Read more: Interview: Nicholas Soames—There’s no such thing as “Project Fear”
At times, radical action is the most prudent option. For Britain, leaving the European Union would be a safer course than staying in.
The vote on 23rd June to decide whether the United Kingdom should remain in the EU is the most important decision that the British people have faced in decades. Unfortunately, its significance is obscured by political gamesmanship, hysterical headlines and largely irrelevant assessments of short-term impacts.
Unless Britain votes to leave, the EU’s top-down governance by elites will be increasingly imposed on this country. The 21st-century world economy does not lend itself to the central planning and cozy relationships that are hallmarks of the European system. Within the EU, Britain is tied to a static economic system dominated by outdated social welfare structures and obsolete industries.
Of the larger EU member-states, Britain is the only one with a good shot at succeeding in the new world economy. This country has already set itself apart from the EU. We have a proven ability to attract talent and capital; we have a culture of entrepreneurship; we are open to talented immigration; our regulation is moderate; we have flexible labour markets; we have three of the world's top five universities; and we have a competitive tax system. As a result, we are a vital global hub.
However, future success is not a given. It is dependent on Britain maintaining distance from the EU. We do not have such power and influence to halt the long-term drive to greater integration. So far, the European elites have pursued this goal regardless of cost or public support.
Remaining in the EU will result in the same soul-destroying conformity and intractable social problems found in most member-states. While the claim that the French have no word for entrepreneur may not be true (or said by George W Bush), there are few innovators in the EU. If anything, Europe is attempting to isolate itself from coming changes in technology and business structures.
Forbes magazine recently published its annual list of the 100 most innovative companies in the world. Eight of the top ten are in the United States. One (ARM) is in Britain. The next highest ranked EU company is at 22 (Hermes, the French luxury goods company). Nor is the EU home to the world's technology giants (Apple, Google, Facebook, Samsung, Baidu to name just a few) or transportation pioneers (Uber, Tesla).
Read more on the EU referendum:
Europe divides the country into two tribes like no other issue
In praise of "Project Fear"
The end of sovereignty
The referendum is a choice between two irreconcilable visions of society; one fundamentally British and the other fundamentally European. The British vision rests on a conviction that decisions are best made by individuals or accountable representatives. The European vision rests on a conviction that decisions are best made by self-selected and unaccountable elites.
Of course, there are shades of grey. Britain has elites too, while the EU has a form of democracy. But the default positions of each vision are far apart. That difference is demonstrated by the elite's reaction to the rejection of the European Constitution in 2005. Effectively, they implemented it anyway.
Thus far, Britain has been able to bounce back and forth between these two visions. The 1970s were a nadir; there was stagflation—high inflation, high unemployment and low economic growth—and industrial action. In 1979, voters chose a leader to address this situation: Margaret Thatcher. But the power to make such changes is fading. If Britain votes to remain in the EU, the imposition of the European vision may prove irreversible.
Many Britons understandably find the prospect of leaving the EU frightening. At the moment, people, professions and businesses know where they stand. They are not sure what follows Brexit. Actually, the immediate impact of a vote to leave is likely to be immaterial.
There would be life outside the EU. Britain would remain in the WTO and other trade alliances. At the same time, we would be able to build both on the strength of London as a global financial capital and on its many links beyond Europe. True, Britain would need to conform to EU regulations when exporting to the EU. However, Britain needs to conform to US and Chinese regulations when trading with these countries. Canada conforms to the regulations of its chief trading partner, the US, while resolutely independent.
From 1960 to 1980, Britain saw a sharp reduction in the level of trade barriers. Since 1980, there has been little further advance. Partly this is because barriers on manufactured goods are already low. Partly this is because exports of services still face considerable trade barriers, not only outside the EU but also within it. For Britain, reducing barriers to services is critical. However, progress is halting within the EU on such liberalisation. The EU also does not have trade agreements with the largest trading nations: China, India, Japan and the US. In contrast, Singapore has agreements with all these countries (and one awaiting ratification with the EU). Britain will do better on its own.
A pro-Brexit vote may turn out to be as momentous as the decision made by the American colonies in 1775 to separate from Britain. There are many similarities. The American economy was closely intertwined with that of Britain. Many colonists worried about losing British markets. They also feared the wrath of the Crown. Today, some commentators fear that if Brexit occurs, Brussels will retaliate through bureaucratic means.
