Winner of the New Statesman SPERI Prize in Political Economy 2016

Monday, 16 July 2018

Trump and Brexit


As Trump makes clear, the UK can choose US rules or EU rules. Brexit is about having no say in either.

Of course every Leave voter is an individual with their own motives. But if you had to broadly characterise the two big issues that gave the Leave side victory in 2016, it was fears about immigration and a wish for greater sovereignty. Both were based on lies.

Immigration

You would not know it from the media, but people in the UK have been developing a more favourable view of immigration over the last six years. Here is a table from the latest National Centre for Social Research Social Attitudes survey on Europe.


In 2017, for those who expressed an opinion one way or the other, nearly three quarters thought immigration had a positive impact on the economy, and 65% thought immigrants enriched our culture.

Given this trend in attitudes, how did we vote to Leave? I keep going back this poll on EU immigration published in June 2016 which I wrote about shortly after it came out.

You can see it is consistent with the numbers above: people on balance think EU immigration is good for the economy and for British culture, and even for themselves personally. So why would they want to reduce EU immigration? Because they overwhelmingly thought EU immigration was bad for the NHS (and by implication all public services).

This, after all, is the line that Conservative and even some Labour politicians have consistently pushed, as have parts of the media with no comeback from most broadcasters. Before the referendum there were few stories about EU doctors and nurses, but plenty about migrants using the NHS. This concern was emphasised by the Leave campaign with the combination of the £350 million more for NHS claim and the prospect of being ‘overrun’ by Turkish immigrants.

The only problem with these claims that immigration reduces access to public services is that we know, with almost certainty, that the opposite is true: immigration creates net additional resources for public services. This is not complicated: they pay more in taxes than they take out because they tend to be of working age. But the myth that politicians and the media promulgate is that immigrants are somehow the reason access to public services has become more difficult, and they do this in large party to cover up the impact of austerity.

There was a final issue during the referendum that may have encouraged people to vote Leave. Even if they were positive about the EU immigrants that were already here, it just seemed sensible that the government should control their number. After all the government had set a target for net migration, and were having great difficulty meeting it. Yet the media never talked about the positive aspect of freedom of movement - the ability of UK citizens to live and work anywhere in the EU - and how that would end if we left.

Sovereignty and trade

I still talk to Leavers on both right or left who are convinced that the EU has taken away major elements of the UK’s sovereignty. One talked about “accountable democracy, sovereignty, independence, autonomy and freedom”. Yet when I ask for specific instances of a law or somesuch where the EU has compromised all these things, answer comes there none. There is a simply reason for this, beyond the propaganda, and that is that the EU is about harmonising regulations, and this harmonisation has brought benefits rather than pain to UK citizens.

International trade involves a form of cooperation with other countries, and international trade is good for both sides because it allows more efficient production as well as consumption of a greater variety of goods. The more we cooperate on rules and regulations, the more trade will happen. This harmonisation of regulations is like marriage: each side loses a degree of individual autonomy but we gain much more in return.

The thing about regulations governing networks of trade is that there cannot be too many of them, just as there cannot be many operating systems for computers. The whole point about harmonising regulations is to reduce their number of regulations, so firms do not have to produce lots of different goods which differ only in the different national regulations they meet. Which means that, if the UK wants to really benefit from the gains to trade, it has to choose one standard to match UK regulations with. And given existing patterns of trade, the UK only really has a choice between two: the EU and North America (NAFTA). Neither is likely to abandon their regulations in favour of what the UK may happen to do. (Equally third countries will never choose to harmonise on UK regulations rather than EU or the US.)

Translate this into Brexit, taking back control is like divorce, except in this case divorce from a partner you are still happy to be with (we happily trade with). To be honest, however, I’m not sure many Leave voters needed convincing of all this. As this poll shows, only 22% of Leave voters thought we would lose full access to the single market. Instead they believed the propaganda they were fed, that somehow their lives were being influenced in a negative way by the EU, and that they would therefore be better off after Brexit

Brexiters and Trump

While most voters were not very interested in regulations, many Brexiters certainly were. Most Brexiters are not very interested in immigration, but are interested in removing us from EU regulations and adopting much looser US standards. Of course they talked about ‘global Britain’, but it never made sense for the UK to set its own regulations for trade independently of both the EU and US. What they wanted was to get rid of EU regulations on labour or the environment which did not fit into their ideological framework.

To say, as I did here, that the Brexiters hijacked the EU negotiations, to make them about their own concerns rather than the people who voted, is not quite right. I think it is another example of deceit: getting what they want indirectly because what they want is not in itself popular. EU labour and environmental regulations are popular with most people. So the Brexiters could only achieve their goals through deceiving Leavers, and once more through our partisan or pathetic media they succeeded. After all, the first significant deceit, which was reducing the size of the state by making a fuss about the deficit, had been a big political success.

