Saturday, 25 June 2016

Why Brexit is Not a Victory for Liberty

I know. I'm late - and everyone is sick of reading about Brexit already. So here's a take you haven't read yet: The libertarian case for opposing Brexit.

My excuse for tardiness is exams. As always.

Yesterday I was at an IPA Young Members event in Sydney, and obviously 98% of the room was enthusiastic about the recent Brexit news. We heard grand speeches about the return of liberty to the British Isles, throwing off the yoke of EU, how it's a "remarkable victory of freedom in our lifetimes" and "the only correct libertarian position" is to support it.

Here's why they are wrong.

First of all, this is the Life of An Econ Student, so let's get the econ out of the way. As usual, that's not what politics is about - or what the arguments for the referendum/Brexit were really about.

Various numbers have been thrown around, from both Leave and Remain campaigns; one side telling us how much the UK would save by leaving, the other telling us how the economy will fall off a cliff if we do.

The membership fee for Britain, minus rebates and reciprocated money through programs and farm subsidies, add up to something like £12-18bn, let's say £20 for simplicity. That's about 2.5% of UK government expenditures, or around 1% of UK GDP. It sounds like a lot of money, but in public finance terms it really isn't.

Besides, the arguments coming from the Leave campaign sounds like a Brexit would simply mean 20bn more left over for the NHS; if you quit, you simply don't pay anymore. But such shallow zero-sum "all things equal" reasoning in a world of change is hopefully beneath most libertarians. There are about a thousand other variables that will change much more, from skilled migrants to financial services to investments or risk premia to interest rates to what free trade agreements (or lack thereof) could be made to literally everything else. Which means we can't say what the impact will be, nor its direction. It depends on millions and millions of decisions, political and private, in an unprecedented scenario, on which we have no historical data. That various estimates point one way or another are making absurd assumptions about things we have no idea how they will play out.

Brexit is simply not a case that turn on economics, since the economic case would depend on what trade deals an independent U.K will strike, and how millions of businesses and consumers will act. Unknowable.

To the actual dispute.

Libertarians somehow believe that Brexit is a victory for liberty. If you push them, they are likely to give you one of three reasons:
  1. free immigration is immoral and islam is a dangerous culture. I've outlined at length why this is not a sound or coherent libertarian position, and I'll ignore it here; anyway, if you are upset about migrants to the UK, then maybe you should go after the Indians and Bangladeshi whom you irrationally hate so much, rather than complaining about Brussels (who have very little to do with your non-European immigration).
  2. EU regulation is crippling and hurts business.
  3. Decentralised government is preferable to centralised government. Competitive federalism etc.
Both (2) and (3) can be true. But Brexit is only a victory for liberty insofar as the independent Britain introduces less crippling regulations and less statism than the EU is doing, and has been doing historically. Jeff Deist, a great scholar and author I admire, recently wrote this on
Decentralization and devolution of state power is always a good thing, regardless of the motivations behind such movements.
No, professor. Not if the decentralized unit is less conducive to liberty, more prone to regulate, tax, spend and oppress its citizens than the centralized unit is - and the effects of its institutions (The Single Market).

The case, in other words, is a case of extreme naive beliefs and utopian hopes about what British politicians will do now.

British politicians, who for decades have been infringing rights, happily enforced regulations, expanding the state power and evolving the nanny state are now champtions of liberty? Brussels didn't make Britain invade Iraq. Brussels didn't force Britain to bail out its banks during the Global Financial Crisis. Brussels didn't compel Britain to instigate Patriot Act-style anti-terror laws after the London bombings in 2005. Brussels didn't make them cover the entire city of London in CCTV cameras. Brussels didn't force Britain to uphold a bankrupt and garbage system of socialised medicine, redistribution, rigid labour markets or trade unions. Brussels didn't assist in hiking taxes on the British population - quite the opposite, considering the competition effects and tax-lowering effect of the Single Market. British politicians did that all on their own.

But now, after having freed Britain from its chains, you suppose that these very same politicians will pursue free trade and repeal anti-liberty laws and become a beacon of light in a statist world? How naive does one have to be, expecting British politicians to all of a sudden pass good liberty laws?

Especially when the people who voted for Leave and led the campaign are overwealmingly middle-aged, economically illiterate men who blame their loss of form of former days of glory on everything from globalization to the migrant next door. Men who loves strong trade unions, favours government in every aspect of your life. Hardly liberty material.

And you are telling me this is a win for liberty?

The most infuriating part is hearing these otherwise smart people celebrate like it's 1999, people most of whom are either a) not European and so don't have to live with the consequences, or b) have very little (if any) knowledge of the European Union. If you can't tell me the difference between Schengen, the Eurozone and the European Union (and which ones Britain is part of) you are instantly disqualified from having an opinion.

Not to mention that the European integration project probably has - on net - been the biggest force for freedom, competition and liberty Europe has seen since the repeal of the corn laws in 1845. None of that matters, because hey, we hate bureaucrats (unless are not in London), and Romanians if they are.

This is the kind of shallow, uninformed arguments I expect from lefties. Not from generally well-read and well-educated libertarians.

Bugger off.

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