From Project Fear to Project Prosperity

Professor Patrick Minford has produced a paper claiming that making a clean break from the European Union would substantially improve the UK economy. The BBC initially covered this paper uncritically, without opposing views — but has since updated their article slightly to reflect criticism of their original article, by including a few short paragraphs questioning this work.

Here is my conversation with Professor Minford…


Professor Minford,

I just read this article on the BBC Web site. It relates to your work on: “From Project Fear to Project Prosperity”.

My industry is export of B2B digital (data) services, which is the kind of business you seem to think would benefit most from a “Hard Brexit”. Honest questions for you:

  • How is the historical evidence stacking up, for the idea that large or medium-to-large-sized states (such as the USA or UK) can broadly succeed, while maintaining social cohesion; with an ultra-low-tax economy? (The Reaganomics experiment was commenced 35 years ago in the USA, and has since been implemented in certain south American countries. How’s it going there?) I went out in search of the evidence that Reaganomics was succeeding, and couldn’t find any:
    http://www.slyman.org/blog/2011/07/reaganomics-and-prudent-taxation/
  • Will manufacturing be eliminated, or made more profitable, by unilateral abolition of tariffs by the UK? Has your opinion changed? If so, what new information has persuaded you to change your mind?
  • What will be the effect of unilaterally eliminating tariffs for goods & services from the EU, while the EU would be applying 10% (cars), 30–40% (dairy/meat) tariffs to our exports to them?
    https://www.youtube.com/watch?v=27U3bf4kkuA
  • Who is paying you for this study/ sponsoring your department or positions within it/ lending money to your employer or such like? May I have a complete list please, in descending order of total amounts payable? Are you personally friends with any of the people who are negotiating / implementing this Brexit thing? I’d like to see evidence that your judgement is not being clouded by such influences.
  • Do you understand what became of the personal lives of tens of thousands of miners who were made redundant in the early to mid 1980’s — e.g. in terms of mental health, family life & relationships? Do you understand the pervasive effect on the local economies affected, the cultures of these areas, the employment prospects of millions of youths who grew up there, and the TRUE levels of “success” (mostly, inefficient spending & failure) of the government’s derisory & belated efforts to boost the economies of these areas with new industries e.g. digital media?

    Now I would fully support the idea that the UK coal industry needed major economic reform, but would also say that countermanding the negative effects of reform (and Chinese cheap labour based supply shock), is a moral duty — and that support should have been 10× or 100× as stronger & more coordinated than it was, and should have come years earlier to these now chronically deprived & culturally destroyed areas. (The coal miners couldn’t just abandon their homes/mortgages, “get on their bikes” to London, and get new jobs in the city doing finance!)

    Have you factored in the appropriate level of support to your economic calculations? Or is destroying the lives of many millions (or tens of millions) of people, and concreting over our countryside; a price worth paying for making the remainder of us significantly more wealthy? (For the record I AM NOT A LABOUR supporter/member. I am VERY much against Corbyn’s subtly divisive politics, and McDonnell’s political strategy of class warfare which your brand of Hard Brexit would support and embed as a permanent fixture on the UK political landscape! Which is, I suspect, the reason why they support your position!)

    TED: How Economic Inequality Harms Societies by Richard Wilkinson

Will Hard Brexit be the revolution that eats its children — or, which may be used as an excuse by some politically partisan government, to destroy the economy of her opponents’ political constituencies (mining & manufacturing), whilst fuelling their own (Tory-voting financial districts) with virtually unlimited cash/liquidity? I will credit that serious readjustment was necessary in the late 1970s/ early 1980s; but would argue that Thatcher took this too far, and turned it into a means of personally humiliating and destroying her political opponents — including many millions of ordinary people! Her lies about the people of Liverpool in the wake of the Hillsborough football massacre, and her deliberate failure to provide enough staff or economic support soon enough at job centres in areas affected by mining+manufacturing layoffs; should tell you enough about how politicians are likely to ABUSE your economic advice — and subvert our economy to support their own ideological objectives!

Would you like to create a world in which your children + grandchildren + great-grandchildren will have to fight tooth-and-nail for their survival and progress? Because that is what life is like, in many of the countries you would be eliminating tariffs from!

Please excuse me if I come across a bit strongly-worded: I’m struggling not to just accuse you of being an “irresponsible charlatan” — and accusing the BBC of bias for publishing their puff-piece on your work, without an adequately robust challenge or countering from an equally competent economist with a different viewpoint. Please help me! Don’t just dump a heap of academic papers on me that I won’t understand. Please argue, briefly in outline, in terms of the historical evidence stacking up for the idea that a “tax haven” economy would work sustainably for a medium-to-large sized democratic economy living in a competitive world! Are you not giving undeserved respite to knaves and nitwits?