Normal US politics would want none of this. The US traditionally values the UK as part of the EU, and a jumping off point for their own corporations. Trump is of course not a normal POTUS. He is part of a right wing plutocratic elite that has captured the Republican party, and a good part of the Conservative party. Their aim is to spread his kind of authoritarian right wing politics as far as they can. Trump’s retweeting of Britain First islamophobic materials was no accident. One of his ambassadors has lobbied on behalf of former English Defence League leader Tommy Robinson!

I remember writing sometime back that Trump’s election was a big blow to Brexit. I thought, perhaps naively, that at least some Brexiters would think twice before becoming cheerleaders for Trump. I thought some might be concerned that far from doing trade deals, they would be concerned that Trump seemed more interested in destroying trade by placing tariffs on imported goods. If any have showed any concern I have not noticed. It seems instead that the Brexiters, along with the right wing press, really are the Republican party in the UK.

Theresa May

Stage one of the Brexit endgame that we saw less than two weeks ago was Theresa May at last standing up to the Brexiters in her party. I think she could and should have done this from the very beginning. That she didn’t do so reflects naivety about Brexit rather than strategy on her part. There are many clues that this was so, some of which are spelt out by Jonathan Lis here: getting rid of Sir Ivan Rogers was a huge unforced error that conclusively shows that she and her immediate advisors did not understand the task they had taken on. But it would be suicide for her to turn back from her new path now..

Trump’s attacks on her are another sign of how important her Chequers document is. Of course it is not a plan the EU can accept, but it represents her choice to finally stop the Brexiters turning Brexit into their ideological, Republican orientated plaything. She must know that her new opponents will not be appeased, and do not do compromise. I hope that Trump’s humiliation of her will help her see that global Britain was always a myth, and that the UK has to choose the EU rather than the US. She will need resolve as she is forced to compromise further to get a deal, although she will try to push at least some of that into transition.

Perhaps I am wrong about the final situation being BINO plus face saving for the UK: perhaps the EU will offer serious concessions for the first time in these negotiations. But it is foolish to believe that these concessions will in any way be advantageous to the UK, and somehow make Brexit worthwhile. What gain is there to be outside the single market for services, when exports of products from financial and creative industries to the EU is one of the UK strengths? What gain in there in restricting EU immigration, when most people now agree that immigration enhances our economy and culture, and economists know also enhance our public services. Yes, we would have more sovereignty: the sovereignty to make our lives worse with no compensations.

Whatever deal May finally does with the EU, and at whatever time, it remains the case that Brexit will do for UK sovereignty the opposite of what it claimed. It is better to follow EU rules than US rules, but with Brexit we will be following, with no say in how these rules are changed. It is a huge indictment of our political system that our Prime Minister and a majority of our MPs feel incapable of saying to people you were lied to, and following this course gives you less sovereignty than you had before June 2016. All we can hope for is that the Brexiters, in their new found position of Brexit rebels, will vote against the deal and let parliament, directly or indirectly, kill the whole thing off. The Brexiters will have caused enormous damage, but it would be poetic justice if they helped bring an end to Brexit.








21 comments:

  1. One reason for the polls may be that ppl believe immigration is going to be cut, and in expectation of this feel more magnanimous. The requirement not to limit EU immigration seems to have been removed, but this is contingent on a deal allowing this.

    Also the Brexiut vote may have polarised ppl so that Remainers are keen to justify their vote by accepting immigration.

    In short, we dunno how these numbers will develop if we are refused immigration control and ppl grow to resent this, driven on by the press again.

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  2. The problem with the EU is it is using regulations not to further international trade but as a lever to impose its views on member states. This is an abuse of power.

    If the EU does not impose its views on member states, then why have these women written this letter stating that unless we allow the EU to impose its views on member states we will lose valuable rights? https://www.theguardian.com/politics/2018/jun/28/womens-rights-at-risk-after-brexit?CMP=share_btn_tw

    And to be clear, what is at issue here is not the issue of women's rights, but the notion that we need the EU to impose rules on us to save us from ourselves. As we celebrate 100 years since women were granted the vote, I think both Leavers and Remainers alike would recognise that women's rights in theUK were achieved by women fighting for these rights until they were enacted in legislation voted for by the UK parliament, not through EU directives instructing us to bring them in against the wishes of the people.

