Will Brexit Destroy Capitalism?   Leave a comment

The Weird Hobbesianism of the Brexiphobes

Jeffrey A. Tucker

Tuesday, June 28, 2016

The UK “is part of Europe, and always will be,” says Boris Johnson, a leader of the Brexit campaign. Wait. How can you be part of something and not appoint a dictatorial, authoritarian, meddling, pillaging central state – a completely artificial creation having nothing to do with the real history of Europe – to manage it?

It’s called freedom. That’s how it works. It means the absence of external political restraint on shaping the future.

In the days following the British vote to leave the EU, we’ve seen apocalyptic panic among the opinion classes. The New York Times has published a long series of freak-out pieces about the end of the “postwar liberal order.” Except that there is nothing (classically) liberal about a distant bureaucracy that aspires to centrally plan every aspect of economic life.

Another writer worries that “we will have fewer people coming here, enriching our culture and our lives. There will be fewer opportunities. We will have less of a chance to explore the world for ourselves.”

Huh? No bridges have been blown up. Britons can still buy plane tickets. People from abroad can still visit and work. It’s not even clear that immigration will change that much. It really depends on what politicians in the UK do next. An untenable political union is under strain and that is all. Now Britain can actually make some political decisions for itself.

But here is the silliest thing I’ve yet seen. Try to wrap your brain around the claim in the Times that Brexit  “may just wipe out laissez-faire economics.” If there is no European-wide government authority, “where does capitalism go now?”

Capitalism? Does the Brussels bureaucracy really embody the essence of the capitalist spirit? What can the writer mean?

Well, you see, Reagan and Thatcher were “globalists,” and the global order was cobbled together in the postwar period under the influence of John Maynard Keynes, who had saved capitalism from being discredited by the Great Depression, and therefore laissez faire (which means leave it alone) owes its very existence to the man who wrote “The End of Laissez Faire.”

Or something like that. There’s no sense in trying to explain all these frenzied mind dumps because they make no sense.

Latent Hobbesianism

Having read a hundred articles warning of the coming Armageddon, I’m trying to understand the underlying source of the mania. True, there were plenty of unsavory types supporting Brexit, people who were driven to leave the EU by racist and xenophobic motives. They might imagine a new and more pure Britain is possible and desirable.

But, this is hardly news. It is not possible for democracy to function without an ugly underside. And people support good policies for bad reasons all the time.

That said, there is something deeper going on here. Some people just cannot imagine the possibility of order emerging without government planning. If there is no central state that can bind everyone, forcing good behavior and unity, surely the results will be an atavistic and chaotic mess. Life will become, in Thomas Hobbes’s words, “solitary, poor, nasty, brutish, and short.”

There is a certain tradition of Enlightenment thought that imagined that government serves the one great purpose of cobbling together order in place of the war of all against all of the “state of nature.” Without Leviathan, we would be slitting each other’s throats, and unable to figure out any other way of living. The state, in this view, is the wise planner that can rise above the people’s base instincts and tell us what is best for us. In the most extreme rending of this story, all things must be either forbidden or mandated, with nothing left to chance.

(This same perspective explains so much of domestic politics. People who can’t imagine order without imposition always end up favoring power over liberty.)

Hobbes Was Wrong

Brexit doesn’t establish economic and civil liberty for Britain. But it gives those ideas a chance.But is this really the history of Europe? Remember that Hobbes wrote during the English civil war when vying for control of the state was indeed a violent undertaking. This was not because human beings are incapable of figuring out a better way, but because there was a state there to control in the first place. It was responsible for the moral hazard that unleashed the violence.

The bigger picture of the middle ages through World War I was of small states minding their own business, with people free to move, and trade relations growing ever more sophisticated. States were limited by borders in their geographic jurisdiction and in their internal political power by legal and cultural restraints. The right of exit and the decentralization of power made it all work.

F.A. Hayek was fond of quoting John Baechler: “The first condition for the maximization of economic efficiency is the liberation of civil society with respect to the state…The expansion of capitalism owes its origins and raison d’être to political anarchy.”

By anarchy, he didn’t mean everyone going bonkers. He meant a lack of a centralized authority. The result is not the end of laissez faire but its institutionalization in political habit. That doesn’t mean a turn against “globalization.” It makes international cooperation essential for survival.

Brexit doesn’t establish economic and civil liberty for Britain. But it gives those ideas a chance to escape the EU’s subversion of the classical idea of what Europe is all about. Yes, a post-Brexit Britain could screw it up, especially if the extremes of right and left prevail against an emergent libertarian third way. Brexit is a beginning, not an end.

At least one impediment is out of the way. That’s progress.

Found on FEE

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Posted June 30, 2016 by aurorawatcherak in economics, Uncategorized

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