onsdag 8 november 2017

The Brexit tragedy

Brexit has been described as a "tragedy." That is a limited view. The EU was the tragedy. Brexit is just one of the consequences.

The seeds were sown when the the EEC was founded. Its leaders ignored a founding principle, that of "subsidiarity". Subsidiarity is a principle that first came to public attention in the Catholic Social Teaching encyclical Quadragesimo Anno, issued by Pope Pius XI in 1931. It holds that social and political issues should be dealt with at the most immediate (or local) level that is consistent with their resolution.

Subsidiarity was formulated thus: "It is a fundamental principle of social philosophy, fixed and unchangeable, that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and industry." (Pope Pius XI, Quadragesimo anno, 79)

Had this principle been followed, there would have been no Common Agricultural Policy, no tariff wall around the customs union, no requirement to levy VAT as a condition of membership, and no common currency. All of those policies have worked to the advantage of those at the core of the continental land mass, and to the disadvantage of those in the western maritime fringe and the Mediterranean south.
  • The CAP in its original form was against the interests of the population of a country which had traditionally imported much of its food from Australia, New Zealand, Canada, the US and Argentina, and which was immediately cut off from this source. 
  • The tariff wall was also against the interests of a country which traditionally traded world-wide. 
  • VAT is one of the worst conceivable of all taxes, one its many ill-effects is to amplify regional geographical disadvantage. 
  • A common currency is impractical without political unity; worse still, it is damaging when interest rates are used as the primary means of economic regulation, as there is no interest rate which suits both the core regions with strong economies and the peripheral regions with weak economies.

It was not coincidental that the vote for Brexit was strong in those parts of the country which received most funds under the EU's structural fund under its cohesion policy for peripheral regions. The people in those areas received no perceived benefit. The money ended up the pockets of the large infrastructure companies and their mobile workforces, and enriched landowners in those peripheral regions. There was no trickle-down.

The real tragedy is that the founding principle of subsidiarity was betrayed and that the damage being done is not acknowledged, or even noticed by EU leaders and supporters.

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