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July 01st 2016 print

Peter Smith

Brexit Ain’t Necessarily Exit

Expect the Labour Party under a new leader to oppose Brexit, despite the popular vote. At question is whether the new leader of the Conservative Party will manage to unite Conservative MPs  into ratifying the popular vote. Now that Boris Johnson is out of the race

up marketI see markets rebounded from their funk at the temerity of the British people to vote for Brexit. There is no deep explanation required. The people and institutions involved in swinging markets on a daily basis are complete know-nothings, like the rest of us. They had overbought on an expectation of a market bounce once the UK had voted to stay in the EU. They then had to square their positions by selling once reality hit. And, as is the way with markets, selling begets selling. Overshooting on both the up and downsides is commonplace. It can be explained by human psychology or by the setting of computer trading programs. Take your pick; both are right.

What I find interesting is the way reactions to irrelevant market perturbations or the pronouncement of self-interested corporate leaders are taken to be instructive commentaries on world affairs. The decision taken by the British people is about the character of the life of a nation as it evolves. What happens in the next five minutes or the next few years is largely by the way.

Netanyahu put it well when speaking at the UN about the nuclear deal with Iran, in which most restrictions on Iran are lifted after ten years. “A decade may seem like a long time in political life, but it’s the blink of an eye in the life of a nation.” It would be unfortunate if the worst happened and the UK experienced a recession because of Brexit, but exactly what effect would that have on life in the UK in 2030? None is the answer.

I like to think that those who voted to leave the EU had in their mind what kind of country they wanted to their children, grandchildren and great-grandchildren to live in. Certainly, as someone who was English-born, my support for Brexit was about the very long run. I do not hold any lower expectations for the mindsets of the vast majority of those who voted to leave. I don’t think it was about a migrant taking their particular job or taking their particular place in a hospital queue. I think it was borne of patriotism. Patriotism is essentially about the long run; not what is good for the next five minutes.

This brings me to the young and old. The young predominantly voted to stay, the old to leave. I have noticed something about the young now that I am in the older category. They tend to put greater emphasis on the present than on the past or future. I suppose this is because the present is the key to their future. As you get older and have less and less personal future to worry about you develop, I think, a broader perspective on time both backwards and forwards.

Some young people who voted to stay have accused older people of being selfish in voting to leave. This seems to me to be the kind of naïve reaction that the old expect the young to come up with. They didn’t disappoint. In fact, the only evident selfishness on display was on the part of those people who were prepared to put their country’s interests behind their own personal aspirations, which they felt would be adversely affected by the UK’s exit from the EU. I am not delegitimizing this rationale for voting to stay, but nor should it be lauded. At the same time, laudable or not, perceived self-interest should never be underestimated.

As I warned in my previous piece on Brexit, the fight to leave the EU has just begun. The elite business and political empire is striking back. Politicians of various hues are extolling the supremacy of parliament over the opinion of the unwashed. Petitions and demonstrations are afoot. It will go on.

I expect the Labour Party under a new leader to oppose Brexit, despite the popular vote. The surviving rump of the Liberal Democrats plus the Scottish Nationalists will vote against Brexit. At question is whether the new leader of the Conservative Party will manage to unite Conservative MPs (many of whom opposed Brexit) into ratifying the popular vote.

Now that Boris Johnson is out of the race; perversely, perhaps, the two candidates who opposed Brexit, Theresa May and Stephen Crabb, might have more chance of persuading their colleagues to stay the course than the three — Michael Gove, Liam Fox and Andrea Leadsom — who supported it. And I don’t want to be sexist, but Theresa May might have an eye to Margaret Thatcher and be the toughest of the two candidates for fear of looking weak by comparison. But, whoever becomes PM, will the UK be out of the EU in two and bit years’ time? My guess, and it is just a guess, is no.

It might be a close run thing, but I tend to think both the UK and Europe will give ground over the next few months. Too many people of power and influence have a vested self-interest in the status quo or something close enough to it. A compromise might well be struck to give the UK more control over border movements, maybe final authority in legal action related to national security, and other bits and pieces. This would provide a rationale for parliament to overturn Brexit. Nixon’s gloss on the defeat in Vietnam — “Peace with Honor” — might be apropos in, say, six to nine months’ time. Could be wrong of course; pessimism is characteristic of aging, which older people call realism.

Peter Smith, a frequent Quadrant Online contributor, is the author of Bad Economics

Comments [11]

  1. Jody says:

    Years ago my accountant said to me, “most of the people I see across my desk make decisions for the present and this moment without any regard for the future”.

  2. Tezza says:

    On the topic of the old allegedly disregarding the interests of the young, Judith Sloan reports the interesting turnout figures: only 36% of those 18-24 bothered to vote, compared to 83% of those over 65. Not until about age 35 plus did age-specific turnout approximate the nation-wide turnout.

    http://catallaxyfiles.com/2016/06/26/if-it-meant-so-much-to-the-younguns/

    According to James Dellingpole, Theresa May is hopeless.

    • Lawrie Ayres says:

      I have been keeping tabs on Jame’s opinion of Teresa for years now. Theresa is a left winger in love with wind farms and obviously of the elite. She will be a disaster and the Tories will regret the day she becomes PM as they will lose the support of the Conservative side of their party.She could well lose the next election by ignoring her base just as Cameron was given a shock. Turnbull is going to fiond out how many of the base he peed off tomorrow.Luckily for him the alternative is horrendous.

