With the welfare state and mindset as strong as ever, some might wonder if Brexit is working.
Some will claim that Brexit is working if the British government maintains “certainty” in the marketplace. That’s the assumption behind recent reports.
According to Reuters (emphasis added):
Scientists, farmers and others who got EU funding were facing uncertainty after Britain voted on June 23 to quit the EU. Hammond reassured them on Saturday that the British government would pick up the tab.
The new guarantee over funding comes as Britain faces the looming prospect of a recession following the Brexit vote. Companies are expected to put off investment and consumers to cut their spending as Britain and the EU work out their new relationship.
Hammond told reporters that Britain needs about 4.5 billion pounds a year to fill the gap left by the end of EU funding, although Britain’s actual exit date may be some way off. Prime Minister Theresa May has said she will not start the two-year process of leaving this year.
“We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive,” Hammond said in a statement.
So “certainty” means guaranteed money to certain groups at taxpayer expense.
What I wrote about Brexit in the U.S. applies to Britain as well: “Beyond Brexit, we need liberty.”
Obviously, the U.K. is not there yet.
The whole point of free markets is that they allow a society to allocate resources efficiently. By definition, this means that inefficient businesses are replaced with efficient ones. People working in a business that can’t make a profit are moved to businesses that are successful.
Why do people in agriculture, college, or “science” deserve more certainty than construction workers or office managers? That actually understates the situation. Let’s ask a more accurate question: Why do people in agriculture, college, or “science” deserve to have their incomes taken from construction workers or office managers?
Talk about uncertainty!
But this doesn’t mean that Brexit is failing. Hopefully, constrained by their national budget, the Brits will deal with their welfare state sooner. Staying with Brussels would have allowed them to get worse and risk becoming another Greece.