The debate surrounding the EU referendum in Britain, scheduled in two weeks, and the fate of the UK outside of the EU, is now in full swing. Unsurprisingly, little of substance has been said so far on the issue. One would expect that both sides would be better prepared with arguments to support their cause, but many aspects discussed have not only been erroneous, but have appealed to people’s fear rather than their intelligence. Both the Remain and the Leave camps have failed to show how either decision would enhance economic and political freedom; instead, they have tried to one-up each other in the preservation and growth of the existing welfare state, military complex, and bureaucratic apparatus.
Setting aside the disappointing democratic discourse within the UK, an even more irritating factor have been the pronouncements of international organizations regarding the effects of a possible Brexit. As if economic progress were impossible before the creation of European inter-governmental institutions, the IMF has repeatedly warned that a Leave vote would ‘precipitate a protracted period of heightened uncertainty, leading to financial market volatility and a hit to output.’ The latest to join in this is the World Trade Organization, arguably the least entitled to display self-righteousness given its track record. Roberto Azevedo, WTO’s director general, has declared that in the event of a Brexit, he doesn’t ‘know exactly how members are going to behave [toward the UK] and what kind of engagement there will be. [Negotiations might take] two, three, four years. It can take a decade or more. It depends on the complexities of the negotiations and the appetite for members to do it quickly… [but] there would be a vacuum. The UK would be the only WTO member without a list of its commitments… it’s a legal uncertainty. I don’t have a crystal ball and the message I am bringing to you is that nobody has that crystal ball.’
This post was published at Ludwig von Mises Institute on June 10, 2016.
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