Nothing better reflects the confused thinking of the European mainstream left than its attitude towards Brexit. Each week, a new chapter in Brexit's horror story seems to be emerging: The withdrawal from the EU will be an economic disaster for the United Kingdom; Tens of thousands of jobs will be lost; human rights will be eviscerated; The principles of fair trial, freedom of speech and decent labor standards are all compromised. In short, Brexit will turn Britain into a dystopia, a failed state – or worse, an international pariah – cut off from the civilized world. With that in mind, it's easy to see why the leader of the Labor Party, Jeremy Corbyn, is often criticized for not lobbying for a Remain agenda.
The anti-Brexit hysteria of the left, however, is based on a mixture of bad economics and misunderstanding of the European Union and a lack of political imagination. Not only is there no reason to believe that Brexit would be an economic apocalypse; more importantly, the task of the EU offers the British left ̵
This argument can be found in a recent article by anti-Brexit commentator Will Denayer, citing the fact that the report was produced by Britain's "pro-Brexit government" as evidence of its reliability. He admits, however, that these predictions suffer from a neoliberal bias embedded in the forecasting models themselves . The mathematical models used by the UK government are very complex and abstract, and their results are sensitive to the numerical calibration of the relationships in the models and assumptions made, for example, about the effects of technology. The models are notoriously unreliable and easy to manipulate to achieve the desired result. The British government has refused to publish the technical aspects of their modeling, suggesting that they do not want independent analysts to test their black box assumptions.
The neoliberal prejudices in these models include the claim that markets are self-regulatory capable of delivering optimal results as long as they are not hampered by government intervention; this "free trade" is clearly positive; that governments are financially constrained; these supply side factors are much more important than the demand side; and that individuals base their decision on, among other things, "rational expectations" about economic variables. Many of the key assumptions used to construct these exercises are unrelated to reality. Put simply, the prediction models – similar to the mainstream macroeconomics in general – build on a sequence of interconnected myths. Paul Romer, who graduated in economics at the University of Chicago, the temple of neoliberal economics, in the 1980s, has recently used a devastating attack on his own profession by mainstream economists in his essay "The Trouble With Macroeconomics." – what he calls "post-real" – as the endpoint of an intellectual regression of three decades.
It is therefore not surprising that these models could not predict the financial crisis and the Great Recession, and today they are constantly failing to make reliable predictions about anything. Brexit is an obvious example. In the months leading up to the referendum, the world was overrun by warnings – from the IMF, the OECD and other bastions of contemporary economics, claiming that referendum turnout would have immediate apocalyptic consequences for the UK, leading to financial meltdown problems and plunged the country into a deep recession. The most embarrassing prediction about "the immediate economic impact of a vote on Britain's exit from the EU" was published by the Tory government. The objective of the "study" in question, published by the UK Ministry of Finance in May 2016, was to quantify the "impact … in the immediate phase of two years following a vote vote".
Within Two Years of Choosing The Ministry of Finance predicted that GDP would be 3.6 to 6 percent lower and the number of unemployed 820,000. The predictions in the "Study" of May 2016 appeared bleak and clearly aimed at having the biggest impact on the vote, which would take place a month later. A few weeks before the referendum, then-Chancellor George Osborne quoted the report as warning that "voting would be an immediate and profound shock to our economy" and that "the shock would plunge our economy into recession and lead to an increase in an unemployment of about 500,000. "
Nevertheless, the majority of voters opted for Brexit. This proves once again that economists are wrong, because none of the scenarios predicted in the run-up to the referendum has occurred. Larry Elliott, Guardian business editor, wrote: "Brexit Armageddon was a frightening vision – but it simply did not happen." After almost two years since the referendum, economic data from Britain mocks these doomed warnings – and especially the government report mentioned. Office of National Statistics (ONS) data show that British GDP was already 3.2 percent higher by the end of 2017 than at the time of the Brexit vote – far from the deep recession we were told
The unemployment rate fell from 4.9 percent to 4.3 percent between June 2016 and January 2018, while the unemployment rate fell by 187,000 – a forty-three annual low. The economically inactive – those who are neither working nor looking for work – have fallen the most in nearly five and a half years. So much for the countless workers who were to become unemployed through the ballot box.
