I never thought economics was a subject worth studying until 2008. But suddenly with the worst economic crisis since the 1930s making a difference to all of our lives, I thought it best to try to come to some sort of understanding of what was going on. I didn’t, of course, go to the library and find the latest first year economics textbook. But I did start reading the financial pages in the newspapers. Also I investigated ways of making a return on an investment in a world where interest rates were near to zero and succeeded by learning on the job.
In my college we discussed each other’s subjects and people didn’t pull rank. What’s the point of discussing at all if someone just says I know best I’m a physicist? In the end all subjects become one. Study gives you a command of the details, but in the abstract anyone with intelligence can comment on the whole thing in general. They may get the detail wrong, but the detail doesn’t matter.
In the Story of Louis Pasteur (1936) the actor Paul Muni portrays the French chemist who has a theory that disease is caused by unseen microbes. He advocates that doctors who are treating women in labour should wash their hands and boil their instruments. But he is dismissed by the medical community as a charlatan and a crank. How could these things that no-one has ever seen possibly cause disease? I always remember this story whenever I come across a consensus that overwhelmingly argues for something. Truth is not democratic. One person can be correct and all the others can be wrong. We are social beings and we like to fit in. To get ahead in the medical profession in the 19th century it was necessary to dismiss Pasteur. To be taken seriously as an economist prior to the referendum on the EU it was necessary to say that leaving the EU would be a disaster for Britain.
The same is true of far too many subjects studied at university. There is enormous pressure to write unoriginal papers and books that simply find different ways to agree with the consensus. In the Soviet Union a history article would be vetted according to whether it fitted in with Marxist-Leninist orthodoxy. But it is no better in the Anglo-American world where it is necessary to fit in with the liberal leftish worldview. Try questioning any of these assumptions in a radical way and you are liable to find yourself unpublished and perhaps without a job. Is it any surprise then that so much of what passes for thought in universities is dull and pointless. The consensus, of course, may well be correct. There is a consensus after all that balls when dropped fall to the floor. But only if someone is able and willing to challenge orthodoxy is there the chance to think originally. Test even your basic assumptions, perhaps one day you will find balls sometimes fall up.
Imagine if we could go back a few months and begin the EU referendum campaign knowing what we do now. We would then know that the overwhelming consensus of economists and politicians was wrong. We have voted to leave the EU and there has been next to no chaos. Of course we haven’t left yet. But we were promised by people like George Osborne that immediately on voting to leave the British economy would suffer something like a heart attack and would need an emergency budget to keep it on life support. In fact the opposite has happened. The UK economy still looks in better shape than any other in Europe.
The vast majority of Remain supporters were quite wrong about the immediate effect of voting to leave the EU. So why should we trust their views on actually leaving the EU?
Remainers are still working with the assumption that the EU is good and leaving the EU is bad. For this reason even when they accept that the UK must leave the EU they hope to mitigate the situation by arguing that the UK should leave the EU as little as possible. It is for this reason above all that they want the UK to remain in the single market. But this is really to fail to overturn the assumption and admit that they were mistaken. It is to continue to work within a consensus that is rapidly being shown to be false. The EU is not good. Brexit is not bad. Leaving the EU far from being a disaster will bring freedom and prosperity. Remainers may well be washing their hands but they still don’t believe in microbes.
There is nothing to negotiate with the EU. We are leaving and we must simply leave on our own terms. Of course we would like to trade with them. For this reason we should be always willing to lower any trade barriers with both the EU and the rest of the world as much as possible. We should then say to everyone “you can trade freely with us”. We are open for business. If you choose to charge an entrance fee to go to your shop we will try to find another shop where we can go for free. So it will be you that loses, not us.
It is vital to realise that the EU is above all about protectionism. It is a customs union that allows its members to trade freely with each other, but prevents them from trading freely with anyone else. The price of membership of this customs union is too high. When I go to Tesco every week I don’t have to pay a fee to go in the door. But the EU charges an enormous sum every year just so you get to trade without tariffs. But this fee means that we don’t actually have free trade at all. Paying to have free trade is self-evidently not free trade, for the simple reason that it is not free!
If we had to pay a tariff to trade with the EU, what would be the cost to the UK? No-one seems to be able to agree on the figure, but it doesn’t matter. The important question is this. Would we save overall if we simply chose not to pay the EU entrance fee while paying whatever tariff they choose to charge?
