Tuesday, 30 August 2016

Should it be so difficult to leave the EU?

Someone said to me the other day that an institution so hard to leave as the EU was wrong. I wasn’t so sure, as I thought of several associations that are hard to leave – i.e. hard to leave or not take part in without significant downsides. Trade bodies being one, or adhering to international standards.

We’ve also entrenched EU membership into a lot of our internal agreements, and hence in a way have “done this to ourselves”. 

So, what next? Joseph Stiglitz on Today this morning was remarkably upbeat about the prospects of coming to a “rational” agreement with the EU with a kind of looser arrangement, similar to that Gus O’Donnell was proposing the other day.

I’ve been searching for a while for a note about 5 economists from Europe who suggested there could be a “two-speed” Europe with the UK on the outside track from further political integration – an idea that seems to have been around for as long as I have been alive. I cannot for the life of me find this note, so any advice or links would be helpful?
In short I feel there are three takes from the story so far:

 1. Brexiteers’ Singapore fantasy - plus harnessing the British pathological love of nostalgia (sops such as blue passports or going back to imperial measurements). This involves turning Britain overnight into a low tax, low regulation economy. As much as libertarians will welcome this nirvana, I’m not sure that’s what anyone was voting for bar some people in government……

2. Remainer's Two Speed Europe / Norway. I think this looks desperate right now but practically and pragmatically preserves what Daniel Knowles was on about – making sure there isn’t suddenly a lot of faff involved in trading in Europe.

3. Fundamentally it's our issue at the moment. We don't know what we want, are stuck in decision paralysis and that will start to cost us

P.S.  I have decided to stop worrying about Labour and leave them to it. So what if we don’t have a functioning opposition holding the govt to account through Brexit?

Tuesday, 23 August 2016

Corbyn's not for turning, neither are the Hard Brexiteers

People like consistency. I think this helps explains Corbynmania amongst his supporters in the Labour party, and also to an extent Brexit.

I think that because Corbyn refuses to compromise, he engenders support amongst people who dislike compromise. This could also apply to those who want "Hard Brexit" or mean to bounce Theresa May into it.

This is my theory, so much as it is. It's not meant to apply to everyone, but is after trying to think through how I'd end up supporting Corbyn or Hard Brexit, that I thought if I was someone who believed in no compromise, I might have come to that POV.

In pretty much everyone's daily life, they have to compromise. Perhaps a person is slightly overweight and needs to have a salad rather than a burger for lunch? Perhaps a person can't afford to go see Bruce Springsteen because they have to pay the mortgage? Perhaps they'd love to go to Turkey for the family summer holiday but their spouse vetoes it due to fear of terror attacks?

Plus of course, there are all of the roads not taken - the job they didn't take, the course not pursued, the person not asked out on a date. All of these may inform a self-image of "I didn't do that = I can't do that = someone's preventing me from doing that"

Perhaps they don't like this and feel anxious about (as they see it) not getting any autonomy  - and autonomy is a key human need.

Back to politics, I think flexibility (most of the time) is an important skill in politics- as you have three main interested parties in what you do : yourself (which includes family needs), your party and the country. Balancing the needs of the three is a continuing challenge and part of the skill is getting it right.

Jeremy Corbyn doesn't even seem to try the last two. I think this makes him a bad politician.

So, in the face of the daily, grinding compromise, people and causes arise that arise that people can project onto. People like Corbyn who don't seek to find a consensus, appeal to those who think that's all you need to get what you want, be that equality for all or exit from the European Union.

Being inflexible tho, is not a good thing. Getting to a "win/win" situation is much the best outcome if possible. Of course there are some cases, such as the UK being under mortal threat, where you don't really want someone to be seeking a compromise, but mostly, it pays to see the other side and "get you both to yes". It's harder than banging on about what YOU want, of course.

It was suggested to me that Corbyn has compromised on having a free vote over Trident and also on campaigning to Remain in the EU. I think tho, that neither were compromises that he believed in - on Trident he is continuing as if he has changed Labour party policy without taking his party with him, and the free vote was more of a cop-out than a compromise, and on Remaining in the EU, I think the problems with his attitude have been covered elsewhere, but his support was lukewarm at best and totally scuppered by his call for immediate hard Brexit after the vote.

So, perhaps no compromise is a sensible attitude if you want to attract fervent, single-minded support, but is it really a good way forward?

Thursday, 11 August 2016

Imagine there's no countries - how do we get there from here?

There's been some astonishingly good analysis on the Brexit decision in the last couple of days, here are some of my reflections.

I'm struck by the fact, as the IFS outlines, that the government wants to take a lot of time, effort and money to shoot ourselves in the foot on the back of one vote about #Brexit, a non binding one at that. But the most startling thing to me is that the choice that seems to be surfacing, albeit probably impossible, is being part of the single market but not having free movement of people.

As Daniel Knowles points out spectacularly well in The Times, it seems Brexiteers don't understand international trade, only it's discontents. I've noticed this before, namely that even David Cameron and his "global race" don't seem to understand that all economies gain from trade, and that includes people moving across boundaries.

People don't seem to like immigration across the world, and there's probably some political leadership to be done there- as per when Free Trade was advocated in the 18th century by the likes of Adam Smith. Sometimes it feels as if without ideology as we are, more or less; we don't seem able get across ideas in the modern world, but it's in my view that the economic world has far outstripped the political world with globalisation. It is better to have the free movement of people, the question is how we get there from here?

Watching Out and Proud, the Sky documentary with Faisal Islam last night I was struck by how many people genuinely had based their vote on the ahem, misspeaking of the Leave campaign - people referred to the £350m for the NHS (discredited) and apparently the fact oil, gas and food will become cheaper after Brexit.

I'm not sure many people think we are actually a great economy in the world, because they look around their local area and see poverty and lack of investment. The Pareto Principle leads people to invest where money can "do the most good" which seems to inevitably mean loads of investment for the South East of England and less/not much elsewhere. The EU seeked to balance that by investing in our deprived areas, areas that will lose out as a result of Brexit.

It seems there are many reasons for voting out and that they often stem from a mixture of misconceptions ("We'll be better off out as we aren't that well off as a country") prejudice ("immigrants taking our jobs") and ignorance about how free trade works - ignorance that extends to the people charged with Brexit.

I can only hope eventually our very pragmatic PM, Theresa May, comes to appreciate that Brexit could cost us very badly, that is if she doesn't already, and potentially provides the very leadership we spoke of. It's a small hope, as our previous PM, despite being on the surface more outward looking, didn't really get it either.