory.)

You're right. I know no one directly affected. I can just think about abstract cases. For example, UK workers living in the Schengen area without troubles and EU27 workers living in the UK. Also, UK students can study without paying fees in universities of several countries of the EU for now, while universities at quite expensive at home.

For the UK not caring about the parents of British citizens: it's a Europe thing. I know the case of a couple with 2 kids. Father German, mother Chinese. The mother can be can deported for innumerable administrative and stupid causes until she gets a permanent residence permit. The most interesting one is to reapply for residence permit in case of divorce. If the application fails, bye bye to the mother and the kids stay. You may call it law against foreign housewives or low income wives.

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The thing about it is that the UK looks like it won't exist in a few years with England as the successor state. Scotland, which will become independent might soon host a large foreign EU army which would suddenly make England non-viable as a real nation state since they would totally lose the capability to defend themselves.

An EU army? Oh noes.

The US can send a company and a couple of jets to England. Ought to take care of it.

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To paraphrase Bismarck on the EU army, we would just send the police to arrest them.

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So a return to the Auld Alliance? Somehow England managed to survive "The King if France bestriding our realm as Elizabeth I put it. In fact the Scots generally got the worst of that deal

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@Axa - thanks for the link, it was good, though I question why the author believes 257 Harvard respondents in 1995 have the final answer as to positional goods, since the paper cited says: "S.J. Solnick, D. Hemenway / J. of Economic Behavior & Org. 37 (1998) 373–383:
Some researchers have used direct questions to explore positional concerns about income. Zeckhauser (1991) asked his students informally whether they would rather have per capita income be $25,000 in Japan and $24,000 in the United States or $22,000 in Japan and $23,000 in the United States. He reports that while many prefer the United States to be more prosperous, their views sometimes shift when he chides them for being envious. Tversky and Griffen (1991) asked subjects whether they would rather work at Magazine A, where their salary is $35,000, but colleagues earn $38,000, or Magazine B, where they are paid $33,000, and other workers earn $30,000. Magazine A was chosen by 85 percent, although, interestingly, in another group, 64 percent believed they would be happier at Magazine B". In other words, the answer to the survey question often changes depending on the group.

Concerning BrExit, it could well be that 10 years from now the UK will be clamoring to rejoin the EU.

@Ray: Ha, that one is very weak indeed.

I read the other article with 1000s of survey respondents among several countries ( https://www.andrewoswald.com/docs/happecperf.pdf )

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The whole piece is predicated on there being a 'correct' choice but it seems to me brexit is about preference. Also, that democracies are often schizophrenic in their desires and ineffectual in their policies doesn't seem like new information to me, but it is perhaps the best argument for decentralizing power and making the units of collective decisions as small as possible (trending towards 1).

"The whole piece is predicated on there being a 'correct' choice,,,"

That's what struck me as well. This isn't like, say, vaccinations, where the evidence is irrefutably on one side--cultural questions like Brexit are multi-dimensional, and reasonably people can easily come to very different conclusions. The author seems to have forgotten that.

The idea of throwing your hands up and saying "Everything is ruined! We're all doomed!" because someone opted for a different outcome than you prefer seems very childish. Particularly since GB has legitimate gripes against the EU.

As for your other point, one merely need point to Athens. The whole point of a republic is to try to mitigate the flaws in a democratic government and those in a more centralized government. In Britain this is particularly true, since the British government basically evolved by progressively reducing the power of the monarchy and giving more and more power to the people, staring with Runnymede. They're still working out the kinks.

@James - sounds like vacillating, prevaricating B.S. I bet the average Brit will be pissed when GDP is down a half a percentage point or more per year due to BrExit, as the data says it will be and already is (using a synthetic GDP, see https://www.cer.eu/insights/whats-cost-brexit-so-far
, the UK is losing 440 M quid a week due to BrExit.

High minded principles like saying 'no' to Brussels will take a back seat when money is taken out of your pocket; money talks, B.S. walks, it always does.

