When The Fantasy Brexit Is Better Than The Real Brexit Options

To me, the Brexit negotiations are a bit like a group of vegetarians and a group of vegans arguing about how to make the best beef burger - they don't really believe in the cause for which they are fighting.

Let's play a pretend game: if we were to take out all the politics, the corruption, the self-serving manoeuvres of bureaucrats, and the perverse incentives to stop other countries also leaving the EU, and pretend that the outcome of Brexit could be solely based on sound economics for the benefit of as many people in the world as possible, then Britain would be better to have a bespoke arrangement to stay in the EU single market (because it’s best to preserve the free movement within the EU of goods, services, labour and capital), and leave the EU customs union while at the same time enjoying a bespoke deal that confers all the trade advantages of being in it, and at the same time all the advantages of not being entirely under its regulatory thrall with regard to the rest of the world.

And once you understand why that is true in this pretend game, you see that it points to a bigger argument in the real world about trade: wherever they are in the world, all countries should trade without tariffs, and as freely as possible without the deadweight losses incurred from excessive political interference.

The EU customs union is a trade bloc agreement to abolish tariffs and quotas between EU member nations, in order to encourage free movement of goods, services, labour and capital, while adopting a common external tarif on non-EU countries. The customs union is based on the problem of having a tariff free trade bloc and a different attitude to those outside it. If Britain had zero tariffs on Japanese cars, but Germany had a 10% tariff, then Japanese cars are better going to Germany via the UK, which adds layers of additional complexity to trade relationships, as does every other likewise situation.

If all tariffs are removed across the world, then there would be a huge gain for every domestic nation - free trade would eliminate billions of pounds of deadweight costs in global trade negotiations, all of which is picked up by taxpayers in countries across the world.

One of the reasons politicians have become so powerful in the global economy is because the project began with conditions under which many countries had different rules on quality control, product safety and environmental standards - meaning there was no common, all-encapsulating set of rules that could govern trade across the world.

If everyone understood that a) global free trade is the most desired economic goal, and b) that that would happen most optimally with a multilateral, fairly common set of standards for quality control, product safety and environmental standards, then every country would have done their best to achieve this much sooner than now. It would have started domestically, whereby effective regulations ensure that businesses meet the standards required for consumers, and would then be applied across the global marketplace, under the assurance that if a business operates within its own domestic laws and regulations, it operates within a globalised system of commerce too.

But alas, in the real world, thanks to the plethora of unnecessary political interferences, this doesn't happen particularly well at all. Coming up against this more economically-friendly model is the reality that countries are governed by self-serving politicians, eager to protect their careers, fatten their wallets, increase their power, and preserve their status at the expense of the people from whom they confiscate earnings.

A global trade environment that worked best for everyone would no longer work best for the bureaucrats that have their ever-wealthier fingers in the pie - it would mean less tax for the state, reduced control over competition, and less special-protection for their domestic businesses. Even though the citizens of their country would be immeasurably better off, the political establishment would not - they would no longer reap the rewards of their crony capitalist agreements with domestic firms who can’t compete with more efficient foreign competition, or personally benefit from the self-serving legislative measures designed to keep money flowing into their country, and from the spoils creamed off from customs taxes that pay for their lifestyle.

One of the near-insuperable laws of economics is that when people who are not creating any wealth are getting paid to impede the progress of those who are, there is something that badly needs addressing.

EDIT TO ADD: I mean, basically, the Establishment never thought for a moment that Remain wouldn't win - they thought that Leavers were just 5 or 6 million older people scattered around coastal towns, nostalgic for the days of 1960s Britain. When they heard the result, they pretty much said something like:

"Crikey, we are in big trouble now, and we can't let this Brexit scenario happen! Here's the plan to thwart it- during the lengthy 2-3 year negotiations, we'll construct countless subsidiary arguments about hard and soft Brexit, different types of hard and soft Brexit within those subsets, etc, and turn everything into a squabbling morass of indecision and ambiguity, until the majority of the population is a tiny bit satisfied with some of it, but mostly unsatisfied with the rest of it. And then we'll make out that it's such a mess that the only way to resolve it is to take it back to the people, by which time, a lot of those old xenophobes in Great Yarmouth and Lincoln will have died, and a lot more young neo-Marxist children will have come to voting age, so we'll be able to stay in the EU by then, and when we get excoriated by the centre-right, we'll be able to refer to the 'will of the British people' in both referendum 1 and referendum 2."

