Last night I participated in a lively debate sponsored the British American Business Council, OC Forum, and World Affairs Council regarding the potential British exit from the European Union. The vote on this controversial referendum comes June 23, and while polls are trending negatively for the exit to happen, my belief in the wisdom and even necessity of a BREXIT is of the highest conviction. If I were a betting man, I would expect the referendum to fail next month, but for a BREXIT (British exit from the European commission) to happen in a future year, under much less fortunate circumstances than are available now. Sadly, they are delaying the inevitable if they vote to remain now.
Observers at the debate can state who they believe won, but the audience “applause meter” did award our side with the win. The audience seemed mostly split before we began, and appeared mostly split when we were finished. I had multiple people tell me afterwards that they entered the night opposed to the BREXIT, but were swayed by my arguments that night (as a married man, I am not used to my arguments swaying opinions). Truthfully and humbly, I do feel that my arguments prevailed last night, and though the intellectual prowess of my two opponents was extraordinary (David Pyott, the long-time chairman and CEO of Allergan, possesses an MBA from the London Business School and International Law degree from University of Amsterdam where he studied international trade and commissions; Dr. James Coyle, the director of Global Education at Chapman, Ph.D in Political Science from George Washington University, was no slouch himself), I believe they failed to make the case for a British advantage in staying within the European union, and in fact at different points enabled my own argument.
Fundamentally, one can believe that Britain’s national security is threatened by leaving the EU if they wish, but my opponents last night conceded that was hogwash. The NATO alliance is unaffected by this move, the European dependence on Britain’s counter-intelligence is unaffected, and the American relationship is certainly unaffected. This line of reasoning was defeated soundly, which made the debate more focused than it could have been if our opponents were less competent in foreign policy.
Instead the debate focused on free trade and it focused on immigration. The free trade piece was near and dear to my heart, because of course if I believed that British exports or imports were to be necessarily impacted by leaving the European Union, I would oppose the BREXIT firmly, as I am a free trader to the core of my being. The reality is, and last night highlighted this, the argument that a BREXIT will diminish the free trading capacity of the UK is fear-mongering hogwash. Through time, and post-BREXIT ripples, her free trade will increase when devoid of EU bureaucracy, and in fact will be a net benefit to Britain to negotiate individual deals and treaties. To suggest that trade will dry up because a BREXIT reflects an incredible misunderstanding of how trade and the very notion of free exchange really work. The Germans responsible for 35% of auto sales in Britain would surely disagree.
On the immigration front, I wholeheartedly agreed with Mr. Pyott that if millions of more people come to Britain over the next 15-20 years, it will be a net positive to their economy. The anti-population growth fallacy is amongst the most unforgivable economic errors. However, in the course of my agreement with Pyott over the benefit of population growth, we highlighted the real difference: “Free movement is an inviolable principle of EU membership”, states the EU commission. As they prepare to add not just 73 million people from Turkey to this ill-fated commission, but also Albania, Macedonia, Montenegro, and Serbia, the stakes are beyond high for Britain to re-assert some control of their own immigration policies. Independence in this regard would enable them to encourage a multi-racial society, free of xenophobia, but with a consideration for the quality of the immigrants coming (pro-economic producers and students and job creators; anti-criminality and terrorism). Welfare benefits to immigrants right now in England are outside the jurisdiction of the Brits, and rather all decisions around such sit with the unaccountable body of the EU bureaucrats in Brussels. Immigration is going to force a British response either now or in the future; the British people will very much wish the answer is now if they do not act.
It was fascinating to hear David Pyott talk about the benefits of the purchasing power of the pound in the EU, who may not have followed the currency of the most high profile European country to NOT be on the Euro, and NOT be in the EU. Let’s just say that our Swiss friends may find his argument unpersuasive. We have no doubt the sterling would benefit through time after Britain were untethered to the disastrous EU, just as Britain has already benefitted from being untethered to the Euro currency.
To me the most interesting part of the night was David Pyott’s defense of “transfer payments” from Britain to “weaker EU countries” as analogous to the payments California makes to Washington D.C. for various services rendered. Suffice it to say, he forced me to quickly pounce, for indeed herein lies the rub. As Britain sends more to Brussels now than they are cutting in austerity efforts, he accidentally walked into the real heart of the matter, which surely transcends the perverse economic arrangement Britain finds itself in. There is no comparison to California and Washington D.C., for Californians elect their senators and congressmen who represent them in Washington D.C. Our federal head with individual state model is categorically different from the structure of the EU, where member-nations have no ability to hold the governing bureaucrats accountable. This is the very heart of the matter – sovereignty. Britain is making transfer payments to a body that is not accountable to Britain’s own citizens. The very point of this dysfunctional arrangement, is that it does NOT function like the U.S. model does.
I have provided the transcript of my opening remarks below. It was a very engaging evening, and though I feel good about how it went for “my side” (my debate partner, Dr. Jon Gibson, was outstanding), I also commend my opponents for their high level of competence and conviction, regardless of the disagreement we have on this issue.
In Defense of BREXIT
Allow me to first thank the British American Business Council, the Orange County Forum, and the World Affairs Council for inviting my participation in tonight’s debate. I also want to thank these worthy participants with whom I am honored to share this stage tonight.
The issue we are here to present tonight is an emotional one for many British citizens, and for good reason. One in my shoes must always be apprehensive to join into the fray of an issue so emotional to so many people when the reality is that my interest in the subject is purely ideological – and not at all personal. I am a Californian native and American citizen, and though I have very strong feelings about Britain’s relationship to the continent of Europe, and how that ought to be manifested economically and structurally, I cannot claim any personal stake in the fray. So I participate tonight with humility but conviction, and apologize in advance for being “that American” intruding into the interests of the UK.
