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Brexit: “crackpot realism” in action

Among the many changes to government in the last four decades, one stands out.  Government no longer does things.  To a greater extent with every year that goes by, government uses legislation and regulation to force others – corporations and individuals – to do the things that government used to do.

There is nothing underhand about this.  When she came to office in 1979, Margaret Thatcher was abundantly clear that she intended “rolling back the frontiers of the state.”  Government departments that used to administer vast public organisations had the rug pulled away from under them.  Critical infrastructure such as telecommunications, water and sewage, energy, mining, steelmaking, dock, railways and airports were sold off to the highest bidder.  Those things that could not be sold off were handed over to quasi-private agencies only nominally accountable to ministers.

The one promise, however, that Thatcher and her successors reneged on was the pledge to cut “red tape.”  Instead, the volume of new laws and regulations has grown remorselessly.  In part this is because few within the apparatus of state believed the ideological nonsense about free markets.  Having sold off the proverbial family silver, they were determined to legislate to prevent its misuse.  More often, however, legislation was used to justify the existence of politicians themselves.  After all, if we only needed 600 of these people to run things back when everything was controlled by the state, why do we need 650 of them now everything has been privatised?

In this environment, a new type of ideologically-driven politician emerged.  One who claimed to have the answer to a whole raft of social and economic ills.  Such people are examples of the “crackpot realism” identified by American Sociologist C. Wright Mills in the 1950s.  As Robert Higgs explains:

“Trouble is, Mills explained, these serious people are fools. They seem to know what’s going on, and how to right what’s wrong with the world, only if one accepts their own view of how the world works. So ‘practical’ are these serious people, however, that they understand nothing beyond their noses and outside the circle of their own constricted understanding and experience.”

Crackpot realism arises when the people – politicians, corporate CEOs, central bankers – who make decisions are both distant from and unaccountable to the people – engineers, technicians, trade negotiators – who have to put those ideas into practice.

We are witnessing this in the banking sector where TSB is experiencing the mother of all computer crises because managers concerned with saving money refused to listen to computer engineers concerned with actually making the system work.

We are also witnessing it in the slow motion train crash that is the UK government’s attempts to negotiate Britain’s exit from the European Union.  Arguably, the Brexit politicians themselves – ideologues like Dan Hannan, John redwood, Jacob Rees-Mogg, Nigel Farage and Iain Duncan Smith exemplify crackpot realism insofar as they were absolutely clueless about how to leave the EU in the event that they unexpectedly won a referendum that the pollsters assured them they would lose.  However, as Higgs puts it, these were not really the “Serious people.”  Rather:

“Such people are to be distinguished from the glad-handing, back-slapping buffoons who seek and gain election to public office. The electoral office seekers are specialists: they know how to get votes, but as a rule they know nothing about how to ‘run a railroad,’ whether that railroad be a business, a government agency, or any other sort of large operating organization. So, after the election, the elected office holders always turn to the serious people to run the show…”

Indeed, in the case of the ideological Brexiteers, they retreated to the sidelines from whence they came and from where they could continue their habit of sniping at the government for making a hash of things.  The true crackpot realists are the government ministers – including Mrs flip-flop herself – who continue to believe that leaving the EU is still a viable project.

This is not to suggest that Britain could not simply walk out of the EU tomorrow morning without a deal.  This is both entirely doable and wholly unacceptable to the people charged with delivering Brexit.  To understand this, we need to be clear about the unspoken assumptions that underpin Brexit.  These are that:

  • The vote to leave the EU must in some fashion appear to have been honoured
  • Trading/customs arrangements with the EU must remain intact
  • The City of London’s position in particular must be maintained
  • Existing EU trade terms with non-EU countries must be carried over.

And, of course, the incumbent government must maintain itself in office throughout the process and beyond.

This, however, is precisely where the voices of the negotiators and administrators responsible for delivering Brexit are landing on deaf ears.  Among the best advice offered to Mrs May when she took over from Cameron was a warning from Sir Ivan Rogers, the former UK permanent representative to the EU in Brussels:

“I did say last autumn I would not agree unequivocally to invoke Article 50 unless you know how Article 50 is going to work because the moment you invoke Article 50, the 27 [other EU countries] dictate the rules of the game and they will set up the rules of the game in the way that most suits them.

“My advice as a European negotiator was that that was a moment of key leverage and if you wanted to avoid being screwed on the negotiations in terms of the sequencing, you had to negotiate with the key European leaders and the key people at the top of the institutions and say: ‘I will invoke Article 50 but only under circumstances where I know exactly how it is going to operate and it’s got to operate like this otherwise this is not going work for me.’”

