31.08.2019 (The Guardian) - As countries turn inwards, ideas such as a cryptocurrency to reduce global dependence on the dollar are being lost
Unless Britain leaves the European Union’s single market and customs union, the Brexit party will cry foul. As long as the Brexit party exists, the Tory vote will be forever divided. That is the driving force behind the Conservative party’s policymaking. Even the gift of a peerage is unlikely to deter Nigel Farage from his mission to push the UK out of all the EU’s major institutions, leaving the Tories on a single track to no deal.
Given that parliament will not vote for a form of Brexit that would involve a border between the north and south in the island of Ireland, we have come to see that there cannot be a deal.
Last week the wheels began to wobble on Boris Johnson’s bandwagon as some rogue Tories began to whisper that they might rebel. The resignation of Scottish Tory leader Ruth Davidson added to the sense of unease in No 10, which only a day earlier had announced its intention to prorogue parliament for five weeks with such remarkable contempt that it seemed the UK’s executive branch had stepped aside in favour of an emperor.
Yet Johnson’s project, shamefully, continues. And with a praetorian guard possessed of cunning and guile, his time in office looks likely to continue until at least 1 November and beyond a dramatic UK exit.
It has been said many times that the Remain camp’s downfall was its failure to excite and enthuse a majority in favour of expansive, global ideas. How, these critics ask, can voters be expected to rally to the cause when all they have is Project Fear, and Project Fear is nothing but a succession of exaggerated forecasts of economic doom?
Yet, when the economic clouds turn from grey to black, negative voting is an honourable pastime. In this vein, why not cite how badly the UK is prepared for life outside the EU and how harsh that world is likely to be?
One small example appeared last month when Malaysia’s prime minister, Mahathir Mohamad, said the UK would have a “historic opportunity” to strike a trade deal, provided – and here’s the kicker – it relaxed restrictions on imports of palm oil imposed by the EU.
The EU believes palm oil, with only a few exceptions, has a terrible environmental impact, just like it believes farm animals should be treated decently – putting it on a collision course with the US, which argues that, as long as food is safe, you can treat the animals pretty much any way you like.
When Malaysia believes it will be able to extract massive concessions from the UK, it is clear the balance of power has shifted.
Of course the UK could drop its objections to palm oil grown on deforested land, just as it could welcome US beef pumped full of growth hormones. Even that, though, would not tackle the underlying issues facing its economy, deprived as it is of investment, both public and private. Taxpayers are reluctant to pay more tax and shareholders are unwilling to take a cut in their dividend, leaving no funds available for investment. It’s a sorry state of affairs.
There are policymakers still striving against the odds to put aside the current political malaise and provide answers to the long-term problems holding economies back from reaching their previous – and by that they mean pre-financial-crash – levels of productivity and average income growth.
Mark Carney, the outgoing governor of the Bank of England, is one. At a meeting – more of a think-in, really – of central bankers in the US, he put forward proposals for a global digital currency. He said such a currency would reduce the need of developing-world countries to hold dollars, which they do to insure against uncertain times, and need increasingly now that Donald Trump’s tantrums are an almost daily event.
Hoarding dollars takes money out of the financial system. The scale of the hoarding is such that central banks cannot hope to replace it with their own stimulus tools, most of which are already exhausted.
With less money available for investment, productivity is flat and incomes grow at a snail’s pace.
Carney’s idea is a neat way to get around the problem he identifies. Except that it is conceived in a vacuum, one where the EU referendum never happened and America First was Trump’s pipe dream.
Rather than discuss rational solutions to global problems, the UK is hurtling towards a complete separation with the EU: and, for many Brexiters, an independent Britain is one that trades using its own currency. Global currencies, digital or otherwise, can be debated in the central banker’s echo chamber. Ideas like these are not going to make headway anywhere else.