Brexit and the Death of Homo Economicus
BY IDREECE KHAN
When the economics profession as we know it today first came into being in the 18th century through early pioneers like Smith, Malthus and Ricardo it was all about trying to understand the world through the a priori method of pure reason. It is using this approach that the economics profession is at its best. Early classical economists made major breakthroughs in the way we understand the world and how humans interact with each other through deductive logic. And again in recent years it is through the a priori method that the economics profession continues to make breakthroughs, most notably in recent times in the field of behavioural economics through the work of the genius’ Amos Tversky and Daniel Kahneman.
What we have also seen however in the past few years are the areas where the profession has made false turns. Most notably in forecasting the future. Economists are not gods. The majority of people instinctively know this which is why when the Bank of England’s governor Mark Carney published his list of Brexit scenarios with all of them showing a U.K worse off compared with remaining in the European Union we can dismiss this as nonsense.
It should go without saying that the future is always uncertain. Just look at where the world was fifteen years ago. As Prime Minister Tony Blair had just taken us into war in Iraq. Neither Facebook nor Twitter nor Uber existed. It would be another four years before first iPhone was released. The Arab spring was yet to occur. There was no war in Syria and thus no subsequent refugee crisis into Europe. The great recession had yet to occur. And most importantly with regards to the current debate the Lisbon treaty had yet to be ratified transferring more power away from Europe’s national governments towards the European Union.
It seems to me then that when we attempt to forecast the future we should do so with utmost humility. When politicians, economists, Europhiles, and other vested interests say with certainty that leaving the European Union will leave Britain worse off economically they are speaking with a level of hubris which would have the great ancient Greek philosophers turning in their graves. Pride comes before the fall, we discovered this a long time ago. What Carney and his ilk are really doing is making an appeal for authority, they are telling us that they know better than us plebs and that we should do what we are told or else there will be “consequences”. Attempting to scare us into submission using futures that do not exist is a level charlatanry that takes a certain kind of arrogance, we must not stand firm and not allow the elites to get away with it.
For my part I do not know where Britain will be fifteen years from now. Against this never ending projection of fear I would however make an appeal to our past. The United Kingdom has existed as a successful nation for centuries before European Union came into being, does anyone seriously believe that this nation, the nation of William Shakespeare, John Locke, Charles Darwin, Isaac Newton, Michael Faraday, Jane Austen, The Bronte sisters, George Orwell, Aldous Huxley, Charles Dickens, David Hume, Winston Churchill, the nation that defeated the Corsican ogre, the nation that defeated fascism, the nation that gave the world the idea of individual liberty and free trade cannot exist successfully again as an independent self-governing nation? And surely if we can answer no to this then we can walk away from Europe with no deal if we are left with no other credible alternatives.