That's the case if a City of London financial worker bee is considered an average Brit.

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I think that the way that Brexit is going is totally predictably, and also public opinion in response to what is happening is totally predictable. That the policies of democracies are often ineffectual also isn't news.

I feel like there is an implied question (and criticism) of the people who allowed the Brexit vote to happen in the first place. Why was there a vote? For those opposed to Brexit, why take that risk? For those who were in favor of Brexit, they seem like the proverbial dog who caught a car. Why weren't they prepared for the political work that they surely should have known would follow upon a successful Brexit vote?

That criticism of the leadership and elite class of democracy I think isn't totally novel, but it does feel to me like there is a shift. It isn't uncommon for leaders to be incompetent and to have errors in judgment. What does seem (perhaps) new to me is that a unexpectedly large number of the elite seem to be just phoning it in. They aren't even putting forth an honest effort. Cowen calls this complacency, but to me it seems you could be complacent and still work quite hard at changing the status quo at the margins or improving your place in it or work really hard to maintain it and shore it up where it looks weak. To me, it looks more like laziness.

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Odd - no links, and no 'Duplicate comment detected' message either.

'I am here to tell you that you should give a damn about Brexit. '

Especially after someone spent months determinedly avoiding discussing the amazing train wreck involving a country that brings tears to his eyes whenever the plane he is in lands at Heathrow.

'But most Europeans seem to have moved on'

Of course - the UK will be out of the EU on March 30, and the EU does not care all that much about non-members of the EU. The EU is not paying all that much attention to what is going on in Brazil or Ukraine either.

'Parliament could, at any time, take matters into its own hands and halt or slow down the process.'

And the U.S. House of Representatives can impeach Trump - so what?

'So if the U.K. cannot get this decision right'

Still anti-Brexit in your heart, aren't you? Whereas some of us are looking forward to the City no longer having access to EU decision making - or money. And finally, no more whining about how the EU is taking away control from the UK.

'For Remainers, as they’re known, it is striking how few obstacles are in the way of the proper solution'

Except the lack of a majority in any part of the British political system.

'Virtually all the Leavers are unhappy with how Brexit has been handled.'

And, in one of the best moments of pure comic gold, have questioned those responsible on the British side for making such a deal. Such as Raab, the man in charge of the Brexit negotiations, disavowing the deal that was made under his leadership. To the extent that he has said that staying in the EU would be preferable to the current deal - the one he was involved in creating.

'But at some point things must have fallen off track.'

You must mean the illegal contributions to the Leave campaign before the vote, right?

'I’ll be glued to my seat, watching.'

Just make sure that if you want a true front row seat, use an American airline - as it is currently going, no EU airline will be flying in or out of the UK on March 30.

@clockwork_prior - "Whereas some of us are looking forward to the City no longer having access to EU decision making - or money" - some of us? Using the Royal "us" in the UK? You live in the UK, in Fairfax County, Virginia, USA, and in Germany? Shiit you're about as international as I am (I live in three countries throughout the year).

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See France & riots and burning as another alternative, especially without Brexit.
"We face tournament-like choices and perhaps we will not end up doing the right thing."
Remain, with globalized serfs instead of citizen freemen could be a disaster.
Leave, with a 2% reduction of GDP, mostly concentrated on the elite super rich in The City, is unlikely to cause most native born Brits to even notice economically.

Implementation of lousy policies will make either option bad, thus "not right". Implementation of good policies, whether Leave or Remain, will be far better for the UK.

The actual policies being implemented, and how, will really determine the near future.

Norway & Switzerland can, and will continue to live fine w/o being in the EU; or they might even join.

To this European, it looks like the pro-EU elite in Britain are accepting a Poison Pill agreement, to hurt the British people whether they leave or remain. It's despicable behavior by the elite.