Read more on the EU referendum:
Brexit would not damage UK security
BME voters could swing the referendum—why is Remain neglecting them?
The environmental case for the EU
Before the 1770s, a break with Britain was unthinkable to the vast majority of Americans. There was growing concern over the authoritarian and intrusive nature of British governance, but the leaders of the colonies were level-headed gentry, farmers and merchants. They assumed an amicable resolution would be achieved through negotiation. America was not France. No overthrow was desired of the social order and none occurred.
It was only reluctantly and after considerable debate that many of the American colonists came to support a break. This had become apparent that the underlying vision of governance held by the Crown and its supporters was not subject to negotiation. This is true today with the EU. The underlying vision of the European elites is not going to change. Britain either accepts it as its future or goes its own way.
Another example from business casts a useful light on Brexit. For instance, Gordon Moore co-founded Intel in 1968 and built it into a company in which memory chips provided two thirds of revenues and almost all of profits. Yet in the 1980s he had the foresight to refocus the company on its nascent microprocessor operation. This action appeared high risk at the time, but it has proved to be the opposite. Intel's microprocessor business has thrived and it is one of the world's biggest tech companies.
There are eight main reasons why Britain should leave the EU.
First, as I have said, the stifling, top-down elite-led EU approach will come to dominate Britain. Britain cannot win the fight against conformity, and grinding and ineffective opposition is a terrible waste of energy. Rule by elites lies behind the loss of faith in the democratic process in many western countries. In America, it has fostered the rise of Trump. It does not work economically (slow growth, flat middle-class income, widening income disparity) or socially, with declining belief in institutions and commitment to shared values.
Second, there are irreconcilable differences between Britain's view of the role of the state in the economy and the Union’s. This difference dates back to the Enlightenment. England adopted a distinctly empirical approach that focused on what worked in practice, fostering a vibrant and innovative culture. In contrast, the continent embraced Cartesian certainty based upon theory alone, and rule by Plato-style “philosopher kings” which gives the state a leading role in regulating the economy.
Third, Brexit would decrease the cultural and economic North-South divide in Britain. The shift in focus away from Europe can only benefit the North. Brexit would provide a restorative tonic for the British politic.
Fourth, once clear of the EU, Britain will more easily be able to connect with the more vibrant economies outside the continent. We will be a successful bastion of our unique form of capitalism and free trade, stationed off a declining Europe.
Fifth, the EU poses the greatest threat to London’s position as the world’s professional services and financial centre. Should Britain stay in Europe, London will lose ground to non-EU cities as unsympathetic regulation and hostility undermines its competitiveness. Should Britain exit the EU, Frankfurt or Paris will not replace London as a world or even the European financial capital. They do not have the human capital, openness, infrastructure, regulatory experience, and cultural amenities offered by London.
In addition, nowhere else in Europe outside non-EU Switzerland offers wealth holders the security of a centuries-old safe haven. Many of the world’s wealthy look to London to protect their capital and this appeal will be enhanced by Brexit. It is difficult to imagine money fleeing to a Europe with a recent history of wealth confiscation (see the raid on uninsured savings in Cyprus) and arbitrary imposition of taxes, let alone a recent history of default (Greece) and upheaval.
Sixth, Brexit would enhance our security ties with the US. America’s disgust at the unwillingness of most members of the EU to spend money or effort for their own protection does not spill over to Britain. The US military looks to Britain as a true partner. As one example, the RAF and US air forces have worked closely together in many operations including in Iraq and Afghanistan. This partnership is assisted by officer exchanges, interoperability of equipment and communications, joint training exercises and a shared history spanning 100 years.
Seventh, Brexit removes the danger that the inherently unstable EU governance model will spill over to Britain. The European model of rule-by-elites may be initially efficient and even beneficial to a country. However, it inevitably degenerates until those in power primarily serve themselves. These leaders do not then yield power gracefully. Following civil war and regime changes in the 17th century, Britain learned to peacefully accommodate massive shifts to its governing order. Europe never did.
Over time in an unresponsive system, tensions build. Periods of seeming stability are followed by sudden upheaval. In the past, this often took the form of blood-soaked revolutions and repressions. In the 20th century, they took the form of horrific regimes, wars and destruction. The builders of post-war Europe determined to ensure that the continent never again experienced such horrors. However, the system they adopted is likely to ensure continued instability.
