Examining ‘Take back control’
Bob Hancké
29 November 2021
The CER’s John Springford has updated his ‘Cost of Brexit’ report for September 2021 (https://www.cer.eu/insights/cost-brexit-september-2021). Using a ‘synthetic twin’, composed from countries technically similar to the UK in many crucial respects before 2019, he estimates that Brexit has lowered UK trade by 11 per cent. A few more calculations suggest that the UK’s GDP faces an annual Brexit hit of 4-5%. That is, as he says, a big deal (an annual loss of 4.5% means that an entire year’s GDP disappears every 15 years or so).
Ian Mulheim of the TBI calculated (here: https://institute.global/policy/cost-frost-0) that the Brexit-induced loss for this year alone roughly covers the significant tax rises that the Johnson government’s ‘Chancellor of the Exchequer’ (Minister of Finance in the rest of the world) has imposed, while reducing the size of the economy that produces tax revenue. Like ten years ago, austerity begets austerity as a result, making any levelling up promises emptier than a discarded beer can on a Saturday night in central London.
A few weeks ago, I explained that Brexit constrained the UK more, not less, in what it can include in trade agreements, because the EU’s standards on products, food and privacy will always be more important than any other trading partner; the EU is, you see, the UK’s most important market and losing that is hard to off-set by a few percentage point export gains elsewhere. You can read that blog post here: https://blogs.lse.ac.uk/europpblog/2021/11/01/the-iron-cage-revisited-how-brexit-constrains-the-uk/; it is based on a longer report with colleagues from Nord France Invest and PEACS (https://hub.nordfranceinvest.com/hubfs/Brexit/PEACS_NFI_technical_report.pdf).
The death of 27 refugees in the English Channel last week alerted us to the new, again Brexit-induced, UK-EU border problem. The UK, it seems, would like to be a member of the EU when it comes to border control and refugee policy—how else to understand the demand, floated by Johnson on Twitter, to send refugees back to the country where they entered Europe? That is the rule – a poor rule, but a rule nonetheless – between EU member states and associated countries, but a non-EU member cannot claim that. Simply pushing back rubber dinghies, as Priti Patel, Minister of the Interior (‘Home Office’), suggested, is illegal under maritime law, and setting the Royal Navy on them while at sea is not only morally reprehensible and illegal but something very few commanders of a ship would even contemplate.
‘Taking back control’… It would have been good if everyone had done their homework on that in 2016. But, then again, most Brexit-loving MPs prefer to think about the criminological consequences of a female Doctor Who (https://www.theguardian.com/politics/2021/nov/25/bond-doctor-who-casting-women-risks-driving-boys-to-crime-mp; a – female – colleague of his defended him: https://www.thestar.co.uk/news/politics/sheffield-mp-miriam-cates-defends-doncaster-mp-nick-fletcher-over-doctor-who-and-star-wars-role-models-3475277). Oh Dear.
------------------------------------------------------------------------------------------------------------------------------------------
Monday, 28/06/21
The world of work post Covid-19
John Naughton in the Observer on changes in work patterns, echoing some of the ideas in our October 2020 Dossier. Work will change but many employers have yet to see how and why. Memo to corporate leaders post-Covid: the disruption to businesses has only just begun: https://www.theguardian.com/commentisfree/2021/jun/26/memo-to-corporate-leaders-post-covid-the-disruption-to-businesses-has-only-just-begun
The new flow of gold: Data
However, whatever tech commentators tell you, data isn’t oil: it’s people’s lives https://www.theguardian.com/commentisfree/2021/may/29/data-oil-metaphor-tech-companies-surveillance-capitalism
Covid-19: Methodologies to unpack the pandemic's origin and analyse its spread
Caltech's David Baltimore discusses the debate over origins of SARS-CoV-2 - Bulletin of the Atomic Scientists
An interesting article on why natural selection and politics have combined to produce the perverse outcome of a fast-growing delta Covid-19 variant.