Paul Krugman's elite "2% drop" is likely a bit more accurate than his predictions of US market dropping after Trump's election, but only because he was so wildly, willfully elitist negative and elitist wrong. He's getting paid to bash Trump, with good sounding arguments. US unemployment has not been lower in Krugman's adult lifetime--yet Nobel winning Krugman is too small to acknowledge Trump's success. Whether Trump knows econ or not, his policies are having good effects for normal American workers.

Brexit done reasonably well is likely to have good effects on normal British workers, and reduced British social problems.

'mostly concentrated on the elite super rich in The City'

And the auto industry, which is the largest single employer in the UK, and which exports 56% of its production to the EU.

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So many of humanity’s core problems — addressing climate change, improving education, boosting innovation — ultimately have the same structure as “fixing Brexit.” It’s just that these other problems come in less transparent form and without such a firm deadline. We face tournament-like choices and perhaps we will not end up doing the right thing.

Not sure why we would consider this a referendum on humanity writ large, exactly. Sure seems like collective decision-making is a lot different in Britain than it is in, say, China. And in 100 years time, whose decisions along the way will have mattered more? I thought Western chauvinism was beneath you, Tyler!

Red China is a totalitarian regime. The only decosion-making that matters is by its masters. The United Kingdom is a democracy. Now it is engaged in a great discussion, testing whether that nation, or any nation so conceived, and so dedicated, can long endure.

China's decision-making process is no less legitimate for being limited to a few elites. Power flows from the point of a gun, after all, so it's best to be the one holding it.

It is not legitimate. But more to the point, it says nothing about how "mankind" makes decisions. It says how an insectoid elite makes decisions.

it says nothing about how "mankind" makes decisions.

Neither does Brexit! Stop stealing my points, you faux-Brazilian nutter!

Yes, it does. It shows how a free, developed nation makes decisions in a democracy. Also shows the strenghts and shortcomings of democratic decision-making. That says more about mankind than an elite making all the decisions they want with no regard whatsoever for what the peoplewants!!!!

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Brexit reminds me of those former colonial nations that achieved independence, then slid downward into corruption and poverty.

Yet the people there preferred domestic corruption to the international variety, and poverty to international wealth.

I can see Britain becoming smaller, poorer, more corrupt, yet preferring that to membership in the EU.

You realise, here in this little island, we're growing faster than most of the rest-of-EU? Oh, sure, our productivity stinks, but that's a side-effect of having a working labour market and low unemployment. We'll be OK.

In fact most of the planet is doing better than the EU and has been doing so for some decades. But hey, "Join the EU: we grow faster than Antartica!" isn't much of a headline for prosperity.

All these gloom and doomers forget about the United States.

UK/US enters into a free trade agreement. A real one, not a managed trade like now

The EU ha sits own problems. Populist parties are on the rise. Who knows what the EU will look like in 10 years even.

The US and UK are not going to enter into any kind of free trade agreement. Maybe one where the UK gets fleeced because it's by far the weaker party with little to offer on its own, I guess good for the US but basically the UK is just starting off its life being the world's kicking ball.
I'm not even sure the term "UK" is going to be accurate for much longer, Scotland and Northern Ireland are going to be out of the union soon.

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Which colonial nations are those that you are thinking of which haven't seen increases in GDP/capita, education, etc. post-independence? Canada?

There are about 4 African countries that have not grown per capita since independence...

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"I am reminded of the scene in Ingmar Bergman’s 'The Seventh Seal,' where the traveling knight has to play a game of chess against the figure of Death, and his life will be spared if he wins…"

Hmmm: no doubt that Death enjoys a different recollection of this event: it was the knight Antonius Block who challenged Death to a game of chess.

Was Bergman ever in doubt about who would win the match he was depicting?

Hard to say whether the UK is doomed on such a misreading of Bergman's classic.

Are you so sure Britain is the 3d world country here? I see it more like an incompetent Singapore freeing itself from an even worse Malaya. Perhaps they see the EU has failing and Britain willing to take an upfront hit for long term benefit. I doubt anyone in Japan or Singapore would accept a 2% or even 10% increase in GDP in exchange for loss of control of immigration policy alone.