Eighth and finally, Brexit would increase accountability in the British government. Within the EU it is not clear who is in charge, with opaque layers of government offering endless opportunities for obfuscation and dissembling. With Brexit, once again it will be clear who is responsible for what.
Brexit will, of course, have potential losers. These include farmers who will be left without EU agricultural subsidies. It may include workers in industries dependent on exports to the EU. However, should we want to continue various subsidies or provide workers with assistance in the transition, discontinuing the British contribution to the EU budget—approximately £13bn a year—will make available ample funds.
Access to the single market and freedom of travel are attractive benefits of EU membership. There is a legitimate fear that Brussels bureaucrats will punish Britain out of spite and impose onerous restrictions. Balancing this, Britain’s trade deficit with the EU translates into over 1m high-paying jobs in Germany alone. National leaders, who need to face their electorates, may be less inclined to support spiteful actions.
There is overwhelming consensus among economists that Britain must stay in the EU. But then, a consensus of economists supported Britain joining the euro. More recently, economists failed to predict the crash in 2008, the slowness of the recovery and the euro crisis. With a few notable exceptions such as Alan Budd, they have inaccurately predicted economic trends and the impact of monetary and fiscal policy.
The opinions of large business associations are no better. These associations almost always support the interests of established large companies that are not overall generators of new jobs or growth. They do not represent the views of the thousands of smaller and growing businesses that represent the economic future of Britain rather than its past.
The future is Britain's to lose.
If we adopt protectionism, expand crony capitalism and limit competition. If we impose high regulatory and tax burdens. If we close our borders to talented immigrants. If we fail to strengthen our ties to the dynamic economies outside Europe. If we let our ties to America and to the old Commonwealth atrophy. Then, we will not become a world hub and a vibrant participant in the new economy. Then, we will not realise the economic opportunities from Brexit.
If we fail to adhere to our very British values of compassion, decency, fairness, integrity, democracy and rule of law (values that for centuries have lit the world). Then, the glue that binds us together as a people will weaken. Then, support for capitalism will be undermined.
Britain is tied to an anchor in the shape of the EU. It is time for us to sever the cable.
Now read: What are the chances of a Frexit?
At times, radical action is the most prudent option. For Britain, leaving the European Union would be a safer course than staying in.
The vote on 23rd June to decide whether the United Kingdom should remain in the EU is the most important decision that the British people have faced in decades. Unfortunately, its significance is obscured by political gamesmanship, hysterical headlines and largely irrelevant assessments of short-term impacts.
Unless Britain votes to leave, the EU’s top-down governance by elites will be increasingly imposed on this country. The 21st-century world economy does not lend itself to the central planning and cozy relationships that are hallmarks of the European system. Within the EU, Britain is tied to a static economic system dominated by outdated social welfare structures and obsolete industries.
Of the larger EU member-states, Britain is the only one with a good shot at succeeding in the new world economy. This country has already set itself apart from the EU. We have a proven ability to attract talent and capital; we have a culture of entrepreneurship; we are open to talented immigration; our regulation is moderate; we have flexible labour markets; we have three of the world's top five universities; and we have a competitive tax system. As a result, we are a vital global hub.
However, future success is not a given. It is dependent on Britain maintaining distance from the EU. We do not have such power and influence to halt the long-term drive to greater integration. So far, the European elites have pursued this goal regardless of cost or public support.
Remaining in the EU will result in the same soul-destroying conformity and intractable social problems found in most member-states. While the claim that the French have no word for entrepreneur may not be true (or said by George W Bush), there are few innovators in the EU. If anything, Europe is attempting to isolate itself from coming changes in technology and business structures.
Forbes magazine recently published its annual list of the 100 most innovative companies in the world. Eight of the top ten are in the United States. One (ARM) is in Britain. The next highest ranked EU company is at 22 (Hermes, the French luxury goods company). Nor is the EU home to the world's technology giants (Apple, Google, Facebook, Samsung, Baidu to name just a few) or transportation pioneers (Uber, Tesla).
Read more on the EU referendum:
Europe divides the country into two tribes like no other issue
In praise of "Project Fear"
The end of sovereignty
The referendum is a choice between two irreconcilable visions of society; one fundamentally British and the other fundamentally European. The British vision rests on a conviction that decisions are best made by individuals or accountable representatives. The European vision rests on a conviction that decisions are best made by self-selected and unaccountable elites.
