Sunday, 17 February 2019

After Brexit


Once we've left the EU we will no longer be the recipient of EU economic direction. Britain will have to come up with a design of its own. Here's where we'll see all the classic waffle from the left about an industrial strategy. The fad of the hour is a "green new deal".

Course, we have been here before. The 2008 Energy Act was more a Keynesian stimulus package than an actual energy policy. More than a billion pounds was sunk into the renewable energy sector in Hull alone.

The problem being that it doesn't work. Hull has had no shortage of regeneration funding and in a lot of ways it looks better now than it ever has, but still it languishes. Liverpool and Newcastle have many of the same economic and social problems. Similarly they've had their fair share of regeneration cash but still underperform.

Ultimately the thinking on the left is faulty. They always seek power making promises of getting the masses back into reliable well paid jobs. Populists of every stripe offer hope of a restoration of some kind. With Labour it's a romanticized idea of boosting manufacturing and moving away from London based finance and services jobs.

I suppose it is progress that the regional disparity is now a recognised problem and politics in London knows that their grip on power depends on coming up with solutions but fixing the problem is easier said than done. The uncomfortable truth is that we could spend four and five times what we do on regeneration and it wouldn't make a dent. Globalisation is a genie that isn't going back in the bottle and Brexit is little remedy.

In terms of our economic woes, the trends are far from unique to Britain. It stems from having more people than we know what to usefully do with and ageing populations that we have to care for. We struggle to create an organic demand for labour so we prop up our economies with centrally planned white elephants. This we call investment, but it all comes crashing in the moment it has to function without subsidy. Similarly, perpetual immigration is not sustainable.

This sort of sloppy thinking is in part a goodly reason why we are where we are. The current crunch is caused by a failing paradigm where the Potemkin industries in the regions simply aren't productive enough. All of them rely on tax sweetheart deals and stealth subsidy. Worse still, we are at a crunch point where they are becoming expensive luxuries we cannot afford.

Much of our economic policy since the financial crash of 2008 has been a sticking plaster to tide us over until things pick up again but if the signals from around Europe are anything to go by, they are not going to pick up any time soon and this current paradigm will not outlive the political dissatisfaction that goes with it. Moreover, it's going to get worse. We can't afford any more tax but tax is going up once again.

This kind of command and control thinking is generally flawed but the left have failed to factor in Brexit into any of their estimations. One way or another we are going to take a major hit to our exports and already we are seeing a number of government schemes on the chopping block. Meanwhile, though changes in the aviation sector most certainly spelt the death of the A380, Brexit was most likely the final nail in its coffin. All the while there are major money movements that haven't yet registered with the media. Sooner or later tax receipts are going to nosedive as is investment.

Part of the reason I'm somewhat ambivalent to the dire warnings in respect of Brexit is because I have always anticipated living to see this whole system caving in on itself. Voting for Brexit was just a vote to give it a little shove. Some of the first casualties of Brexit will be household names which have been in and out of the news for years having financial difficulties. I'm of the view that the longer we prop it all up the worse it will get.

That, though, is exactly what this and the next government would attempt to do for the simple reason that they don't know what else to do. Generally speaking they have no ideas of their own and the sort of manifesto fodder they subject us to is lifted from progressive think tanks like IPPR. They market it as original thinking when in reality it's exactly the same thing we've been doing since at least 1992. The left will, of course, say that the Tories have subjected us to a decade of harsh austerity but it amounts to little more than bookkeeping.

Typically the left does not care about governing or seeking out ideas that will work. The agenda is always the same - to create a command and control socialist economy based on high taxes and borrowing. The only thing that changes is the pretext. Despite all the historical precedents nothing deters them from their fanatical devotion to this goal.

The Labour party in its current form resides in a non-interconnected world where economic policy can be imposed unilaterally without regard to the global context, where increasing tax on upwardly mobile corporates and high earners inevitably leads to increased revenues without risk of relocation, where the City's hegemony is inevitable and can be squeezed for new revenues as though other nations are incapable of competing for business. Where the government can nationalise and subsidise industry at a whim without fear of reprisal or economic consequence.

