Brexit and nostalgia

I got into an interesting -- and, I should add, entirely polite* -- Twitter debate about trade with some Brexit supporters yesterday.  I don't think anybody's mind was changed, but I did come away with a better understanding of what some Brexiteers want.

The starting point was a tweet by one of the Brexiteers pointing out that the share of UK trade going to the EU has been falling in recent years, despite the "frictionless" border.  Therefore, it ought to be easy in a post-Brexit world to replace any trade that might be lost with the remaining EU countries by increasing trade with the rest of the world.

I pointed out that experience in Canada suggested that in fact, redirecting trade flows is extremely difficult.  Successive Canadian governments going at least as far back as Pierre Trudeau in the 1970s have tried to wean Canada off its dependence on the US market, to no apparent avail: our neighbour to the south still accounts for upwards of 70 percent of both exports and imports. It seems probable that the same "gravitational" effect would be seen between the UK and the EU.

It was only quite late in the tweet exchange that my chief interlocutor made it plain that what he was really concerned with was trade in goods, and specifically manufactured goods, not goods and services.  He pointed out that the UK's manufacturing base accounts for about 10 percent of GDP, against 20 percent in Germany, and asserted that the UK needs to rebuild that percentage to about 15 percent.

I honestly have no idea how you would go about achieving that.  Redirecting the UK's trade flows away from Europe and towards low-cost manufacturing powerhouses in Asia would likely have the opposite effect. Theresa May talks fondly of a trade deal with the US, but has anyone noticed what's happening on the US trade front recently?  NAFTA talks are teetering on the edge of failure; Trump has imposed tariffs on imports of solar panels and appliances; and Buy America programs for public sector procurement are springing up in various states, including Texas (aimed at Mexico) and New York (aimed at Canada).

These practical considerations, of course, beg the more fundamental question: why, exactly, would it be a good idea to swim against the tide of history and try to rebuild the manufacturing sector at all?  It's hardly likely to be a massive job creator: to the extent that richer countries can compete with newly-industrializing nations at all, it would surely entail massive investment in automation and robotics.  UK prosperity has for many years been based on the success of the financial sector, especially banking.  Job losses in that sector post Brexit are likely to swamp any gains in manufacturing employment that might be eked out.

I already knew that much of the motivation for Brexit voters was based on nostalgia for a rosier past, without perceived intervention and nitpicking regulations from Brussels, and with fewer foreigners cluttering up the place.  I hadn't quite realized that this also extended to a yearning for the old economy. one with factories and mills and -- who knows -- maybe a few coal mines too.  The UK ceased being the world's leading manufacturing power some time around the Great War.  Brexit may turn the clock back in all sorts of ways, but a revival in manufacturing will not be one of them.

*Well, maybe apart from the moment when I was accused of being a "Bremoaner bot"!