      • Peter says:

        Want to say that I have no fondness for the views of TM on climate or on her silly “Islam is a religion of peace” narrative. Just think she might have best chance of unifying Conservative MPs and getting the UK out of Europe; noting that it’s hard to find a British MP who doesn’t believe in GW or that Islam is a religion of peace. Could of course be quite wrong (and probably am).

    • gardner.peter.d says:

      As I pointed out to shocked friends on Facebook, actually the majority of older generations have families they love and for whose futures they care very much. One has to ask what is it about the Young Remainers that makes them think their own parents and grand parents are so totally selfish?

      As for removing the vote from people over 65 my reply was simple: start a petition on the Parliament website if that’s what you want to disenfranchise at age 60 everyone currently under 30.

  3. I would add a few points in my take on the Brexit debate. To mind there was more to it than just that under the voluntary voting system that applies in the UK that fewer younger people voted than did the older and more dis-affected and patriotic and conservative types. To me the BREXIT vote was simply a statement by the people of the UK that it is NOT necessary to give up political sovereignty to a bunch of centralised bureaucrats in order to benefit from free trade. Free trade/capitalism is the ONLY way to raise everybody’s standard of living and it functions best in the absence of centralised bureaucrats whether they be in Brussels or Canberra.
    A detailed look at the BREXIT voting ‘map’ was very revealing. The wealth consuming areas such as Scotland, Northern Ireland and the big city areas of the midlands wanted to remain on the bureaucratic EU gravy train, as did the wealth manipulating Goldman-Sachs types and bureaucrats in London. The wealth producing areas of the rest of the UK – rural and small city England and Wales – wanted to leave the EU. We have the same situation here, very few of the GREEN and Labor voters and even many of the Turnbull trendy type LNP people and ABC viewers [i.e. the Inner City elites] live in the wealth producing areas, but are concentrated in the big cities.

    • Lawrie Ayres says:

      Very astute observation. Wealth creators here are often pilloried by the left, think miners like Gina Rhinehart. The current “in” crowd are universally in the parasite class who live off their hosts whilst trying to kill it. If the host dies so do the parasites but they are too stupid to realise that simple fact.

      • ianl says:

        > If the host dies so do the parasites but they are too stupid to realise that simple fact

        Well, perhaps, but what they *really* think is that there is an inexhaustable supply of hosts …the parasitism can just go on indefinitely. I think they may be right. Certainly the majority of hosts seem never stop “hosting” till the end.

  4. Antony says:

    Remember the Eagles song, Hotel California:

    Mirrors on the ceiling,
    The pink champagne on ice
    And she said “We are all just prisoners here, of our own device”
    And in the master’s chambers,
    They gathered for the feast
    They stab it with their steely knives,
    But they just can’t kill the beast.

    Last thing I remember, I was
    Running for the door
    I had to find the passage back
    To the place I was before
    “Relax,” said the night man,
    “We are programmed to receive.
    You can check-out any time you like,
    But you can never leave!”

    Official video: https://www.youtube.com/watch?v=lrfhf1Gv4Tw)

  5. gardner.peter.d says:

    Knowing Cameron to be a useless bend-over-backwards negotiator, it was my view before the General election that if Cameron became PM he should gain some back-bone by holding two referenda: the first exit now or stay on condition of primacy being given to British law in all matters and national vetoes being restored in full to pre-Lisbon status; the second, after the renegotiation to accept the new deal (in the form of draft treaty changes agreed by all 28 member states) or exit. Once he plumped for renegotiation prior to a referendum, it was too late and he he had neither bargaining strength nor competence as a negotiator – undermining himself by his arrogance, bloated self-belief and being an EU-phile to his very core. It wasn’t a negotiation at all but a joint plan to stitch up UK.

    Cameron’s leading Project Fear with Chancellor Osborne close behind or sometimes in front, dragged the offices of PM and Chancellor into the gutter. They should have stood apart ready to do the will of the people, argued that Britain was perfectly capable of standing on its own two feet in the world but there were certain advantages and disadvantages of remaining in the EU. Having lost the Referendum, Cameron has walked off the job, leaving Britain rudderless and bitter. Cameron is now utterly discredited. His dream had been that as President of the European Council in 2017 to set up the revised treaty based on completing economic and monetary union by 2025 as outlined in the Five Presidents’ Report, with UK firmly docked in the EU – as he promised Juncker. He wanted to be the founder of the Federal State of Europe.

    It is imperative that Britain completes exit as soon as possible. Everything else is secondary. It will be in a stronger position to negotiate any new trade deal if it is first of all completely independent of the EU. That is the first milestone. By then it will be clear that the advantages of a free trade deal with the EU are relatively minor compared with other markets which should have priority.

    It is only by being an independent sovereign parliamentary democracy that Britain has been able to save Europe from itself on several occasions over the last two hundred years. Were it to remain full in the EU it would be part of the problem, completely constrained by EU rules and with no more than 8% of a vote on anything, utterly powerless to stop conflict breaking out in Europe again.