We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

“It is conceivable that Mrs May could, with Labour support, push such a half-baked Brexit though Parliament. But her party would be finished. For most of its advocates on the Government benches, Brexit is about global free trade or it is nothing. Leaving the single market is not enough; Britain must also regain the power to trade freely with the rest of the world. Anything less would not just be a monumental betrayal but would tear the Conservatives apart. The party split in 1846 after the Corn Laws were repealed; it would surely do so again if Mrs May sells out her Brexiteers.”

Allister Heath

Big regulation

War and Peace is 1,200 pages long. Bleak House spreads to 1,000. Dodd-Frank, the US’s sprawling overhaul of financial regulations after 2008, runs to 848 pages – earning itself the nickname `Dodd-Frankenstein’. And the EU’s bumper trade deal with Canada reaches a hearty 1,600 pages. Last week, surmounting all of these achievements, the EU introduced a truly spectacular piece of regulation. `Mifid 2′ is its name and it weighs in at a princely 7,000 pages. That’s 1.4 million paragraphs, or six Bible-lengths. It must surely be a contender for the longest piece of red tape ever.

Juliet Samuel (Daily Telegraph, registration required). Needless to say, people continue to drone on about “neo-liberalism” and “unfettered markets”. If only.

I can predict a standard retort: that if the UK wanted to be an enthusiastic EU member (no laughing at the back, kids) then it could influence the EU machine and reduce this regulation. But how has that worked out, really? True, I know of some politicians who have tried to slow this process down, but it continues regardless.

Sure, when the UK leaves, then UK-based firms that wish to do business with the EU will need to comply with EU regulations just as they must do so with the laws of the US, or Canada, Australia, or Planet Zog. But the process cuts two ways. If the UK parliament has any sense (big if, course) and keeps rules within bounds rather than “gold-plates” whatever is in force in other countries, then the UK will gain. Further, the very existence of countries with independent rule-making makes it harder for policymakers in transnational groupings such as the EU to create tax/regulatory cartels. (This is why countries such as Switzerland drive Brussels nuts.)

In time, the regulatory costs of doing business in the EU will cripple its financial markets, and that makes it rather harder to persuade yours truly that being outside this regulatory behemoth is so bad for business. Being outside a relatively free and flexible customs union, which is what the Single Market is, can sound risky, even daunting. Being outside an expensive, inflexible, bureaucratic nightmare is far less so. In fact, getting as far away as possible from such a structure is not just a smart gamble, but essential.

Terror at living outside the EU, ctd

Recent UK gross domestic forecast predictions, issued this week via the glum figure of UK finance minister Philip Hammond, have encouraged some of my friends who are EU Remainers to shout about how Brexit is damaging Britain, we are going to lose tens of thousands of jobs to the continent, or wherever, etc, etc. The rage is not dying, in fact. Some of the language (Brexit supporters are “retarded” being a recent one) is not becoming milder. We haven’t yet reached the acceptance phase after the initial shock and anger.

Apart from the devaluation of sterling after June last year, there hasn’t been all that much of a shift on the economics front. The underlying performance of the UK economy does not appear to have altered that much. Some American banks such as Goldman Sachs and JP Morgan talk of shifting some business to the continent to create subsidiaries in anticipation of any EU access shenanigans, as I would expect, but it hardly fits with a Biblical level of terror to justify some of the vehement language I see on forums such as Facebook.

