Manhattan Contrarian On Brexit: Leave!

Today is the day of the big vote in the UK on "Brexit" -- whether or not to leave the EU.  The polls show the referendum to be too close to call, although the supporters of "leave" seem recently to have  taken a slight lead.  

Of course, all the forces of The Great And The Good are arrayed on the side of "stay."  Proponents of "stay" include the leaders of both major political parties (Conservatives and Labour), nearly all of the press and of academia, as well as most leaders in business.  Really, doesn't that tell you all you need to know?  This is why we need contrarians!  You won't be surprised learn that the Manhattan Contrarian urges the British people to vote "leave."

To its great credit, the UK does still have at least a few independent thinkers among its leaders and politicians.  Among the Brits who have taken the side of "leave," I would recommend reading statements from Daniel Hannan (Member of the European Parliament in the Conservative Party, representing the South East England district)  and Boris Johnson (Mayor of London from 2008 to earlier this year, and now an MP in the Conservative Party from a West London district).  Among Americans who have weighed in on the subject, I recommend this from Joel Kotkin (a professor of demography at Chapman University).

Admittedly some of the arguments that have garnered much of the support for "leave" are in my view not the best arguments.  Such arguments include playing on British dislike of the euro project and playing on the fear of a wave of migrants.  These arguments are not the best arguments not because the UK would be wise to join the euro or to take in hundreds of thousands of migrants, but rather because the UK in fact did not join the euro (and does not have to to stay in the EU) and because the UK did not join the Schengen agreement (that's the agreement that makes it such that any migrant once admitted to any agreeing state thereafter has unrestricted access to all the others).

But here's the argument that counts:  The EU has become fundamentally an anti-democratic project, what goes under the name of "progressive" in the United States, for turning over more and more of governance to an unelected, unaccountable class of "experts" in a distant capital who will then supposedly run things so much better than the stupid hoi polloi can run their own lives.  And it's not just that the existing Brussels bureaucrats are "progressive" in their outlook and direction.  It's that they are completely insulated and isolated from democratic processes.  With each passing day and year they seize to themselves more and more power; and there is no limiting principle to stop them or to say how far this can go.  Nobody knows who they are or how they get their jobs.  And there is no process by which they can be voted out when they overreach -- which they do more and more with every passing day.

Well, actually there is exactly one process by which anyone has the hope of getting out from under the thumb of these bureaucrats, and that is this vote on Brexit, available only in the UK and only right now.  Blow this one, UK voters, and it is highly likely that there will be no chance to say no to anything the EU does, or to reverse any EU decision no matter how bad, for the remainder of your lifetime and probably that of your children.

What the EU has come to is really a tragedy.  It all seemed to start out so well as the European Economic Community, a free trade bloc.  Let's remove all tariffs and trade restrictions between and among European states!  That will hugely increase trade and cause economic integration, growth, and prosperity.  And in fact that was a great idea, and basically worked as advertised.

But then the EU government started to metastasize.  The people in Brussels just had one brilliant idea after another of what they could accomplish for the public good if only given each time just a smidgeon more power.  Today, I'm certainly no expert on everything the EU is up to -- but then, neither is virtually anybody in Europe.  The nameless, faceless bureaucrats just crank out thousands of pages of regulations directing you what you can and can't do and gradually strangling creativity and enterprise and adventure in the name of supposed fairness and justice and the environment and eliminating all down side risk of life.  Here is a list from Kotkin of a few of the areas into which the EU bureaucracy has crept:

[The EU] bureaucracy [] . . . seeks to impose regulation on everything from the borders to the schools, planning, environment policy, and, perhaps most insulting of all, laws that control the production and distribution of such critical European products as alcohol and cheese. Climate change regulations imposed from Brussels also threaten to further weaken the middle class, even making car ownership too expensive for most drivers.

And of course the position of Brussels is that their regulations have "supremacy" over the law of any member country.  You won't be surprised to learn that the area of EU regulation that I find most offensive is the area of the environment and "climate change."  With unlimited ability to impose regulation in the name of "saving the planet," the EU bureaucracy is completely in a position to destroy much or most economic activity and thoroughly impoverish the people, without any ability of the people to push back.  And it goes without saying that the EU bureaucrats have completely bought into the anti-human carbon elimination campaign.  If there is anything that is going to stop them from multiplying the cost of energy in Europe by orders of magnitude, shutting down all electricity production that actually works, and making automobile ownership too expensive for all but themselves, I have no idea what that is.  Note that in the U.S. our EPA is up to the exact same thing; but in the U.S. the democratic election of a new President can get all the current EPA bureaucrats fired and replace with people who take the opposite direction.  There is no comparable process to get the EU bureaucracy to reverse or modify course.

On the other side, the side of "stay," the arguments are not trivial, but to me ultimately unpersuasive.  The main one is, once we exit, we are outside the EU and therefore subject to the EU external tariff.  That has the potential to severely damage many of our businesses and industries that currently make their livings selling to EU citizens, not the least of which is the UK's crown jewel, namely the London financial sector.  If you think about this argument, you realize why all the existing poo-bahs are for "stay": if lots of businesses and careers get disrupted, then those currently at the top of the economic heap are the most at risk.

Boris Johnson at the link above summarizes this argument as "the campaign of fear."  And I think he is right.  The extent of business disruption from exit is unknown and may be nothing.  The EU could impose its external tariff on the UK, but then again, it may well not.  Doing so would be just as disruptive for EU businesses as for UK businesses (although perhaps more widely disbursed in the EU).  Moreover, Switzerland is not a member of the EU, but is in on the free trade agreement. What's so hard about the UK doing that?

The pervasive economic stagnation in today's EU members is not entirely the fault of the EU bureaucracy; certainly the governments of the member states bear much of the responsibility for their own overspending and overregulation.  But the EU bureaucracy is responsible for a substantial part, and that part is growing unchecked.  The fundamental point for the UK is, if you want to preserve any prospect of future growth, dynamism, and human freedom, you've got to get out of this trap now while you have the chance.  Go for it!