Well, that analogy is acceptable to this Brit.

Sure, we're klutzes, but the EU is led by Nightmares.

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There was a first referendum in June 1975, with 67% in favour being in the EU on a national turnout of 64%. It was not considered undemocratic to have a second one in 2016. That referendum resulted in a majority of 51.9% being in favour of leaving the EU. The two referenda produced conflicting results. So why not make it a "best of three"?

A lot of the sentiment in favour of the "leave" vote was on the basis of getting foreigners out, despite the fact that they are essential to the health service and general economy. Another chunk was in the belief that there would be fewer onerous regulations, despite the fact that if anything goes wrong some of the public clamour for "there ought to be a law against it". Regulations are regulations, whether enacted in London or Brussels (or Berlin or Moscow for that matter.) They benefit some people and hinder others.

"Remainers" are claiming that the campaigning for leave was on the basis of lies and fear mongering, and some of the funding of the leave campaign was, guess what, against electoral regulations.

Strange days.

https://www.newyorker.com/news/news-desk/new-evidence-emerges-of-steve-bannon-and-cambridge-analyticas-role-in-brexit

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In 41 years, that will be a good argument.

If we have a 3rd ref now, prepare for another in 5 years, and another Scottish independence ref, and then one on Northern Ireland.

If we overrule the ref result, then prepare for the past ref result on Scottish Independence to be retroactively considered a sham.

You do not get to increase the frequency of referenda without the consequences that this sets a precedent. The precedent does not go away because "Oh, all the 'best citizens' agree this time, and won't next time".

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The problem with your 1975 vote theory is that was only for participation in the EC/EEC Common Market, not participation in the EU.

It wasn't until 1992 that the EU was formed by treaty. Only France, Denmark and Ireland held votes by the people on it. In the UK, Parliament actually exceeded their legal authority in approving it without a vote by the people, but without anyone with the de facto power to stop Parliament, they got away with it. (See https://www.independent.co.uk/voices/why-the-people-should-have-a-vote-on-maastricht-the-house-of-lords-must-uphold-democracy-and-insist-1490346.html for more details).

So the 2016 vote was actually the first one in the UK for which people could vote for or against membership in the EU. They voted against.

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EU is just another consolidation of centralized government -- ALWAYS dangerous to the general population

BREXIT is a very wise move for average UK citizens

However, UK has had a long steady drift to socialism, with which the UK populace is comfortable. UK economy will collapse this century and Brits will endure a much lower standard of living & liberty because of their embrace of destructive ideology.

American settlers fled the destructive ways of Europeans... centuries ago -- and there is still nothing in foolish European politics/government to envy or emulate.

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Brexit is now favored by less than a majority of the British. With Brexit, as with so many issues today, not only in Britain but throughout Europe and in the U.S., will Britain be held hostage by a motivated and vocal minority, or will "democratic traditions" and the majority view prevail.

I should have complimented Cowen for his column. The stakes really are that important. The tyranny of the minority has become problematic in the U.S., as Republicans respond to defeat in elections with authoritarian tactics (from voter suppression to outright election fraud (as in North Carolina) to gerrymandering to rewriting the separation of powers that is an essential feature of the American government). Democracy is on trial not just in Great Britain, but right here at home.

It was fine when the Tyranny of the Minority was 5 Democrat SCOTUS votes, wasn't it?

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What's interesting here is that Americans sympathetic to Brexit tend to be American populists, and consistent in that way. They are for Trump and Brexit because somehow the "feels" of "nation first" are more important than the reality (link).

But I kind of see Tyler attempting a straddle. He is down on Brexit and its harms, but increasingly looks for bright sides and silver linings to Trumpian dysfunction.

Myself, I'm with Michael Lewis and The Fifth Risk (still underrated).

This is bad, in both cases. Someone has shouted a danger, and the first thing we are throwing overboard is expertise.

Throwing expertise overboard? Let me throw it a lifebelt!

Oh, sorry, that was an anvil. My bad.

