Brexit — a rejection of mainstream economics, but sadly not the Euro

This true and devastating assessment of the "science" of economics from Ann Pettifor at Prime:

If, as a result of Brexit, the economy crashes it will not vindicate the economists, it will simply illustrate once more their failure.

We, at Policy Research in Macroeconomics (PRIME) call for an urgent, independent, public inquiry into the economics profession, and its role in precipitating both the financial crisis of 2007-9, the subsequent very slow ‘recovery’; and in the British European referendum campaign.

Economists have once again proved themselves not only irrelevant, but a dangerous irrelevance.

For too long they have resisted call after call for reform. If they will not do it themselves then it is time for others to take control. The profession should be brought to account through a public inquiry into the this failure.

While it is risky to second guess public opinion, it may just be that the prospect of hardship to come might not have been very compelling for those already suffering the hardship of low wages, insecure low-skilled jobs, bad housing, high rents, an under-resourced and increasingly privatised NHS, and other forms of public sector ‘austerity’.

With this historic vote, the British people have not just rejected the EU. They have done something that should worry the British establishment, and their friends in the City of London, and internationally, far more. They have rejected economics – and in particular the dominant economic narrative …

The “experts” and the economic stories they tell, have been well and truly walloped by the result of this referendum. And rightly so, because while there is truth in the story that international co-operation and co-ordination is vital to economic activity and stability, there is no sound basis to the widely espoused economic ‘religion’ that markets – in money, trade and labour – must be unfettered, detached from democratic regulatory oversight, and must be trusted to ‘govern’ whole countries, regions and continents.

The British people have today rejected this mainstream, orthodox economics, a strain of fundamentalism that they may rightly judge has proved deleterious to their own economic interests.

Ann Pettifor

Absolutely correct, yet here I do not agree with her.

I voted to Remain. I do not believe that Brexit is a wise decision. I fear its consequences in energising the Far Right both in Britain but also across both Europe and the US.

She misses the forest for the woods. The real problem is not the EU with its Moloch Brussels, but the Euro. A single currency for disparate nation states and no fiscal union will never work. Germany will continue to make sure no such union will come as it would dent their export dominant economy. The EU could work, if Germany leaves.

Secondly, to stay in a Euro union with your own sovereign currency makes no sense.

You certainly do not need a EU for these reasons:

We need a strong EU for the future on a wide range of issues – not least climate change.  But we also need to work in solidarity with all those across Europe who can see that Europe has to change the basis of its economic ideology and strategy if it is to fulfil its Treaty commitment to the peoples of Europe to work for “full employment and social progress.. a high level of protection and improvement of the quality of the environment”.

The Euro is exactly one reason that full employment and social progress will not be achieved. The other reason is the austerity policy which will not change, unless Germany leaves the so called Union.