Friday, June 17, 2016

A very brief comment on Brexit

I've been posting less frequently with the end of the school year. Will be going to the History of Economic Society Meeting this weekend. Posting will be even more limited. At any rate, hope to be able to say something more substantial on Brexit before the referendum. Let me say that I'm against Brexit, which is I suspect the view that Wynne Godley would take on the issue. He was firmly for Europe, but against the euro as it was shaped, but not in all circumstances. He correctly pointed out that a common currency requires a fiscal union.

It seems that more than a few heterodox Keynesians (post-Keynesians for the most part) have come in favor of Brexit. I think it is important to emphasize the difference between the common currency (the euro) and leaving it, for example, Grexit, and the European Union. Brexit, of course, refers to the last, since the UK has its own currency, the pound.

Mind you, I don't think that the problems with leaving the EU are essentially economic, and I think to emphasize these costs is a mistake. The real problem with Brexit is the political costs, associated to a more closed view of what Europe means. It would lend support to radical right wing views that reject a more culturally and ethnically diverse Europe, and it might, as Yanis Varoufakis suggested lead to the slow disintegration of the European project.

I have posted a few videos of 'Yes, Minister' before. The one below (h/t Ramanan) is apropos. Enjoy!


  1. "The real problem with Brexit is the political costs, associated to a more closed view of what Europe means. It would lend support to radical right wing views that reject a more culturally and ethnically diverse Europe"

    No, this is entirely wrong. The populist right is ALREADY on the march all over Europe -- it is already winning and will continue to soar by allowing the dysfunctional German-led EU to continue.

    The best way to defang and defeat this populist right movement is a return to sensible national economic sovereignty with sensible national borders and inter-European government cooperation only where necessary.

    You also ignore:

    (1) the EU is grossly anti-democratic
    (2) EU Fiscal Compact (otherwise known as the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) of 2012 effectively imposes a ban on effective stimulative Keynesian economic policy in many Eurozone countries

    1. Hi LK:
      So your point is that to defeat the radical (I would say fascistic rather than populist, I like populism) right is to adhere to there anti-Europe program? Yeah, that makes a lot of sense. I don't ignore the limitations of the European experiment, including it's democratic deficit. I don't think you should throw the baby with the bathwater. You seem to ignore the democratic deficit of national polity. So one can fight for more democratic institutions at the national and European level. And regarding the last point that's exactly Godley critique of Maastricht, and of several post suggested here. The UK, however, has not signed the Fiscal Pact, as far as I know, and can certainly do its own fiscal policy while it remains in the EU. The fact that it's not and will not be in the euro helps too.

    2. Its actually does make sense economically and socially because

      economically:when you bashing the working class with open borders policy which causing downward pressure on their wages

      And causing a serious pressure on public services by mass immigration of low skilled workers which is diminshing the ability of the government to plan well public infrastructue and services which in turn worsen public services and make it less affordable, which in turn hurt the quality of the public services that working class and lw middle class get,

      people which i remind you are the most vulnerable part of the population along with the unemployed.

      Socially:the establishment the elite in europe and in usa dont dare to criticize iliberal anti human right views and values of some members of the immigration/minority communities which they openly criticize if we are talking about the general population (homophobia xenophobia racism intolerance chauvinism and etc).

      Not only that but the elite is trying to white wash this views of some members of this communities and also what is not less important they silence legitimate critcizm on members of this community by saying that any criticizm is racist and fascist no matter how much its racist or fascist indeed (sometimes it is but sometimes is just valid criticizm).

      So this pan european anti nationalist pro open borders ideology which widening along with neoliberlaism the inequality in the society (by putting downward pressure on scarce low skilled jobs) which deteriorate public services for the people that need them the most,which silence by agressive rhetoric and strong words like racism and fascism any legitimiate criticizm of open borders immigration and immigrants behaviour values ans views no matter how much valid and legitimate this criticizm is.

      No wonder that people will start to hate the establishment and will reject its views and no wonder that when the same establisment silence any valid and legitimate criticizm of immigrants and minorities the only criticizm and ideology which stays as the alternative to the eatablishment views is the one which dont care about the establishment which dont careabout the mainstream and consensus the only criticizm/movements/ideologies left is shallow xenophobic and racist movements and thats why this people vote for this movements because they feel there is no longer another alternative.

      So this anti europeam sentiment got popular support not because of najal farage or mary la pen rhetoric but its got strong popular support because of the eu and the establishment actions.

      Thats why LK opinion make sense

    3. Long comment. Just a brief reply to your first comment. No immigrants do not necessarily reduce wages. They only do to the extent that they weak the bargain power of labor. Wages are not simply a question of supply and demand as taught in mainstream models. It's one of the things explained at nauseam in this blog. There are good theoretical reasons for that. What is the evidence. Don't know in the UK, but in the US while there is a debate (see for example my reading is that it does not depress wages.

      The EU is not the cause of the economic woes of the UK, so if people vote against the EU as a result of their economic problems they're being fooled. THat's the point.

      Btw, I appreciate comments and debate, but please try to be more concise and direct on your comments.


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