Rather than heed the advice of one of Britain’s few technocrats to understand the workings of the EU, Mrs weak and wobbly chose the political expediency of placating the Tory ideologues on the government back benches.  Article 50 was triggered before the government had taken the time to work out what they wanted from the Brexit negotiations.

I have likened this to a beginner’s susceptibility to “fool’s mate” in the game of chess.  Triggering Article 50 was the fool’s opening move precisely because, as Ivan Rogers warned, it handed the initiative to the EU’s highly competent chief negotiator Michel Barnier.

So it is that the British government is still floundering in its attempts to work out what its negotiating position is going to be, while the EU negotiators complain that no progress has been made since March:

“’Mr Barnier informed us that since 23 March no significant progress has been made on the three pillars that we work on: withdrawal, future framework, and Ireland,’ Ekaterina Zakharieva, the Bulgarian foreign minister chairing the council, told journalists at an official press conference following the meeting…

“Ms Zakharieva said the EU27 countries wanted more ‘intensive engagement by the UK government in the coming weeks’, warning that the October deadline was ‘only five months from now’.”

Although Britain’s Article 50 leaving date is not until March 2019, negotiations have to be concluded by October to give both parliaments time to vote on the provisional deal.  However, rather than engage with the few technocrats remaining within the sinking ship of state, Mrs May has taken the unprecedented step of dividing the Cabinet into two groups to develop each of two possible UK negotiating positions.  That is, more crackpot realism; as we learn from Lord Kerslake, the former head of the British civil service:

“We haven’t sorted out a deliverable version of the ‘end state’ of Brexit because there isn’t a deliverable version [and]… The deliverable version isn’t acceptable to a significant chunk of Conservative MPs.

“The biggest single issue has been the inability of ministers to firm up what the policy is. Talk privately to anyone involved [and] the thing they say is most difficult to handle has been the indecisiveness of the May government. And I think it’s greatly challenging for preparedness.”

This is the equivalent of TSB’s computer engineers desperately telling management that their new computer system doesn’t work.  Those within the civil service who would have to put one or other of the government’s Brexit plans into operation are – via Lord Kerslake – warning that neither can work.

Fortunately, the government may be spared the indignity of attempting and failing to deliver their version of Brexit simply because the EU27 have already ruled out both of the approaches that ministers are currently examining.  The unpalatable alternative, however, is for Britain’s negotiator David Davis to spend the summer learning shorthand dictation so that he can write down the terms on which Michel Barnier is prepared to allow the UK to leave the EU – terms that will most likely include a border between Northern Ireland and the British mainland that will be wholly unacceptable to the DUP MPs that May relies upon to remain in office.

Even Dan Hannan has been forced to acknowledge that things are not going as expected:

“Mr Hannan, writing on Conservative Home, said he was often asked, ‘not working out the way you thought, is it?’ He said: ‘To be fair, they’ve got a point.’ He went on: ‘I had assumed that, by now, we’d have reached a broad national consensus around a moderate form of withdrawal that recognised the narrowness of the result.’”

Like most of the Leave campaigners, Hannan made the mistake of thinking that Brexit was a largely economic issue and that EU countries would arrive at a favourable settlement rather than risk harm to companies that trade with the UK.  The problem is that the EU project is far bigger and far more political than economic.  As former Greek finance minister Yanis Varoufakis (who has first hand experience of EU negotiations) warned:

“Theresa May made two gross errors. The first one was immediately after the Brexit referendum; she interpreted the verdict of the British people as a verdict in favour of xenophobia, of ending freedom of movement, when the sensible interpretation would have been that it was an attempt to restore sovereignty to the British parliament.

“The second error was to imagine that she was going to negotiate with the European Union. The European Union does not negotiate unless it is forced to, because the European Union’s greatest nightmare is a mutually advantageous agreement between Britain and the European Union.

“They are only concerned with one thing: How to signal to the rest of Europe that anyone who votes in a government or who votes in a referendum in a manner which challenges the authority of the deep establishment in Europe will get crushed.”

This is the reality that the UK government cannot face up to.  Instead, they continue to adopt the crackpot realism of unworkable negotiating positions that they cannot even agree upon within the Cabinet; still less parliament as a whole.  Meanwhile, Barnier patiently repeats the same word as an earlier intransigent Frenchman… Non!

As you made it to the end…

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