Whether they pull it off remains to be seen - but that was the Establishment's plan - and it was set in place from pretty much the day after the 23rd June 2016.

 
 
 

 

Why So Many People Are Bodging Up The Brexit Debate

A couple of weeks ago on Facebook, I said that I have some highly intelligent Remain friends, who I love dearly, but that I think they are missing a key thing: most Remainers fail to realise why the EU has to go, because they misunderstand why its most well-informed critics dislike it. Here's a simple way to explain it.

The EU shares a common property with Islam. All the bad things attributable to Islam are the reason it's one of the worst of all human inventions. And all the good things attributable to Islam are nothing to do with Islam - they are good human qualities that exist in spite of Islam, not because of it. They are the qualities associated with being human that Islam has appropriated, and for which it has tried to take credit, fooling millions in doing so.

Similarly, the bad things attributable to the EU are what make it an obviously failed economic model, with all the concomitant problems that come with diseconomies of scale. And all the good things about the EU are the good human cooperatives that are nothing to do with the EU - they are beneficial things that would exist in spite of the EU, not because of it. They are the qualities associated with being human that the EU has appropriated, and for which it has tried to take credit, fooling millions in doing so.

Although I stated that quite succinctly, what I am describing is a very complex phenomenon that makes the Brexit battleground oversimplified, and talk of deals and no deals somewhat inadequate to the task. The reality is, a monstrosity of an organisation like the EU, and its concomitant interconnectedness with all the domestic politics of its members states, is going to be a very knotty institution from which to disentangle ourselves. This means that countess social commentators from both sides will continually be able to bleat on about the benefits and costs of Leaving, and the benefits and costs of Remaining, and act as though they the only ones talking sense.

The debates would be of a higher standard if more people adopted a Bastiat-esque Seen & Unseen approach to the situation. That is, everyone who wants to talk about Brexit should constantly be mindful of the reality that there are huge costs if we Leave, huge benefits if we Leave, huge costs if we Remain, and huge benefits if we Remain. Unless you are attuned to thinking this way, you are providing only sub-standard analyses of the Brexit debate.

Moreover, you also need to add in another element - the element of timescales, which adds a further level of permutational complexity to the debate. For example, with timescales factored in, there are huge costs if we Leave soon, huge benefits and opportunities if we Leave soon; huge costs if we Remain now and Leave later, and huge benefits if we Remain now and Leave later. The number of possible outcomes is nigh-on uncountable, because there are so many subset events that could feed into any potential transpiration, and there are so many good and bad things that might happen, based on so many good and bad decisions that could be made, that it is virtually impossible to predict the short-term net benefits and costs of the culmination of all this.

But all that said, I think there is a way to be confident that, unapprised of all the permutations and possible costs and benefits, voting Brexit was still, on balance, the best decision you could have made. I'm a great believer in the integrity of challenges to failed models, even if that failed model has numerous benefits. Failed models are inevitably going to provide a net loss when all costs and benefits are counted up - and that is why it is right that Britain should leave the EU. It may be a long percentage game to reap the rewards and gradually undermine the failing institution, but many long term gains require bold decisions in the short term.

One of the reasons it's hard to measure the net costs of failed models is because both benefits and costs to society almost always happen very slowly, and are hard to perceive with the naked eye. It is hard to tell if a swimming pool is gaining water or losing water if there is a small leak during a rainfall.