Assume we must take seriously the risk of life outside the joyous embrace of the EU Single Market, this is worth considering, from Tory MP and former minister, Peter Lilley:

The Single Market is talked about as if it were some inner sanctum accessible to a privileged few. In fact, every country has access to the Single Market – with or without tariffs. The Single Market programme, which I implemented, involved harmonising product rules – sensible, since businesses can now make one product range for the European market, not 28. But that benefits American and Japanese exporters as much as German or British firms. Although often invoked as particularly benefiting UK service companies, in fact UK service exports to the EU have grown less rapidly since the Single Market reforms than any member state except Greece and Italy

He also responds to the point that apparently, by being outside the EU, the UK will now submit to EU rules without being able to influence them:

People assume Britain benefits from participating in setting these rules. But rules provide a framework within which all companies operate – not an advantage to any individual country. Britain set the rules of tennis but rarely wins Wimbledon! British exports to the EU have grown less rapidly since the Single Market than they did before 1993, less than our partners’ and much less than non-EU countries’ exports! Maybe that is partly because we suffer EU regulations on 100% of our companies (costing our economy billions of £s) whereas non-EU firms need only comply with EU regulations on activities carried out within the EU.

And on the “passporting” issue that comes up:

How important is the right to passport services to the EU? Passporting lets financial institutions operate throughout the EU via branches supervised by their home country regulator without seeking authorisation from local regulators. Having introduced the Single Market measures, I decided to make a speech extolling how they had removed barriers to trade, not least through passporting. Unfortunately, my officials could not find a single company doing business it previously could not do! Banks were almost invariably operating, not through branches, but via subsidiaries which still needed local authorisation and regulation. (Emphasis mine.)

And on the terror that outside the EU, the UK will be hurt, Mr Lilley looks at EU-regulated mutual funds and alternative investment funds regulation (private equity, real estate, private equity, etc):

Since then the UCITS, MiFID and AIFM directives have extended passporting rights to other financial service providers who do take advantage of it. However, most UCITS funds choose to operate via subsidiaries in Luxembourg and Dublin without causing an exodus of jobs from London. Also the AIFM directive provides for recognition of equivalent standards of regulation by non-EU providers which is intended to be granted to Hong Kong and Singapore, so could scarcely be refused to the UK post Brexit.

In other words, you don’t have to be in the EU to manage investments sold within its borders. And yet if you take some of the Remainer arguments at face value, you would think that the UK is to be cast into a dark, lonely place.

A final thought. One of my Remainer co-jousters talks of the folly of the UK “going it alone”, as he claimed we had done after 1945. That, however, not only ignores our membership of NATO but also the UK’s web of trade with not just the continent of Europe, but also the old Commonwealth nations and places such as Argentina, and of course the US. The UK was hardly living under a rock during the period before EEC membership began in 1973, and further, that membership involved slapping tariffs on many of those countries. As Mr Lilley says, it has taken ages for the EU to hammer out free trade deals with nations such as India, China, etc, and to improve on what we have with the US. (I have even seen some of my Remainer friends dismiss this range of countries as “minor”, or “colonial outposts”). So let me get this straight: the US, Canada, Australia, New Zealand, India, South Africa, parts of Latin America, the Pacific-Rim, etc, are “minor”, but the European Union is a powerhouse. Great, got it.

Have a good weekend everyone.

 

Samizdata quote of the day

“The EU’s finances run the way they do because no one has a sense of ownership of the funds. It is always “someone else’s money” that is being abused.”

Lee Rotherham

Samizdata quote of the day

“The really big point is that far from being a tumultuous, cacophonic, unstable, firecracker of a polity, Brexit Britain is starting to feel like a relative island of calm, more at ease with itself than it has been for many years, led by a sort of 1950s Prime Minister, who is nearly 20 points ahead in the polls. The spotlight of worry has swivelled round elsewhere, to Greece, France and to the United States. If Brexit is a revolution, it is so far turning out to be a very British and incremental one, lacking in violence or upset. More tea, vicar?”

George Trefgarne

Indeed. What has struck me about some on the Remain side, for example, is that they have been coming across as a bid mad, unpleasant or utopian, not the other side. It is pretty hard to portray the likes of David Davis, for example, as fire-eating radicals when the eurozone, for example, is and remains an economic clusterfuck of Old Testament proportions.

