As the divorce between Britain and the European Union moves closer to its final deadline of March 2019, a number of observations can be made regarding the fallout. The overly optimistic “Leavers” and the forcefully hysterical “Remainers” are both wrong. For the most part, we cannot know what the future brings.
Impact Assessments Are the Pretense of Knowledge
When you have people vote on an issue, you can always criticize what they ended up voting for in three different ways:
- They were uninformed on the topic they were voting on.
- They did not understand what the decision they made implied in reality.
- Even if they did understand the implication, they were not able to assess its impact.
The first one has been ticked off already. During the first weeks after the vote, EU supporters ran with the narrative that Brexiteers were uninformed. Their go-to proof: thousands of people googled what the EU is, the day after the vote. This idea, so popular for among those who want to discredit the vote, even picked up by media outlets in the US, turned out to be a partisan way of reading a chart. Steve Patterson points out in his viral blog post that:
The article claims that searches for “What is the EU?” within Britain had “more than tripled” in the hours after the referendum. Did nobody ask: tripled from what number? Well, when you look at the data Google provides, it looks like less than 1000 Brits made that Google search.
The United Kingdom is currently stuck somewhere between step 2 and 3. On one hand, EU-supporters claim that “Leave” voters were unaware that leaving the EU would result in leaving the European single market (despite the former Prime Minister David Cameron insisting quite strongly on this), which is an integral part of the European Union, and that those who oppose the EU willfully ignore the economic impact of Brexit. You surely have to love that people who never analyzed the European Union for its economic advantage or disadvantage and always labeled those who questioned the supposed merit of this political union as backward and bigoted have suddenly fallen in love with economics.
One of the heated talking points in the past months were impact assessments, which the British government only recently made available for members of parliament to see. They remain hidden from the public, as the documents aren’t completed yet and as officials believe that were they to fall into the hand of the EU negotiators, it would harm the position of the United Kingdom.
Those trying to stop or frustrate Brexit believe that her Majesty’s Government is hiding the fact that their own numbers show that leaving the EU leads to economic decline. Whether or not the government did so or not, however, is completely irrelevant.
The economic performance of the United Kingdom post-Brexit is dependant on a myriad of conditions ranging from corporate taxation, tariffs, and trade agreements with the Commonwealth. One has to applaud Kate Andrews from the Institute of Economic Affairs who made this exact point on a BBC Question Time segment:
We want to be talking what those impact assessments would look like, if we were able to do them, and the truth of the matter is you get a lot of nonsensical statistics. Economists are really good at analyzing the past, they are really bad at predicting the future.
Prior to the Brexit vote, the British Treasury had indeed issued an economic forecast and the former Treasurer George Osborne, as well as former Prime Minister David Cameron, issued statements saying that just the vote to leave itself would lead to a recession. Today we know that this hasn’t materialized. Impact assessments are fine and dandy, but believing that we can assess how exactly the fifth largest economy in the world getting divorced from a political union of 27 countries will develop is a fiction. Once again, we can apply Friedrich Hayek’s famous words: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
Cut the Fortune-Telling, Get to Work
The hysteria was widely represented by the “Remain” side of the argument. Former Prime Minister David Cameron even claimed that leaving the EU could lead to a third World War. However, the “Leave” also had its fair share of misrepresentations, as it claimed for instance that Turkey would join the EU, allowing open-door immigration to millions of Turks; a claim they later had to retract.
Lumping all Remainers and Leavers together into one category doesn’t do political debate any favors. Meanwhile, public support for the government to go on and implement the vote is an overwhelming 68 percent.
Instead of debating how prosperous or impoverished Britain will be after leaving the union, it should be the goal of all sides to create the “Open Britain” they all claim to stand for. This should mean free trade and more opportunities for immigration from non-EU countries.
The time is running out on finding a sensible agreement of this sort before the UK officially leaves the EU. Both sides are still preoccupied to score political points to either re-assert the result of the referendum or to make the case that the referendum needs to be retaken. As the pound sterling goes up or down, Remainers and Brexiteers cheer their respective conclusion that it “must be because of Brexit,” when in reality, we cannot be certain about what the future brings for British trade relations or the decisions of future governments.
Brexiteers: you cheered an open Britain that trades with the world. Make it happen.
Remainers: you advocate for an open Britain that trades with the world. Accept the result, and then make it happen.
You might eventually get something done this way.
This article was first published by the Foundation for Economic Education.
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