Should-Read: Simon Wren-Lewis: Does Brexit end not with a bang but a whimper?

Should-Read: As near as I can see it, the clever Simon Wren-Lewis thinks that what Brexit will mean in practice is that Britain loses its votes in Brussels and Strasbourg, but otherwise things go on as they have been: few in England really want a hard Irish border; or the departure of large chunks of London finance for Frankfort, Paris, and Dublin; or restrictions on Britain’s abilities to visit and move to continental Europe. That’s called “staying in the EU—but without any control over what the EU does because you have Brexited”. And Simon is right to say that this is stupid and idiotic and unsustainable, and would it short order be rationally followed by Brexreentrance. But I think he has it wrong: he presumes that the Tory and Labour politicians in Westminster in the medium-term future will not be cynical posturing morons. And he has no warrant for believing that: Simon Wren-Lewis: Does Brexit end not with a bang but a whimper?: “Most media commentary on Brexit makes a huge mistake… focuses on what the UK government may wish to do or should do…

…We should have known the moment Article 50 was triggered: the EU is calling the shots…. But the fact that the UK agreed to the text, and particularly the parts on the Irish border, has told the EU… the current UK government is not going to walk away with no deal, and even if it did the current parliament would almost certainly stop it. That in turn tells the EU that it can get, to the first approximation, the agreement it wants. So what we should be asking is not what the UK’s next move will be, but what the preferred outcome for the EU is. My guess would be that their preferred outcome is a formalisation of the transition arrangements…. It avoids a hard Irish border, it imposes no additional trade restrictions, and the UK is clearly worse off… has no control over the rules it must obey…. Two alternatives… staying in the Single Market and staying in it just for goods… Dreams of doing trade deals with other countries would no longer be possible, and for that and other reasons a large part of the Conservative party would not be happy. The Conservative’s Europe problem would not be solved. The fact that the Brexiters will still be agitating for a more pronounced break from Europe will be one reason why the UK will stiff suffer in economic terms…. Norway and Switzerland may be able to tolerate being out of the club but obeying its rules because they would probably reason their impact within the club would be small….

Does this mean that any deal will just be the first stage of breaking away from Europe? The Brexiters will agitate for this, but I doubt it will happen. The Brexit is essentially a project of the old. It seems far more likely to me that as time passes a majority for rejoining will emerge, and Brexit will come to an end. This made period of UK politics, and all the political and economic harm it has done, will be a complete dead end, a colossal and damaging waste of time. This is my best guess at how Brexit will end…. The vote that rules them all today will gradually be seen… as just the machinations of a small number of hollow men…

January 19, 2018


Brad DeLong
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