Another fail by Obama

With the TTIP, the EU and US set out trying to construct a slightly watered down version of the single market – in which corporations would be able to use the courts to force governments to open up their public services to foreign providers. It was doomed to collapse because there is such an obvious asymmetry between the US and the EU on this. The US already has high involvement of private companies in the provision of public services. As for those where the state does still retain a monopoly – like defence – there is no way US courts are going to allow, say, French missile manufacturers to supply weapons. It will be ruled out on grounds of national security.

Europe, by contrast, has a relatively high degree of state involvement in the economy, giving plenty of juicy opportunities for US firms – and plenty of reason for left wing parties in France and Germany to oppose TTIP. Britain may now be at the back of Barack Obama’s queue – though what relevance that has given that it will soon be where we stand in Hilary Clinton’s or Donald Trump’s queue that matters. But my money would be on post-Brexit Britain sewing up a trade deal with the US before the EU has managed it.

Ross Clark, having fun at the expense of Barack Obama, whose comment earlier this year that the UK would be at the “back of the queue” in trade deals with Washington if it had the temerity to quit the European Union has, along with so many others, backfired.

We are often told that President Obama was going to bring us an era of smart diplomacy, unlike that that moron Bush, etc, etc. The gap between the promise, and the reality, is wider than ever.

The Eurocrats were nothing if not predicted

I found this post from eleven years ago while hunting around the internet for something else. It is quite strange to read it now. The author may have been on to something:

As several people have predicted would be the case, many of the EU’s ‘great and good’ are just continuing with the Great European Integration project as if the French and Dutch NO votes never happened. But it does seem that the shock to the system those votes administered to the torpid media has indeed woken up a few people. It seems that the insects have not noticed that someone has picked up the rock they were under.

Have they noticed even now?

Patrik Schumacher – architect and libertarian

One of my daily internet visits is to a site called Dezeen. Here I learn about lots that bores me, involving designers making small buildings shaped like boxes rather than ornamented, and about lots that interests me, including such things as much bigger and (to me) much more interesting buildings that are being dreamed of, built and celebrated.

On the matter of Brexit, Dezeen reported that the the overwhelming majority of “creatives”, in London and in the world generally, favoured and still favour Remain. These creatives were very angry when they learned that a majority of British voters did not share their views.

But Dezeen also had a recent link to a creative who sings a very different sort of ideological song to that sung by most of the kind of creatives whose work and opinions Dezeen reports on. I give you Patrik Schumacher:

PatrikSchumacher

Patrik Schumacher has written an opinion piece for Archinect, with these words at the top of it:

Brexit: a chance to roll back the interventionist state and unleash entrepreneurial creativity …

I have very little in common with the arguments of the Leave Campaign, and in particular reject the anti-immigration thrust of the Campaign. However, I welcome Brexit as offering an enhanced ability and chance to experiment with new policies that dare more economic freedom.

Later on in the piece, we read stuff like this:

I am convinced that the next prosperity potentials of our civilisation can only be explored and discovered if the straight jacket of the nanny state is gradually loosened and dismantled. (The bigger the scale of a country or block, the easier it becomes for the state to expand its scope. That’s why I favour small countries: they must keep their state action small in scope and cannot afford to erect trade barriers or impose heavy tax and regulatory burdens.) It’s time to roll back the state and for us to take the risk of giving more freedom and self-responsibility to us all, unleashing entrepreneurial creativity, organisational experimentation as well as individual aspiration and empowerment.

It’s those particular sorts of libertarian phraseology that I find so intriguing. “Roll back” the “interventionist state”. “Unleash entrepreneurial creativity”. “Nanny state”. “Heavy tax and regulatory burdens”. Above all the simple: “Economic freedom”. This guy is one of us. There really can be no doubt about it. He has been reading the same kind of stuff that Samizdata readers have read, in among training to be an architect and then working as an architect. Any libertarians who doubt the ability of libertarian ideas to spread beyond the confines of mere libertarians should read this piece, and rejoice.

