Nick Hubble – Capital and Conflict (Great Britain) –
Last week you learned about Michel “Barmie” Barnier. He’s Europe’s lead negotiator for Brexit. The idea is to get to know the people behind the negotiations. They’re the key to understanding just what will happen.
So what about your own team captain? Britain’s negotiator is David Davis. And he sounds like quite a guy. Davis claims to have made £1,000 betting on the Brexit referendum. And the money is supposedly going to his new department’s drinks bill. There’s nothing like someone who puts their money where their mouth is.
What else do we know about him?
David grew up in a council estate in London. He was disinherited for becoming a Communist, joined the SAS reserve, founded a university radio station and went to Harvard. In other words, he’s been there, done that.
His political career sounds promising too. He was minister of state for Europe in the 90s, Conservative Party Chairman and Chairman of the Federation of Conservative Students. In the first round ballot for Conservative Party leadership, he came first and beat Cameron. But not in round two.
In keeping with his punt on Brexit, Davis is willing to put his career on the line over important issues. In 2008 he resigned as MP to force a by-election. The aim was to promote a debate about civil liberties. Davis spoke out against the new powers of the just passed Counter Terrorism Act, criticised the government for hiding torture of suspected terrorists, and lectured about the Magna Carta at the Royal Holloway university. He won the by election and did draw some awareness.
All this sounds very promising. He sounds willing to walk away from negotiations if that’s what it takes. He understands Europe and might sympathise with their deluded ways from his own youth. He certainly won’t be intimidated and knows how to play the public with stunts. Davis’ weakness is supposedly public speaking, which shouldn’t be a big issue.
The problem is the self-destructive nature of Europe. Just take a look at Europe’s visa war with the US to see what might happen.
The threat of self-harm
The Americans require nationals from several Eastern European countries to get visas to enter the US. (They also require Australians travelling to Canada via L.A. airport to do so, because their rules are stupid.)
The EU sees America’s visa requirement as an affront. Americans are ignoring the nature of the EU by dividing it into acceptable and unacceptable countries.
Recently, the European politicians’ patience ran out. They struck back at America. Last week the European Parliament voted to require Americans travelling to Europe to get a visa. In other words, if the Americans are going to be stupid, the Europeans want to compete.
The effect will be to reduce American tourism to Europe, impose costs on European bureaucracies and annoy American tourists. None of these are beneficial to Europe. They don’t really harm the American government at all either.
This sort of self-harm tit for tat is a fascinating part of political culture. People in business couldn’t get away with it because it’s too expensive. If the other party to a deal is being stupid, you walk away instead of imitating them.
The point here is that politicians are willing to harm themselves and their constituents out of symbolism. If they do the same over Brexit, things could get interesting.
The stakes are much higher in Brexit, so the European populace might hold European politicians to account. European lobbyists probably favour a trade deal with the UK. But the world doesn’t exactly have a great track record when it comes to these issues…
Georgia, Scotland, America and the EU
In Eastern Europe’s Georgia I was unexpectedly asked to weigh in on the proposed free trade agreement with Europe at an event about economics. Two enormous bulky Russian economists sitting either side of me had just made the pitch about how wonderful the agreement is for Georgians.
I told the audience that free trade agreements are b***s***.
If someone steals money from you, but tells you about the benefits of getting some of that money back, are you enthused by the idea? Of course not! You’re annoyed they stole from you.
Free trade agreements are exactly the same thing. The government steals your right to exchange goods with other people, and then gives some of those rights back to you, expecting you to be happy about it. It’s absurd.
If free trade is good, why restrict it in the first place? Why do you need a political agreement to have free trade? Free trade is the absence of political interference, not its result.
If you actually read a free trade agreement, it only gets more ridiculous. The document sets out all the trade restrictions that apply under the proposed free trade!
Former Chancellor George Osbourne couldn’t be more wrong when he said leaving the EU without a trade agreement would be “the biggest act of protectionism in British history.” Leaving the EU without a trade deal is exactly what we should do.
If Britain simply stated it would not restrict trade with the EU in any way, the EU would have no choice but to reciprocate. Any attempt to restrict trade would be a rhetorical nightmare. It’d make Europe’s politicians out to be the bad guy. They’d have no leg to stand on.
If trade between Britain and the EU was a good thing while Britain was in the EU, that can’t change because of a political change of sovereignty.
In much the same vain, Ingrid Detter de Frankopan argues we shouldn’t even trigger article 50 – just leave.
Braveheart or Scotty?
But what about Scotland?
Apparently the Scots are considering leaving the UK to be part of the EU. That’s a total paradox. The Scots have far more power to shape their world by voting inside the UK than in the EU.
In the EU, they have 6 out of 751 MEPs – 0.8%. In the UK parliament, they have 59 out of 650 – 8.6%. If you’re about pushing your favourite policies, you’d prefer the UK. As Star Trek’s Scotty pointed out, inside the EU, they just “don’t have the power.”
Yes, yes, I know, I’m not thinking pragmatically enough. What’s the real story here? Scotland’s Nicola Sturgeon is just pandering to her electorate, paradox or not. It’s sort of like Trump. He just tells people what they want to hear so they can cheer. It doesn’t matter if it doesn’t make logical sense.
So perhaps today’s Capital & Conflict is mistaken. Perhaps people care more about symbolism than their welfare. Perhaps being a proud Scot or European matters more than the policies you live under. Perhaps Europe will cut us off.
In that case, Brexit should happen anyway. The Brits voted for it out of the same symbolic motivation that Europe could kick us out for.
Until next time,
Editor, Capital & Conflict