Why ‘no-deal’ Brexit doesn’t worry UK biz
It’s difficult to go into the office nowadays, since most of my colleagues are so distraught by the prospect of a no-deal Brexit that they rarely speak. The finance department have painted European flags on their faces for solace, and spend the day staring blankly out of the window sobbing over a tear-stained picture of Guy Verhofstadt.
Except, um, no. None of this has happened. In fact, most businesses seem weirdly calm in contemplation of a no-deal Brexit. I have met people from multinationals who are sanguine about Brexit, and those who are worried, but few get emotional about the subject as, say, academics, politicians or journalists do.
Brexit has all along been a political problem, not a commercial one. As one eminent German businessman commented under conditions of anonymity: “If you put 15 businesspeople in a room, we could sort out a deal in an afternoon.” Which might cause us to wonder why we need a vast bureaucracy with an annual budget of Euro 160 billion just to allow businesses to get on with the perfectly natural habit of trading with each other.
Remainers have almost exclusively made their case on economic grounds, yet in a manner far more fanatical than the businesses they claim to defend. One of the strangest aspects of the Brexit debate is how readily people on the left adopt neo-liberal beliefs about free trade when it supports their emotional predisposition. This may explain why such people have won so few converts; after all, it doesn’t sound convincing to hear leftists suddenly profess passionate concern for global supplychains. Theirs is an emotional fear disguised as an economic argument; a bit like saying: “Please don’t nail my testicles to the table, it’s a very valuable table.”
You can’t help but think: “That isn’t your real reason, is it? What are you hiding? Maybe you really are part of a secret cabal of metropolitan lizard-people who hate the nation state and would be happier governed by an unaccountable bureaucracy staffed by lizards like you.”
If businesses seem relatively unfazed by the disruption of Brexit, remember that most businesses exist in a permanent state of disruption. If you are worried about the automotive industry after Brexit, this is nothing to the crisis it faces over electrification. For the next five years, people may hold on to their cars for twice as long as usual, since no one wants to buy another petrol car now, but nor do they want to buy an electric car just yet. Consumers have learned that, when buying anything with a plug, it pays to wait. Microwaves, computers, LCD televisions all got far better and cheaper with time, so nobody wants to risk making the mistake of buying too soon. Yet nobody suggests we ban electric cars to prevent uncertainty in the car industry.
The truth is that the market mechanism is much more resilient and better at solving problems than economic theory gives it credit for. Business approaches problems using a distributed intelligence applied locally, so problems that seem intractable to a central policy-maker are often solved easily through hundreds of instances of local ingenuity.
Just as there are things which work in theory which don’t work in practice, there are also things which work in practice but not in theory. The bicycle has been gradually perfected over 100 years — yet physicists still have no idea how it works. We underrate markets because we forget that there is present in the system overall a far greater intelligence than is present within any one person inside it. In this respect, business is the opposite of politics, where the system overall is dumber than the people within it.