Wolf and the 'bitter lessons of Brexit'

Martin Wolf is the chief economics commentator at the Financial Times and therefore a man whose opinions are worth something. His latest column is about the damage that Brexit is inflicting on the UK: The bitter lessons of Brexit. He begins by pointing out that populism, although very potent, is a destructive form of politics, "weakening institutions, damaging debate, and worsening policy. It can threaten liberal democracy itself." It’s a masterpiece in clear, rational and succinct language, no more than 750 words but so well written it conveys all the stupidity of Brexit and why it could never work.

I want to steal a few quotes and record them here as aphorisms that we should all carry with us:

• Brexit was in fact certain to go wrong, because it was based on false premises. Countries cannot be fully sovereign in trade, since it involves at least one counterpart.

• Creating the single market, then, was an act of regulatory simplification. Leaving it would increase regulation for any business trying to sell in both the UK and the EU.

• The rules of the single market were created because the alternative was multiple different regulatory regimes and so costlier (and smaller) trade.

• An institution has to decide whether countries are abiding by the rules they had agreed. That has been the indispensable role of the European Court of Justice.

• In the short term, existing businesses enjoyed sunk costs — their capital, knowledge and relationships. The costs of creating such assets anew is far higher than those of using what they already had

• Suppose a business is considering entering the EU market today. Other things being equal, would it make sense to locate in the UK rather than in any of its 27 members? Of course not. Over time, then, the separation will grow.

• This is also true for personal relationships, education, work experience, or work as a creative person, consultant, or lawyer. In sum, this supposed liberation has greatly curtailed the freedom of many millions of people on both sides.

And finally, this sums it all up:

• Whose freedom has it increased? That of British politicians. They can act more freely than they could when bound by EU rules. What have they done with this freedom? They have lied about (or, worse, failed to understand) what they agreed over the Northern Ireland Protocol. They have threatened to break international law. They even proposed eliminating thousands of pieces of legislation inherited from EU membership, regardless of the consequences.

As a result of this "classic populist blend of paranoia, ignorance, xenophobia, intolerance of opposition and hostility to constraining institutions," men like Farage, Tice, Johnson, and a whole list of guilty men and women (who he does not name by the way, this is my very partial list) Wolf accuses them of destroying "the country’s reputation for good sense, moderation and decency."

I honestly don't think I've ever read such a short, clear, and more damning summary of Brexit and its disastrous consequences than Wolf's.

Pre-referendum I remember having several email exchanges with Dominic Lawson, the son of Thatcher's former chancellor Nigel Lawson, at The Sunday Times where I tried to point things like this out although in a much more long-winded fashion.  He was dismissive of any and all problems, as they all were.

On rejoining, Wolf is not optimistic of any early move: 

"I have argued that attempting to rejoin the EU now would be a mistake. But it is possible to seek improvements in the UK’s relationship with it, notably over movement of people and workers and over regulatory standards, especially in food and manufactures. There is no good case for divergence from the latter. For that matter, would UK-specific regulation of artificial intelligence or a carbon-border adjustment mechanism make any sense? More boldly, the case for rejoining the customs union and so eliminating the difficulties now created by rules of origin is strong."

A few weeks ago he wrote that: Britain won’t rejoin the EU for decades — if ever, which I posted about HERE.

I think he's far too pessimistic and has underestimated public opinion and the propensity of the Conservative Party to tack when their hold on power is threatened.  Rejoining is dependent on the Tories certainly. 

The EU wouldn’t want to receive an application to join under Article 49 unless the major parties all agree on it. That must be clear to everybody. But there must come a moment, because of all that Wolf says, when it will become obvious that Brexit was a huge mistake and there are no great advantages to it.

If he's right about regulatory alignment and rejoining the customs union, rejoining will be the blindingly obvious next step and it will become not just economically desirable but politically, too. When that happens (and I am 100% certain that it will) you can be sure when faced with the alternative of political oblivion and a sniff of power, the Tory Party will do a rapid about-turn on Brexit.

I don't pretend it will happen next year, but neither do I think it will take decades.