But alas, there is another American who chose to enter the fray as well, though perhaps some think President Obama is more qualified to have an opinion on the matter than I am. I am not sure about all of that – what I am sure is that to lack an opinion on so many matters related to Middle East turmoil and Russian aggression against the Ukraine and global oil market manipulation, but then to have the strong and unashamedly distributed opinion that Britain has no business leaving the magic of the Eurozone strikes me as not sensible to say the least, or put more diplomatically, rather selective.
There is no need for me to pile on President Obama tonight, though I welcome the chance to do so during Q&A. Rather what must be piled on is the overwhelming and indisputable evidence that a British exit from the Eurozone is best for the sovereignty, security, and quality of life of those who call the United Kingdom home.
The rhetoric attached to the term “euro zone” by rhetorically clever advocates of Britain staying is that it is merely a “free trade zone”, and if it were so simple, if the debate tonight was really over the economic miracle that the most brilliant Scot of them all, Adam Smith, so famously advocated for – free trade – then I would be standing on the other side of this great divide. For I am a free trader through and through. A free trade advocate as it pertains to U.S. policy, and a free trade advocate when I, as an economist and as a financial professional, evaluate the best policy paradigm for any other country, Great Britain included. Free trade is not threatened by a British exit from the Eurozone as we will see tonight, and it will be disingenuous to insinuate otherwise.
The argument for the exit starts with a defense of national sovereignty, a defense that is perhaps less necessary in our own Constitutional Republic here, where a high value is placed on national autonomy, independent form of government, accountable representation by a citizen-elected government, etc. But see, America first learned so much of her western traditions in jurisprudence and civic government from our treasured ally of England, and indeed, there is no lack of respect for national sovereignty in the UK either. For in 1999 when so many European nations made the grave and I will suggest eventually fatal decision to share a common currency, it was Britain that had the wisdom and foresight to say, “No, this continental cooperation stuff only goes so far.” The difference in UK economic angst over the last ten years compared to the peripheral nations of the Europe bloc who did not possess wisdom is staggering. I find it no small coincidence that the same arguments which were made in the 1990’s for the UK ditching the pound in favor of mother Europe’s share currency are making their way back in the form of this conversation now. My prayer is that on June 23 the wisdom of the 1990’s that kept the UK out of the disastrous Euro currency will once again prevail, and allow Britain to exit the euro zone, and with that exit achieve greater sovereignty, independence, and quite frankly, economic opportunity.
My arguments for the exit are as follows:
(1) What is best for Britain ought to drive the British decision on voluntary British associations. Emotional appeals to shared European values or traditions or institutions are unhelpful, vague, nebulous, often inaccurate, and should never be the top priority for a civic-minded British citizen
(2) The costs of being officially in this Eurozone outweigh the rewards for Britain by any mathematical measurement. When we look at the $13.6 billion pounds the UK contributed to the EU in 2015, all money that Norway and Switzerland and other prosperous European countries who are NOT in the Eurozone did not pay, we find a cost that is not able to be matched with a value. Another 200 billion pounds will be sent over the next decade, adding to the HALF TRILLION POUNDS sent since 1975. Enough is enough.
(3) The EU’s goals from the get-go were unachievable, have not played out in the reality of their nation-state members, and defy the intent of free and independent sovereign democratic countries. The greater centrality being promoted by a stronger EU leads to more bureaucracy but not more economic freedom and opportunity. A stronger Brussels has never meant a stronger London, and will not mean such in the future. The European Court of Justice has no precedence in facilitating the will of the UK citizenry, quite the opposite
(4) The immigration issue is out of control and requires Britain to take measures to protect her own best interests. Economic interest can be a deciding factor again, instead of blind non-beneficial blindness
(5) The utter falsity of the arguments being made by the REMAIN camp
a. Britain will not suffer any deterioration of national security. The military alliance of NATO is not being jeopardized. Her ally relationship with the United States is not being jeopardized. Britain’s intelligence services are the envy of the world, and all freedom-loving, peace-loving countries will continue to aspire for a friendly alliance with Britain
b. Britain will not struggle to re-establish trading partners and treaties. Switzerland exports MORE per capita than does the UK. And in fact, since 2011, U.S. exports to the UK have been higher as well. Britain will do what the counter-party countries will want them to do – negotiate independent deals, immediately. In fact, they will now negotiate them without the regulatory hurdles that have been a hindrance not a blessing.
c. Free trade zones exist now, without this union, stretching from Iceland to Turkey. Bosnia and Albania are part of this zone – do we really believe Britain would be excluded?
I stand here tonight as an advocate of a BREXIT because I am a believer in the principles of national sovereignty, and a concerned observer and critic of what the costs of EU membership has meant to our allies, Great Britain. Europe will go as it goes over the next decade, and no doubt tremendous challenges exist for the continent. But Britain must be free to operate as her own country, negotiating her own trade deals, free of the monstrosity of a toll paid to centralized Brussels, and free to assert global leadership and economic competition like a country as great as her should surely be asserting.
I close with these eloquent words from Lord Chancellor and Justice Secretary Michael Gove, ardent defenders of the BREXIT position:
“If we vote to leave we will have – in the words of a former British Prime Minister – saved our country by our exertions and Europe by our example. We will have confirmed that we believe our best days lie ahead, that we believe our children can build a better future, that this country’s instincts and institutions, its people and its principles, are capable not just of making our society freer, fairer and richer, but also once more of setting an inspirational example to the world. It is a noble ambition and one I hope this country will unite behind.”