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That you for providing a link to Reality. I was looking for her. I didn't think she was hidden on twitter.

Suddenly I feel nostalgia for the days when people could deny that the sky was blue, because Wikipedia claimed it true.

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I grew up in N.Ireland during the troubles. I am not surprised to find that democracy does not always deliver a perfect solution. (N.Ireland during the troubles is a pretty good counter-example to many illusions: the population was literate and viewed education as an important means of improving their situation, voter turnout was high as people cared deeply about the issues, both sides had strong social bonds provided by their churches, and so on).

To look only at a decision made now is to make a classic mistake of concentrating on the war and ignoring the following peace. I would be reasonably satisfied with a May-style Brexit that claws back enough sovereignty for the UK to decide explicitly what its relationship should be with Europe over the next few years, as opposed to sleepwalking into a United Europe with the only explicit arguments those over a free trade area, or for that matter triggering a break-up so abrupt it resembles economic war.

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I think that Tyler's views are bit too strong on Brexit as a stake for collective decision-making of humanity. The UK has never been totally committed to Europe. It has always had one foot in the English Channel and one on the continent. For instance, it was not part of the concert of Vienna and slow to act to prevent and participate in WWI. This lack of involvement, albeit not always a symptom of British undesirability to join, holds especially true for the European Union.
It only joined the union in 1973. They left the European Exchange Rate Mechanism in 1992.
Although it is very worrying to see the England leave the EU, I think it is not as concerning or a sign of humanity's degenerating collective decision-making than it is a sign of growing populism. However, if this populism spreads to the key actors of the EU, notably France and Germany, than this could be potentially very worrisome. If ever a Frexit or a Grexit were ever to happen, I think this would be a deafening blow to humanity's collective decision-making capabilities through the medium of democracy.

"I think that Tyler's views are bit too strong on Brexit as a stake for collective decision-making of humanity. The UK has never been totally committed to Europe."

I was going to write the same thing except instead of "a bit too strong" was going to write "way too strong."

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What's wrong with populism? Isn't it just democracy, the people expressing their wishes?

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Remember me?

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The UK is not a democracy at the moment, it is part of the undemocratic EU, dominated by the ECB. Hence the problem, hence the reason to escape. Tyler is late to the scene, democracy was lost 20 years ago.

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I think Tyler is onto something. The problem isn't England leaving the EU (and I know the difference between England, the UK, and Britain). The problem is the sheer disfunction that has been unleashed by Brexit. If Britain if very, very lucky then leaving the EU is the third biggest problem facing the country. Bigger problems include: a constitution that is clearly broken, political parties that are not fit for purpose, an electorate that cannot negotiate its differences, and an excessive concentration of political and economic power in London. The question is not "can these issues be resolved" but rather "can these issues be resolved peacefully". I think we need to take seriously the possibility that the answer to this question might be, No.

This Brit has to admit it's a real risk. As I said to my colleagues over coffee yesterday;

"I would now put the chance of serious civil disorder (100+ consequent deaths) in the UK within the next 10 years at 5%".

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National sovereignty is more important than a few percentage points of GDP. Great Britain has $2.6T GDP and is one of the global capitols of capital. They can tell the EU make me an offer or we just go back to the WTO. Instead, the ridiculous old queens took the opposite tack.

When you're a sovereign, you get to ask forgiveness instead of beg permission. That's why it's good to be a sovereign and sovereigns jealously guard their sovereignty.

I certainly hope the US and/or NAFTA is making an offer as we speak. A $2.6T pickup is the foreign relations opportunity of our lifetime. Language and cultural compatibility adds icing onto the cake.

$2.6T is their economy based heavily on financial services selling into the EU, if they're out of that then this really dries up.
I'm actually sympathetic to the idea of leaving the EU but let's face it, Britain doesn't have much on their own.

The City is 6% of GDP. Rather less than half is EU business.

Furthermore, less regulated areas tend to steal financial business from the more regulated areas. So, apart from end-user transactions (the low value bit) I would expect more of the EU's financial services to go to London after Brexit not less. The EU can't for instance stop the proverbial Belgian dentist from investing in some UK financial product via intermediaries.

