Tag Archives: Brexit

Professors Minford and Scott Cato: whose assessment will prove to be more accurate?

The BBC and other media outlets report the views of Patrick Minford, Professor of Applied Economics at Cardiff Business School, Cardiff University.

In his report From Project Fear to Project Prosperity, to be published in the autumn,  he predicts that a ‘hard’ Brexit will offer a ‘£135bn annual boost’ to economy around a 7% increase in GDP.

Minford, lead author of the introductory nine page report from Economists for Free Trade says that eliminating tariffs, either within free trade deals or unilaterally, would deliver trade gains worth £80bn a year. He has expressed the view that the British economy is flexible enough to cope with Brexit. The four elements in his calculation are listed in the Guardian as:

  • free trade, either via free trade agreements with the EU and the rest of the world, or if those are sticky via unilateral moves to remove our trade barriers
  • UK-run pragmatic regulation to replace the EU’s intrusive single-market regulation of our whole economy
  • our net EU contribution and
  • the cost to the taxpayer of the subsidy paid to unskilled EU immigrants, which we estimate at £3,500 per adult.

MEP Molly Scott Cato (left, speaking in the European Parliament), who read Philosophy, Politics and Economics at Oxford, giving up her professorial chair at the University of Roehampton after election, says that Patrick Minford’s  modelling is based on the UK unilaterally removing all restrictions and tariffs and trying its luck in a global market. According to LSE economists who have analysed his work, this would mean a massive fall in wages and the “elimination” of UK manufacturing.

Minford views the EU as a costly protectionist club, but in reality, Scott Cato continues, the single market eases internal trade and reduces costs: “In the real world, proximity, common standards, and rapid movement of components matter, hence the importance of the customs union. UK manufacturing is largely foreign-owned and revolves around assembly of components manufactured elsewhere in the EU. Ironically, this makes it even more important that we stay in the customs union, to ease the passage of components across borders”. She ends:

“Minford’s work is indicative of the whole Brexit project: based on the illusion that the UK has some manifest destiny that allows us to stand alone in a globalised world. It is high time this phony economics was sent into retirement”.

 

 

 

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Brexit: moving away from globalisation towards self-reliance’  

Colin Hines draws attention to Green MEP Molly Scott Cato’s publication and launch of  a report by Victor Anderson and Rupert Read: Brexit and Trade Moving from Globalisation to Self-reliance’

Although it regrets our leaving the EU and wishes we wouldn’t, the report is written as an alternative approach assuming we are outside the EU.

Its Executive Summary states:This report puts on to the political agenda an option for Brexit which goes with the grain of widespread worries about globalisation, and argues for greater local, regional, and national self-sufficiency, reducing international trade and boosting import substitution”.

Hines continues: “As I am aware it is the first time a report from a politician isn’t clamouring to retain membership of the open border Single Market”

It details the need for an environmentally sustainable future involving constraints to trade and the rebuilding of local economies. Indeed the report actually calls for ‘Progressive Protectionism’ rather than a race to the bottom relationship with the EU – see page14:

Reducing dependence on international trade implies reducing both imports and exports. It is therefore very different from the traditional protectionism of seeking to limit imports whilst expanding exports. It should therefore meet with less hostility from other countries, as it has a very different aim from simply improving the UK’s balance of payments. It could be described as ‘progressive protectionism’, or ‘green protectionism’. X1V reference adds: ‘For detailed proposals on how this could and should be done, see http://progressiveprotectionism.com/wordpress/

Also ground-breaking in Green Party literature of late is its discussion of the arguments for and against managed migration.

Its sensitive handling of this contentious issue for many in the Greens does mark an important step forward and hopefully will help to start an internal debate about whether or not the party should reconsider its open borders approach.

This recent Daily Telegraph article with Iain Duncan Smith and Nigel Lawson frothing to get rid of key environmental regulations shows how impossible any green future will be under a hard Brexit.

Hines feels that we won’t leave the EU and central to that happening will be a realisation across Europe that to see off the extreme right they must manage internal migration and protect domestic jobs. At that point the reasons for supporting Brexit for most are no longer valid.

He ends: “This timely report makes a crucial input to this debate, one that will rage for the next two years”.

 

 

 

A realistic, grounded alternative politico-economic vision – 2

shaun-5Shaun Chamberlin, of the Fleming Policy Centre, Chelsea Green’s UK/Europe commissioning editor, responds to Hines: ‘Amen’. He continued: ‘This very much echoes my response to the interview question: What would David Fleming’s reaction to Brexit have been?” ‘

“I think David’s work articulates the far more positive, reasonable motives that many will have had for their vote—a desire for more accountable control, closer to home; recognition of the economic truth that unlimited movement of both people and capital does indeed drive down wages for the working class; and above all a desire to reclaim a clear identity—something that David describes as “the root condition for rational judgement”. If you don’t know who you are then how can you know what to do?

“A nation, after all, is a powerful root for identity, built through long association with a particular place and culture, which many generations have shaped and defended”.

As David writes, “if defeated, the nation often manages, eventually, to come back into being, with a sense of renewal and justice. It exists in the mind of its people.” And it gives an identifiable meaning to the sense of “we”, to a “national interest”. This, perhaps, is what the European Union was seen to be threatening—our sense of who we are—and why so many rejected it.

“But more than a route to understanding Brexit’s causes, I see Fleming’s work as a progressive, practical vision of what it could look like. If Brexit is the path we are taking, then we need to reclaim it from the xenophobes and racists who see the “Leave” vote as a vindication.

“Globalisation and neoliberalism are destroying our collective future, but they have also all-but-destroyed the present for many, as the neofeudalism termed ‘austerity’ continues to bite. The one common factor behind unexpected election results like Brexit, Trump and Corbyn may be desperate rejection of the establishment and the status quo—all the major parties supported “Remain” after all.

“It is important to remember that fascists like Mussolini and Hitler didn’t only consolidate power on the basis of lies and fear—they also raised wages, addressed unemployment and greatly improved working conditions. So if we are to avoid the slow drift into real fascism, we need to present an alternative politico-economic vision that can restore identity, pride and economic well-being. We need to tell a beautiful story of how we will make the future better for the desperate, rather than a fearful one. This is the story that Fleming’s books tell, and what inspired me to devote my past few years to bringing them to publication.

His seven-point protocol for an economics based in trust, loyalty and local diversity is, quite simply, the only realistic, grounded alternative I have seen to a future I have no desire to live through”.