Friday, 24 June 2016

It's all going a bit JG Ballard

Britain has voted to leave the EU. This all happened because the governing Conservative party tried to stem the loss of voters starting to vote for the UK Independence Party.

Britain and possibly the whole of Europe will pay heavily for this terrible miscalculation. Because Scotland voted to remain in the EU and has been dragged down the plug hole by the hoards of stupid south of the border, it looks like they're going to get another referendum on independence. This time the Union will very likely be broken, Scotland could leave the United Kingdom. This adds more uncertainty into the years to come as Britain exits the EU. What is definite are years of uncertainty at the end of which British industry will probably be destroyed and the City of London may haemorrhage to Frankfurt, or other financial centres in the EU. This is a slide into dystopia with all the bite of JG Ballard and the sense of irony of Douglas Adams.

I am not overstating the threat to British manufacturing, to see support for an expectation of the elimination of British manufacturing we need only turn to prominent Vote Leave supporting economist Prof Patrick Minford who said recently:
Over time, if we left the EU, it seems likely that we would mostly eliminate manufacturing, leaving mainly industries such as design, marketing and hi-tech. But this shouldn’t scare us.
How would the public of China, Germany or the United States react to a leading member of a pressure group on one side of a referendum such as this making such a statement? Here in the UK, the side making that argument just won the vote.

Truly, we are through the looking glass now.


I just had to share the front page of Liberation, which shows Boris Johnson (the most likely candidate for Prime Minister. Groan...) with a message of support from France. It sums up both the farcical figure of Johnson and Britain's new position in the world, stranded above a great height looking utterly foolish, waving our flag in abject futility.

Merci Les Gars!


Dreessen said...

Hey Chris,
I feel for you guys over there. Apparently a lot of the voters didn't know where they actually voted for. I have no idea what this means for Britain's climate measures, but I will say one thing. It probably wouldn't hurt if Parliament changed the law so that the chief executive was elected separately. The beauty of the U.S. Presidency is that he or she is not beholden to party discipline. Hopefully, the Conservatives lose in the general election that's coming late this year or early next year.

Chris Reynolds said...

Hi Dreessen,

The domestic political situation is such that I'd rather the conservatives didn't lose the next election. The current leader of the main opposition, Labour, really isn't government material (for a whole host of reasons), and he's very left wing.

Unfortunately I don't think having the Chief Exec elected separately would have helped, the decision to hold the referendum was made for reasons internal to the Conservative party and not driven by pressure from the party itself. It was the solution of the PM and his advisors and was made without serious consideration of the possibility that they's lose the referendum.

Furthermore we have to follow this through. When the markets were clearly betting on a remain vote and I mentioned this to some of the office staff at work (mainly leave voters) the reaction was telling. I was met with a barrage of nonsense, with claims that the vote would be rigged so that remain would win. To not follow this through is to rile half of the UK population, and indeed to rile democrats like myself who voted to remain. There is also the issue of the murder of the MP Jo Cox, this was epipehnomenal of the vitriolic and racist nature of the majority of leave voters. If we don't leave we could develop a right wing litte-englander terrorist threat within the UK.

This also has to be followed through because the EU leaders have already said that we need to leave and do so quickly (i.e. Jean Claude Junke). With problems of nascent 'leave' referenda in other EU countries an 'example' will need to be set - that those leaving the EU will not get preferential terms of independent access to the Eurozone free market. Otherwise they will bolster the calls in other member sates to leave. In simple terms it is in the EU's interests that the current market devaluation of the UK economy (i.e. it is worth less outside the EU) stick. We play the same games when competitors. When firms leave us for major competitors then find they cannot offer emergency call outs or fast turnarounds, when we're asked to provide an on-demand service to augment our competitor's failings we decline. It's not in our interest to support the faults of our competitors.

Were I in the position of the EU, I would as Junke has done call an emergency meeting of the EU leaders. I would try to get an agreement for an offer of terms stated in language that implies this is pretty well our first and final offer. Were I in the EU's shoes I would make it a hard offer, currently (IIRC) EU import duties from outside the EU are about 4%, with VAT (17%) on top for domestic customers. Applying that current status for people exporting into the EU from outside would be a hard deal for the UK and if applied could precipitate a further downwards revaluation of the UK (as seen in stock market indices and the value of the pound). Such a tough stance could help to stabilise the Eurozone by reducing perceived risk of 'leave referendum contagion' through the EU. Such a tough stance could also reduce fears of loss of trade with the UK as it would drive contraction of industry supply chains to within the EU. That is bad for the UK, but the UK has made clear our rejection of the EU, and the as a consequence the EU has no obligations to the UK.

Chris Reynolds said...


At the end of the fourth paragraph I closed saying:

"It's not in our interest to support the faults of our competitors."

That should read:

"It's not in our interest to compensate for the faults of our competitors."

Kevin O'Neill said...

I've always thought voters in the USA pretty much won us the right to proclaim ourselves the stupidest developed nation in the world. Nixon, Reagan twice, Bush the younger twice. Hard to beat that.

Brexit beats that.

As for Corbyn, if elected he's already said he wouldn't change anything:
"He [Corbyn] also announced a review of immigration policy and ruled out a new EU referendum if Labour wins power.

He said: "The referendum has taken place, a decision has been made, I think we have got to respect that decision and work out our relationship with Europe in the future."

If that's a radical left-winger then Britain is deeply and royally screwed. Most of Europe has been in thrall to neo-liberal, libertarian, fantasy economics for the past decade and until and unless that changes it's hard to see how anything can get better.

Chris Reynolds said...


But what if Trump gets elected because of the same march of the anti-intellectual precariat that drove the UK's exit?

No. Things are bad enough without considering that.

Corbyn is deeply inept, normally I'd say no chance, but with the utter disarray of the Conservative Party he stands a better chance than one might expect. That said I think Boris Johnson is likely.