Thursday, June 30, 2016

Don't let a good disaster go to waste

(Edit: This is easily the most thoughtful analysis I've seen of Brexit. Summary: yes it's bad, but not nearly as bad as it's made out.)

Last week, as you may have heard, my country got voted out from under me. ("My country" in this context being, of course, Europe.) I wonder if this is how the Serbs felt, all those years ago.

I wasn't present to witness the campaign on either side, but nothing I have seen of it leads me to believe that any sort of rational thought went into that vote - on either side. Neither Leavers nor Remainers made the slightest attempt to explain the issues soberly, they both went straight for the id. It was pure - instinct. The instinct of people who have spent their whole lives being protected from their own instincts, because that's what modern civilisation does.

But second-guessing the result is a mug's game. Lots of things could have been changed. If the Greeks had been forced out of the euro, if the French had been a bit more competent at policing (and protecting) their own immigrants, if the Germans had been just a little less high-handed in their treatment of everyone else in the HRE - sorry, I mean EU - if the Irish had managed their own banks better, if the Labour Party hadn't adopted its insane "democratic" leadership election process, if Nick Clegg hadn't made that stupid pledge about tuition fees in the first place...

But they did. And there's no point guessing what might be going on in a thousand parallel universes where history was a little different, because there's only one that we get to live in. There was a vote, and it went the way it did. Everything else is so much applesauce.

So let's at least try to be constructive. What should happen now?

Well, first of all, there's the position of the 3 million-odd non-UK EU nationals currently living in the UK. They should be guaranteed a place for life. Every single one of them, without exceptions, right up to and including the mass murderers among them, should be allowed to remain in the UK just as long as they want to, and to come and go as they please, forever. Anything else would be so unjust, it would bring lasting shame and well-deserved vitriol on the whole country.

Then there's the however-many non-EU immigrants. It would be odd if, having just voted out of the EU, the country's first independent act was to discriminate in favour of EU citizens at the expense of other potential partners and allies. So they'll be staying, too.

There's all the EU red tape about consumer products. This is, of course, already built into UK law, and I heartily recommend that the UK adopts the same policy as New Zealand does toward Australia - viz, if something meets Australian product standards, it can also be sold in NZ with no further paperwork required. (The Australians, in turn, also accept EU or US certification and testing.) However, this doesn't have to be reciprocal. That would mean you could sell things in the UK that would not be legal in the EU.

This could, of course, be a very bad thing. But it's just as likely to be beneficial. A lot depends on the next government's attitude to consumer protection.

Manufacturing that's required to be inside the EU will move. Let's make no bones about it - that will be a disaster for many areas, e.g. Sunderland, whose early declaration was so foreboding on the night. There will be a huge temptation for the next government to move heaven and earth (i.e. pay out ungodly sums of money) to prevent this, but it would be a catastrophic mistake to give in to that pressure. Instead, they should pay out some of that money to people who are willing to set up new enterprises to employ people outside the EU. (And not just "manufacturing", either. Don't be dogmatic about what sort of industry it should be. A job is a job.)

Presumably, EU R&D programmes will no longer be portioned out to the UK. I'm pretty sure most UK researchers will see this as an unmitigated disaster. It's natural to see "disaster" when the assumptions that you've based your career on are changed. Natural - but not rational. In those areas where British researchers and departments are among the best, the Europeans would be fools to exclude them. Where they're not, they're fools now to include them, and I think that might go some way to explain the glacial pace of EU R&D over the past 40 years. Academically and intellectually, I think Britain could be better off out than in - IF, and it's a honking big "IF", the best minds don't get swept away in the current tide of anti-intellectualism and ideological hysteria.

And the City of London will lose much of its current business. Again, what can't be cured must be endured. Worst case, this might result in a massive recession in the British banking sector. Or to look at it another way - the beginning of the much-longed-for redistribution of wealth away from the top 0.1%, and the long overdue decline of house prices in southeast England.

So cheer up, Remainers. Whatever you did to win the vote it wasn't enough, so now you've got a lot more work to do in the aftermath. One thing I'm sure of - that if you spend your energy now on denial, recriminations and fantasies of fleeing the country, the UK is screwed. Because those same people who voted it out will be running it.