This is not only a question about money. The EU charges more than money in order to be a part of its customs union. Think of all the things that the UK had to give up or take on in order to trade “freely” with the EU. We used to have the right to all the fish in the waters around the UK. We had to give this up. In this way our fishing fleet was nearly destroyed. That too was part of the price. We had to accept that the laws made in our own democratically elected parliament would be subordinate to the laws made in Brussels. We had to accept all sorts of rules and regulations that we could not change even if we wanted to. A British firm that sells light bulbs to another British firm is governed by rules made in Brussels that we in Britain cannot change. The rules by which someone is employed in Britain are frequently set not by people we elected in Britain but by people who are unelected in Brussels. Bossy people keep telling us what to do simply in order that we can trade “freely” with other European countries. The price keeps getting higher and conforming to these regulations makes our businesses ever more inefficient.
The highest price of all however is this. So long as we remain a member of the EU we cannot make a trade deal with anyone else. Moreover, rather too frequently the EU itself cannot make such a trade deal. It is sometimes thought to be an advantage that the EU is a large bloc that can use its power to get good deals. But it now looks as if the EU free trade deal with Canada may fall through. The free trade deal with the USA is almost certainly dead. The reason for this is that in order to do a deal the EU has to keep all of its members happy. But many of those members are protectionist by nature. It is in the nature of a customs union to be protectionist. That is what it is for. The Common Agricultural Policy is a way to protect French farmers from competition so that they can continue to farm inefficiently. Therefore, the fact that the EU struggles to make free trade deals ought not to come as a surprise. So this too is part of the price of trading “freely” with the EU. Don’t dare trade freely with anyone else.
Britain at the moment is talking to other countries about possible trade deals. It makes sense for us to prepare the ground. But immediately the Germans tell us we are being naughty, because we have to wait until we actually leave the EU before we can even begin to negotiate a free trade deal with Australia. It’s quite a price to pay in order that we should have a trade deficit with Germany. Better by far to say to them keep your Mercedes we will go elsewhere.
I have never thought that immigration from within the EU was a problem. Given our demographic situation we should get down on our knees and thank every Pole and Czech who chooses to come and work here. But the price of trading “freely” with the EU is that anyone who has the right to live in an EU country has the right to live in the UK. What this means is that practically speaking we have little control over our own UK border, because the EU has lost control of its own external border. Anyone who can get into the EU can get into the UK. We have no control of this. This too is very a high price to pay.
Some people would like a world without borders. But this would simply mean that our welfare state would collapse and we would have no National Health Service. Our system of universal welfare depends on the concept that you pay taxes in order to at some later point receive a benefit whether it is sickness pay, unemployment benefit or healthcare. It is a sort of universal insurance. But I pay insurance so that if my house burns down the insurance company will help me buy another. But if someone who has never paid insurance can also get his house rebuilt, the insurance company would collapse under the strain. You can have a welfare state or you can have unrestricted immigration. But you can’t have both. If someone can simply turn up in Britain and gain the same rights as British people who have paid taxes all their lives, it will mean that in time the whole system of benefits will collapse.
A world without borders would be a world where we had to share equally with everyone. We would all be part of one giant country. The average per capita income in the world is six thousand pounds a year. Call me selfish, but I’d rather have borders because they and they alone protect my lifestyle. If you want to take a massive pay cut, be my guest. Why not stand for the Pay Cut Party and see how many votes you get?
The price of trading freely with the EU is that we have to treat everyone in the European Union as if they were a British citizen. But what do we get in return? If I choose to move to Warsaw, will I get unemployment benefit? Will I get free tuition in their universities? Will I get free language classes in Polish and will I be able to claim tax credits if I work there and child benefit if I have children? No. I will get nothing whatsoever. EU citizens from countries that would give us no benefits can still claim whatever benefits are available to Brits here. This is not only unfair, it is simply untenable. It damages not only Britain it damages Poland and the Czech Republic, because their young people naturally enough prefer to live here rather than at home.
So here is the deal. Every EU citizen who at present lives in the UK should be allowed to stay. After we leave the EU, every EU citizen should have the right to live in the UK, but they should only receive the benefits that a UK citizen receives if they have paid taxes for a certain period of time, for example. five years. We will grant work visas to any EU citizen who is highly skilled and we will grant work visas to any unskilled EU citizen up to for example 100,000 people ever year. After that figure is passed we will be reluctant to give any more visas that year to anyone from anywhere. This would still be a very generous immigration policy. But most importantly it would be the UK Parliament who decided immigration policy. Those who want to make it laxer than I suggest can campaign for this. Those who want to make it tighter can campaign for that position too. Above all we must recognise that it is too high a price to pay to trade “freely” with the EU that we lose control of our borders.
