Why Brexit Was Not a Mistake
Brexit is being hailed in the media as a huge mistake. It has been consistently portrayed as an incredibly stupid move by the British people. Jingoism, xenophobia, and Trump-like obnoxiousness have led to an obviously wrong conclusion, so the story goes. It is seen as so plainly against British interests that the technically non-binding referendum should be ignored or even attempted a second time.
This is the mass view and it is quite likely wrong. Allow me to debunk the most common rationales for the supposed idiocy of the British electorate’s choice.
Leaving the EU will be bad for Britain economically
It is generally agreed that the UK’s departure from the EU will be bad for its economy. The recent market turmoil lends credence to this. But it is not necessarily correct.
Consider that the main basis for the economic attractiveness of the EU is as a free trade zone. We are constantly being reminded of this. And yet the very same propounders of this argument themselves do not appreciate the merits of free trade. If they did, they would argue for Brexit.
The EU is not really a free trade zone
The EU is a free trade zone internally but highly protectionist vis-a-vis the outside world. To enter the EU, foreign goods are subject to heavy tariffs. If you have ever travelled to Europe and tried to buy clothing, food, or a computer, this is why they are so much more expensive than in the US. This is a really big deal. Most of the world does not lie within the EU, hence from the perspective of an EU member, most of the world’s potential importers must suffer heavy tariffs.
It should then be no surprise that inter-EU trade consitutes the majority of imports and exports for most EU nations; it is priced more favorably than that with external nations. The effect of distance is also in play, though to a lesser extent than one might imagine in today’s globalized world (in which it is economical to ship hay from the US to Japan).
But a nation outside the EU could be a true free trade champion. Britain could and should declare free trade unilaterally with every other nation, whether they reciprocate or not. They would become an incredibly dynamic and prosperous trading hub. If the EU chose to impose senseless tariffs against Britain, it would only further their own misery; Britain can trade with the world.
The free trade argument is the main pillar of the economic case for staying in the EU. The recent market reaction should be treated as a short term rehedging of bets: the consequence of predictions being so wrong, and not an indicator of the long term merits of membership. Thus if better trade opportunities exist outside the EU, the economic case for Remain falls apart.
The EU has brought peace to Europe
It is also popular belief that the EU underlies peace in Europe and thereby prevents a repetition of the tragedy of the world wars. This is to put the cart before the horse. It is much more likely that the reverse is true, that peace has enabled the EU.
Consider this alternative explanation. Peace in Europe has arisen from the new power dynamics across the world. Since World War 2, the main power centers of the world have not been in Europe. Since the Suez Crisis in 1956, no European nation has embarked on a foreign intervention in the old imperialist manner (the Falklands war does not count since it was defensive). Power lay with the Soviet Union and the US. Now it lies with the US and China. There has been peace in Europe because, frankly, the Europeans are weak. Since 1945, hostile moves there would be squashed very easily by the reigning superpowers. Everyone knows this.
Europe consists of peaceful states, not because of any changes in human nature, but because of reigning power dynamics. Were the US, China, and every prospective superpower (India and others) to magically vanish from the world’s stage, Germany, France, and the normal crew would soon revert to their old ways. By contrast, the power disparity today between superpowers and European states is so vast that misbehavior by the latter is essentially hopeless.
The EU managed to arise in this remarkable era of peace because it was facilitated by outside forces. Otherwise troubled areas around the world would have only to create mini-EUs to resolve their tensions. It’s just not that simple; the power realities must make peace possible in the first place.
Big countries are more sensible than small ones
I suspect that part of the defense of the EU is an instinctive tidying up of the map. Seeing big, solid countries like China, India, Russia, and the US on the map must make Europeans anxious. The multitudinous little borders, such as those around Liechtenstein, Monaco, Belgium, Slovakia, etc must seem hopelessly anachronistic. There is an unspoken sense that big countries are simply better. They’re grander. They attract more attention. They win the Olympics much more often. A EU superstate is often seen as a worthy goal.
But Superstates are terrible
Superstates are centralization in government, culture, and language. The more effective the superstate, the less variety in laws and norms there will be. Whereas the forces of globalization move according to the tick-tock of human desires, the centralizing hand of a giant government is almost impossible to escape when its reach is so large.
Decentralization is a blessing
Diversity in laws and in culture is a great thing. Let there be experimentation in approaches. Let neighboring countries compete to set a better example of governance with each other. Let Hungary be shamed by Switzerland. Let the Netherlands inspire Belgium. Let the missteps of France serve as a warning to policymakers in the Czech Republic. Many systems of law provide experimental grounds for different sets of laws. This is desperately needed since the process of making law is so error-prone and unknowable.
A superstate that squelched such diversity would be a real shame. A monolithic bureaucracy in Belgium would silence the raucous and infinitely more fertile breeding ground of 28 different governments. One has only to look at other superstates, today and in history, to see this in effect. From Ming China, to the Turkish Empire, to the USSR, China, and even yes the United States today, great superstates have always stifled innovation in policy. And the US is no counterexample; the federal system used to devolve significant power to states, accompishing the decentralization I’ve described. But with the overwhelming strength of the federal government in recent times, the US has also become a centralized superstate and suffers the same risks.
Many Brexit Supporters were Xenophobic, Ignorant, Gullible, Misguided, Idiotic
Of course they were. Every side to every election has an ample supply of misinformed idiots. Many Brexiters professed ugly xenophobic beliefs. Perhaps many of them came to the conclusion to vote ‘Leave’ on completely absurd grounds. I have no doubt of that. But even if there are multiple rationales to arrive at a particular conclusion, the weakness of some does not invalidate the others. The flimsiness of some arguments for Brexit does not taint the others.
It is sort of amazing how often I’ve heard this line of reasoning. The ugliness of some in the Leave campaign is used to paint the whole idea with that brush. I find it to be little more than sophisticated name-calling.
Arguing the case for Leave does not mean defending every case that has been made.
Brexit might actually be the smart choice
Brexit is big news because it was so unexpected. For the prediction markets to be so wrong is unusual. But the economic and strategic impact will likely be minimal. In fact Britain could gain immensely.
The EU is massively over-regulated in the fashion of the French. This same approach has rendered their country structurally uncompetitive to the very core. Should Britain really allow itself to be subject to French or Italian-style regulations? Does anyone think that is going to work? It’s not just that the form of the EU, its centralization, its bureaucracy, are bad. The actual content is pernicious as well. It is an over-regulated, sclerotic monster.
It’s quite plausible that, in leaving the EU, Britain is dodging a bullet. Perhaps on their own they will be far more agile, less regulated, and more competitive than their hide-bound continental brethren. Britain could be a large version of Hong Kong. Less flatteringly, the EU might be more like Mainland China, the centralized superstate. Is there really any question then of which to choose?
