A friend of mine emailed an article on Brexit by The Atlantic, ‘We’re All Worse Off’ (paywalled).
The Irish News reports Just 9% of Britons say Brexit more of a success than failure, poll suggests
Perception vs Reality
I responded to my friend that failure is a perception because Britain did none of the things to make Brexit work.
Consider UK policy after Brexit: No tax cuts, no trade deal with the US or China, No dismantling of inept EU rules and regulations, no progress on things like artificial intelligence or energy.
This is not a failure of Brexit, it is a failure to take advantage of things possible without being tied to the EU.
Sunrise
A few days after I emailed my friend, Eurointelligence, admitted in an article called “Sunrise” that my view is the correct one.
It was always nonsensical to replace the entire volume of some 4000 EU regulations on a single day. The majority are unproblematic. The intellectual and operational difficulty with Brexit is to select specific areas where regulatory divergence makes sense. We all know about the costs of Brexit are transparent, but the opportunities are hidden, and dependent on how well this divergence is managed.
As Joël Reland from the UK in a Changing Europe think tank explains, there are still 600 EU regulations that will be changed. What will also change is the end of the supremacy of EU law by the end of the year. UK courts will then be able to override EU law. We expect this alone to lead to significant divergence down the road. The government has also given itself fast-track authority on future changes.
But the most important aspect is that this reform is now going hand-in-hand with another initiative that is running in parallel: the pro-innovation regulation of technologies review, led by Patrick Vallance, the UK government’s former chief scientific adviser. The review is finally doing what we had urged the UK government to do right after Brexit, which is spot high-tech opportunities the EU is missing. Artificial intelligence is an obvious one, as is medical research and many other tech developments held back by the EU’s antediluvian data protection regulation. On high-tech industries, the EU has entered a regulatory death spiral, focused entirely on consumers since the EU companies no longer have skin in the game.
The EU’s problems with these industries has been building up over the last 20 years. Innovation and entrepreneurship have fallen down the ladder of political priorities. We also have doubts about the efficacy of Horizon EU, the EU’s research programme. It is large in volume, and a bureaucratic nightmare, according to this survey. But apart from the cumbersome application process, one has to question why it is that the race for several cutting-edge 21st century technologies is nowadays mainly between the US and China.
We don’t see the UK so much as a threat to the EU in the way Emmanuel Macron and Michel Barnier had imagined, through low-wage sweatshops. The UK will simply exploit areas the EU has left to others.
We expect the UK’s shift in technology focus and regulations to persist under a Labour government. Labour will reap the benefits from what now appears the start of a post-Brexit strategy. Once you have spotted opportunities for investment and drawn in investors, you are not going to reverse to a status-quo ante.
Some See Failure, Others See Sunrise
The headless Atlantic misses the inevitable opportunities that will come into play sooner or later simply because the EU is so inept.
Interestingly, Eurointelligence was one of the biggest supporters of the EU that one could find.
Increasingly, it has very negative articles on Germany regarding cars, energy policy, Russia, and China.
Specifically, Germany is looking back, trying to protect dying industries and even needing more coal to do so.
In general, EU nannycrats are still trying to punish Google, Microsoft, and US technology companies. It take unanimous consent of 27 countries to do much of anything so its focus on AI is to throw up roadblocks.
Yep, the Tories totally blew the aftermath of Brexit. But those are policy errors that do not make Brexit unwise.
The UK would be crazy to want back in the EU. Fortunately, “Once you have spotted opportunities for investment and drawn in investors, you are not going to reverse to a status-quo ante.”
Indeed. Kissing the EU goodbye was a very wise decision, it will just take longer than expected for that to become obvious.
Bring on sunrise.
Artificial Intelligence Will Progress
In Time Magazine. Eliezer Yudkowsky, a US Decision theorist, proposes a total ban on AI because “If we go ahead on this everyone will die”. He would preemptively strike all AI data centers.
Yudkowsky belongs in the EU.
For discussion, please see To Stop AI, Lunatics Are Willing to Risk a Global Nuclear War
This post originated at MishTalk.Com
Please Subscribe!
Like these reports? I hope so, and if you do, please Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
If you have subscribed and do not get email alerts, please check your spam folder.
Mish
There’s lots of negative media stories about Brexit, mostly exaggerated or just not true.
https://www.briefingsforbritain.co.uk/uk-exports-and-brexit-what-has-really-been-happening/
In this article it is shown that:
While underlying UK goods export growth since 2020 looks relatively weak this is more due to a decline in exports to non-EU economies than exports to the EU. Despite some claims to the contrary, there is no evidence the drop in non-EU exports is a Brexit effect
Looking across a wide range of possible ‘counterfactual’ series that could indicate where UK exports would have gone in the absence of Brexit suggests that UK exports to the EU may only be a few percent below the ‘expected’ level. This is a much better outcome than many critical studies of Brexit claimed would occur prior to the UK leaving the EU customs union and single market
Looking at past UK export recoveries after global downturns suggests a delayed recovery is unremarkable. It may just be that the UK’s particular export structure and/or corporate strategies produce this kind of pattern with Brexit not an important factor
If UK exports had indeed been badly hit by Brexit then this should be visible in the performance of UK manufacturing industry. But in fact, UK manufacturing has outperformed that of the other G7 countries since 2020
UK services exports show no apparent impact from Brexit, in contrast to past claims that they would be hard hit. After a slump during the pandemic, their recovery has been at the top of the range of the recoveries seen among the G7 economies
The OBR and others claim that Brexit has reduced the UK’s economic openness with a big negative impact on productivity. But the degree of ‘openness’ has at most declined by a very small amount which is not consistent with the claims on productivity. Moreover, the actual data do not show signs of lower productivity in the market sector of the economy – only in the public sector which has nothing to do with Brexit