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I've always wondered about the viability of the Euro - the food produced by Greece and Italy will always be worth less than the heavy machinery produced by Germany. So how in the world is it in Greek interest to have free trade? They need either tariffs or a currency exchange rate to make that olive oil add up to a tractor. With the EU they have neither, which means they will keep begging for a bailout every few years. Why is this allowed to continue?

If the Germans (or whoever) stop extending credit to the Greeks, then the olive oil will sort of have to add up to a tractor, or no tractor.

Not that it's necessarily the Germans who are doing the lending, but the problem here is kind of self correcting... assuming someone doesn't screw up the risks of lending to the Greeks, and then demand Greek assets be stripped to compensate for failures to adequately assess risks.

Imbalances like this no problem, assuming the structure means everything must be paid up on debit, or creditors actually lose their shirts. If creditors in advanced economies do not accept that, then yeah, something is going to give.

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It's frankly ridiculous that the world sees this in moralised terms of "What does this say about us as a species?" and "What side you stand on here is essential to universal values!".

It's a question of structures and pragmatism, not some kind of statement of universal values.

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No brexit, hard brexit, soft brexit... Does it really matter? Like the Bolsheviks at Brest-Litovsk in early 1918, the Brits are negotiating with an entity that very soon will not exist anymore, and any concession they do or not do, obtain or not obtain will have no bearing on what happen next.

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If this was 1776, they'd be writing about how America leaving the UK will cost it 2% of GDP and its a terrible decision. They're blind men discussing the tail if the elephant.

+1

I love it when people mention 1776. I grew up near Lexington and Concord, surrounded by history.

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Indeed. When debating existential questions and uncertain futures, what should we think of people who obsess about such small costs?

It's a sign of pathological behaviour; an inability to see non-economic value in life. Diagnose these people with cancer, and they would spend their last day at the office.

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I do believe that Britain has made a pig's breakfast of Brexit, but it isn't as if the EU has been functioning smoothly. Right now, there are severe problems with Greece and Italy, problems that seem to defy resolution. As well, if Brexit is bad news for the EU, then it might put something akin to effort in getting Britain to stay. Like Evans-Pritchard, I was reluctantly for Brexit as the EU seemed incapable of making tough decisions, instead, constantly kicking the can down the road and wasting money just to avoid irking some of their citizens, which has happened anyway. Even now, Britain and the EU can't come to a decision that involves action.

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Why don't they elect members to the European Congress?

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The most important issue with Brexit is that, with the largest turnout ever for an election/referendum in the UK, including many people who had never voted before, they voted to leave. If the will of the people is not respected, what does that mean for democracy in the UK, or the world?

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Following on from the idea of 'revealed preferences', it seems that hard core Brexiteers didn't actually believe a majority of people shared their passion for separation.

I make this claim based on the fact that there was plenty of lies/half truths told about the positive effects of Brexit (350 million quid a week available for the NHS for example). Since such 'duplicitous/problematic' language was, in fact, used, can we truly say what % people 'wanted' Brexit?

By 'want', I mean, actually be willing to pay real costs of Brexit for real gains. Could an argument be made that the hard-core Brexiteers by nature of their own arguments knew a majority of people wouldn't actually support Brexit?

There were plenty of half truths and lies on the remain side to cancel out the lies on the Brexit side I think. Remember the idea that the UK would plunge into recession with a Yes vote? Actually since then the UK has been growing faster than the EU.

Why anyone would think that an institution that has presided over the destruction of the Greek, Portuguese and Italian economies is worth defending I don't know. If it takes the UK 2% of its GDP to remove that risk I would think it is money well spent.

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So even-handed. "Why Brexit happened and what it means", on the same topic from June 2016, makes a good counterpoint: https://marginalrevolution.com/marginalrevolution/2016/06/why-brexit-happened-the-lens-of-japan.html

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