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  3. The thing about immigration (and refugees) is that the rate of influx matters. Too many too fast will almost certainly strain public services (temporarily) and might even hamper cultural assimilation. Talking in binary terms about whether immigration is good or bad doesn't help. The image of Britain overrun with immigrants is what the brexit campaign evoked. That the UK needs to control immigration rate is an acceptable position, but the immigration rate hasn't been a problem in the UK! Indeed if the economy keeps going the way it has these past few years, there will be few who want to come. Never the less, just as the conservative party engaged in deceit about immigrants taking up too much of public services, it is deceitful to claim that immigration (at any rate of influx) is good for the economy. The honest and more nuanced argument about immigration rate will probably convince more working class people who might be against immigration.

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    1. "If the economy keeps going the way it has these past few years, there will be few who want to come" -- no, because it depends on the economies they come from. The continent is doing poorly under the euro, and Eastern Europe is just poor anyway, so of course ppl will move to the UK just to get a job and/or higher pay.

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    2. Rate of increase is certainly an important issue but so is cultural assimilation.You seem to assume that with a modest rate of influx this will facilitate cultural assimilation but this is questionable; it may or it may not. What we may well end up with is a large section of the populations that will not assimilate and then what? These are issues which cannot be ignored.

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  4. "The Commonwealth immigrant came to Britain as a full citizen, to a country which knew no discrimination between one citizen and another, and he entered instantly into the possession of the rights of every citizen, from the vote to free treatment under the National Health Service...But while, to the immigrant, entry to this country was admission to privileges and opportunities eagerly sought, the impact upon the existing population was very different. For reasons which they could not comprehend, and in pursuance of a decision by default, on which they were never consulted, they found themselves made strangers in their own country. They found their wives unable to obtain hospital beds in childbirth, their children unable to obtain school places, their homes and neighbourhoods changed beyond recognition, their plans and prospects for the future defeated; at work they found that employers hesitated to apply to the immigrant worker the standards of discipline and competence required of the native-born worker; they began to hear, as time went by, more and more voices which told them that they were now the unwanted."

    Enoch Powell, Rivers of Blood, 1968

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    1. I was young in the 1960s. There was a lot of discrimination. Class discrimination was much worse and women did not have equality. LGBT people were, in some cases, criminalised. Polish workers -who came in the war-were often among the first to be sacked.

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    2. The only true thing that could be said about Powell's speech is that some neighbourhoods were changed beyond recognition as minorities would move into the poorer ones. Everything else is a complete, vicious fabrication.

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  5. Tommy Robinson is "Tommy Robinson". His real name is Stephen Yaxley-Lennon. His origins are proletarian, but the name suggests otherwise. The pseudonym is curiously emblematic of the deceit the far right needs to get any traction.

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  6. Migrants are irrelevant. They want too disaster capitalism the island and turn "little england" with London as the focus into the "New Havana". Using it as a deregulated tax haven and smut city. Where foreigners "vacation" with access to underage sex, with the slums providing the "bodies".

    This is what a globalist neoliberal like Trump wants. Its what his handlers want. Considering 40% of the Brexit supporters were non-white, don't get used Simon. UKIP is 35% Muslim and Hindu for example. The centre left at some point, is gonna have to call a spade and spade. Tell the truth, it is ok to do so.

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    1. Do you have a source for this 40% claim? Or perhaps you're a parody

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    2. This is deranged and racist. Simon, please don't give a platform to racists.

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    3. It's got to be a parody. 40% of the electorate isn't non-white, so the idea that 40% of the Brexit votes came from non-white people is simply absurd.

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  7. I sent the following suggestion to the People's Vote campaign a few days ago (before seeing Justine Greening's call for something similar) and wanted to share for thoughts:


    I support having a People’s Vote and think the time has come to spell out what question should be asked and how the process would work. This would help to dispel criticism that it is just a re-run of the 2016 referendum and increase the likelihood of a People's Vote coming about.

    I propose asking the electorate to RANK three options:

    - Accept the negotiated deal and leave the EU

    - Reject the negotiated deal and leave the EU

    - Remain in the EU

    I am not wedded to the wording of the question described above, but I think an 'instant-runoff' element is crucial. This is the method used in Australian elections and would avoid strategic voting and accusations of splitting the Leave vote. See second paragraph of the following for a nice explanation: https://en.wikipedia.org/wiki/Instant-runoff_voting?wprov=sfla1

    I think this process would reveal the true "will of the people". For example, if we are to Leave it would tell us if the electorate in aggregate actually prefers a Hard or Soft Brexit.

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  8. Over two weeks and no comments approved. What is going on?