The prosperity pool

That analogy reminds me of a term the economist Don Boudreaux has for human material progress - he calls it 'The prosperity pool', where the higher the water level in this pool, the greater our prosperity. Boudreaux rightly points out that the “prosperity level” in the prosperity pool is only gradually filled up with drops. Even tiny saucerfuls of additional prosperity are exceedingly rare - there are mostly only small drop-by-drop progressions, no more. This is also why if something is going to be good and large, it is going to emerge bottom up, not be imposed top down.

Very few single drops have any noticeable effect on the prosperity level, but each drop - bicycle stabilisers for children, cat's eyes on the road, padded cushions for bike seats, new shades of varnish, comfier shirts, more efficient sewing machines, sunglasses, clothes pegs, and so on - make our lives a little better through their entrance into a highly competitive market. Even the things you may perceive as quite large drops - Google, Microsoft, Facebook, Ford, General Motors, Samsung, Apple, Sinopec and Walmart (to name but a few) are still small relative to the entirety of the prosperity pool and the complex nexus of the human interactions required for these developments.

There are numerous ways the EU causes harm to human prosperity (see my sidebar tab), but as well as the harm it causes, it also doesn't create enough additional value to justify its existence. The rest of the time it primarily moves resources sidewards - and as anyone who has ever taken a swim knows, moving water around in the pool does not raise its overall level.  

In the prosperity pool analogy, new drops are added to the pool every time value is created in society: either through a new good or service, an improvement to an existing good or service, an increase in efficiency, an improvement in technology and decreasing costs of doing something (there are a few more, but those are the big five).

Furthering the analogy; taxes, subsidies, tariffs, price fixing, protectionism, bureaucracy, overregulation and making itself rich off the fruits of other people's labour is the EU's raison d'être. To the typical Remainer, the EU seems to resemble a consignment of rocks thrown into the pool over time as the EU has grown in size (consistent with Wagner's law), which appears to them to have raised the prosperity level. Propagandist memes like this one below are a good case in point:

 

   

But alas, the above meme is a rather pathetic medley of exaggerations, attempts to take undue credit, misunderstandings about opportunity costs, and outright falsehoods - all intended to create a fabricated picture of the benefits of the EU. But here's the reality check: as anyone who has ever taken a bath or read Archimedes would know, even if the measured level of the prosperity in the pool appears to be higher, the appearance of a consignment of rocks can make it seem like the water levels are increased when, in fact, they are not.

 

Continuing with the pool analogy, what the taxes, subsidies, tariffs, price fixing, bureaucracy and overregulation are really equivalent to is closing some of the valves in order to restrict the plumbing line to the pool. They are the costs that society bears in the shape of all the unnecessary expenses, the misallocations of resources, the interferences is information-carrying price signals, and in the new businesses that never get started up, the buildings that never get built, the innovations that never materialise, and the countless mutually beneficial transactions that never occur.

 

And if we do have genuine aspirations to create a world where the bureaucrats get properly exposed for what they are doing, and a world in which the above activities are no longer an impediment to a fuller and even faster global development for all human beings, then the only way to vote was to vote for Brexit, and hope that by starting to pull out the weeds we will be beginning to irrigate the soil too.

 

 

 

Britain, Trade Histories & The EU

A reader emailed to ask about Britain's historical relationship with free trade and Europe, and whether the current uncertainty surrounding Brexit makes things precarious for us. Here's my reply:

There was little free trade in Britain until it was taken up consciously as national policy around about the mid 19th century. Previously, tariffs were sometimes sky high, as in the case of the French against British wool products, British tariffs against Indian cotton cloth, etc.

But also there was no mass immigration because welfare was only available locally to select inhabitants. The nearest thing we came to it, except very recently, was the French Huguenots in the early 1700s fleeing persecution. As expected, Londoners kicked up a stink and a special Act had to be passed allowing them to stay. Excise taxes at border posts, as before, could be very high.

Of course, Europe then was far different to now - it amounted to lots of principalities with border posts. Germany had a score of them and Italy a dozen until late in the 19th century - so any merchants travelling down the Rhine had to repeatedly pay excises at border posts. Only a few cities in Europe, such as Antwerp and Hamburg were freer.

