Brexit


It has been a pretty intense day for people everywhere in Europe. Yesterday, 51.9% of UK voters expressed the opinion that the UK should exit the European Union. I had a very interesting day following the post-Brexit debate and taking part in the mostly-online conversation.

First of all, I’d like to clarify a few things about my own position with regards to UK membership of the EU. I can’t actually say whether the UK leaving the EU was a good decision or a bad decision. In fact, the decision alone means nothing without knowing what replaces the UK’s current relationship to the EU.

brexit400The Eurocracy has become a cumbersome beast, big, slow, hungry for resources, and hungry for power. Basic economics teaches us that over-regulation creates inefficiency and it’s all too easy to see how abundantly but poorly regulated many things are in the EU [1]. It’s also very risky to put so many layers in between tax payers and tax spenders. You usually just end up having a lot of waste, more inefficiency and very little accountability. On top of that, the EU is a champion of anti-competition and generally bad, business-discouraging practices, which in the long run hurt people they’re supposed to protect by hindering economic growth and making society poorer than it could be [2]. Clearly, there are many things the EU needs to reform for the sake of its own competitiveness and survival. I also think we stood a better chance at bringing about those reforms with the UK pushing alongside the rest of us from inside the beast.

On the other hand, the EU does provide people with unprecedented mobility which generates economic growth and, overall, makes people in the EU much better off. People most often fall pray to a very simple form of subjective bias as it is easier, and much more relatable, to imagine how someone could lose their job to an immigrant, and much harder to grasp the idea that immigration makes everyone better off in the long run. People in general simply do not realise, or will not accept, that labour mobility is a really important driver for growth [3]. Then, there’s the common market which makes things cheaper to buy and to sell within the EU because it cuts back on the red tape. We could always aim for less red tape but, even as things stand now, moving merchandise within the EU is far easier than doing so between it and the outside world. And, no, making products easy to move isn’t something that only helps companies, it’s also important to consumers because products are invariably cheaper if they’re easier to bring to the shelves.

Lastly, there’s the small issue of how the European idea came about. Not more than 75 years ago, people in Europe were shooting each other, and some groups hated others enough to wish they would all be gone forever from the face of the Earth. Yes, it seems inconceivable today that we might ever see such things again. I imagine it seemed inconceivable back then, to all those people senselessly destroyed by their fellow man, that the things we now learn about in the history books could ever come to pass. Initially, the idea was mostly about integrating the economies of European countries to the point that they’re simply unable to go to war with each other because the weapon production line is spread through all the countries. If that were still the case, and if the cost of keeping the French and Germans from exterminating each other is that of the monumental waste that is the EU bureaucracy in Brussels, I’d actually consider volunteering to pay some extra money out of my own pocket only to then watch a bureaucrat in Brussels light a cigarette with it. Because such is the value of peace! But the EU has grown well beyond that and beyond the golden arches theory [4], which I like to use in order to explain the benefits of free trade and globalisation to conflict prevention, and, maybe referencing the holocaust in an article about Brexit is taking this a bit far, but I will come back to that.

It’s fairly obvious that the current status quo will be replaced with something new but Brexit proponents don’t seem to have thought things through nearly enough. If the UK manages to retain its access to the common market, free movement of goods, free movement of people, free movement of capital all while escaping Brussel’s red tape, well then, bravo Britain! It would be a dream come true to have a solid fiscal option, outside of Brussel’s reach, where EU companies could run off to do business when the bullies in Brussels get too mean. If, however, the UK hinders personal mobility, loses proper access to the common market, cuts its young people off from the educational opportunities they would have enjoyed as EU citizens, kills off valuable research ventures, and damages its financial sector then things aren’t looking up, are they? I didn’t even mention the prospect of losing parts of its territory as part of the primary list of adverse effects but, with Scotland announcing the need for a new referendum, Irish dreams of a unified Albion, and Gibraltar voting massively to remain in the EU, that appears to be something worth considering.

Based on all of the information above, one could still argue that “leave” was the right answer. People in the UK can make Britain Great again! I however, as a teacher, can’t be satisfied by simply being given the right answer. I want my students to give me the right answer, to do the right thing for the right reasons. A lot of the pro-Brexit campaign relied on issues related to immigration and erroneous data. Many people, perhaps most people, voted to leave the EU because they want to keep foreigners out of their country. And, again, from a democratic point of view that is their choice to make. It matters not whether they are rich or poor, intelligent or stupid, young or old it matters only that they are citizens of the UK and it is their right to decide. It is also a worrisome sign of the growing wave of populism and nationalism that is sweeping through many European countries. It is proof of growing hatred, racism, xenophobia and bigotry, and it is proof of poor understanding of the way the world works. This is the part where those flashbacks from the 1930s start coming back.

Voting to leave the EU was also the wrong choice to make from a practical point of view. I can even understand voting in a way that will produce some sort of advantage for you when you know for sure it will be bad for other people. Romanians are all about “the death of the neighbour’s goat” [5]. But, in this case the overwhelming evidence supported the option to stay in the EU, it was in the best interest of many British individuals who voted to leave. What were the benefits retirees in the UK are expecting to get out of leaving the EU? How will leaving the EU make things better for the UK citizen in the countryside? Which part of the CAP [6] did the Welsh farmer not like? It just feels like a lot of students went to an exam yesterday without doing any of the homework or opening up wikipedia to google the name of the course, never mind opening a textbook. This is, ultimately, what I really have a problem with.

The results of the referendum could be interpreted to mean that 17.4M people in the UK hate me on principle because I’m Romanian. I don’t actually think that is true, or at least that figure isn’t accurate, and I find it easy enough to not take offence at the thought. However, it seems a lot of European leaders, at the time of writing this, are taking the results of the Brexit personally [7]. This further reduces the likelihood of the UK making everything work on that check list of a best case scenario.

Written on 24.06.2016

Notes, references and additional materials:

[1] Read this article from the Economist for an example: http://www.economist.com/node/21547837

[2] Watch a very good video about the consequences of protectionism here: http://www.mruniversity.com/courses/principles-economics-microeconomics/tariffs-quotas-protectionism-definition

[3] An interesting piece of information about the benefits of immigration in this article from the University of California, Berkeley: http://clas.berkeley.edu/research/immigration-economic-benefits-immigration

[4] The Golden Arches Theory is something you can read about in Thomas Friedman’s book “The Lexus and the Olive Tree”

[5] “as long as the neighbour’s goat dies too” is a frequently used Romanian idiom that is based on the idea that it’s ok if your goat dies as long as the neighbour’s goat dies too.

[6] Common Agricultural Policy. Big money moved around by the EU: http://ec.europa.eu/agriculture/cap-post-2013/

[7] EU parliament leader: we want Britain out as soon as possible. http://www.theguardian.com/politics/2016/jun/24/top-eu-leader-we-want-britain-out-as-soon-as-possible