Friday, January 22, 2021
The curse of getting what you voted for
Since December 31st, 11 pm, Britain is no longer part of the European Union. Three weeks later my newsfeed is full of UK news stories about people who ordered some goods online from Europe, and were totally shocked and surprised when they were asked to pay tariffs and custom duties on those goods. That is literally what Brexit means: Britain leaves a free trade area, and thus trade with that area is not free anymore. It is not some unfortunate, hard to foresee side-effect of Britain leaving the European Union, like lorry queues at the border. Tariffs are exactly and directly what Britain voted for when they voted for Brexit. And the outrage over these tariffs means that a lot of people voted for Brexit without even understanding the very basics of what that means.
While economists generally prefer free trade, there is a political argument to be made for tariffs. The idea is that if the British have to pay extra for goods from Europe, they will preferably buy British goods instead, thus creating jobs in the UK. But in 5 years of Brexit, politicians clearly failed to get that message across. Instead they spouted some nonsense about "taking back control", and decried any reporting of economic consequences as "project fear".
What economic theory tells us is that free trade is good for the average person. Yes, maybe some goods that used to be made in Britain are now made in China. But that means those goods are now cheaper for everybody who buys them. And UK unemployment end of 2020 was 4.9%, despite the pandemic, so the idea that free trade means that all the British become unemployed is clearly false. The four freedoms of the EU single market, free movement of goods, free movement of capital, freedom to establish and provide services, free movement of persons, are also all beneficial for the people who have those freedoms. Again, lots of newspaper articles from British citizens complaining that their free movement to Spain has ended, showing that they didn't understand that they voted against that freedom of movement.
Emotionally, some people are feeling good about Brexit. Politicians talked up some freedoms, like freedom from decisions of the EU, which are largely theoretical. If the EU decides on some manufacturing standards, a British manufacturer has the theoretical choice of not following those, but only if he is willing to forego exports to the EU, which is unlikely. Many of the gained freedoms are actually only important to politicians, while the lost freedoms are more important to the ordinary people. The people got exactly what they voted for, but it becomes more and more evident that they didn't understand fully what they voted for, and in many case were deceived by politicians.