One of the key elements of the debate over Britain’s referendum on EU membership has been the claim, from both the British government and widely respected independent authorities, that it would spell serious economic trouble for Britain. There are real problems with these estimates (many of them likely underrate Britain’s ability to ameliorate its own situation post-Brexit, by negotiating new trade deals etc., and they come with all the massive uncertainties any economic forecast does). But they are what they are, and so people who are primarily engaged in looking at the economic effects of policy, and not so much thinking about issues of state sovereignty, personal liberty, cultural identity, etc., have lined up pretty solidly against Brexit.
There’s an irony here: The commentators who think Brexit is some kind of loopy nativist project that will impoverish Little Britain did a pretty good job of admitting over the past few years that a similar project, the euro, proved a costly failure.
Moving governance from the national to the international, unaccountable level has already impoverished millions of actual Europeans (and stoked some actually-bad nativism), as Douglas Murray points out in his NR cover story. Economics and policy wonks admitted it — yet they seemingly refuse to apply this lesson to the Brexit debate.
Now, the EU is not the euro. A common currency without political and fiscal union is a much worse idea, economic-policy-wise, than the EU’s attempt to forge a closely integrated common market and ever-closer political union.
But the lessons of the euro should teach us something about the EU, too: Elite, undemocratic integrationist projects that ignore the will of actual people, the diversity of a continent of hundreds of millions of people, and their national identities come with some real downsides and pose unforeseen risks. Take the current migrant situation in Europe: The EU has been just as bad at handling a serious political/cultural/security crisis as the European Central Bank has been at handling an economic one.
This applies to economic concerns per se, too. The euro disaster — which, again, experts have recognized — is a good example of why economic policy is ceteris paribus better made by national political authorities than unaccountable transnational bureaucrats. The EU has tons of other economically important policies besides the euro: immigration, resource management, anti-trust rules, IP protection, and lots more. Taking these decisions out of the hands of nation-states and handing them to supra-national authorities comes with certain economic benefits, but the economic downsides, especially ones that are harder to recognize or yet to materialize, can be much greater. We have a signal example of this on the very same continent that economic types seem to be ignoring.
A final point: Lots of smart economic-policy types have also raised this concern with regard to the Trans-Pacific Partnership — that, e.g., normalizing regulations across very different countries may have some benefits but could create long-run costs. I’m not saying this should make them support Brexit, but can we at least recognize it applies to the EU too?
(An unrelated but parallel dynamic: Education scholar Rick Hess noted the other day how left-of-center education reformers have recently come to recognize the mistakes they made with Common Core, ones conservative ed-reformers predicted . . . at the same time that they’re trying to banish conservatives from the ed-reform movement on the grounds they have nothing to add.)