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To what can we compare Brexit

Posted by admin at 3:29 PM on Sep 24, 2017

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David Smith’s article in the Times (Sunday 10 September), "Britain's first Brexit offers lessons for our departure” concedes that the leaving the ERM in 1992 and our current course of leaving the EU are “different animals”, but suggests there are lessons to be learnt. I suggest that they are not just different animals, they live in different worlds.

https://www.thetimes.co.uk/edition/business/britai...

He adds a PS about the Archbishop of Canterbury’s contribution to an IPPR report, in which he describes the economy as broken. Smith sees this as “unhelpful hyperbole” on the part of a potentially turbulent priest, but concedes that the economy “could be doing a lot better” and needs “bold and imaginative thinking.”

Here are my comments:

There can be no comparison between these two "Brexits". Our departure from the ERM belongs squarely in the world of finance, a sector which Michael Hudson powerfully exposes in "Killing the Host" as having a "strategy to dominate labor, industry and government," and which, "involves disabling the economy's brain." The metaphor which runs effectively through his book is that the rentier dominated financial sector is parasitic on the real economy.

The Brexit upon which we are now embarking is not just "bigger". As Smith says, "Liberation from the ERM and departure from the EU are very different animals". They are not just different animals, they inhabit entirely different worlds.

Brexit is about the real economy. It involves people's hopes and careers, their creativity and their aspirations. It is about components which cross the channel five times in the course of assembly into a finished product. It is about foodstuffs which are grown in one country, processed and packaged in another and sold throughout a flourishing European community. It is about services and information which pass instantaneously between countries in a way which was hardly imaginable 44 years ago when we signed up to the European project.

I know this is something which David Smith understands and cares about. His book "Something will turn up" is a perceptive work on British industry and how it is shaped by the forces of international capital. There is sharp analysis and he offers sensible proposals.

In contrast, today's piece belongs alongside his observation some years ago that GDP figures were disappointing because of a mild winter when people had not needed to use their heating.It is all too easy for economists to become caught up in their own world of figures and not to see the wood for the (often threatened) trees.

Rather than enter a debate that I am not qualified to (I am a "turbulent priest" rather than an economist), I will simply ask whether our departure from the ERM was the cause of "the longest period of continuous economic growth in our history, and one of the strongest." Is there not a danger of confusing coincidence with causation? Interest rate cuts may have been a factor, but there were many other factors at work in those years - technological advances in particular.

The PS is interesting. Justin Welby is the first Archbishop of Canterbury to have worked in industry, and his perspective is an important one. Hyperbole, perhaps, but if it helps us towards the "bold and imaginative thinking the economy needs" it will have been significant. In "The Business of Virtue", Clive Wright offers, "Business should take heed of religious wisdom because it codifies centuries of moral understanding and has rich insights to offer about the tension between private interest and the public good, a tension which epitomizes modern capitalism."

We need economists (and perhaps even practical theologians) who can bring a fresh perspective to a complex field. It must begin with the real economy and the people whose lives are caught up in it. As Alan Greenspan wrote, "…if you going to model and economy, you have to do far better at understanding how the unit of the economy functions - i.e. the human being."

Our workplace chaplaincy (Industrial Mission) team has the strap line, "Connecting Church and the Economy". We do it, not with spreadsheets or graphs, but by being alongside people in their daily work. All too often it is these people who have been the victims of the big economic events and have struggled under the predatory capitalism which Hudson highlights. They are the people who will be impoverished by Brexit.