Brexit would mean free rein for capital

Submitted by martin on 29 May, 2016 - 12:51 Author: Martin Thomas

88% of six hundred economists surveyed for the Observer newspaper (29 May) reckon that Brexit would reduce economic growth in Britain.

Economists often get things wrong, and the gist of the economists' opinion is that Brexit would disrupt the regular flows of the global capitalist economy, thus pushing down trade and investment into Britain.

Most enlightening is what the pro-Brexit minority of economists say. The "Economists for Brexit" group led by veteran Thatcherite Patrick Minford has produced a report.

As ardent free-market ideologues, they argue that a capitalist Britain outside the EU will do well because it will have fewer constraints on the rapacity of the free market.

They object to the EU because "the EU has pressed for social legislation (such as the 2003 Working Time Directive and the 2004 Gender Equality Directive) that adds to companies’ costs".

Their list would probably also include the Agency Workers' Directive, TUPE, and redundancy-payment laws.

They also object because "European governments have been more emphatic than the global average about the dangers of global warming" and so the EU has pushed Britain to "adopt the renewables agenda with greater zeal... Coal-fired power stations have been closed down, offshore wind farms built and so on..."

The Brexit campaigners disagree among themselves on what trade deals Britain should do on quitting the EU. The economists go for a radical option: "What other trade agreements do we need? My advice would be: none". Not the Norwegian model, not the Swiss model, not the Canadian model, not even the Albanian model favoured by Michael Gove.

The pro-Brexit economists argue that Britain should scrap all barriers to imports, and seek nothing more than World Trade Organisation rules for its exports. In their calculations the benefit of cheaper imports outweighs the consequent job losses.

On immigration, the economists differ from the Ukip-minded majority of Brexit campaigners in that they want more non-EU immigration and less immigration from the EU.

There, spelled out clearly, is the second core Brexit argument after the basic Ukip "hate-migrants" case. It is an argument for Britain as an offshore, low-regulation, low-social-overheads, environmentally-reckless site for global capital.

Whether their scheme would "work" in its own terms is doubtful. That it represents the way Brexit points, socially and economically, is not.

The way to fight the neoliberal policies of the EU leadership is by starting from the limited integration across borders created by the EU, and working for cross-border solidarity around demands for social levelling-up, democracy, and more open borders.

The Economy after Brexit

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