Posh and Brex

By Dr David Hugh-Jones

Like everything in Britain, the Brexit debate is all about class. Riffing off Nancy Mitford’s famous distinction between “U” (posh) and “non-U” (vulgar), Harry Mount in the Sunday Times[1] divided the voters up into “EU” and “non-EU”. There’s the sophisticated, well-travelled, culturally open remainers. Then there’s the salt-of-the-earth Brexiteers, who get regarded a bit like the citizens of Rock Ridge in Blazing Saddles: “just simple farmers. These are people of the land. The common clay of the new West. You know… morons.”

david blog

There are also posh and vulgar arguments: on the one hand, subtle technical debates about the effects on trade and employment; on the other, tub-thumping about migration, sovereignty and identity. The consensus among (ahem) intellectual elites is that the posh arguments are what really matter; the vulgar arguments are, in the Economist’s scornful phrase, “grunting caveman obsessions about who is part of the tribe”. So, we have a debate on two levels. Downstairs, the tabloids rumble about uncontrolled immigration. Upstairs, thinktanks and institutions issue weighty reports on the economic costs of Brexit.

The consensus is wrong. The posh arguments are a waste of time, and only the vulgar ones matter.

The posh arguments about economics are a waste of time, not because prosperity is irrelevant, but because they can’t settle anything. The effect of Brexit on our balance of trade, GDP and employment depends on the post-Brexit institutions and agreements that would emerge. That is a matter of politics, not economics. Guessing – oops, predicting – what will happen requires not technical expertise, but judgment, historical knowledge, and an understanding of the political leaders involved. If you want to know what Brexit will do to GDP, ask a well-connected journalist or politician, not me or my nerdy colleagues.

Turning to economics for answers, focusing on technical reports from the OECD or the Institute for Fiscal Studies, is a symptom of the human tendency to substitute a difficult question with an easy one. How will Brexit affect our economic relations with our partners? Will France and Germany punish us pour encourager les autres? Would the EU even survive in its current form? It’s incredibly hard to know. The ramifications stretch off into the future. It is comforting to ask something easier, like what would happen to GDP in the next five years.

But politics is prior to economics, so the really important question is the vulgar one about sovereignty: do we want to share it with our neighbours, or keep it for ourselves? The answer depends on how you rate European and British politics. On one side, there are the tin-eared bureaucratic politicians of Brussels who, as right-wing nationalism spreads across Europe, choose to strike a migration deal with the authoritarian Islamists in Turkey. On the other side, the political class that brought us Iraq, Libya, and the expenses scandal. Take your pick.

The second vulgar issue is migration. It is just as important. This is not because migration exerts intolerable pressure on public services (it doesn’t) or because it pushes poor Brits’ wages down (it may, but not by much). The long-run question is this. The ideal of an integrated European labour market is that workers move all around Europe, to wherever they are most productive and best paid. This ideal is the single most appealing thing about Europe, and also a necessity if the Eurozone is to be viable in the long run. It means that Europe becomes like the US, where people expect to move across state borders once or many times in their life. But bluntly, it also means the abolition of Europe’s constituent nations.

Not the abolition of its constituent identities: Texas, Florence, and Yorkshire all have proud identities as parts of a larger, economically integrated whole. Nor yet the abolition of Europe’s states, which are very durable. But a nation is something else: a group of people who simultaneously share an identity and a state. That cannot remain true if the people are scattered across Europe’s state boundaries.

Does that matter? In one sense, of course it does. Many people simply care about British identity, and feel loyal to Britain in a way they do not to Europe. But there is also a case that it matters practically, that this loyalty is not just a feeling (or even a caveman obsession) but an important strategic asset.

There is a widespread view among academics and policy-makers that “institutions matter”. If you get the institutions right – rule of law, secure property rights, freedom of contract, democracy and so on – then the rest will follow. This view is incomplete. Modern economists have realized that some transactions are incontractible: they can’t be specified by written legal contracts. It is less widely recognized, but just as true, that in politics, some things are un-institutable: they can’t be governed by the formal rules of institutions. Democracy only works if electorates stay informed, and bother to vote. State bureaucracies fail when there is a culture of nepotism or corruption. Social insurance and help for the poor depend on our concern for our fellow citizens. These goods cannot be mandated by laws. Instead, they are supported by citizens’ sense of commitment to their shared enterprise, the nation. This commitment may be hard to build in a community whose members can always exit to the lower-tax country next door. It may also be hard to build at European level. As a practical example, the key constraint preventing a rational solution to Greece’s fiscal woes is that German voters don’t want to pay for the southerners’ past mistakes.

But, perhaps a European identity can and must be built. The USA supports strong norms of civic duty across a continent-sized economic area. Europe may be able to do the same. Threats from outside can bring people together quickly, and Europe is certainly facing multiple challenges in its neighbourhood. It is hard to believe that individual nations would face these challenges better alone, or led by the kind of Eurosceptics who see Vladimir Putin as a defender of Christian civilization.

Whichever side you come down on, these are the issues that matter. The vagaries of political leadership, and the imponderables of national identity, are hard to measure, but these, not the short-run path of GDP, are what will decide the viability of Britain and Europe this century. The non-EU oiks may be wrong, but they are looking in the right place. The Brexit choice isn’t economic. It’s existential.

[1] http://www.thetimes.co.uk/article/are-you-an-eu-nob-or-a-non-eu-oik-xbb2mbnml

 

Advertisements

2 thoughts on “Posh and Brex

  1. Assumes new deals can be struck on favourable terms with a wave of a magic wand. First of all, no such expertise currently exists in the UK govt and little even amongst law firms in England according to an op ed in yesterday’s FT and secondly, the UK will have to negotiate separate deals with new trade partners from Europe and it’ll often be second priority, so the economy contracting is a likely scenario

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s