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  9. Leaving aside the short-term prospects of politics in the UK (vital though that is in our current crisis) and about which I applaud your acute analysis, I would like to turn to some of the longer-term implications of our current mess for liberally minded people.

    If the nationalist right is eventually thwarted in the UK and elsewhere liberals are going to get a chance to govern again. If the threat we face now is to permanently removed we will need to do better than we did in the run up to the 2008 crisis. We need sound ideas, capable of being put into practice and explicable to a wide public.

    I would like to contribute to that by developing one of the points you make about trade agreements and their close relationship with harmonisation of standards through international law. The Brexit proposition on the right was that there was no such link and that the UK could have its cake and eat it by having full market access with no loss of legal sovereignty. This was partly a lie since lying is intrinsic to modern conservatism (in the American sense).

    It also arose from a profound misunderstanding of what a free (I prefer the term effective) market actually is and I believe that this misunderstanding also permeates the left. An effective market is not a free for all. Inevitably in a free for all those with the most economic power dominate and can ruthlessly exploit the situation to gain even more economic power. Monopolies are the most obvious but not the only example of this. When the paid apologists of the right – journalists, politicians and some academic economists - speak up for “free markets” this is the situation they are defending, and they do so at the behest of those who currently hold economic power.

    For a market to work in providing quality goods and services at the best price there have to be a number of factors. These are well known to economic theory, but little effort seems to be made to see if they apply in practice. I know why the right don’t bother – they are the hired hands of the privileged. The left pays little attention because they swallow the misleading rhetoric of the right about free markets.

    For example, an effective market requires the possibility of new entrants to that market. You can hardly see that applying to newspapers and we all know what the internet giants do to rival start-ups. Many capital or knowledge intensive markets are extremely difficult to get into.

    An effective market also requires that consumers have good knowledge of the products or services on offer to make rational choices. This is hard to achieve without tight regulation about labelling and standards and good public education about things like health.

    To participate in a market consumers have to have sufficient resources and their market power is related directly to their disposable income or wealth. In a highly unequal society this market power is likewise highly unequal. If the NHS were replaced by some kind of market cosmetic operations for the rich would be likely to have priority over cancer care for the poor.

    In other words, an effective market requires an effective state (not necessarily a nation-state) to police it and ensure that the basic conditions are met. Shrinking the state as your only aim leads to less effective markets and more elite domination.

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  10. Trump is not exactly typical of the rich right -wing plutocrats who have taken control of the Republican party. He is better seen as a racist con-man who won the Republican nomination after promising to protect social security, medicare , and other aspects of the welfare state. However, once he became President he made an implicit deal with the Republican elite. He will let them determine policy if they let him continue to grift.

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  11. Time for an update on the customs software issue? The UK is changing its system anyway. But without a clear brief, writing a new system is impossible. You can write software for staying in the single market for goods. You can write software for WTO rules from Day 1, to be modified by future trade deals. What you can't do is write software for "maybe SM, maybe selective regulatory alignment short of SM, plus an undefined transition period, plus something we haven't decided in Ireland." Note that the uncompleted software is not just for customs officers; it has to be applied by every significant trader, like PAYE. This is heading for the Swedish joke about the compromise on changing the rile of the road: cars would switch to the right on January 1st, trucks on June 30.

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  12. On the immigration issue, I think many people can accept that in a country with an ageing population near full employment, net immigration can be beneficial. But it is harder to understand why between early 2008 and late 2011, with unemployment rising by roughly a million over the period, the economy "needed" substantial net inward migration, at levels way above anything experienced in the eighties and nineties. As for pressures on the health service, it is probably fair to say that in the medium-term immigration helps rather than hinders, but if the population is 500,000 higher than you had planned for a few years earlier, it must surely cause some capacity problems at the margins, even in the absence of austerity

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  13. "Trump is of course not a normal POTUS. He is part of a right wing plutocratic elite that has captured the Republican party, and a good part of the Conservative party. Their aim is to spread his kind of authoritarian right wing politics as far as they can. Trump’s retweeting of Britain First islamophobic materials was no accident. One of his ambassadors has lobbied on behalf of former English Defence League leader Tommy Robinson!"

    Personally, I would see it more as a fossil-fuel/white-supremacist elite.

    It is notable that the Trump's administration is dominated by climate change deniers (and Trump himself is cosy with the rulers of the Russian petrostate). Perhaps the white-supremacism and Islamophobia is to make it easier to accept dooming Africa and the Middle East to destruction by climate change?

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  14. "when I ask for specific instances of a law or somesuch where the EU has compromised all these things, answer comes there none."

    How about how the EU overruled Ireland's sovereignty by making them charge Apple more taxes?

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