David Smith, the economics editor for the Sunday Times, has a splendid article on his personal blog, Economics UK, about why the Eurosceptic approach is the economically rational one.
Britain’s unemployment rate, on a comparable basis, is 4.8%, against 9.4% in France and 9.8% in Germany. Unemployment stands at under half the EU average. Per capita gross domestic product in Britain, according to a new report from Capital Economics, is higher at $30,200 (£16,440), than Germany’s $29,200 or France’s $28,500.
The economic momentum is with us. Britain has been growing continuously for 12 years, during which time other EU countries have suffered at least one recession and in some cases two. The sick man of Europe has made a remarkable recovery.
Of course the economic argument for Britain being in the EU (as opposed to some EFTA-like agreement) was always tosh. Switzerland anyone? It is now highly visible tosh.
Here on Samizdata.net we may decry the regulatory idiocy of the Labour government but clearly things are even worse in Euroland, and at least if more sovereignty is maintained at the UK level, more of the damage can be undone at the UK level rather than locked in by remote stasis oriented Europe wide institutions. All the EU has to offer is corruption, stagnation and regulation. No thanks.
We have done well in comparison to the other major EU economies due to Thatcherite economic policies. I’ve always wondered what net benefits we get from the EU. Countries like Ireland seem to possess some tangible benefit from EU membership, but we do not. And our good growth over the past twelve years has little to do with any aid from the EU.
It’s all very well comparing per capita GDP and unemployment with France and Germany, as it is perhaps with Spain, Portugal and Greece. I’d also like to know about Scandinavian countries in the Euro zone. How do they perform in comparison to old Europe, and, in the case of France and Germany, is this just national failure rather than systemic EU wide failure? For instance, can Eurozone strictures be coped with successfully if certain national strategies are adopted and competition friendly policies with the powers of anti reform blocs like the unions already undermined?
Lee: your questions can be answered a priori: the more socialist the economy, the more burden, by definition. Britain’s not “coping successfully” though – we’re merely slightly less bad. In a continent of paraplegics, the one legged man will win all the foot races. But that does not make cutting off one leg a speed improvement!
Comparing the UK with France, Germany and Italy makes perfect sense as they too are large, global and highly varied economies… the others are simply too small to make broad comparisons like Smith does, rather than specific industry-to-industry comparisons, really useful.
Lee, there are scandi countries in the eurozone, unless you count Finland. Sweden and Denmark still use thier own currencies.
That should read:
there are no scandi countries in the eurozone
“Of course the economic argument for Britain being in the EU (as opposed to some EFTA-like agreement) was always tosh.”
The economic argument for Britain being in an EFTA-like agreement is also tosh. Free trade does not require reciprocal agreements.Since tariffs make us worse off, it makes no sense to insist on reciprocity. Unilateral action is all that is required.
At the risk of stating the obvious, unilateral action is indeed a great idea but will not gain UK companies access to other markets if they just outright ban imports in some areas (i.e. the way the US does with anything vaguely defense related). An EFTA like agreement is needed for UK exporters but yes, if the hapless taxpayers in other places want to subsidise my goodies imported here, that is fine by me.
Perry, this makes no sense and indeed is a highly counter-productive argument.
Once you agree that domestic tariffs make the UK worse off as a whole (which I presume you do), it is irrational to make the lifting of UK domestic tariffs dependent upon the lifting of tariffs elsewhere. True, we would be even better off if other countries also lifted their tariffs as well, but so what? We will be worse off if we keep our own tariffs in place, quite irrespective of what other countries do.
Indeed the argument that unilateral free trade is a “great idea” in theory, but not in practice, is highly damaging to the cause since it ends up leading to the kind of faux free trade that one sees with GAFTA and the like. I am surprised that somebody like you should fall into this trap.
p.s. My point is not of course an original one. See e.g. U.S. Vice President John Calhoun speaking in 1841 in favour of unilateral lifting of tariffs:
“If other countries injured us by burdensome exactions, it was not reason why we should do harm to ourselves” (speech from Jan. 27, 1841)
We are talking at cross purposes here… yes, I agree that unilateral free trade is a splendid idea, but even better is convincing a benighted foreign government that they need to do the same. THAT is what I mean by an EFTA-like deal… the only thing better than unilateral free trade is multilateral free trade, but sure, I would not wait for that to proceed with ending domestic tariffs.
This is a message that has to be hammered home. The Federasts continue to plug the lie that more of Britain’s trade goes to the EU than anywhere else. They manage this untruth by ignoring invisibles from the equation.
It will be a tough fight for the No side, but I think it is entirely possible for them to win the referendum. Whether there will be a Tory Party after the referendum is another question.
Perry:
“We are talking at cross purposes here… yes, I agree that unilateral free trade is a splendid idea, but even better is convincing a benighted foreign government that they need to do the same.”
Yes, but you confuse the issue by putting forward multilateral trade deals as a means of convincing foreign governments to adopt free trade. The only correct way to proceed is to unilaterally abandon all tariffs and only then seek to persuade others to do the same. “Deals” of any sort (GAFTA, NAFTA, EFTA etc etc) are neither necessary nor desirable and will only slow down the path back to free trade. This point needs to be understood and clearly articulated by all libertarians – it is central to the free trade and anti-EU case.
Cydonia’s point has also been made in this article(Link), by John Blundell in the Scotsman.
Tarriffs and all aside, the EU is also a liably for taxation with the new rules soon to be imposed.