Please excuse the strong wording of my message (which comes from dealing with the rough end of some of the economic & social & cultural problems that economists of your persuasion have created in decades past — do you know what it’s like to grow up on a council estate, in a school area where the teachers have washed their hands of playground discipline, or abandoned efforts to influence the culture?) You are destroying our country! Please show me how this is not the case.

Answers to some of my questions would be better than none at all. If I get nothing, or an inadequately argued justification for your public remarks; I’ll be referring my concerns to someone more competent in these areas of study, investigation, & public accountability.

Matthew.

p.s. You will probably like this video. I am looking forward to your reply!

p.p.s. I’m very interested to know how your new super-wealthy hard-Brexit Britain economy (which will, you are persuading us, be so much wealthier than the economy of mainland Europe); will cater for the needs of young British people who want to marry someone from mainland Europe, and settle here in their native country. (There is currently a £35k GBP income threshold — which must be sustained over several years —to be allowed by the UK government to marry a non-EU citizen and settle here! This will apply to EU citizens too after Brexit. £35k GBP is well above median average earnings, especially in the north of England, or in parts of Wales: this means that either Britain will become effectively a prison island for millions of young people just when everyone else is broadening their cultural horizons, or, the poorer part of our people will have no choice but to emigrate, IF EUROPE WILL TAKE THEM, and if the EU does not reciprocate with similar laws to the ones we apparently favour!!!) Let’s say you succeed — your predictions are correct. What then? Britain becomes an EVEN BIGGER TARGET FOR ILLEGAL MIGRATION! (The only people I know in the north of England who, at <25 years old, can sustain income above £35k/year; are criminals and fraudsters!) This is not all — there are many other ways in which your suggested policies could have a VERY DIFFERENT EFFECT in the real world, to the effect predicted by your dry equations which ignore much of human psychology & circumstances.

Have you considered giving some respect to other economists, and other schools of economic thought & theory; on matters where your conclusions differ from theirs? If not, why not? Can you cover the gaps between your economic models, and hard/human reality; by demonstrating historically that your models have succeeded? Or can you show that this time around, applying your radical unilateral liberalisation ideas will not create an underclass of slaves — or ghettoes that millions cannot escape from, though they may fight for generations to do so?

I want answers — as will millions of other people, British and Europeans alike, when this gets pushed through on the back of your dubious assurances!!!

Matthew Slyman, M.A. Computer Science (Camb.)


Professor Minford’s reply:

Dear Mr. Slyman, v many questions.

But they are all answered in my paper.

Here is the link.

Regards,

Patrick Minford


Further, my reply to Professor Minford on Monday 21st August:

Patrick,

Thank you for replying. I have shared your reply on social media. Sadly, I’m 1/3 of the way through your introductory paper, and not thus far finding any answers to my questions: you appear to gloss over the human effects of your policies, which are most vital in determining the effects of economic policies in the real world.

I cannot find the part of your paper where you list sources of funding for your project/ work/ department/ university. Is your group being fully transparent about this?

Please explain to me, how our exports of digital & financial services are fundamentally limited by the amount of land & labour we have available domestically in our own country (second to last paragraph on Page 3)? In these last paragraphs on Pace 3, you present export economics as a zero-sum game.

I am currently making my way through this document. Initial reading:

  • You suggest that the EU only benefits large businesses. I run a small business and benefit tremendously from EU regulation & common standards: as a one-man business, my administrative burdens would otherwise be impossible to bear, if I had to deal with 28 different government administrations with more widely differing standards on tax accounting etc.! Large businesses can bear these burdens with proportionally less impact: they can employ an export specialist. My small business would be killed by this since I would have no time for innovation if I also had effectively a full-time job learning how to export to other European countries!
  • You talk of lowering the cost of living by 8% but already your policies & threats of implementing your policies, are increasing costs of living substantially by tanking the value of the GBP! The Bank of England recently said that the UK housing market was already being significantly distorted by inflows of investment cash by foreign criminals laundering money here: accessible housing at the bottom of the housing ladder is typically 6×–10× average salaries. House price affordability is bad — and deregulating our property market further, could make it worse. Demographically, we are eating our seed corn as many young people simply cannot afford to get on the housing ladder, settle down, and have children!