Particularly embarrassing for the professional pessimists are the data on British industry in the last two years. Despite the uncertainty surrounding the negotiations with the EU, "manufacturing has grown the most since the late 1990s," said the Economist and UK Manufacturers Association EDF. This is mainly due to growing demand for UK exports, which benefit from the benefits of the lower pound and improved world trade conditions. According to a report by Heathrow Airport and the Center for Business and Enterprise Research (CEBR), British exports have their strongest position since 2000. As the Economist recently said, "Britain's suffering doers enjoy a boom in one-off Generation, "as the shifts triggered by the Brexit result in a much-needed" realignment "from boom and bust financial services to manufacturing. This also promotes the growth of investment. Total investment spending in the UK – which includes both public and private investment – was the highest of all G7 countries in 2017: 4 percent year-on-year.
Predicting that a holiday victory would cause the British economy to be smashed a "run on the pound" has also proved unfounded: yes, the pound sterling has lost ground to other major currencies since the referendum, but that not only did not destroy the British economy – quite the contrary, as we have seen – but since the beginning of 2017 its value has been rising again.
So what was behind the blind certainty of the comment given the lack of evidence for Brexit that caused an economic collapse? An important piece of ideology that supports the entire Brexit debate is the idea that Britain enjoyed tremendous economic benefits from joining the EU (or the EEC as it was known in 1973). Is this claim valid? As a recent study by Cambridge University's Center for Business Research (CBR) shows, "Compared with previous decades, there was no improvement in UK per capita growth after 1973. In fact, per capita GDP has grown much more slowly after accession than in pre-accession. "
Researchers conclude that" there is no EU accession to economic growth in the United Kingdom improved. "The much-vaunted creation of the Single Market in 1992 has not changed anything – neither for the UK nor for the EU as a whole. Even if we confine ourselves to assessing the success of the single market on the basis of the main economic parameters – productivity and per capita GDP – there is little evidence that it lives up to the promises of its advocates or official forecasts. The graph below shows a long-term comparison between the EU-15 and the US in terms of GDP per hour worked (a measure of labor productivity) and GDP per capita.
That makes even more ridiculous the support of the "left" for the "free trade". We should consider what future historians will think about such aberrations, such as the Labor Campaign for the Internal Market or its allies Yanis Varoufakis and his DiEM25 group. Especially considering that even mainstream economists like Dani Rodrik now explicitly say that trade liberalization "causes more problems than it solves" is one of the root causes of the establishment's backlash against the West and the time to come " plac [e] some sand in the wheels of globalization. " In this sense, one would expect the left to see Brexit as the perfect opportunity to "reformulate multilateral rules," as Rodrik advises – not sticking to his teeth (19659002). In addition, in the Brexit debate, it is often forgotten that the internal market is much more than just trade liberalization. A key single market principle has been the deregulation of financial markets and the abolition of capital controls, not only between EU members but also between EU members and other countries. As we argue in our recent book "Reclaiming the State," this reflects the new consensus that began even among the left in the 1970s and 1980s. This consensus stated that economic and financial internationalization – what we now call "globalization" – has taken place. The state has become increasingly powerless towards the "forces of the market". In this reading, therefore, countries had little choice but to abandon national economic strategies and all traditional instruments of intervention in the economy, hoping, at best, for transnational or supranational forms of economic governance.
