Wednesday, December 21, 2016

Economy: Why Brexit Will Become A Success Story

(Drivebycuriosity) - There is much ado about Brexit. Many claim that Great Britain will fall into an abyss after leaving the EU. But I believe that the Britains did the right thing and Brexit will be a success story.

History shows that separations often go well. Taiwan separated in 1949 from Motherland China which led to a "period of rapid economic growth and industrialization, creating a stable industrial economy" (wikipedia). Today Taiwan has a per capita income of $39,600, about 5-times of China ($7,924). Hong Kong, which got separated in the 19th century, has a per capita income of $42,200. Singapore did even better. The tiny state had been a part of Malaysia, but got kicked out in 1965 after political conflicts (wikipedia). The independence brought Singapore swift economic growth. Today the state belongs to the most advanced economies of the world with a per capita income of $52,900.

There is more evidence: Europe became the world’s most dynamic civilization after around the year 1500 partly because of political fragmentation and competition between multiple independent states, wrote the historian Niall Ferguson (bostonglobe). Small countries like The Netherlands became global power. The Italian Renaissance is another example: A patchwork of independent city states, including Milan, Florence, Pisa, Siena, Genoa, Ferrara, Mantua, Verona and Venice, was competing against each other. This created a climate  which fostered businesses, sciences & arts. Today Switzerland & Norway aren`t member of the European Community - and both countries are doing well. People worldwide are buying Swiss products & services and don´t care whether the country is part of an union or not. 

                                              Shaking Off Eurosklerosis 

I suppose that the British economy will benefit from Brexit because the country will get rid of the EU over-regulation. "One of the very good things that could come of a Brexit: shaking off the Eurosklerosis that has held back growth in the Eurozone for many years", writes the economy blogger Scott Grannis  ( scottgrannis ). Eurosklerosis describes a pattern of economic stagnation in Europe that resulted from government over-regulation and overly generous social benefits policies.

According to EU law, the Brits couldn´t work for more than 48 hours a week, averaged over 17 weeks ( marketwatch ). 60% of Great Brtain`s laws came from the EU in Brussels rather than from Parliament in London ( marketwatch.). It's not hard to understand being pissed off at being subject to unaccountable bureaucrats in Brussels", writes Rolling Stone author Matt Taibbi ( rollingstone ).

Brussels has been gaining more and more power over the years - developing the EU Union into something like the defunct Soviet Union, a bundle of states ruled by a central government. The European Parliament and the EU committee, especially Jean-Claude Juncker, the President of the European Commission, treat the EU increasingly like a kingdom. Even after the Brexit decision they want to expand the power of the EU and demand more integration, meaning more power for Brussels (
It is highly unlikely that the rest of the world will curb trade with the UK and will invest there less when the country is on her own. Companies are doing business with the island because they are making profits there. Why should they give up these profits?

Great Britain will get more attractive for businesses when the country isn´t controlled by Brussels anymore and will become more liberal (in the sense of Thatcher & Friedman) and less regulated.

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