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Brexit: What and Why?

di e - 12 Gennaio 2018
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The vote for Brexit is sometimes described as meaning that Britain is “Leaving Europe”. That description is nonsense. Britain is indissolubly part of Europe, through geography, history, language, and culture. What Britain voted to leave was the European Union, a body which contains some parts of Europe and which aspires to contain also some countries which geographers would not in general regard as in any way part of Europe.
In this paper we discuss some factors that may have influenced that vote. By this we most emphatically do not mean that we shall look into individuals’ motives. We shall follow Queen Elisabeth I, who soon after taking the throne of England (Scotland was not then part of the Union) published a new prayer book. She wanted all her subjects to use that prayer book, but she also wished to leave its interpretation to the individual. Her words were “I have no desire to make windows into men’s souls”. In our view all participants in Brexit discussions should follow that course. But it emphatically is sensible to consider why there was over time growing unhappiness about Britain’s membership of the EU, leading first to the referendum and then to that referendum’s result.
In certain senses there is an incompatibility between the British and the European outlooks. The British philosophical and legal roots and traditions are different from those in Continental Europe. The consequence of these different roots and traditions is that the British incline to openness, flexibility, and a focus on the individual, whereas in Europe the tendencies lean the other way, to less openness, to inflexibility, and to a greater focus on the state. These differences were not particularly problematic when Britain joined what it regarded as a trade-promoting Common Market. But they increasingly brought difficulties as matters of law, regulation, and trade were affected by the moves towards ever-greater European Union integration.
The different traditions have led to different economic models. The British leads to free trade and an embrace of globalisation and less regulation. The European model leads to a bigger state, more regulation, and greater protection.
In this short paper we consider four matters, all of them clearly part of Britain’s history, which made Britain a less than comfortable member of the European Union, as that body is at present constituted, and even more so if its present constitutional aims are confirmed. These four matters are law, regulation, trade, and attitudes to immigration. They are discussed in that order.

The legal systems of Britain and Europe are fundamentally different. Note the word “systems”. We do not mean that individual laws are different. That the British drive on the left and most of Europe on the right is neither the result of nor an example of difference in legal structure. Britain has a form of law called Common Law; countries on the European mainland have Roman (sometimes called Civil) Law.
A simple, no doubt over-simple but nonetheless fundamentally accurate summing up of how these differ is as follows. In a common law system you can do anything you like so long as it is not forbidden. In a Roman law system you can do anything you like so long as it is allowed.
These differences embody the views about the individual set out above, and also lead to entirely different views of the role of the state. In the philosophy underlying common law the state’s function is to provide the setting for individuals to do as they wish to further their own interests, constrained only by prohibitions that prevent these actions from harming others. The state is an enabling state. Under the philosophy of Roman law, the state exercises choices for the citizen, and provides a menu of what is deemed desirable from which citizens can choose. The former can lead to a small state, while the latter in general cannot.
Roman Law, going back to Emperor Justinian and in its modern form to the Code Napoleon, works by applying unchanging general principles. Common Law seeks practical outcomes; indeed, judges may begin by finding a solution and then seek legal justification on which to base it. As Oliver Wendell Holmes the renowned American lawyer and longest ever serving member of the US Supreme Court (he served from 1902 to 1932) wrote, ‘the life of the Common Law has not been logic, it has been experience.’ This fundamental difference has had a gradual effect, until it became impossible to ignore it.

For those inclined to favour market solutions in economics the guiding principle on regulation is competition where possible, regulation where necessary. Stress is put on the fact that regulation is a tax on activity. It reduces total output. On the other hand for those who believe market failure to be widespread there is a bigger role for the state – more regulation is required. (For many of them government failure seems not to exist.) And it follows from our brief outline of the difference in legal structures that under the European model regulation is ever-more extensive and detailed. Worse still from a practical point of view is that the large bureaucracies required to detail the regulations precisely – as the Roman Law basis requires – spawn further regulation, and so on.
For the Common Law model regulation is viewed as a burden that at minimum requires careful monitoring with a view to reducing wherever possible.
An example comes from the laws governing relations between employer and employee. When laws were being proposed and subsequently enacted to prescribe how the safety of workers in a wide range of industries was to be protected, a trade union leader, Frank Chappell, who was leader of the electricians’ union objected. Not because he had no care for the safety of the members of his union but rather because is his view the existing law was superior. It prescribed a general “duty of care”, and this, he maintained, allowed working practices to adapt so as to be safe in different environments, and as environments changed.
The existence of many detailed laws does not guarantee good outcomes. This has been long understood. To quote the Roman historian Tacitus, ‘corruptissima republica plurimae leges’ (the most corrupt republics have the most laws. (Tacitus Annals) ).

Similar outcomes follow for international trade – as indeed they do for any trading activity. The British have long pursued free trade (often against powerful political forces) and indeed having adopted it almost two centuries ago have preached the benefits and endeavoured to export the doctrine. Europe from the nineteenth century generally resisted that model. The market model shows that maximum gains flow from the free movement of goods. Any interference in that free flow will result in welfare losses. There will always be gainers and losers when moves to free trade are made. But indisputably the benefits to the country overall are greater under free trade.

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