Patrik Schumacher works for Zaha Hadid architects. The recently deceased Zaha Hadid was rumoured to be a very “difficult” woman to work for. Bossy. Opinionated. Highly individual in her behaviour and in her designs. I don’t know much about Hadid other than noticing when she recently died (at far too young an age for an architect). But if Patrik Schumacher was the sort of man she hired to do her bidding, I am starting to suspect that she too may have been some sort of libertarian, maybe in the closet, but maybe of the in-your-face variety.

There’s lots more I could say about this, but my basic point is: how interesting, and how encouraging.

Samizdata quote of the day

First, Brexit means Brexit. The campaign was fought, the vote was held, turnout was high, and the public gave their verdict. There must be no attempts to remain inside the EU, no attempts to rejoin it through the backdoor, and no second referendum. The country voted to leave the European Union, and it is the duty of the government and Parliament to make sure we do just that.

Theresa May

May is currently the front-runner to be the next Prime Minister.

The risks we run

In all the talk and words about the UK Brexit vote last Thursday, a regular line is that the Leave side has been “misled”, and doesn’t know what it is doing, and it is going to have buyer’s remorse, etc, etc. Who knows, maybe that criticism is apt. However, it is a bit rich for those who, for example, favoured the creation of the European single currency, as many pro-Remainers did (they might hope we’d forget) to claim that those who wish to leave an entity with pretensions to be a superstate are not thinking of the risks. That is a bit rich.

The launch of the single currency is arguably one of the riskiest, most hubristic transnational projects of recent decades, and I still see very little sign of contrition for rolling out a new form of fiat money without creating the economic and political architecture to deal with life inside a one-size-fits-all interest rate.

One reason why remaining EU states are scared of what has happened is the fear that a eurozone member state, envious of how the UK has just voted, might have similar ideas.

Samizdata quote of the day

“England has saved herself by her exertions, and will, as I trust, save Europe by her example.”

William Pitt, the Younger

In partial defence of two Red Princes

Over the last two days two scions of notable political families have attracted controversy related to the referendum.

In a leaked telephone call, Will Straw, Remain campaign director and son of Jack Straw, said the following:

“We need to recognise that people have been pulled up short by Jo Cox’s death and it is now time to make a very positive case for why we want to be in the European Union… to call out the other side for what they have done to stir division and resentment in the UK. That is something we must all do… This is what we think is the closing argument of the campaign, reflecting all the arguments that we have been setting out for many months but also the new context that we’re in. What we want to say is people should vote Remain on Thursday for more jobs, lower prices, workers’ rights, stronger public services and a decent, tolerant United Kingdom.”

I see little to condemn there. He is a political campaign manager: deciding how to adapt his campaign message to best take advantage of recent events is what he is paid for. I do resent how the Remain side has smeared the Leavers as somehow responsible for the doings of a deranged neo-Nazi, but what was Straw meant to do, ignore it? Does anyone think his counterpart on the Leave side was not similarly briefing his team on how to minimize the fallout?

Stephen Kinnock MP, son of Neil Kinnock, has also been the subject of angry comment. At the ceremony – basically a secular memorial service – held in Parliament to honour Jo Cox he was one of very few MPs to depart from the consciously bipartisan tone. While wearing (unless my eyes deceive me) an “In” campaign badge, he said,

“I can only imagine Jo’s reaction had she seen the poster unveiled hours before her death – a poster on the streets of Britain that demonised hundreds of desperate refugees, including hungry terrified children fleeing from the terror of Isis and Russian bombs. She would have responded with outrage and a robust rejection of the calculated narrative of cynicism, division and despair that it represents.”

That catch in his voice was not faked. Jo Cox was his personal friend. It seems probable that she was murdered for political reasons. (The likelihood that the killer had mental problems makes that no less true.) It must have seemed urgent to speak for her when she could no longer speak for herself. He still should have stood firm against the temptation to make a political point at that time and place. To do so struck in its own way at the very thing he said he wanted to preserve: the sense across all parties that, as Jo Cox herself said, “We are far more united and have far more in common with each other than things that divide us.”

Mr Kinnock’s speech did not play well among the Independent‘s commenters.