In normal times Corbyn wouldn't have a hope of winning power, but the Tories are not faring any better. Since any version of Brexit is likely hit the economy hard, and with the Tory right wedded to equally bankrupt ideas, it would seem that the next election could go either way. The first thing to go out of the window, though, will be grandiose schemes from think tank spivs.

The ugly truth about to land on our doorstep is that britain has lived beyond its means for decades and there are unpopular choices ahead that will redefine British society. Any borrowing we do will be to put our Brexit brushfires rather than chasing left wing flights of fancy. The worst of the damage done by Brexit will in truth be a consequence of propping up a zombie economy without allowing for a societal correction.

Ultimately new ideas as to how we go forward after Brexit are not going to come from the Westminster bubble not least because they are not capable of original thinking - but also because they have yet to internalise the fact that Brexit will force them to change their ways. It puts government on a wholly different footing. We have come to the end of the road and now we face a pile of tin cans kicked down the decades. Now we have to reform all those things that politicians have shied away from reforming and make the cuts we will really notice.

In a lot of ways we won't be able to design a new future until the chips have landed. If we leave without a deal then central government will be limping from crisis to crisis which will keep the civil service occupied. It will then fall to local authorities and individuals to pick up the slack. What we need is a new political structure that enables people to address their own problems.

This may prove to the be the ultimate Brexit dividend. If central government was going to come up with solutions then it would have by now - even just by accident. I take the view that only a radical change of circumstance can dislodge the ossified paradigm which currently governs our politics. Many of the embedded structures of bureaucracy are likely to collapse, forcing us to improvise and innovate in public policy.

Most of all I expect to see a reversal of Blair's public sector reforms - reverting to a time where local charities actually performed real world functions rather than retreating to business parks to fill in grant application forms. We will see a return of the voluntary ethos. Much of what has gone wrong since 1997 is government assuming roles that it cannot and should not do, bureaucratising them and them wondering why cost of provision skyrockets. We then wonder why these services are then cut back. Britain's economic and social revival is going to have to be people led rather than state directed.

I'm often told off for my "hair shirt" Brexit ideas, usually by centrists and statists who cannot envisage a Britain where we actually do things for ourselves without being prompted - where things happen without government funding and motivated people find ways around problems. A Britain where people are not warehoused in non-jobs where we are no subject to the ideological conditioning of the left. Those are the people who wail most profusely about leaving the EU. They will never be convinced.

If there's one thing I've taken from many of the follow investigations by journalists as to why people voted for Brexit, there doesn't seem to be an overall coherent reason. All the vox pops might mention something about immigration when prompted and some express their general dissatisfaction with the status quo - when all the economic metrics tell us that materially we've never been better off and Britain is a wealthy place. I would venture a guess that there is something more fundamental missing from British society.

Everywhere you look social and creative spaces are being erased and with it a lot of cultural distinctiveness. Venues close and with them go the places where people congregate. Social media and general atomisation leads to more insular lives. Communal workplaces have vanished and towns robbed of their reason for being. In many ways as the state has taken over the social function of society it has made people redundant. Our malaise is as much spiritual and social as it is economic. This can only worse as the EU gradually erodes the vitality of local democracy.

The problem with remaining in the EU is that it ensures nothing changes. It locks in the current paradigm and maintains the direction of travel. Even if you disagree with me that it will all eventually cave in on itself the fact remains that the ossified political paradigm is no longer delivering and the longer it survives the more it locks in privilege while condemning ever more people to economic exclusion. When hard work is no longer a path to prosperity you can't be surprised if productivity collapses.

Nobody can argue that Brexit is presently well executed, and it will surely take its toll. We are already seeing the beginnings of the implosion caused by uncertainty. It's a lot of upheaval that could have been avoided. For that I do not blame Brexit, rather I blame the incompetence of our politicians who have collectively failed us. That failure though is endemic to the system. We cannot, therefore, trust in the status quo to remedy Britain's malaise. We are looking in the wrong place if we are looking to Westminster for solutions. As much as Brexit frees us from Brussels, it frees us from a failed paradigm. That alone gives me hope for the future. 

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