It was only when Ricardo's arguments about free trade started to become more widely appreciated that cities became freer. David Ricardo would often be heard in the House of Commons in the early part of the 19th century extolling the virtues of removing tariffs, but the most the UK responded with was Imperial Preference - whereby, free trade was freer with its colonies but not with other nations.

Then two world wars interrupted the free flowing migration of widespread trade, and as well as mass murder on an unprecedented scale, socialistic tyrannies were spread across lots of Europe via the Russian, German and Italian dictatorships. Consequently, many of the resultant post-war government interventionist policies that followed the world wars set precedents for the economically stultifying State meddling that we've become so used to in the past six decades.

Once upon a time, the idea that Europe would need a bunch of unelected socialist bureaucrats for its nations to enjoy the free movement of people, goods, services and capital in a "single market" would have been ludicrous - but alas, that is what we have with the current EU from which we've just promised to distance ourselves.

During the next sixty years or so, Britain became more diverse in its trade agreements with the rest of the world, and although there have been some serious peaks and troughs, generally we have been going in the right direction. This has been the beauty of a freer market unbound by over-regulation and special preference blocs. If it’s beneficial for Britain to trade with France for wine, Germany for BMWs, China for steel, Kenya for coffee and Brazil for bananas, then that’s what will (should) happen.

All any country wants in terms of trade is to import goods in which foreign exporters have the comparative advantage, and export goods in which they have the comparative advantage – and within that process find the nations that have the most attractive comparative advantage. The Netherlands may have a comparative advantage over us in terms of fuels and metals, but if there is an even greater comparative advantage by having a fuel and metals trade deficit with the United States and Japan then that option is preferable.

So trading with anyone with whom a mutually beneficial transaction occurs is the desired result. Apart from a few exceptions regarding meeting quality standards, the idea of even having to talk of 'having access to a market' by going through doors in a politically constructed labyrinth is preposterous.

One shouldn't forget that, ostensibly, the post-World War 20th century was unprecedented, and the nations that came together to co-operate in the reparation job deserve a lot of credit. We live in the most peaceable Europe we’ve ever seen, and no doubt attitudes to union and unity have helped. The problem is, I think it has gone way too far, and there are interferences in our freedoms, and in prices too, which go way beyond the desire to secure peaceful co-existence.

The European Union has effectively put up a de facto wall around its bloc to protect its own European agents from more competitive prices outside the EU, which makes it more difficult for poorer African, Asian and South American traders to compete. If the EU opened its barriers to free trade with, say, Africa on farming, and stopped subsidising its own farmers, as one example, it would be the first big step towards the revival of the developing nations' agricultural industries.

Rather like our own NHS on a smaller scale, the EU is the world’s best living example of the limit of economies of scale, where once an institution becomes too fattened up you get dis-economies of scale**, where scores of extra management are added to the workforce, along with such increased bureaucracy and self-preservation that lack of communication and inadequate understanding from the top to the bottom, and sideways too, means there are more problems than solutions. I think history will show that our coming out was a good thing for us, and a catalyst for good in Europe too as other nations will follow suit.

Then of course there is another charge to level against big bureaucracies - it's what's called the Ringelmann effect, which is the tendency for individual members of a group to become increasingly less productive as the size of their group increases. A good example is in a tug of war event, where you'll usually find there is an inverse relationship between how many of you there are pulling your team's side of the rope, and the magnitude of each agent's individual contribution to the total effort.

Another example, when you're in a crowd and the speaker enters the stage and says good morning, there is usually a murmured response. When he says "come on you can do better than that", the reciprocation is much louder. The volume of the words you utter will be less loud than if you were asked to respond on your own.

This phenomenon of increased group size resulting in lower individual effort or productivity is also known in psychology as social loafing. Large institutions like the EU, the civil service, and local authorities are going to be replete with social loafing, particularly when you factor in Parkinson's law and the Allen curve, which is even more reason why we're better off out of it.

Left Wing Intellectuals: Really?