The political economy of electric vehicles
The international political economy of rare earth. Fascinating… and a bit scary. https://www.euractiv.com/section/circular-economy/news/rare-earth-metals-at-the-heart-of-chinas-rivalry-with-us-europe/?utm_source=piano&utm_medium=email&utm_campaign=9707&pnespid=k_d3pfJAFxSN5lOdyZ18c1lKCxE7FBkF8eSBGEpryg
There still is no free lunch. Even if we find technical solutions, we still need serious work on the governance of cleaning up our environment. The rush to ‘go electric’ comes with a hidden cost: destructive lithium mining: https://www.theguardian.com/commentisfree/2021/jun/14/electric-cost-lithium-mining-decarbonasation-salt-flats-chile?CMP=Share_iOSApp_Other
------------------------------------------------------------------------------------------------------------------------------------------
Friday, 28/05/21
No trade deal for the Swiss
After seven years of negotiations, the Swiss have stopped official FTA negotiations with the EU. The reason? Access to the EU Single Market only comes with acceptance of the free movement Directive and ECJ jurisdiction, both of which the Swiss don't seem to like. Sounds familiar, right?
Quo vadis productivity?
A very interesting paper on productivity slowdown in the OECD. Sophisticated yet not extremely technical. Perhaps not quite a beach read but for the garden..?
Academics turned technocrats turned politicians
Educated at prestigious East-coast schools and anointed to be the monetary leaders of the US and the Eurozone, Janet Yellen and Mario Draghi have been among the most powerful (academic) policymakers over the last 30 years. Looking at the evolution of their personas over the these three decades, this recent FP essay gives a good overview of what we can expect from Yellen and Draghi in their new political positions.
------------------------------------------------------------------------------------------------------------------------------------------
Friday, 16/05/21
Clearly AI is going to win. How people are going to adjust is a fascinating problem
A fascinating interview with Daniel Kahneman on his new book in last weekend’s Guardian
A Contingent Economic Strategy for the Next Phase
While not denying the importance of public expenditure in the recovery from the Covid economic consequences, Jean Pisani-Ferry and Olivier Blanchard argue for more targeted government spending. A less hawkish critique than some might have anticipated.
Learning to live with debt
... or how to live under the emerging new political-economic paradigm. Very interesting piece by the Centre for European Reform.
The Great Reset
The two articles above almost sound like as if we had left the current neoliberal paradigm already. But is that really the case? And when/under which conditions do paradigms change anyway? Our latest PEACS dossier picks up these questions and analyses if these announcements are too early, mere lip services perhaps, or if they indeed herald a shift in our guiding economic orthodoxy.
------------------------------------------------------------------------------------------------------------------------------------------
Sunday, 16/05/21
Krugman Wonks Out: Return of the Monetary Cockroaches
A very interesting take on the inflation discussion: crypto currencies base their raison d'être on the perils of fiat money.
The UK economy: Brexit vs Covid
The UK economy was always going to take a hit from Brexit, but the double-shock of Brexit and Covid might make the adjustment even more painful.
------------------------------------------------------------------------------------------------------------------------------------------
Saturday, 08/05/21
Why inflation is not lurking in the shadows: Revisited
As we argued in our blog already a couple of months ago, inflation rates are not going to remain persistently high. A new study by the IW (German employers' think tank) tells you why in detail.
The Economist: What history tells you about post-pandemic booms
Quite a thought-provoking piece in The Economist on the political-economic history of pandemics.
Euractiv Green Brief: Beware the carbon price backlash
Another 'conservative' coalition is on the horizon. If the social aspects of the energy transition, like energy poverty, are not properly addressed, (poorer) consumers could team up with 'traditional' energy producers to delay the shift to green energy.
------------------------------------------------------------------------------------------------------------------------------------------
Sunday, 02/05/21
AK Wien on the A&W blog
Digitisation, Covid-19 and the Green Transition - it's time for a future-proof industrial strategy. The Austrian Chamber of Commerce's A&W blog presents some good pointers on how such a grand policy programme could look like (blog post in German).
Paul Krugman in the New York Times
A very good, short and slightly counterintuitive post by Paul Krugman on why cutting taxes for the rich is self-defeating here.
The Woman Who Shattered the Myth of the Free Market
A fascinating essay — in more than one way — on Joan Robinson. https://www.nytimes.com/2021/04/24/opinion/joan-robinson-economy-monopoly-labor.html?referringSource=articleShare