I am in favour of a so called “Hard Brexit” because the price we have had to pay to be a member of the EU single market is far too high. The UK economy will have to adjust. But the fundamental fact is this. You do not have to be in the EU single market in order to trade with EU countries. Japan trades with them. So does China, so do Australia and New Zealand. I want the UK to be in the same position as those countries. We must simply say to the EU we want to trade with you as freely as possible. But if you make it hard for us to trade with you that’s fine, we will go elsewhere. You can make life hard for us if you want. But it will hurt you more. The UK economy is performing much better than the EU. If you want to cut yourself out of our market by all means be my guest. If you want to make life tough for Brits who live in the EU now we will welcome them home. We want to trade freely and have a friendly relationship with our European neighbours, but it has to be two way traffic.
So let us talk to the EU by all means. Let us make plans and try to come to a consensus. But their hand is weak. All we want from them is that we can sell our goods as freely as possible and buy theirs in return. If they don’t want this then we simply walk away.
I was I think the first to point out that leaving the EU would make Scottish independence untenable. My friend Malcolm Cameron calls this the “Effie Deans Doctrine”. I kept making this point when Remain supporters thought that Brexit would lead to the collapse of the UK. They were wrong about this, just as they were wrong about what would happen to the UK economy when we voted to leave. But it is leaving the single market above all that makes Scottish independence impossible. If Scotland were in the EU single market while the UK was not, Scotland could not make a trade deal with the UK. They could not make one any more than the UK can at present make a deal with Australia. Scottish trade with the UK would therefore be controlled by Brussels.
Scottish independence given a “Hard Brexit” entails the following. It means that Scotland would probably have to join the Euro. It probably means that there would be hard border between England and Scotland. This is to assume that Scotland would have to join Schengen. But this is after all a condition for membership of the EU. It would mean that Scotland would no longer be part of the UK single market and might have to pay tariffs at Berwick and Gretna. We would lose the billions of pounds a year we receive from the UK Treasury and we would have to pay a subscription to the EU without any rebate. If any of that appeals to you, then by all means vote for Scottish independence.
When Scotland elected 56 SNP MPs it was clear to me that in order for Scotland to remain in the UK something had to change. The momentum was with them and in time there would probably be a new independence referendum. If things had stayed the same, it looked like the Pro UK side would eventually lose. It was for this reason that I began to campaign for Brexit, because I could see a glimmer of hope. Brexit I believe will bring the UK closer together and also it will bring us prosperity. The EU is in trouble. Its two main means for bringing the continent together are failing. Free movement of people (Schengen) has led to new border posts going up. Everywhere in the EU people are building fences. The Euro is acting like a drag anchor on the EU economy. We have a positive story to tell about the UK’s future outside of the EU. Just watch as we succeed, while the EU gradually realises that it is a failed experiment. A Hard Brexit makes the choice clear for Scots. The fanatics and the fundamentalists will want independence come what may, but they are a minority. The moment has passed just like so often before.
The last chance for Scottish nationalism is that the UK stays in the single market. This is why Nicola Sturgeon’s is now making that her red line. The weakness of her position is shown by how her red lines keep changing. She threatens and blusters but never does anything. It is absolutely simple really. Our task is to defeat the SNP. But the first rule of battle is “always do what your opponent least wants”. If the UK remains in the single market, then the whole doctrine of how Brexit stops Scottish independence in the long term is liable to not work. If the UK stays in the single market, it is as if we stayed in the EU. Then Scotland could vote to leave the UK with the comfort blanket intact and the SNP could argue that nothing fundamentally would change. There would be no hard border, no damage to trade none of the huge disadvantages that Brexit can bring to Scottish nationalism. So Pro UK Scots and Brits everywhere must face up to this choice. The vote for Brexit required something like a miracle. It may later be seen as a second Dunkirk. Ordinary people rising up and doing what was necessary when our country was in danger. Brexit will equally save our country for the long term. It will keep it intact. But for pity’s sake don’t throw the SNP a lifeline. It really is time to change your assumptions. Brexit only defeats Scottish nationalism if it is a Hard Brexit.
When you have a weed that keeps reappearing each year you have to dig it out at the roots and then pour weed killer in the hole. This is what a Hard Brexit will do to the hopes of Scottish Nationalists. They will bluster and they will threaten, but their threats will be empty. Pro UK Scottish Remainers have been wrong about everything. They are wrong about this too. The price of staying in the single market is too high not least because in the end it will destroy our country. You either change your assumptions and wash your hands of the SNP, or you don’t.
This post was originally published by the author 16 September 2016: http://effiedeans.blogspot.com/2016/09/a-hard-brexit-will-bury-snp-forever.html