Brexit Divisions

The dominance of Brexonomics

Fundamental political questions about the character and outlook of a post-Brexit Britain need to be answered before we worry about the specificities of economic sectors and trade relationships.

David Schäfer
13 December 2016

The EU's chief Brexit negotiator, Michel Barnier. Virginia Mayo/Press Association. All rights reserved.

The UK that woke up on the morning of 24 June was, first and foremost, a divided one. While the ‘Brexiteers’ celebrated their narrow victory that came so unexpected for many (including, in some notable instances, themselves), the Remainers began to lick their wounds. How, Remainers asked, could it be possible that a majority votes for Brexit even though all rational arguments pointed in the direction of a remain victory?

A very pronounced account of this narrative came from the Centre for European Reform. In a report (“Brexiting Yourself in the Foot”) published days before the referendum, they wondered about the high support for Brexit in those regions that stand to lose the most from leaving the EU. This led some, such as the AP columnist Lee Schafer, to conclude that pro-Brexit forces “didn’t seem interested in their self-interest”, opposing as they did the most rational option.

The same terms of discussion also characterised the conduct of the initial post-referendum negotiations between Theresa May’s government and European leaders, although here, perhaps ironically, it was the Brexiteers who adopted the discourse of economic self-interest as a weapon against their European counterparts. Boris Johnson, who had vigorously denied the central importance of the single market for Britain’s economic welfare during the leave campaign, argued that sooner or later EU leaders would realise that a far-reaching trade deal with the UK would be in their best interest.

The real question that needs to be asked is: to what end does Britain seek to leave the EU?

He sounded the trumpet with full force, claiming close EU-UK relations to be in Europe’s best interest and their best means of limiting the economic consequences of Brexit. Boris’ hopes were duly shattered by his counterparts when they made it clear they would rather forego their prosecco exports to the UK than cave in on British demands for unconditional membership of the single market. Again, not the outcome a ‘rational’, cost-benefit analysis of the situation. Common to both these discussions, therefore, is that they show the clear limitations of utilising economic criteria and rationalist lenses to understand the outcome.

The debate as it stands is far too narrow to help us adequately understand the tectonic shifts Brexit is about to cause in the political economy of Europe. The real question that needs to be asked is: to what end does Britain seek to leave the EU? This end, whatever it may be, is not something explicable in terms of aggregate economic data (proportion of customs, budgetary contributions, balance of trade). It is, rather, a distinct model of society that is sought.

In this following I address the shortcomings of using cost-benefit analysis to understand what is at stake in the Brexit negotiations. I argue that the ‘how’ and ‘why’ of single market access need to recede into the background to make way for a more urgent discussion on the fundamental question animating the Leave and Remain camps alike; namely, what kind of country do we want Britain to become? There is no ‘best’ or ‘most rational’ position on the table; the outcome of Brexit is first and foremost a political choice, albeit one that involves trade-offs and will result in winners and losers. While this discussion needs to be informed by evidence about the likely economic consequences, it should not be confined to these narrow boundaries. Determining the court of post-Brexit Britain is not a technocratic choice.

Bigger questions than mere economics

The verdict of economists on Brexit is largely unequivocal: Brexit will be damaging. The chancellor’s downward adjustment of the growth forecast and the remarkable u-turn in fiscal policy are only the latest pieces of evidence for this. True, the doomsayers among economists were proved wrong in their prediction of an immediate economic shock following the referendum result. And yet they were predominantly right in that there was indeed a negative effect, albeit on a smaller scale than that predicted by most economists. The accompanying reconfiguration of the British economy is not necessarily deemed to fail, but it will likely prove costly in at least the short- to medium-term.

These economic considerations certainly need to be taken into account – but should they be allowed to imprison the debate within an overly narrow territory? It is one of the chief ironies in Britain, which already perceived its EU membership in almost exclusively economic terms, that much of the post-Brexit discussions is reduced to the economic sphere – again. This debate is misguided. It omits the magnitude of the fundamental changes ahead. Brexit is a defining moment for British society. There will be no sector, no region, no individual unaffected by Brexit in one way or another – whether we are talking about politics, business, universities, social models, or societal values and norms.

Discussing the terms of delivery for prosecco does not do justice to the challenges that lie ahead. Despite the technical challenges of the transition, the very nature of Brexit is everything but a technocratic endeavour. It involves meaningful trade-offs about those values that are to be placed at the core of British society:

With no clearly ‘best’ option and several ‘rational’ options to choose from, the ball is once again in the messy field of politics.

A trade-off between an open Britain and a closed Britain: a Britain that welcomes trade and investments even though a liberal Britain may come at the price of a widening gap between the rich and the poor; or a Britain that seeks to shield its own population against the perceived and real downsides of globalisation and prefers to shut the doors for the rest of the world (even though – it may soon realise – fresh oxygen can only enter once the door is opened again).

A trade-off between an active and passive Britain: a Britain that plays an active role in managing interdependence, that is willing to institutionalise international cooperation and delegate sovereignty to international organisations, even though that might bind its hands; or a Britain that eagerly guards its sovereignty, takes back control and gets rid of the constraints of international institutions, even though that also means not sitting at the table when the real decisions are taken.

A trade-off between a dynamic and a protective Britain: a Britain that gives opportunities but also limits the protection for those that do not climb up the social ladder; or a Britain that attempts to work for everyone, but also accepts that redistributing the slices of the cake more equally may result in making the cake a lot smaller.

These choices need to be discussed. None of them can objectively be assessed as a better option than their counterparts. There is neither a ‘best’ nor a ‘worst’ outcome, but all choices produce winners and losers. And with no clearly ‘best’ option and several ‘rational’ options to choose from, the ball is once again in the messy field of politics.

A real discussion this time

A broad political debate is needed to decide which equilibrium is to be the desired one. The referendum was meaningless in this regard, since it did not answer any of the fundamental questions sketched above. And if the referendum did not solve the question, then where is this debate to come from? Parliament would appear a poor choice in this regard, since its authority has taken too much of a beating from the referendum. What is needed, rather, is a renewed public debate; one that seeks to involve citizens regardless of the side they took in the referendum, and regardless of their political affiliation.

In order for this to happen, two preconditions need to be met. First, ‘Brexiteers’ need to stop shouting down the 48% that voted to remain; they are not the enemies of the people. To marginalise the views of Remainers at this stage is to prohibit the emergence of the kind of national consensus necessary to make legitimate decisions on the country’s economic, political, and social future. Second, Remainers need to halt their efforts to derail the Brexit process; they must accept the inevitable – that Brexit will happen – and focus their efforts on the kind of Brexit that will be best for the country as a whole.

The referendum campaign was the first missed opportunity to decide where the country should be heading. ‘Project Fear’ from the Remainers, and what amounted to ‘Project Lie’ from the leavers, did little to create an atmosphere of reasoned debate. Indeed, any hope that plebiscites can trigger reasoned public deliberation leading to a reasoned consensus, as Habermas would have put it, has been shattered by the experience of the 23 June referendum. After having already wasted the first opportunity for a reasoned debate, there is only one way to make the state of affairs even more lamentable; and that would be to miss the second opportunity as well. There won’t be many more to come.

Is this outlook overly pessimistic? Maybe it is; but if the public takes the opportunity that lies idle at the moment and begins to make the choices that really matter (and that is not the customs for prosecco), Brexit could unexpectedly become a success. Because despite all uncertainty, one thing we know for sure: in 20 years we will live in Britain. Do we really want Theresa May or Boris Johnson to decide it on our behalf?

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