On Newsnight last night, the Daily Mail's Stephen Glover and a philosophy professor called Barry Smith were discussing Labour MP Barry Sheerman's statement that most of those who voted Remain in June's EU referendum "were the better educated people in our country".

They discussed the fact that a high proportion of Remainers were university educated students, and that among the 'intellectual' demographic a high proportion of them are left wing - by which I assume they mean economically left wing (they never said).

Both contributors spent their time analysing why so many students are left wing, whether they are being coerced or compelled by university lecturers, whether those lecturers suffered heavily from confirmation bias, and why young people begin as lefties but end up much further to the right when they have grown up, had some more life experience, become smarter and more worldly lived a few more years.

Yet both failed to arrive at the primary and most obvious reason why young people start as lefties and undergo a gradual metamorphosis into capitalists - it's because when they are young they have no capital, and do not feel the costs of the policies they support (they might feel differently if they understood why it is their older selves that will end up paying for socialist policies anyway, but we've covered that before).

Young people are generally more fancifully idealistic too, with less life experience; are more easily driven by social conformity than older people; and still at the stage when their economic awareness aptly comes under the maxim "a little knowledge is a dangerous thing".

Consequently, whether on average the young people in London and Bristol who voted Remain are better academically educated than the older people in Lincoln and Hull who voted Leave is neither here nor there - because both groups had obvious personal incentives for voting as they did, and turkeys are never going to have a very balanced view on the topic of Christmas.

Because both groups had numerous personal incentives for how they voted, it is fairly obvious that there will be good and bad reasons why young people voted Remain, and good and bad reasons why older people voted Leave. That's one good reason why on this occasion it doesn't really matter all that much whether Remainers "were the better educated people in our country" - because what makes them better educated academically is not primarily what is behind their reasons to vote to Remain.

If there were a statistic released today that said half of the doctors in the NHS never studied medicine, then it would matter, because studying medicine is a necessary requirement of being a doctor. Studying chemistry, biology and English literature (while all excellent subjects) has no real bearing on a person's understanding of the merits and demerits of being in the EU, so it's a largely unimportant statistic to bandy around.

The only really important consideration regarding how people voted in the EU referendum is the number of voters whose main personal interests in the result are to do with what's best for the UK as a whole, whether the EU is a net force for good or not, and more long term, what's best for the other nations of Europe and the rest of the world too.

Even if that proportion of the demographic that rigorously understands all this is in the tiny minority, it hardly matters at all. Good and reliable opinion is contingent on expertise not on consensus. In a room of 500 people where only 1% of them are particle physicists, if you're looking for advice on Fermi–Dirac statistics you will very likely learn more from the minority 5 than you will the other 495 people combined - and I fancy that something similar can be said about Brexit.

For further reading, my own contributions to the EU referendum debate can be found on the right hand side bar, most comprehensive is The EU Referendum: Remain or Leave? You Might Like To Ask The Question In Another Way

I also explained why I think One Day Remainers Will Be Relieved Brexiteers

Brexit Ought To Mean Leaving The Customs Union

In case you’ve forgotten, I wrote an article back in December explaining why Brexit must involve leaving the customs union. More recently Ryan Bourne at CapX adds weight to this by alluding to the shocking 12,651 different taxes associated with Common External Tariff (CET), and how the EU is internally trade liberating but outwardly protectionist, as UK businesses outside the EU could face two-way tariffs if they import and export simultaneously.

As we all know, after leaving the EU, the UK will be able to set its own trade deals in keeping with WTO rules. Given that the pain of tariffs is entirely self-inflicted – rather like ramming a broom handle through the spokes of your bike as you’re riding it – the sensible post-Brexit policy for Philip Hammond and Theresa May will be to abolish tariffs altogether and allow manufacturing industries to import more cheaply from anywhere in the world. For as Ryan Bourne points out in the article – a fact that is utterly pain-inducing:

“The CET, coupled with non-tariff barriers imposed by the EU, has resulted in agricultural and manufactured goods prices being around 20 per cent above world prices.”