Monday, June 27, 2016

Shock and ow

Exchange of texts between me and my sister-in-law, on Friday:

Sarah: What's your thoughts on England leaving EU? And do you think the other countries will allow it? (hope you're not impacted by the currency fall)

Me: I am quite a lot affected by the currency fall, but that's life. It's a scary thing, leaving the EU. The bright side is that the shock might just possibly be enough to inspire the EU to reform itself a little. The downside is World War 3. Some of the Brexit leaders have been saying some very stupid things about doing deals with Russia, and if anything could provoke a full-scale European war, that's it. It worked a treat the last time we tried it.

Sarah: Do you think England will become stronger for exiting?

Me: Hell no. Well, not economically or politically. Maybe culturally, because chaos is always creative.

Sarah: Strange turn of events then. Why do they want to leave?

Me: Because - apparently - there's only so long you can go on treating people as idiots. Even if they clearly *are* idiots. Even idiots have their pride.

Tuesday, June 21, 2016

Shake it all about

At one point last week, my favourite referendum pollster was projecting a 48.5% Leave vote. That is, as the Duke of Wellington might have put it, a damned nice thing.

Today the odds have slipped back to 46.5%. Which is still closer than it was last month.

Now, we know there is tendency for polling margins to narrow, as major votes approach. I don't know how well studied or documented this is, but I'm reasonably sure it always happens. Landslides are no fun, and more importantly, they don't make for good copy. As a vote approaches, journalists will do whatever is necessary - including commissioning as many spurious polls as necessary - to make both sides believe the margin is much closer than it is. (Which is why both of Obama's elections were billed in advance as "too close to call", even though, by electoral college rules, they were never in much doubt.)

Even politically, it makes sense. A side that thinks it's losing will keep changing its strategy, finding new avenues, until it finds something that improves its standing. Whereas the top dogs will just keep doing what they "know" works - until they feel threatened, at which point they'll get a bit bolder, and the gap will likely widen again slightly.

(There must be some way to make a profit from this rule. If only Ladbrokes had a mechanism for placing a bet, then 'trading it in' later when the odds change - but I doubt if they do, because it'd be too open to abuse and corruption. You need to be a banker to get away with that sort of thing, bookies are too closely watched. But if anyone knows a practicable way to do it, please do tell.)

I must confess - if I had a vote at all, I'd be increasingly tempted to vote 'leave'.

Not because I think the UK or its people would be "better off", for any material definition of "better". Anyone who thinks the UK would be richer, or freer, or better run outside the EU is someone who simply hasn't been paying attention, this past quarter-century. No, the only sane and rational reason to vote "leave" is if you believe it would lead to the breakup of the European Union itself.

Why would you want that?

Much as Niq argued about Scotland leaving the UK - the EU is broken. The UK actually does pretty well out of it - those really suffering are the Mediterranean countries. The Greeks, Italians, Spanish and Cypriots are looking at youth unemployment rates well over 30%, and the Germans have made it very clear that they're not taking any nonsense about "democracy" from those countries - they are governed by bankers, until such time as German voters decide to let them go.

And they've made it just as clear to Britain - that even without the financial stranglehold they have over the Med, they won't put up with any wandering from their prescribed policy. "Stay in the EU", their message has been, "and you will play by our rules. Leave, and we will do everything in our power to punish you. Moreover, we regard your 'democratic process' as a pistol to our head, and we will not negotiate under such terms." (Working out the terms under which they would be willing to negotiate is an exercise for - who, exactly?)

This cavalier attitude to democracy is bad enough within Europe, but outside its borders it becomes positively dangerous. We've all seen the disastrous consequences of EU meddling in Ukraine and Georgia; and if the Baltic States survive, it will be thanks to a sterner stance by NATO, nothing to do with the EU. (In fact, here's a prediction: if Trump wins the US presidency, at least one of Estonia, Latvia or Lithuania will be overrun by the Russians within four years.)

Game theory teaches us that "playing nice" is a good strategy, only as long as the other players hold to it too. If you carry on being nice when they play dirty, you get screwed. Of course there is a price to be paid for breaking the tacit agreement, even if the other side has already broken it first; but if you show you're not willing to pay that price, you can expect to go on being screwed until you are. I have personal experience of this dilemma. I voted "out" then.

If you're in Britain this week: voting "out" will certainly cost you. Probably, a lot. (There will be people who will come out of it better off - but believe me, those are people who've laid their plans and invested their money and made their friends accordingly. In short, they're Not You.) But that doesn't necessarily mean it's the wrong thing to do.