Is it "splendid"? and will it serve Brits as well as
the policy did a century and a half ago? First we must note, as the linked article does, that Cameron
is far from withdrawing the UK from the EU. He simply said, in
effect, that the UK never joined the inner circle of Euro users
and will not come to their rescue now that those users have
messed up. "Merkozy" are peeved about that, and I have
some sympathy for Merkel, at least, since the German government
has been the least profligate of them all; but the present crisis
of gross government overspending is ample proof that when the UK
and eight other nations declined to abandon their own currencies,
their judgment was sound. The Eurozone made its bed, and must lie
in it. But the rest of the EU treaty, which provides for open
trade within member territories, still applies and Britain is a
member. "Isolation" is not a good descriptor. Next, it must be said that in the 19th Century the UK traded
very largely with its own Empire, upon which the sun never set;
traders were active in continental Europe but did not depend upon
it. Raw materials like cotton were imported from India and Egypt
(and from the former colonies South of the Mason Dixon line) and
finished fabrics were sold back to customers worldwide by this
"workshop of the world," to the great benefit of all
parties. Such is free trade. That Empire morphed into the Commonwealth,
and over the past half century it has clearly divided into a
prosperous part (Australia, New Zealand, Canada) and a corrupt,
third-world part (all of the English-speaking African
dictatorships, except South Africa.) India is, I'm delighted to
say, fast moving from the latter to the former, while Pakistan
seems a little conflicted between them right now. They are still
perfectly viable trading partners; Britain does well from trade
with Europe, but does not depend upon it. If tariffs were
re-erected, all would not be lost. As I noted in United
States of Europe?, while Merkel's Germany is the least
culpable in the present mess, she is foremost in hoping to
prevent a repetition by binding Europe closer together with a
political union, with control over each country being surrendered
to a super-State; a repugnant idea and completely needless for
the smooth operation of a free market. To the extent that
Cameron's "No" protected Britons back from that fate,
he did a good day's work last week. Here, then, is a full solution to the mess that Europe's
governments have created. 1. Recognize the vast difference between political and
economic "isolation" - and the same advice is urgently
needed by the idiots who falsely smear Ron
Paul with that label. Political isolation - stepping clear of
rule by government and supra government - benefits everyone, while economic isolation - hindering trade across
national boundaries - condemns
residents to a permanently low standard of living by denying them
access to the great benefits of division and specialization of
labor, in which the work is done by those best able to do it. 2. Preserve the policies of zero tariffs and zero immigration
controls, at least within the EU and preferably altogether, so as
to keep those benefits. 3. Forget all your schemes and dreams of becoming a political
superpower. 4. Forget trying to control the quantity and value of a common
currency, and surrender your own to the market, which I assume
will pick gold. Gold will impose its own fiscal discipline (which
is what you now, belatedly, say you need) because no bank will be
able to lend more gold than it owns and will lend none without
very credible collateral. It will also provide traders with an
automatic common currency and hence the incidental convenience of not
having to monitor currency exchange rates, and tourists with that
of not having to visit bureaux de change. 5. Go out of business altogether and let people do as they
want. Will those five steps rescue bankrupt governments like
Greece's? - no, of course not. No
rescue is possible. They must be left to lie in the beds that
they have made. After declaring the obvious truth (that they
cannot pay their debts) they ought to have their assets seized by
their creditors. Since they have no actual
assets that isn't possible, so their creditors may go
belly-up also; and they will be scavenged in a market
process of creative destruction. When all is finished, a couple
of years or so from when you take these actions, the Continent
will be well set for a prosperous future. This advice is the best you European governments will ever
get, but I offer it free of all charge. You can thank me later. Oh, one more thing. According to M. Sarkozy, "David Cameron asked for something that we all thought was unacceptable: a protocol in the treaty that would allow the United Kingdom to be exempt from a certain number of regulations on financial services. We weren't able to accept that..." Yes, Prime Minister: I can well understand how ruinous are regulations on finance. So to demonstrate your sincerity and to begin the process of accepting my five suggestions above, why not propose to Parliament (by year's-end, say) that the forest of regulations with which your government chokes the life out of British financial activities like earning, saving, spending and saving be ripped up and thrown away? - that would unleash a new era of prosperity that will make the rest of Europe green with envy. Let's wait and see whether Cameron does that. Wait, but don't hold your breath.
11A148
Splendid Isolation
by Jim Davies, 12/11/2011
That's the historian's phrase to summarize British
foreign policy in the 19th Century, and it's been dusted off this
weekend after Prime Minister David Cameron shocked the world by saying
No in Brussels on Friday.
Had enough GOVERNMENT yet?
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