The Brexit culture war
May 4, 2019
In all the disappointments about Brexit, one stands out for me — the inability of the libertarian Brexiteers to outline a coherent vision of what Brexit will accomplish. They used to see rational economic management as as a virtue, now what matters is culture.
Brexit discussions have degenerated into a culture war.
I have many friends who voted Brexit and see themselves as libertarians. People who value the ideas of Adam Smith, John Stuart Mill and Karl Popper, and think Margaret Thatcher was the greatest prime minister ever. For them, a vote for Brexit was a vote for freedom.
Freedom from European control, the freedom to make our own decisions good or bad. The economic consequences don't matter all that much.
That is a big departure for the libertarians. They used to celebrate Margaret Thatcher's rational economic management and vision. In her words, “there is no such thing as society”.
Brexit is all about society.
The bête noire of the libertarians used to be socialism, an idea that consistently has failed to deliver but keeps coming back. You see, it only failed because it wasn't done properly. We just have to keep trying and trying until we get socialism right.
The fallacy of that argument is the same as those for libertarian Brexit.
What the libertarian Brexiteers and the socialists have in common is that when the facts don't support the ideology, the facts must change. Recall Michael Gove's statement "the country has had enough of experts." Because the experts say Brexit is hard, the experts must be wrong.
When the Soviet Union was fighting the Spanish Civil War in 1938, its strategy was to amass large forces, moving forward together, using tanks and heavy artillery. No retreat allowed. Why? That is the communist way of fighting a war, as dictated by Joseph Stalin. Franco's army found it easy to defeat the Soviets by using smaller dispersed forces. Retreat, isolate and kill. Ideology didn't allow the Soviets an effective counter-strategy.
Stalin didn't listen to the experts either.
The libertarian Brexiteers tell us the EU inefficient, bureaucratic and anti-market. We need to to be able to create our own policies that will make us successful, negotiate our trade agreements. Use all the money sent to the EU more efficiently.
And besides, as they all say, its only matter of time until the EU will have a big crisis and it will be much better to have left by then.
But how will Brexit Britain be successful? It is not enough to say the EU is horrible. The Brexiteers need to give us a practical and realistic roadmap for making Brexit a success, at least if they want to win remainers over and put Brexit behind us.
Take trade, which is an excellent way to study how libertarians think about Brexit. After all, they are pro-business and pro-trade and anti-regulation and anti-trade restrictions. Leaving without a deal means initially having no trade agreements, then joining WTO, and perhaps eventually trade blocks. Except of course the EU trade block since we will have just left it. See the Department for International Trade for details on future trade arrangements.
A large number of entities, public and private, have pointed out the difficulties with leaving without a deal. Almost half of the British trade is with the EU, and as a general rule, trade increases when countries are closer to each other. Most companies say that leaving the EU without a trade agreement will be quite challenging.
When confronted with such arguments, the Brexiteers respond with ad hominem attacks. The other side lacks purity, is anti-Brexit, anti-UK, anti-liberal, anti-democratic or something else ideologically unacceptable.
What about the facts?
After no deal Brexit, Britain will join the club of countries that do not belong to any trade blocks beyond WTO? The Holy See, Mauritania, Monaco, Palau, Timor-Leste, Sao Tome and Principe, Somalia, South Sudan, Sudan and Western Sahara.
The rest of the world sees benefits in trade blocks but the libertarian Brexiteers are not concerned. Why do they think WTO is good enough for Britain when the governments of the United States, Australia, China, India and Germany do not find WTO to be sufficient for their countries?
The only answer I can come up with is ideology. If one's view of trade is based on David Ricardo's 1817 notion of comparative advantage, trade blocks are not necessary, and even WTO is not needed. After all, the 1846 repeal of the Corn Laws was a unilateral removal of trade restrictions that greatly benefitted Britain. Viewed through the ideological lens of Ricardo's comparative advantage, no deal Brexit is a good idea.
Trade policy has moved on since 1817, and modern experts like Richard Baldwin in his 2016 book The Great Convergence: Information Technology and the New Globalization tell us that trade is highly complex and difficult to negotiate. Without belonging to a trade block, the world is a cold place.
But that is the view of the expert, and since it implies Brexit is hard, the expert must be wrong.
While a large number of studies warn against the consequences of Brexit, I don't recall a single study showing the opposite, how Brexit will be successful. We have IEA's "Plan A+: creating a prosperous post-Brexit UK", and a few like that. But those studies express a desire and do not engage with the arguments for why Brexit is not all that easy. No practical vision, only ideology.
In Friedrich Hayek's 1944 takedown of socialism, The Use of Knowledge in Society, the main argument is that socialism does not work because information is highly diffuse. It is impossible to aggregate all the necessary economic information into a single system used by the central planner.
Hayek showed us that ideology is not enough, socialism does not work in practice. It is the same with Brexit.
After three years, the libertarian Brexiteers are very adept at making the ideological case for Brexit. When challenged, they say Brexit will hard in the beginning, but over time the advantages of not being shackled to the EU will let Britain boom.
They don't tell us how that will happen in practice. Unless they do, their intellectual case for Brexit is no better than the case for socialism, so effectively criticised by Hayek.
What is sad is that Britain has always had a reputation for competent pragmatism and disdain for ideology, a great model for conducting the affairs of state, one that has given us considerable soft power. Now all of that is being squandered. For ideology. Sad.
After I posted this piece initially, one of my libertarian friends told me that he agreed with almost everything I said, but none of it mattered.
His decision to vote Brexit, and continuing support for no deal Brexit, was purely cultural, an atavistic response to European countries exercising control over Britain.
As he explained it, Britain is not culturally compatible with Europe. Britain is law-obedient and follows the rules, while France ignores most rules, Italy all and Germany some. One should not belong to the same political and cultural entity as those. When it had been tried, it fails.
Instead, he wanted Britain to make decisions for itself. Even if it made bad decisions and became worse off, what mattered was that those decisions were British and not French or German or EU.
In other words, the economic consequences of Brexit are secondary. What matters is the cultural.
That is the reason it is impossible to debate Brexit with the Brexiteers. Brexit is emotional, not rational. Practical outcomes don’t matter. Smith, Hayek, Popper, Mill and Thatcher would have been appalled.
Models and riskBloggs and appendices on artificial intelligence, financial crises, systemic risk, financial risk, models, regulations, financial policy, cryptocurrencies and related topics
© All rights reserved, Jon Danielsson,