Referenda tend to be silly and dangerous – see the Brexit

President Obama can do little other than teach, in the last year of his presidency and with a majority opposition. Obama just advised the British to vote for the EU on the Brexit referendum. He is at risk of infringing upon national sovereignty, the very thing that the referendum is about.

The Brexit referendum stay / leave question is, and let me include the FT poll score,

Should the United Kingdom remain a member of the European Union or leave the European Union?
Remain a member of the European Union [  ] (44%)
Leave the European Union [  ] (42%)

Leaving the EU still allows various alternatives. If the vote would split over those options, perhaps one better stays. There is no way of knowing. Referenda tend to be silly and dangerous.

  • Referenda work only well when there are two options only, with a clear-cut Yes / No answer. This kind of question occurs only by exception.
  • Normal issues have more options and grades of grey. With at least three options, there arises the Condorcet paradox. For such issues, there better be representative government, with a Parliament selected by proportional representation (PR), and which Parliaments uses more complex methods for bargaining and voting – see Voting Theory for Democracy.
  • The pitfall is that a question might seem to have a clear-cut Yes / No answer while it actually has other options and such grades. Check how the Brexit question masks the other options. It often is an issue of political manipulation to reduce a complex issue to seeming simplicity, and to create a situation such that the political leader who drafts the question might argue to have the backing of the people.
  • Referenda belong to populism and not to democracy.

In this case, UK prime minister David Cameron has to overcome a rebellion in his own party and the threat of defection to UKIP. Check this report on Cameron’s bargaining with the EU. Given this bargaining result Cameron now argues for the EU and he hopes to secure peace in his party. It is somewhat curious that the whole of the UK is called to the ballot box to resolve such internal strife, but the same happened in 1975 with Harold Wilson and the Labour Party.

An advantage of the Brexit referendum is that the BBC now had two broadcasts “Europe: Them or Us“, that review the relation of the UK to the EU. It has been awfully nice to see the ghosts of the pasts perform their part in this drama. See also here and youtube. Some key points that struck me were:

  • Churchill argued for a united Europe.
  • The UK 1975 referendum caused people to complain a decade later: “We voted for a Common Market and later we got something else.”
  • Margaret Thatcher started out as a European, supported Europe in 1975, actually initiated and signed the 1986 Single European Act, with the change from a Common Market (with veto power by country) to the (Europe 1992) Single Market (replacing veto power by qualified majority), and whisked it through the UK Parliament without proper discussion about this abolition of national sovereignty. Only later came the 1988 Bruges speech.

The key point for Cameron has been to restore a shadow of that veto power. Britain cannot block others from having an ever closer union, but it has an opt-out:

“Assessment: Mr Cameron has secured a commitment to exempt Britain from “ever closer union” to be written into the treaties. He has also negotiated the inclusion of a “red-card” mechanism, a new power. If 55% of national parliaments agree, they could effectively block or veto a commission proposal. The question is how likely is this “red card” system to be used. A much weaker “yellow card” was only used twice. The red-card mechanism depends crucially on building alliances. The sceptics say it does not come close to winning the UK back control of its own affairs – and Mr Cameron is set to announce further measures which he claims will put the sovereignty of the Westminster Parliament “beyond doubt”.” (BBC Feb 20 2016)

Some points that I missed in these two “Europe: Them or Us” broadcasts:

  • There is no recognition for Bernard Connolly whose The Rotten Heart of Europe helped the British to stay out of the euro and to keep the pound. There is still room for a better approach to the notion of an optimal currency area.
  • There is little clarity about what the economic discussion really has been about. “Economic union” and “political union” are vague words, and it seems relatively easy to make a political speech or TV broadcast with these. Details matter however. Details help to keep out the ideologues. It is said that Britain has the best economists (Marshall, Keynes, Hicks) but Germany the best economy. Margaret Thatcher would have been much more effective when she had proposed good economics rather than banging the handbag. The relation of the UK to the EU would have been far better had the UK shown better economic analysis and an economy to prove it. Thatcher came to power during a time of stagflation when economists were in disarray and neoliberalism seemed the only way out. This neoliberalism however contributed to the global financial crisis and the economic crisis of 2007+. See my analysis since 1990. Of the core issue, a recent turn is the myth about German decentralised labour market bargaining. Britain has an impact on the European economy via the City and its banks (a fair reason to stay in), but why doesn’t Britain have more impact ?
  • Democracy in the UK suffers from district representation (DR), and it would be better to have proportional representation (PR). There is too little awareness in the UK that much of their political mayhem is caused by their rather unresponsive electoral system. See the comparison of Holland and the UK, and see how Nick Clegg shot his own foot (and destroyed the LibDems).

PM. After writing this, I discovered this review of “Europe: Them or Us” by Sean O’Grady and he says much of the same thing.

The recent Dutch referendum on the Association treaty with the Ukraine is another example of how referenda can be silly and dangerous. I voted against that treaty because of the military section hat would involve the EU in helping secure the Ukrainian borders, which would effectively move NATO’s borders eastward. Government propaganda did not pay much attention to the military section and emphasized the section on free trade. Even there the propaganda didn’t draw the parallel with the economic collapse in East Germany (DDR) when it was merged with West Germany (BRD). In this case, representative democracy failed, for it created this Association treaty, and the Dutch referendum was a freak event that might actually do some good. It still confirms that referenda tend to be silly and dangerous, since the proper answer would have been a better informed discussion in Parliament, notably by having (a) an Economic Supreme Court, (b) annual elections.

Reproduced with permission by Jos Collignon

Thanks to Jos Collignon for permission to reproduce this

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