Of course, there are shades of grey. Britain has elites too, while the EU has a form of democracy. But the default positions of each vision are far apart. That difference is demonstrated by the elite's reaction to the rejection of the European Constitution in 2005. Effectively, they implemented it anyway.
Thus far, Britain has been able to bounce back and forth between these two visions. The 1970s were a nadir; there was stagflation—high inflation, high unemployment and low economic growth—and industrial action. In 1979, voters chose a leader to address this situation: Margaret Thatcher. But the power to make such changes is fading. If Britain votes to remain in the EU, the imposition of the European vision may prove irreversible.
Many Britons understandably find the prospect of leaving the EU frightening. At the moment, people, professions and businesses know where they stand. They are not sure what follows Brexit. Actually, the immediate impact of a vote to leave is likely to be immaterial.
There would be life outside the EU. Britain would remain in the WTO and other trade alliances. At the same time, we would be able to build both on the strength of London as a global financial capital and on its many links beyond Europe. True, Britain would need to conform to EU regulations when exporting to the EU. However, Britain needs to conform to US and Chinese regulations when trading with these countries. Canada conforms to the regulations of its chief trading partner, the US, while resolutely independent.
From 1960 to 1980, Britain saw a sharp reduction in the level of trade barriers. Since 1980, there has been little further advance. Partly this is because barriers on manufactured goods are already low. Partly this is because exports of services still face considerable trade barriers, not only outside the EU but also within it. For Britain, reducing barriers to services is critical. However, progress is halting within the EU on such liberalisation. The EU also does not have trade agreements with the largest trading nations: China, India, Japan and the US. In contrast, Singapore has agreements with all these countries (and one awaiting ratification with the EU). Britain will do better on its own.
A pro-Brexit vote may turn out to be as momentous as the decision made by the American colonies in 1775 to separate from Britain. There are many similarities. The American economy was closely intertwined with that of Britain. Many colonists worried about losing British markets. They also feared the wrath of the Crown. Today, some commentators fear that if Brexit occurs, Brussels will retaliate through bureaucratic means.
Read more on the EU referendum:
Brexit would not damage UK security
BME voters could swing the referendum—why is Remain neglecting them?
The environmental case for the EU
Before the 1770s, a break with Britain was unthinkable to the vast majority of Americans. There was growing concern over the authoritarian and intrusive nature of British governance, but the leaders of the colonies were level-headed gentry, farmers and merchants. They assumed an amicable resolution would be achieved through negotiation. America was not France. No overthrow was desired of the social order and none occurred.
It was only reluctantly and after considerable debate that many of the American colonists came to support a break. This had become apparent that the underlying vision of governance held by the Crown and its supporters was not subject to negotiation. This is true today with the EU. The underlying vision of the European elites is not going to change. Britain either accepts it as its future or goes its own way.
Another example from business casts a useful light on Brexit. For instance, Gordon Moore co-founded Intel in 1968 and built it into a company in which memory chips provided two thirds of revenues and almost all of profits. Yet in the 1980s he had the foresight to refocus the company on its nascent microprocessor operation. This action appeared high risk at the time, but it has proved to be the opposite. Intel's microprocessor business has thrived and it is one of the world's biggest tech companies.
There are eight main reasons why Britain should leave the EU.
First, as I have said, the stifling, top-down elite-led EU approach will come to dominate Britain. Britain cannot win the fight against conformity, and grinding and ineffective opposition is a terrible waste of energy. Rule by elites lies behind the loss of faith in the democratic process in many western countries. In America, it has fostered the rise of Trump. It does not work economically (slow growth, flat middle-class income, widening income disparity) or socially, with declining belief in institutions and commitment to shared values.
Second, there are irreconcilable differences between Britain's view of the role of the state in the economy and the Union’s. This difference dates back to the Enlightenment. England adopted a distinctly empirical approach that focused on what worked in practice, fostering a vibrant and innovative culture. In contrast, the continent embraced Cartesian certainty based upon theory alone, and rule by Plato-style “philosopher kings” which gives the state a leading role in regulating the economy.
Third, Brexit would decrease the cultural and economic North-South divide in Britain. The shift in focus away from Europe can only benefit the North. Brexit would provide a restorative tonic for the British politic.
