Expert View – Why Brexit Is A Neoliberal Project

30th August 2018 / United Kingdom
Expert View - Why Brexit Is A Neoliberal Project

Simon Wren-Lewis is a British economist. He is a professor of economic policy at the Blavatnik School of Government at Oxford University and a Fellow of Merton College. Wren-Lewis worked for Her Majesty’s Treasury as a budget-team member from 1974 to 1981. From 1976 to 1980, he worked for the National Income Forecasting Team as a senior economic assistant and from 1986 to 1990, he was a Senior Research Officer and Senior Research Fellow at the National Institute of Economic and Social Research. From 1990 to 1995, Wren-Lewis was Chair in macroeconomic modelling at the University of Strathclyde. Today, he conducts research in economic methodology, macroeconomic theory and policy, and international macroeconomics.

This is his view on Brexit.


Neoliberalism is generally associated with extolling the market, encouraging globalisation and generally being on the side of business. As Brexit will reduce the size of markets available to UK firms and therefore reverse globalisation in the UK, and is definitely not what most of UK business wants, how can it be neoliberal?
A good place to start is to go back to a discussion of what free trade means. Most people, and certainly most economists, would think that free trade means free to trade. Following that definition, harmonising regulations across countries which enables firms to trade much more easily in many countries is increasing free trade. The ideal is one single market, which is what the EU has achieved for goods and many services.
Many neoliberals would think that way. But others would see free trade as meaning free from any kind of state interference. The Single Market, with a court to judge whether its rules and regulations have been broken or not, does not sound free in that sense. Their ideal becomes trade that is as free as possible from any kind of state regulation. They do not want harmonised regulations, but the minimum amount of regulations.
If seeing free trade as meaning free from regulations on trade seems strange, it shouldn’t. If you look at how many neoliberals use the term free market that is exactly what they often mean. If someone says that executive pay is determined by the free market, they do not mean a market free from what economists would call imperfections but just free from government interference. Unlike ordoliberals (a variant of social liberalism that emphasizes the need for the state to ensure that the free market produces results close to its theoretical potential), neoliberals of this type would call a market with a monopoly producer free but a market where competition policy broke up monopolies as suffering from state meddling.
I had originally thought that the Global Britain idea that Brexiters go on about was pure deflection from the awkward fact that Brexit would restrict trade. I think I was being unfair. Being true neoliberals Brexiters do not want to destroy trade, but trade has to be as regulation free as possible. Far better, therefore, for the UK to trade with the US or emerging markets that had weaker regulations than with the Single Market. The problem with the Single Market, from the Brexiters viewpoint, is that it locks in strong regulations of various kinds.
This helps explain why so many Brexiters also appear to be strong neoliberals. Brexit is like striving for a kind of neoliberal utopia, in contrast to other neoliberals like Osborne and Cameron who were prepared to compromise over regulations for the benefit of access to a bigger market. And just as neoliberals have no worries about tricking the public to vote for their utopia by pretending it was something very different, they also have little time for firms that cannot understand that what the Brexiters are doing will ultimately be for their own good. Politics as marketing, better described as deceiving of the public, is a common neoliberal trait.

The Brexiters are just one more group inspired by their own vision of neoliberal Nirvana. While Osborne and Cameron were prepared to settle for a small state, the Brexiters want that along with as few regulations as possible. Both obtain their vision deceitfully and are prepared to inflict untold damage on the economy to get what they want.

Like all good Leninists they believe that in the end (for Rees-Mogg 50 years) it will all be worth it. Which means if they get their way we will endure half a century of economic damage only to demonstrate their vision was just one more neoliberal fantasy.

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