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THE LIBERAL PEACE AND BREXIT S Mansoob MURSHED Institute of Social Studies, the Hague & Coventry University Mansoob MURSHED 7th February 2017 Democratic Nations States are at Peace with Each other Since 19th century Common values Economic Interdependency Exception: the Great war Mansoob MURSHED 7th February 2017 LIBERAL TRIPOD: Democracies do not go to ‘war’ with each other Common democratic values Economic Interdependence Not just trade in goods Two way FDI Financial flows and services Common Membership of International Organisations THE EU does all of the above and engenders a cosmopolitanism or common set of values as discussed by Kant Mansoob MURSHED 7th February 2017 ERGO BREXIT is an act of war by knocking out the third liberal peace pillar It is a statement of intent not to cooperate And it makes future policy coordination between Britain and Europe more costly Exiting from common values as in a club Repatriating SOVEREIGNTY Pooled sovereignty in an interdependent world Accepting common standards Shared regulatory frameworks Non EU European countries adhere to common regulations and standards Mansoob MURSHED 7th February 2017 Institutions and Economic Growth The current conventional wisdom is that the quality of ‘institutions’ determine long-term growth or prosperity. Inequality DOES NOT (always) promote economic growth Economic Institutions determine growth, but economic institutions determined by formal and informal politics and power Hence economics and politics are inseparable Are British institutions complemented by EU institutions? Is Brexit detrimental to institutional quality? More inequality of opportunity? Further erosion of the democratic dispersion of power, checks and balances? Mansoob MURSHED 7th February 2017 Brexit and Trade The freedom of the high seas does not ensure free trade Operating under WTO rules is the 21st century equivalent of the freedom of the high seas! But excludes agriculture and services Regulations, rules of origin and other rules create ‘transactions’ costs to international trade that are not strictly classic trade barriers Brexit amplifies bilateralism From the bilateralism of blocs to ‘atomistic’ bilateralism Or more appropriately aggressive unilateralism by a very much erstwhile great power Mansoob MURSHED 7th February 2017 Footnote on FTAs We are told that countries are queuing up to sign FTAs with the UK FTAs exclude many areas not just services but several manufacturing sectors Opportunistic behaviour Weaker commitment to free trade compared to a customs union and a single market And notoriously difficult to negotiate, rather like world trade multilateral negotiations Mansoob MURSHED 7th February 2017 Brexit and Economic Welfare: Uncertainty Non-cooperative behaviour means tax and regulatory competition with a race to the bottom effect for Britain. Other countries like Germany have higher productivity, and do not have to lower wages as much to be competitive. Social Sector and health Budgets likely to be put under more stress Since 1980 led by the USA and the UK the global Wealth/GDP ratio (the Piketty metric) and mean income to median income ratio are rising… inequality is rising Ergo, Brexit could further immiserize the disadvantaged So this could amplify the inequality of opportunity effect we are witnessing in the last 30 years which threatens to undo the egalitarian equality of opportunity achievements of the short 20th century Inequality of opportunity creates exclusions to freedoms and opportunities NEW ROAD TO SERFDOM because the power of rich enhanced and the democratic dispersion of power further attenuated Mansoob MURSHED 7th February 2017 Behavioural economics: why people vote the way they did Rational individuals can be misled Cognitive Dissonance Commitment Problems to redistribution by the establishment Prospect theory Harking back to a past position that is valued and cherished Mass hysteria Mansoob MURSHED 7th February 2017