Fourth, once clear of the EU, Britain will more easily be able to connect with the more vibrant economies outside the continent. We will be a successful bastion of our unique form of capitalism and free trade, stationed off a declining Europe.
Fifth, the EU poses the greatest threat to London’s position as the world’s professional services and financial centre. Should Britain stay in Europe, London will lose ground to non-EU cities as unsympathetic regulation and hostility undermines its competitiveness. Should Britain exit the EU, Frankfurt or Paris will not replace London as a world or even the European financial capital. They do not have the human capital, openness, infrastructure, regulatory experience, and cultural amenities offered by London.
In addition, nowhere else in Europe outside non-EU Switzerland offers wealth holders the security of a centuries-old safe haven. Many of the world’s wealthy look to London to protect their capital and this appeal will be enhanced by Brexit. It is difficult to imagine money fleeing to a Europe with a recent history of wealth confiscation (see the raid on uninsured savings in Cyprus) and arbitrary imposition of taxes, let alone a recent history of default (Greece) and upheaval.
Sixth, Brexit would enhance our security ties with the US. America’s disgust at the unwillingness of most members of the EU to spend money or effort for their own protection does not spill over to Britain. The US military looks to Britain as a true partner. As one example, the RAF and US air forces have worked closely together in many operations including in Iraq and Afghanistan. This partnership is assisted by officer exchanges, interoperability of equipment and communications, joint training exercises and a shared history spanning 100 years.
Seventh, Brexit removes the danger that the inherently unstable EU governance model will spill over to Britain. The European model of rule-by-elites may be initially efficient and even beneficial to a country. However, it inevitably degenerates until those in power primarily serve themselves. These leaders do not then yield power gracefully. Following civil war and regime changes in the 17th century, Britain learned to peacefully accommodate massive shifts to its governing order. Europe never did.
Over time in an unresponsive system, tensions build. Periods of seeming stability are followed by sudden upheaval. In the past, this often took the form of blood-soaked revolutions and repressions. In the 20th century, they took the form of horrific regimes, wars and destruction. The builders of post-war Europe determined to ensure that the continent never again experienced such horrors. However, the system they adopted is likely to ensure continued instability.
Eighth and finally, Brexit would increase accountability in the British government. Within the EU it is not clear who is in charge, with opaque layers of government offering endless opportunities for obfuscation and dissembling. With Brexit, once again it will be clear who is responsible for what.
Brexit will, of course, have potential losers. These include farmers who will be left without EU agricultural subsidies. It may include workers in industries dependent on exports to the EU. However, should we want to continue various subsidies or provide workers with assistance in the transition, discontinuing the British contribution to the EU budget—approximately £13bn a year—will make available ample funds.
Access to the single market and freedom of travel are attractive benefits of EU membership. There is a legitimate fear that Brussels bureaucrats will punish Britain out of spite and impose onerous restrictions. Balancing this, Britain’s trade deficit with the EU translates into over 1m high-paying jobs in Germany alone. National leaders, who need to face their electorates, may be less inclined to support spiteful actions.
There is overwhelming consensus among economists that Britain must stay in the EU. But then, a consensus of economists supported Britain joining the euro. More recently, economists failed to predict the crash in 2008, the slowness of the recovery and the euro crisis. With a few notable exceptions such as Alan Budd, they have inaccurately predicted economic trends and the impact of monetary and fiscal policy.
The opinions of large business associations are no better. These associations almost always support the interests of established large companies that are not overall generators of new jobs or growth. They do not represent the views of the thousands of smaller and growing businesses that represent the economic future of Britain rather than its past.
The future is Britain's to lose.
If we adopt protectionism, expand crony capitalism and limit competition. If we impose high regulatory and tax burdens. If we close our borders to talented immigrants. If we fail to strengthen our ties to the dynamic economies outside Europe. If we let our ties to America and to the old Commonwealth atrophy. Then, we will not become a world hub and a vibrant participant in the new economy. Then, we will not realise the economic opportunities from Brexit.
If we fail to adhere to our very British values of compassion, decency, fairness, integrity, democracy and rule of law (values that for centuries have lit the world). Then, the glue that binds us together as a people will weaken. Then, support for capitalism will be undermined.
Britain is tied to an anchor in the shape of the EU. It is time for us to sever the cable.
Now read: What are the chances of a Frexit?