This led to a gradual depoliticization of economic policies, which was an essential element of the neoliberal project, which aimed to isolate the macroeconomic policy from the referendum and remove barriers to capital flows. The Single Market played a crucial role in the neo-liberalization of Europe, paving the way for the Maastricht Treaty, which integrated neo-liberalism into the fabric of the European Union. This created a de facto supranational constitutional order that no single government can change. In this sense, it is impossible to separate the internal market from all other negative aspects of the European Union. The EU is structurally neoliberal, undemocratic and neo-colonialist. It is politically dominated by its largest member, and the policies it has driven have had catastrophic social and economic repercussions.
Why does the mainstream left have such a hard time coming to terms with Brexit? As we have already noted, the causes are numerous and often overlap: the wrong faith of the left, that "openness" and trade bring prosperity; his internalization of the common economic myths, especially with regard to public deficits and debts; its failure to understand the true nature of the single market and of the European Union in general; the illusion that the EU can be progressively "democratized" and reformed; the misconception that national sovereignty has become irrelevant in today's increasingly complex and interdependent world economy, and that the only hope for meaningful change is for countries to pool their sovereignty and transfer it to supranational institutions.
An Important Question The reason for the left's embrace of anti-Brexit panic was the welcome distraction that comes from dealing with a more fundamental problem: that the economic system, which generally supports the West, is serious is decaying. Another study by the CBR at Cambridge University concluded that the impact of Brexit is likely to be much milder than government forecasts, "even if Britain does not get a free trade agreement or other privileged access to the EU single market The Cambridge researchers found the so-called "hard Brexits":
The economic outlook is gray rather than black, but we think that would have been the case with or without Brexit. The deeper reality is the continuation of slow growth in production and productivity that has shaped Britain and other Western economies since the banking crisis. The slow growth in bank lending against the background of already high levels of debt and the tightening of public austerity measures prevent aggregate demand from rising far beyond the snail's pace.
In other words, the UK is still facing serious problems Economic problems – suppressed domestic demand, rising private debt, decaying infrastructure and de-industrialization – have nothing to do with Brexit, but are the result of neo-liberal economic policies in recent decades followed by various British governments including the current conservative government.
These deeply embedded neo-liberal ideas can only be challenged by a democratic revolution in British politics – but again, the Brexit debate has hindered progress and revealed a deep mistrust of democracy. This is supported by allegations that without the "protection" of the single market, the UK would be in a dystopian nightmare overrun with "genetically modified food, chlorinated chicken and access to secure sectors such as health care". and where, as Denayer writes, human rights are "substantially" reduced and "the principles of fair trial, free speech and decent labor standards" are compromised. While it may be true that in some areas earlier right-wing British governments have been positively curtailed by the EU in their quest for comprehensive deregulation and market introduction, the notion that the British people are unable to defend their rights "external constraints" is condescending and reactionary.
Just as Britain's current economic woes have much more to do with national economic policy than the outcome of the referendum, the country's future depends largely on the domestic policies of the future British governments and not on the outcome of the United Kingdom's negotiations the EU. John Weeks, emeritus professor at the University of London, writes: "The painful truth is that the vast majority of British households with a Labor government under Jeremy Corbyn will come out of the European Union better than in the European Union under the EU yoke one of each led Conservative government. "
Indeed: A democratic socialist government led by Corbyn is the best option for the majority of British citizens and for the British economy. This leads to an obvious conclusion: for a Corbyn-led Labor government, "Weeks" no longer "solves the problem of being a member of the European Union." He refers to the fact that many aspects of Corbyn's manifesto – such as the re-nationalization of postal, rail and energy companies and development support to certain companies – or other policies that a future Labor government could decide, such as the passing of capital controls difficult to implement in EU law and would most likely be challenged by the European Commission and the European Court of Justice. After all, the EU was founded with the precise intention of permanently banning this "radical" policy.
Therefore, Corbyn must resist pressure from all sides – especially within his own party – to support a "gentle Brexit". Instead, he has to find a way to weave a radically progressive and emancipatory Brexit narrative.There has been a single window of opportunity for the British left-and the European left in general-to show that a radical break with neoliberalism and with the institutions that support it, but it will not stay open forever.