2016-06-24

Various Brexit Stuff

Emily Skarbek:
Many of the people I have discussed this with in academic and policy circles want a freer, more open society. This led some to vote remain and others leave, based on divergent predictions about which course of action would lead to a more open society.
But in answer to Skarbek's point, Dan Sanchez has this to say:
Advocates of international unions and super-states claim that centralization promotes trade and peace: that customs unions break down trade barriers and international government prevents war. In reality, super-states encourage both protectionism and warfare. The bigger the trade bloc, the more it can cope with the economic isolation that comes with trade warfare. And the bigger the military bloc, the easier it is for bellicose countries toexternalize the costs of their belligerence by dragging the rest of the bloc into its fights. 
A small political unit cannot afford economic isolationism; it simply doesn’t have the domestic resources necessary. So for all of UKIP’s isolationist rhetoric, the practical result of UK independence from the European economic policy bloc would likely be freer trade and cross-border labor mobility (immigration). Political independence fosters economic interdependence. And economic interdependence increases the opportunity costs of war and the benefits of peace.
Now here's Russ Roberts:
Hard 2 fix something you don't control. Don't despair. UK (which includes 48% voting remain) will now create something new.
Now for a few thoughts of my own:

  • I did not short-sell anything, but looking at the markets this morning, it's clear that I should have. It's not that I could have predicted that Brexit would happen, it's just that it was likely enough to have justified a gamble in this case. I'm certain a lot of people are making some good money in the marketplace today.
  • Governments must compete, and more competition is a good thing; that's just basic economics. So to go from n = 1 (EU) to n = 2 (UK, EU) is a positive move, in my opinion. There are rumblings that Ireland and Scotland may opt out of the UK now, which would mean that, at least in the short run, there would be n = 4 (Ireland, Scotland, UK, EU), at least until the other two joined up with the EU.
  • I'm pleased that secession is still possible in the modern world. It's nice to know that a referendum can be held and that people can occasionally vote for greater levels of local sovereignty rather than lower levels. It's a big "philosophical win" for libertarians.
  • Still, I realize that nationalism and fear of immigration were driving forces in the vote, and so I'm not naive enough to suggest that Brexit is a clear win for liberty. Brexit enables a potential win, but it doesn't guarantee it. How the UK proceeds from here will determine what happens to freedom there.
  • Many of my friends are scratching their heads as to why the UK would want to leave the EU. I think these friends ought to reconsider the benefits of sovereignty. Sure, it comes at a price, but it's not immediately obvious that the price isn't worth the gain.