This should tell you two things. Firstly, as I’ve often remarked on here - that people in the agricultural industry in the developing world are being screwed over here, unable to compete with the EU’s protectionist racket. And secondly, we consumers are being screwed over too because we are paying more than the market value for our goods. Because in case you’ve forgotten, consumption is the primary benefit of trade.

Remember, it’s not Steve’s Steel that pays the tariffs to export, it’s the customers of Steve’s Steel that pay when it is imported. Apparently the EU buys 44% of our exports, whereas we buy just 7% of theirs, which means they tax themselves a lot more than we tax ourselves. The alternatives to exporting to the EU are exporting to non-EU countries or not exporting at all and increasing our home-grown consumption – both of which are more sensible than taxing ourselves - and the EU countries would be wise to adopt the same approach. The outcome – tariff-free trade for both parties, and mutual benefits for both importers and exporters. It’s a no-brainer really. 

Tying One Arm Behind Your Back

It's very frustrating reading all the opinions about what kind of Brexit we will have in relation to trade effects, and whether being outside the EU's customs union will incur the penalty of this or that tariff. For those that don't know, a customs union is a politically constructed trade bloc within which member states trade without tariffs, and outside of which other nations have tariffs imposed upon them. A free-trade area is a politically constructed trade bloc whose nations have signed a free-trade agreement that has very few or sometimes no trade barriers.

The existence of tariffs is infuriating to anyone who understands economics, because they do harm in virtually every area of society. Governments impose them because it gives them a bit of extra revenue, and because there are enough uninformed people in the country who think that by making imports harder the government makes exports and domestic business easier, leading to the domestic economy being better off (an asinine misapprehension that I blogged about here)

The reality is, by increasing the cost of imports, tariffs hurt all domestic economies, as they lead to a decline in consumer surpluses. A really obvious case is seen with the EU's tariffs on agricultural products, which make agricultural products more expensive for EU consumers by putting up barriers to competition. Restricting competition doesn't just inflate prices, it also diminishes quality for the consumer, because if your industry is protected from competitors it is shielded from the need to increase efficiency. And that's to say nothing of the wider costs of tariffs to developing nations trying to compete in a global economy, and all the additional costs to consumers when trade partners retaliate with their own tariffs.

Tariffs are a horrid political interference in free trade, and the harm they impose is hugely frustrating, as seemingly few people ever really stop to question their existence and challenge politicians to put a stop to them. Such are the benefits of free trade that even if every country is imposing tariffs on us, we'd still be better off domestically by not imposing tariffs on foreign exporters. Hearing our political elite spitting and spluttering about negotiating their way out of numerous political interferences is one of the saddest reminders of how frivolously politicians impede and retard all the prodigious benefits of free trade.  

Dear Remainers, One Day You'll Be Relieved Brexiteers...

Even though pretty much everyone is behaving as though pretty much everything has changed, the reality is, pretty much nothing has changed. The EU referendum was always an advisory result that needed to be ratified by Parliament, so Theresa May was never going to be able to invoke Article 50 and start formal exit negotiations with the EU without the House of Commons vote taking place.

And apart from the odd disgraceful public servant who should be shown the door,  the majority of MPs will honour the referendum and vote leave, even if they are in constituencies where remain has the majority vote. The reason being, MPs that defy the will of the British people are unlikely to survive after the next general election, which means individual MPs are more likely to respect the referendum result.

As for whether it's a hard, soft, clean or messy Brexit, well the reality is, it probably won't make all that much difference long term, because the mid-to-long-term future of the EU is about as sticky as a lorry full of treacle spilling its load in the middle of the channel tunnel.

Here’s the thing, it’s fairly straightforward. Anyone with even a sketchy understanding of the very basics of trade and competition should know that any country that leaves the EU’s protectionist bloc will be better off in the medium to long term (there are usually short term shocks and tumults with radical breaks from the status quo, so don’t let it fool you).

This can be understood by anyone who understands why artificially constructed free trade inhibitors make the people within the border worse off as well as those on the outside (something I also covered in the articles attached to the above hyperlink).

