IN OR out there is never a doubt, sang Sandie Shaw in her 1967 blockbuster hit Puppet on a String. So it is with Brexit. No one seems to doubt the certainty with which they regard Britain’s "shock" decision to be out of the EU as good or bad. Virtually every "expert" warned against exit and predicted dire consequences. The jest that the future is not what it used to be and that it is dangerous to make predictions, especially about the future, has seldom been more apposite.
The reason all predictions are as flawed as referendum predictions is that no one has any idea about such decisive facts as what the exit deal will entail, and what Britain’s post-exit policies will be. Both depend on such unpredictable factors as public opinion and the behaviour in diverse countries of politicians, bureaucrats, advisers, lobbies and more.
Objective data shows that the fortunes of countries depend more on domestic policies than international alliances. Why there should be doubt about in or out is that no one knows what trade and other deals Britain will strike with the EU, individual EU members and the rest of the world.
Making positive or negative predictions amounts to predicting the future behaviour of thousands if not millions of role players. That Britain’s credit rating has been downgraded by a couple of rating agencies tells us more about rating criteria than the future. They are, like friends with whom I socialised this weekend, victims of mainstream propaganda.
Since in or out entails doubt, I make no prediction. Instead we have a carpe diem question: will Britain exit EU stagnation onto the high road of prosperity? Winston Churchill reputedly counselled that one should never waste a crisis.
South Africans could teach them a thing or two. Ending apartheid, with all its complex laws, levies and institutions — like "homeland governments" and "multilateral secretariats" — was similar to what must be done to end Britain’s EU membership. The Institute of Economic Affairs (IEA) details what is entailed in Breaking Up Is Hard To Do. It is clear from the institute’s website — see at least the summary — that it is conceptually straightforward. As the influential Chatham House explains: "The terms of the UK-EU agreement will ... be vital."
It was reported that the "UK’s biggest banks have ... a secret list of demands for politicians", which includes "a bonfire of red tape, open borders and a publicity drive to bolster the UK’s status as a financial centre outside the EU." If their plan, and a little more, is implemented, London’s status as the world’s financial centre can be restored, and the UK can break from the economic stagnation that plagues advanced countries. It can open its economic borders to the world instead of just the EU.
Given the curious nature of the map showing which areas voted in and out, the UK has an opportunity to emulate Switzerland’s intensive devolution and diversity and Norway’s independence. An insightful analyst pointed out that Switzerland is in Europe, although not the EU. It has free trade with the EU, but also China, Japan and other countries. It exports five times more of its exports to the EU than Britain. It does not endure a deluge of EU rules, from the mandatory banana shapes to toilet paper sheets. It has Europe’s highest after-tax wages and lowest enduring unemployment. According to objective criteria, Switzerland and Norway are among the world’s richest, happiest, most innovative and peaceful nations.
The Hindi Times reports that "in principle, nothing changes immediately. Britons remain EU citizens and business continues as before." In principle, whether they follow free market or dirigiste principles will determine the effect of Brexit.
• Louw is executive director of the Free Market Foundation
This article was first published in Business Day on 29 June 2016