Resist, rebel, and remain: the nation deserves and demands a second chance – John Van Reenen

MIT Sloan Professor John Van Reenen

From Vox

Members of Parliament will vote on Prime Minister’s Theresa May’s Brexit deal to on 11 December. Without hesitation, they should vote it down.

More and more people have realised that Brexit was built on a fantasy that we could keep all the benefits of being in the European club without paying any of the membership fees – what leading Brexiter Boris Johnson called the ‘Have Your Cake and Eat It Strategy’. Well, it turns out that having a cake after you have already eaten it once is not so tasty after all. Theresa May has brought back an unpalatable deal that no one likes because it crystallises the reality of what leaving the European Union (EU) actually means. To get easy access to European markets you have to play by the rules of the club – and once a country leaves the club, it no longer gets a vote on what those rules are. So much for taking back control.

The argument for remaining in the EU is fundamentally moral and political, not economic. However, it is important for lawmakers to know that Brexit will make their constituents poorer. Whereas the wealthier can ride this out, it is families on middle incomes and the less well off who will feel the financial pain most sharply. The economics of Brexit are very simple. Being outside the EU inevitably means higher costs of doing business with our nearest neighbours – so there will be less trade, and less trade will make us poorer. The more distant a relationship we have with the EU, the bigger will be our pay cut. This will be hugely painful if there is a disorderly ‘No Deal’; it will hurt to a lesser degree with a softer approach. The formal amounts that the UK pays into the EU disappear in the rounding error compared with these economic losses. (The section at the end of this blog goes into the gory economic details for the truly dedicated reader).

Oh, why EU?

The EU was born from the carnage of the Second World War and has cemented together 28 fractious nations in our troubled part of the world. For thousands of years, European tribes were killing each other in war after war ending in the bloodbath of the first half of the twentieth century. Cooperation within the EU has meant that the fights are now over fishing quotas rather than in battlefields. The challenges facing the human race today require the same spirit of cooperation – on climate change, terrorism and mass migration. These are global problems that cannot be seriously tackled by the UK in glorious isolation – a nation with under 1% of the world’s population (and shrinking).

It has now been well over two years since the EU referendum and the political tectonic plates of the world have shifted. President Trump is the cheerleader of a crude nationalism that reflexively blames all ills on foreigners. His solution is to build higher walls and wreck international agreements. Political bosses in Brazil, Hungary, the Philippines and Russia are stomping their boots to the same beat. They and their cronies are actively undermining global cooperation on climate, trade and terror. This rising tsunami of bile manifests itself differently in different countries, but in the UK, its name is Brexit.

It is our duty to fight against it with all our might.

A plague on pragmatism

The British people are usually a pragmatic bunch. Many pro-Remain MPs may be tempted to support May’s paltry deal fearing that the alternative is a disruptive No Deal, which would be much worse. But the risk of this is low – if Parliament votes the current deal down, Article 50 can be put on hold. This will then create an opportunity for a coalition of MPs to pass legislation for a People’s Vote – a new referendum where the choice is May’s deal, No Deal or remaining in the EU.

I believe that Remain will win this vote. But even if it does not, it is the right democratic course of action. We do not hold an election and then have an eternal dictator. Leavers voted for Brexit because it meant a myriad of different things to different people. Now we have the concrete alternatives, it is right that citizens have the choice to decide whether this is really what they want to bequeath to their children and grandchildren.

Read the full post at Vox

John Van Reenen is the Gordon Y Billard Professor in Management and Economics and is jointly appointed as Professor of Applied Economics at the MIT Sloan School of Management and in the Department of Economics. 

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