Stunning results rolling in late Thursday night indicate that the United Kingdom has voted to leave the European Union.
While free trade helps human flourishing, the European Union didn’t fulfill its promise and potential and instead too often did the opposite. Sometimes a divorce is what you need to hit the reset button and begin again.
Matt Ridley, a columnist for the U.K. Times and a member of the House of Lords, articulated this well in support of Brexit in a Wall Street Journal oped:
[T]he EU’s obsession with harmonization (of currency and rules) frustrates innovation. Using as an excuse the precautionary principle or the need to get 28 countries to agree, the EU gets in the way of the new. “Technological progress is often hindered or almost impossible in Europe,” says Markus Beyrer, director general of BusinessEurope, a confederation of industry groups. Consequently, we’ve been left behind in digital technology: There are no digital giants in Europe to rival Amazon, Google, Apple and Facebook.
The EU is also against free trade. It says it isn’t, but its actions speak louder. The EU has an external tariff that deters African farmers from exporting their produce to us, helping to perpetuate poverty there, while raising prices in Europe. The EU confiscated Britain’s right to sign trade agreements—though we were the nation that pioneered the idea of unilateral free trade in the 1840s. All the trade agreements that the EU has signed are smaller, as measured by the trading partners’ GDP, than the agreements made by Chile, Singapore or Switzerland. Those the EU has signed usually exclude services, Britain’s strongest sector, and are more about regulations to suit big companies than the dismantling of barriers.
Former British Prime Minister Margaret Thatcher had deep reservations about the European Union and the common currency, and if she were alive today, she likely would have sided with former London mayor Boris Johnson to Leave.
Some observers, including Donald Trump adviser Stephen Moore, have tried to say this global sentiment with America’s “special friend” paves the way for a Trump victory. But Trump hasn’t argued for free trade; he has argued for tariffs that would hurt American consumers and businesses. He has also called for spending binges without spending cuts to pay for them. That’s why top economists are warning us about Trump.
My guess is the Iron Lady would be warning us, too.