16A023 A Worm Turned by Jim Davies, 6/28/2016    

The best news in a long while broke in Britain on June 23rd; by 52-48, the referendum there voted to leave the EU. Instead of helping build another huge government on top of theirs and all the others there, Brits have opted to be ruled only by their own, in London.

Winston Churchill was one of the great warmongers of the 20th Century, responsible for millions of premature deaths; but give him this, he was a master of language and of persuasion. And his words from 1942 after the German advance on the vital Suez Canal had been turned back at El Alamein are appropriate to this change:

"Now, this is not the end. This is not the beginning of the end. But it is, perhaps, the end of the beginning."

So even the voters of one country have said of the seemingly relentless progress towards more and more government, "No!" That progression has been reversed. From now on, they will be repressed by slightly less government. This is, literally, a turning point.

The pressure on those voters to choose Bremain instead of Brexit was intense. The huge majority of their members of parliament favored remaining in the EU; only in the Conservative Party was it less than overwhelming, at about 2:1. The media used their influence to promote remaining. The financial markets apparently believed their own propaganda by boosting the £/$ exchange rate, right up to about 4 pm on 6/23; then it fell off a cliff and dropped from $1.49 to $1.37, or 8%. The so-called "smart money" had been betting heavily on a Bremain victory, which as Mike Rozeff predicted as late as June 19th, is almost always an accurate pointer. But not this time.

Leading the move towards a political exit was the UK Independence Party, led by one Nigel Farage; and quite interestingly that Party is an alliance between nationalists and libertarians. Naturally, they had to work with Brexiteers from all other parties, but that alliance bodes well for the country. Presumably UKIP's influence will increase, and with that so will its libertarian component.

How far that influence will guide what Brits do with their liberation from the Eurocrats is yet to be seen, and I'm not setting my hopes too high. One of the sore losers on the Bremain side advised me to set aside some extra cash for petrol (apparently there's some kind of E-subsidy to keep its price "low", but which will now be lost) and that's the level of thinking and economic understanding that prevails. Gasoline has for years been three or four times its US price, and the difference is all tax. That loser didn't seem to grasp that petrol prices would drop by over 75% if that tax were zapped - by the London government, not the Brussels one. He might, had he been told, have replied "Oh, but we need the revenue". Yikes.

So the need for good libertarian education is massive, and until it kicks in there won't be a whole lot of visible improvement. I may have mentioned before where to find some. Even so, this is an historic turning point, which will be recognized as the month that the mindless rush to ever-larger government crested and reversed. Speculation is strong that France, Holland and other EU member countries will follow Britain's lead (with Frexit and Nexit, presumably ) so a few years hence that supra-government may be a distant memory.

Soon, the question will arise: suppose the EU imposes tariffs on trade with this ex-member. How should the BritGov respond? The correct answer was explored in a ZGBlog in April, The Brexit: nothing. Continental Europeans will then find British goods more expensive, so will buy fewer; therefore their demand for pounds will slacken and its price, against the Euro, will drop. That will in turn make British goods less expensive again, so they will buy more of them and a balance will result. Don't hold your breath for the BritGov to be that sensible, nor for it to back the printed pound again by silver (a "pound" was once a pound of silver, today worth not $1.37 but about $258. Such is inflation.)

But once the referenced education has done its job, that's exactly the kind of thing that will happen... except that there won't be any BritGov left to announce it.