Tuesday, 3 November 2015

It's NOT the economy that matters

According to this report in today’s Western Mail, Cardiff Professor Patrick Minford is telling a House of Commons committee that leaving the EU will not lead to the economic disaster which many politicians are claiming.  Whilst I don’t agree with everything that he says, I do agree with his basic message.
Whether an EU exit would leave Wales much better off as he claims is another question entirely – that depends on a lot more than the simple decision to leave, including the not insignificant question about the regional policy which any UK government would follow in those circumstances. But in essence, the economy of the UK in general, including Wales, would adapt over time to the new circumstances.  That’s what economies do.
I find it strange at times that some of those who claim to believe that Wales could and would adapt to life outside the UK are so reluctant to accept that the same is true for the UK vis-à-vis the EU.  In principle, it looks like a very similar argument to me.  In both cases, there would be a period of transition as changes are made; but in both cases, all the experience of others suggests that the economy would adapt.
It underlines the dangers, yet again, of an argument for and against EU membership based first and foremost on economics.  Such an argument is essentially unwinnable for either side.  Those for staying in are forced to resort to the sort of scare tactics used by Project Fear in Scotland, and those for coming out are forced to make untestable assumptions about the policy decisions which would follow and their consequences.  Voters end up having to decide whose set of assumptions to believe – or else make their decision on the basis of other factors.
And that’s the real point here.  The UK’s continued membership of the EU is fundamentally a political decision, not an economic one.  It’s about the role we see for the UK in the wider world; and from a Welsh perspective, it’s about how we see the future development of Wales in either scenario.  We can and will adapt economically to either future path, but they represent two very different futures.  We can choose to be part of a multinational Europe-wide project or part of an isolationist UK.  And that choice has very little to do with mere economics.

5 comments:

green dragon said...

"Voters end up having to decide whose set of assumptions to believe – or else make their decision on the basis of other factors" - and the principal likely 'factor' is likely to be fear. Put simply the side that wins this crucial referendum will be the side which is most successful in scaring the voters. And on balance leaving is likely to be a scarier prospect for voters than staying in.

John Dixon said...

I agree with "Put simply the side that wins this crucial referendum will be the side which is most successful in scaring the voters", although rewarding negativity is a very sad reflection on the quality of our political process. I'm not at all so certain about "leaving is likely to be a scarier prospect for voters than staying in".

Anonymous said...

I don't think it's possible to predict the outcome of the EU referendum with any great certainty but I do think it's generally true that electorates find the prospect of sudden change a bit scarey and tend to vote accordingly. For that reason, I think a vote in favour of remaining in the EU is more likely than the reverse. I do agree with John though that someone should be making the political, and indeed moral arguement for continued membership. But perhaps the there's a perception that more votes will be lost than will be gained by that approach?

John Dixon said...

"... perhaps the there's a perception that more votes will be lost than will be gained by that approach?" Maybe, although that would be a poor reason for the dishonesty involved in failing to put the case. I also think it's a misguided perception, because trying to concentrate on the 'fear' argument fails to tackle the reasons why many will be voting to leave, which have nothing to do with economics.

'ö-Dzin Tridral said...

I agree. The EU understands different cultures in a way that the UK does not. The EU is, by definition, multi-cultural and multi-lingual. The UK is almost inevitably English. I think that the UK membership of the EU has played a role in Wales having an identity and at least the aspiration that it could have a separate life as a small country within the 'multinational Europe-wide project'. I think you're right that it's not the economy, it's the cultural identity that would change if we were ruled solely from London with no wider view possible.