Brexit connundrum is not incompetence

David Allen Green’s latest blog – the latest in an FT series that has become compulsory reading – opines on a popular theory that the mess we are in has as its root cause the incompetence of Theresa May in particular, and of the government in general.

What he and others seem to set aside, often, is that the most important difficulty the UK faces is how to resolve the competing desires of the different Brexit factions.

Given the ill-defined nature of Leave in the Referendum, those in favour of it hailed from a very broad church, including:

1) ‘liberal leavers’ who wanted to leave the single market and create open borders and free trade with the rest of the world;

2) liberal leavers who wished to stay in the single market and retain symbolic control over sovereignty;

3) those who wanted to de-globalise, intervene more in industry, and close all borders, and ‘take back control’.  And perhaps other factions too.

It is not incompetence to have failed to reconcile these irreconcilable factions.  What has to happen to move forward is that some factions have to submit, or be forced to in favour of a winner.

An aggravating factor that prevents an easy compromise is the incentives facing the EU.  For them, Brexit is part of an existential crisis.  Existential because of a list of other threats:  the Mediterranean refugee crisis;  an unfriendly US;  an unfriendly and meddling Russia;  populist governments in Poland and Hungary;  a financially unstable Italy;  not entirely vanquished populist movements in Holland, Spain, Greece, Italy, France.

Presenting the UK with a neat offer curve trading off free movement and trade openness is not possible.  The curve is defined by cancel Brexit/join EEA at one end [which they can deliver] and loose Free Trade Agreement with no Free Movement at the other [which they are also ready to negotiate].  Each interior point on such a curve threatens an unravelling of the Treaties that bind EU members that they don’t want to risk.

So, the UK Brexit factions are faced arguing over whether a symbolic Brexit only or loose FTA is to win the day.  The feasible options are very far apart and so each side finds it hard to contemplate giving in.

It is fair enough to criticise Theresa May for instigating the A50 process, and wasting time afterwards by calling the general election.

But one can make a reasonable argument that GE17 was intended and expected to deliver a victory of the deglobalising faction over the others, resolving the deadlock.  One can also point to how negotiations between competing sides proceed in other cases, often with compromises or capitulations happening only at the last minute.  If a last-minute agreement [within the Conservative Party] is our fate, why not start the A50 clock and hasten us to that point?

Seen this way, the real questions of competence are twofold.  First, there is the concern whether the different factions correctly apprehend the set of feasible deals given the EU’s stance.  Second, we can worry about whether they correctly understand the economic and politial consequences of the choices open to them.

Some of the public statements by the participants suggest that their understanding of these things is not as it should be.  But, applying a theme of DAG’s blog – faux chaos – to this different topic, these unreal statement may themselves be a ploy in the battle between the Leave factions, or between the UK and the EU.

For example, Bulldog Britain or Secret Remainer speeches could both equally spark the following thought process in their adversaries: ‘They really believe this don’t they, despite evidence to the contrary?  So they are not going to back down.  And if we are to avoid the disaster of disunity in the negotiations, or have a chance of picking up the pieces at some point, perhaps we should back down now and let the other lot take a run at it.’

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