Monday, June 27, 2016

UK after Brexit: The Problem with Lack of Scale and Diversity

The separation of the UK from the EU, aggravated by the fact that they won't ever be able to recover the same rights of access conceded once to Norway and Switzerland (UK was only a partial member anyway), will launch that nation into a path of economic and political irrelevance. The two international economics and political principles that support this prediction are simple: lack of scale and lack of diversity. Krugman won a Nobel thanks to his theories supporting these principles.

Projects headed in the UK may have to be abandoned because their leaders won't be able to spearhead them using the UK economy alone. They need more scale and diversity: projects were only workable while taking place in the whole EU.

Party and majority vote democracy is a failed system incompatible with the current social and technological environment. The UK idiotic vote is only one major example of its dysfunctions.

Obviously, the alternative to the UK is to tighten up relations with the US, by becoming a disenfranchised state with duties but no representation (think Mexico or Canada), but it won't probably happen because the US will most surely prioritize its relations with the EU over the UK.