Now that the whole “will they stay or will they go?” shenanigans are all over, it’s time to examine the Brexit fallout. And one particular area that needs to be looked at is whether or not Great Britain will embrace free trade or install trade protections after dumping Brussels.
When the European Union (EU) was started, one of the key ideas, besides avoiding a Third World War, was more open and free trade across Europe without tariffs, restrictions and taxes. It was meant to grow the continental economy and allow consumers and merchants to travel and trade with each other. Too bad a free trade and tariff-free environment never came to fruition. (SEE: Just Another Day in Regulated Europe)
Unfortunately, the initial concept would ultimately crumble, and Britons would have no other choice but to abide by a centralized commission in Brussels. They had to live with it, even if they didn’t want to.
Today, the EU is filled with tariffs, trade restrictions and taxes. This was one of the reasons why so many people in Britain wanted to exit the EU. The UK Independence Party is now demanding tariff-free access to the European market, which would make a lot of sense and benefit others.
With British Prime Minister David Cameron stepping down, the odds-on favorite to succeed him is former London Mayor and staunch Leave proponent Boris Johnson. Leading the Brexit movement, Johnson advocated for better trade, but that doesn’t necessarily mean free trade.
For whatever reason, whenever you hear a politician who is claims to be pro-free trade, he is constantly talking about trade deals and trade agreements. This isn’t what free trade is really all about.
Free trade is when a businessman enters a country and purchases 1,000 pairs of pants for $10 each and then returns to his native land sells those same 1,000 pairs of pants for $20 each. On the way home, he just waves at the border guards and bids adieu. It’s as simple as that.
The trade argument in the UK is the same argument unfolding in the United States this election cycle.
The likes of Donald Trump say they support free trade, but then argue in support of tariffs, import restrictions and trade agreements. These ideas are really the antithesis to free trade, and are more likely to benefit the elite and the well-connected than the average small businessman or consumer.
As legendary free market economist Murray Rothbard explained more than 20 years ago:
“In truth, the bipartisan establishment’s trumpeting of ‘free trade’ since World War II fosters the opposite of genuine freedom of exchange. The establishment’s goals and tactics have been consistently those of free trade’s traditional enemy, “mercantilism” — the system imposed by the nation-states of 16th to 18th century Europe….
“Whereas genuine free traders look at free markets and trade, domestic or international, from the point of view of the consumer (that is, all of us), the mercantilist, of the 16th century or today, looks at trade from the point of view of the power elite, big business in league with the government. Genuine free traders consider exports a means of paying for imports, in the same way that goods in general are produced in order to be sold to consumers. But the mercantilists want to privilege the government-business elite at the expense of all consumers, be they domestic or foreign.”
No matter what Johnson, UKIP’s Nigel Farage or other British leaders do over the next several years, the decentralization of power that Brexit accepted was the step in the right direction. Rejecting centralization and supporting independence is always a good thing, no matter the circumstances.
The June 23 referendum was certainly Britain’s Independence Day. Why so many younger Britons wanted to stay in the EU is entirely baffling. Fortunately, it’s all over now. Sadly, the unintended consequence of Brexit is that young voters may put socialist Jeremy Corbyn into power in the next election. Yikes!
Nevertheless, Thursday’s vote was definitely the beginning of the end for a corrupt, inept and statist decades-old institution. Hopefully, in the years to come, other European nations vote to Leave, too. Why remain in a sinking ship just to drown?
Let’s hope that British Leave proponents now embrace free trade and free markets and veer away from the statist policies that have inflicted European markets for so long.
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