Before reading your paper, I searched the document for “miners”, “mining”, “health”, “family”, “families”, “young”, “youth”, “income”, “earnings”, “wages”, “zero-hours”, “slavery”, “contract”, “quality”, “safety”, “standard”, “standards”, “Reagan”, “deregulation”, “regulation”, “demographic”, “demographics”, “stability”, “stabilisation”, “sustain”, “sustainable”, “sustainability”, “fair”, “equality”, “layoffs”, “redundancy/ies”, “long-term”. From this list, only the words “wages” and “regulation” are mentioned here — so I find it very difficult to believe that you have answered “all” of my questions. I cannot find in this paper, any discussion of the NEGATIVES of deregulation: you appear to believe that a “laissez-faire” free-market economy would be best for the UK! You use the term “vicious competition” to describe the efficiency of non-EU markets; yet appear blind to the viciousness that would be introduced into the lives of millions of British people, if faced with direct (unfair) “competition” vis-à-vis “employees” who are effectively nothing more than slaves!

I could cite various instances from personal experience, of the negative effects (massive waste of personal & working time) caused by deregulation, or, inadequate (Thatcherite) implementation of EU regulations such as data privacy laws. Perhaps one of the most obvious ones is: nuisance phonecalls. Massive amounts of time & attention have been wasted (damaging productivity) because of this deregulation. Have you included this impact in your assessment? (What about the health impacts of deregulation on the food supply chain? Who picks up the tab for that? What effects do you think that could have on long-term productivity?)

Your article uses terminology like “Project Fear” and “Remoaners”. It is difficult to believe this is appropriate language for an independent-spirited, even-handed academic paper (even one written for general consumption by the public!) Why would you use such language unless you were trying to get attention from the media? “As every schoolboy knows and every politician ought to know” — you are admitting to making schoolboy-level assumptions in a serious economic paper on the biggest constitutional decision in generations?

“What exactly is global free trade? Some people think it means that foreign trade barriers must come down against our exported goods and services while we also eliminate trade barriers against our imports of others’ goods and services. However, it is obvious that this is an idealistic vision as we cannot realistically expect all other countries to eliminate their trade barriers, excellent as that would be for the world economy.”
— I thought Brexit Britain was supposed to be a powerful country, that other people would want to trade with so badly, that they would reciprocate — and reduce their own trade barriers & tariffs? You can’t play it both ways!

As I say I will work my way through this, but initial impressions are not good — for the reasons cited above. I’m initially inclined to side with your critics.

Matthew.


Matthew, thanks. I hope you will find the answers you need from our paper on the website.

You can find details of all my research on my website, including all my sources of funding over the 40 plus years I have been doing academic research.

Kind regards

Patrick M


Patrick,

I appreciate your openness about your funding. That helps a lot, in building trust about your motives & professional principles.

The Huffington Post has published this.

I’ll take a back seat for a few days as I am travelling and no doubt have other mail to handle.

Matthew.


Further to my correspondence with Professor Minford, The Independent has published this excellent brief article. I remain convinced that EU membership is best for Britain — and that the true objective of articles like this one by Professor Minford (as signalled by the lack of academic language, and the presence of politically divisive terms), is to cast doubt, throw up a smoke-screen (for those without the time to review his “paper”, or without the capacity to understand trade economics), and neutralise the political effect of expertise as Michael Gove and Nigel Farage have been seeking to do. It is possible that Professor Patrick Minford is innocent of malicious motivation, and simply misguided — but intriguing to note that he is releasing his “academic paper” in instalments, for maximum political effect, despite knowing that his opinions contradict the expert work done by the vast majority of his colleagues in the study of economics, and despite the fact that he must know of their accusations that he is ignoring decades of study & data. Professor Minford ignores many obvious counter-arguments (failing to mention, for example, that the EU is already negotiating FTA agreements with Australia and New Zealand). Page 5: Why is it vital for us to quickly sign mutual FTA agreements with non-EU countries, if UFT (Unilateral Free Trade) is just as good for us? Minford also seems to think, dangerously, that because the UK has developed a high-technology manufacturing sector (e.g. for satellites) as an EU member, that this somehow means we don’t need the EU any more because our high-technology manufacturing sector will sustain us and hold its own in global competition. It’s hard for me to understand how such a well educated man can hold such obviously questionable opinions! Minford correctly identifies some problems in the current economic situation, but seems to regard major economic crises/ sudden readjustments (like Black Wednesday), as a normal part of a healthy economic cycle. Crucially, Minford (despite his assurances) has utterly failed to answer my questions from a human stand-point: becoming prosperous in 10–30 years’ time is unlikely if significant parts of the British work-force are made redundant, and experience long-term unemployment in the mean-time: Minford totally fails to account for the cost of another generation of children being brought up with parents barely able to put food on the table.

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