A private opinion on Brexit

posted in: Politics | 0
Flags of the United Kingdom and the European Union being cut apart with a pair of scissors.

This week, Cambridge Judge Business School hosted a lecture by Professor Hans-Werner Sinn of Munich University, in which he proposed a creative solution that might – just might – persuade some Britons that leaving the European Union isn’t necessary after all.

Professor Sinn’s idea focuses on sharing of costs for immigrants within the EU: people moving from one EU country to another would be partially supported for a while by the social security system of the country they are coming from, rather than the new host country. This would address one of the arguments Brexit supporters voiced during the 2016 referendum: that the immigration to the UK of many tens of thousands of EU citizens posed an unfair burden on UK public services.

Professor Sinn also pointed out that Europe as well will suffer heavily from Brexit (as the UK certainly will). The loss in value of the pound after Brexit may help to reduce the economic imbalance between financial industries in London and other sectors in the rest of the country – although forecasts suggest that the gain will at best take a whole generation and is unlikely to make up for the loss.

Like Professor Sinn, I am an academic and not a politician. Yet as a foreigner who has been living in the UK for eight years after having observed business and politics in multiple countries (the US, Germany, France, Singapore and Sweden) over 25 years, the Brexit debate in Britain has struck me by its lack of creativity in seeking solutions that address public – rather than purely political – concerns.

Let’s take inequality: It’s clearly no coincidence that the vote for Brexit (like the 2016 election of Donald Trump) reflected a divide between wealthy urban areas and less-well-off parts of the country. Yet despite all the right words from Prime Minister Theresa May when she took office after the Brexit vote, there has been little public debate since on inequality – and a creative discussion on this issue might just yield solutions that would allow people living outside Greater London to understand what they gain from being in the EU.

There also has been precious little debate on another crucial issue stemming from Brexit – the role of a united (or not) Europe in having a seat at the table of world politics, where decisions will be made in the next two decades about the distribution of economic benefits of new technologies and the burdens of countering global warming and managing global migration.

I’m convinced that Brexit will mute the British voice (a belief in the weight of the UK as a historical superpower has been debunked by heads of multiple countries, including from the Commonwealth), as well as the voice of Europe. The voices that matter will instead be the superpowers and some representation of developing powers. Throwing influence away because of an overestimation of one’s own influence is unwise.

I happen to share many of the views voiced by opponents of Brexit, which I do not need to elaborate here: the UK has heavily benefited from EU membership, not least by being the English-speaking gateway to a broader Europe; the “loss of sovereignty” cited by Brexiteers is often a complaint about bureaucracy that exists in every national and local jurisdiction; and it’s naïve to believe that other countries will line up to give the UK favourable trading conditions.

Yet I hear the voices of those who say: “But nothing bad has happened yet!” This is like a person who jumps out of a window on the 34th floor and says after two seconds: “But this is not so bad after all!” Which in the case of Brexit is not even true, as businesses are relocating, supply chains are being rerouted, and economic damage is playing out before our very eyes in a way that is not easily reversible. And the people who will be hurt the most are not those living around Greater London, but rather those living in places that were struggling already, as jobs are lost and communities suffer.

As the Westminster endgame nears this month (or so we are told), let’s hope that everyone can at least get beyond petty party political games to ensure a constructive and orderly exit if in fact exit is the unfortunate result – as that would be preferable to chaos. Professor Sinn humbly told his Cambridge audience that he has learned to separate proposals from predictions, suggesting, in effect, that bold and sensible solutions often fail due to timid and narrow-minded politics. At this late date in the Brexit process, let’s hope the politicians can finally prove him wrong.

This blog post reflects the private opinions of Christoph Loch rather than the view of Cambridge Judge Business School or the University of Cambridge.