What is the Cost of Freedom? - The Economic Implications of Brexit
The mandate for Brexit is as strong as it has ever been.
Despite organizations in the United Kingdom claiming that “Remain parties won the MEP election” by ostensibly excluding the two parties that are split on the issue and thus massaging the numbers, it should surprise no one that the largest winner in the MEP elections for the United Kingdom was Nigel Farage’s Brexit party. They won this massive victory despite the party in question only being about six weeks old, dealing both a heavy blow to UKIP, as well as most of the mainstay parties as well who have waffled on about the issue too much.
Likewise, the Liberal Democrats also picked up seats, as well as a bigger chunk of the electorate than they’ve held in some time. This is only of note as the Lib Dems are the largest and most established remain party in the UK, and because they are a part of the ALDE voting bloc within the European parliament, a bloc headed by none other than Guy Verhofstadt, who also is the man in charge of Brexit negotiations on behalf of the Union. The implications of these connections and likely opinions might sway some to argue that Verhofstadt might be acting in a conflict of interest to the issue of Brexit as a whole, and would thus be an improper choice for the position, but apparently no one in the Union has seen fit to make this statement of yet, at least not to any effect.
While the hustle and bustle of the everyday party politics of the United Kingdom and the European Union could fill pages of web space, I would instead like to focus on the impetus and associated costs of Brexit. Long have we known now that the British people want their freedom, despite constant propagandizing otherwise, but the arguments in the negative have always surrounded the costs. While some have certainly been hyperbolic and blown totally out of proportion by fear-mongering, there is still fundamentally an economic argument to be had about what will happen with Brexit come the conclusion of it.
Of course, first we must acknowledge that all of this is pending the conclusion of any potential deal that the new Conservative Prime Minister may eventually strike, or fail to strike with the Union before the end of October, the date at which the latest extension to the Brexit negotiations have been extended.
There is also a court case on the books claiming that since the last extension was done without a vote of the British parliament and the British people as to whether or not negotiations should be extended, that Brexit has already occurred. Of course, all officials between the UK government and the EU at current are operating as if the extension is valid, so for all intents and purposes, it is, and so this court case, well-intentioned though it may be, means little effectively until the courts agree otherwise.
With all of that now said and squared away, let us turn attention back to examining the costs of a no-deal Brexit, the much feared possibility that Britain has spent the last three years half-terrified about and half sick of discussing.
Economists, of course, have forecast that Brexit will be bad for the Island nation’s economy. Some believe that GDP could fall between 5-8 points, and that average household income could drop as much as 20%. These numbers seem inflated to me, or at least to be very extremely liberal estimates of the potential damages taken from the worst case scenario. I believe these projections are likely built upon the implication that after “crashing out” as the popular phrase goes, market solutions and better trade deals will not be available.
While it is true that trading under WTO terms will be more costly for the UK if they continue open trade with the EU, they will at least no longer be required to pay out a net of 13 billion pounds sterling annually to the EU. More importantly, without the EU’s protectionist trading policy looming over them, the UK will be free to explore trade agreements with other countries, which if reached relatively quickly could see a great deal of the impact of Brexit reduced.
However, such results are also contingent on strong leadership and strong negotiation, something the ruling Conservative party has shown a great lack of in the run up to, and subsequent handling of Brexit as a whole.
The World Bank has also released data showing that new markets may be difficult to break into if current projections continue as they have, as well as showing that growth in developed nations has slowed to 1.5% of GDP on average, among other issues.
Given this outlook, it is hard to view Brexit as a wholly good thing. Understanding that the European Union will likewise feel the blow is probably good, considering the aims of some who manifest at the top of their echelon, but at the same time, it will also likely cause some suffering for a great many European citizens as a result as an unintended consequence.
Often times the costs of freedom are painful to bear, and I would be remiss in hiding the truth about Brexit simply because I personally wish for a free Britain.
Despite these costs, however, I think it is important that the United Kingdom soldier on, and that they do not accept any deal which would threaten their continued sovereignty over their own borders, their own laws, and over their own people. Despite starting out as an economic commission, the EU has become anything but, and it is important that free people remain free in the face of those who demand an Empire be formed.
After all, if anyone has Empires and their failure fresh upon their minds, it would certainly be the British who know best that particular folly.
To both parties involved, I can only suggest that a proper deal be reached or that separate ways be had. A competent negotiator from both sides must step forward and hammer out something that works to benefit both groups. The EU must swallow their pride and accept that they need the British, as much as they bluster otherwise, and the British must concede that they do enjoy a great deal of trade with the Union.
If the governments at play truly care about the interests of the people whom they govern and the world at large, they will come to the table and hammer out a deal; one that respects the freedom and autonomy of British citizens, but also benefits everyone involved economically as well.