Innumeracy and Brexit



This is Joseph.

Simeon Stylites has a very good catch. In a column arguing against a "Swiss Model" of membership for the United Kingdom, David Frost suggests that you are looking at a 0.5% GDP difference. This appears to be per annum. 

The United States has grown by an average of 1.8% per annum between 1948 and 2022 (not an era known for low growth). Losing 0.5% per annum would end up creating, over 20 years, a difference of 43% net growth and 30% net growth, given US growth rates. That is a huge difference. Over a century it would be an enormous loss relative to their European Union neighbors -- enough to meaningfully change the relative balance of soft power in Europe.  

What I find strange is that I also cannot puzzle out the benefits that Brexit is supposed to bring. It isn't about cultural preservation: the number of immigrants is now at an all time high post-Brexit. I can see interest in trade but what do they want to trade and to whom? The recent interest in joining CPTPP suggests it is not about taking back control as they will be joining another trade bloc that will also make rules for the UK. How can all of this be worth a large GDP loss at time when the UK could well use a period of brisk economic growth to get out of a financial hole?

All of this commentary is to say that I (Read more...)