Better Project Fear than Project Unrealistic

My friend Robert, a resolute Leaver, has sent me Daniel Hannan’s book What Next, an intelligent presentation of the Brexit case which I’ve read with great interest. What Hannah wants is just what I want – part of a European free trade area but not part of the poltical integration project. I found it interesting that he thinks Farage and Ukip were a handicap to the Leave campaign but most interesting of all his claim that Owen’s proposal for a 2 speed Europe was increasingly acceptable to the integrators until Cameron called the referendum. I think that is what we should be going for. But it is not what Hannan wants. I like being ruled by Brussels as little as Hannah does but I think the alternative he offers us is quite unrealistic. Small economies can’t survive on their own in today’s world which is why so many want to join the EU. He adapts Ricardo’s comparative advantage argument in terms of a UK worker able to take 12 hours to build a car and 12 to make a consignment of toys whereas a Chinese worker takes 48 to build a car and only 4 to make the toys so it makes sense for the UK to concentrate on cars and China on toys. This is completely unrealistic. Ricardo’s original comparison was between 2 roughly equivalent economies in Britain and Portugal. In this example the reality is that while the British worker takes 12 hours to build a car, in 48 hours Chinese workers with their economies of scale and cheap labour can build both a hundred cars and six hundred consignments of toys. In a free trade situation China will outsell our manufacturers in both cars and toys even in our own country. The models he gives are all special cases. Norway has a small population and oil that the EU wants. Australia has minerals that China wants. Iceland only has a tiny population to support. Do we really want. a ruthless regime like Singapore? Switzerland accepts free movement of peoples. I just don’t see that a small country with a large population, no comparative advantage and has to import most of the raw materials it turns into manufactures has a hope of surviving. Better to go for Owen. Political choices are always between least bads. I’m willing to accept the EU provided we’re not part of even greater political integration but because Hannan wants to opt for, to me, a completely unrealistic alternative the opportunity to achieve Owen is being lost. In any case Hannan in quite unrealistic in thinking that in twenty years time the world will be much as now except the UK will be outside the EU. He doesn’t have the imagination to see that automation, climate change and the increasing imbalance in the capitalist system are going to bring about profound changes in the whole world order. Do we really want to risk it on our own? Not me. Don’t like the EU but better than economic chaos.


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