You see, this is the first generation of people in the world's history that has had access to the entire world's knowledge, and moreover the ability to communicate so freely at a global level. My prediction involves two main things happening: 1) wider understanding of how trade and competition bolster people's economic well-being, and 2) wider understanding of how politicians retard this process.

 

Both are likely to happen at some point in the future - it's hard to say precisely when - but what this means is that the EU is being allowed to get away with its stultifying practices only for as long as it can continue to not get found out by a larger number of people.

What they have been getting away with is a socialistic protectionist bloc set up and run to favour its two largest single currency member states - Germany and France. It should be remembered that the European Union was originally a creation of American post-war foreign policy as a bulwark against the communist forces of the Soviet Union. The American plan, tacit though it might have been, was to keep European nations in check against ideologies it felt were threatening or economically repressive.

It was a very unnatural political union. As time went on the EU trade bloc became more and more evidently a sovereignty-stripping monolith used to gradually mould other EU members into the Franco-German line, guarding them against competitive forces and globalised free trade. In other words, the main beneficiaries of EU policies have been Germany and France, its two biggest economies, both having their interests best served by the rules they create.

For most of that time France has been like a microcosmic version of the union to which it is conjoined - protectionist over its own citizens, whereby local French connections are encouraged, with Germany, being the EU's strongest export country, having the most to gain from the EU and the most to lose by its gradual dismantlement.

While all this has been going on, numerous smaller European nations have lost out big-time by supplanting their own national currencies for the Euro, thereby ending their ability to competitively trade their currency against other currencies, and adjusting their fiscal and monetary policies in accordance with market signals. Not to mention that Eurozone nations were able to borrow money far more cheaply with the single currency than their with own currency, which, as is plain for all the world to see, has been an economic disaster for them.

Even if we put aside all the other things that are drastically wrong with the EU, the current situation is rather like this. Germany is like a big company that wants to sell some of its premises to smaller businesses (Ireland, Cyprus, Greece, Portugal and then followed by Italy and Spain) but will also willingly loan the money to the buyers in the hope that they make enough of a success of their businesses to pay them back, but do so by rigging the terms so that debtor submission was always a highly likely culmination - one that domestic politicians surreptitiously pass on to their taxpayers.

But, alas, because of the failing economies of those in debt, paying Germany back is hugely problematical, with the inevitable outcome being the European Central Bank trying to keep domestic banks' heads above water by printing more currency and attempting to hold it in spite of the numerous Eurozone liabilities, not to mention the huge public sector expenditure crisis that's hitting the whole of Europe (including the UK) and will only get worse as domestic governments try desperately hard work to out how to untangle themselves from public sector knots without getting strung up by the electorate.

Mark my words, and remember where you read them, because quite simply, very few people are telling you the truth about the future of the EU and how it is going to be torn to shreds as more and more member states look to follow us in tearing ourselves away.

You may think it's hard to imagine the EU not existing in a form similar to its current set-up, but radical future differences are hard to predict. And one only need imagine how many radical changes someone from the 60s or 70s would have failed to predict about the 40 or 50 years that followed to get an idea of how radically different our future Europe can be. The day when even the staunchest Remainers thank their lucky stars they are not in the EU will, I'm confident, be a reality at some point in the next decade or two -  much like how those that used to argue fervently for the UK to adopt the Euro are now doubly glad we didn't.

Just Like The Kernel Of Wheat In Jesus' Parable, The Dead Seeds Of The EU Must Be Sown Into The Earth

Today, thousands of people with scant regard for democracy are marching through London to protest against the democratically voted for referendum decision to leave the EU. Putting aside the issue of valuing democracy, the people who voted Remain, and the people who voted Leave that are now regretting it, are worried about the future post-Brexit. They should not be, particularly once they get a handle on the bigger picture that extends several decades henceforward.

Sometimes a little bit of pain is required to prevent even more pain. If your young child comes to you with a splinter in his thumb, you know the best way to deal with it is to get it out from the under his skin straight away by pressing down on it with your fingernail.

Your young boy may resist the added pain, but you know that what is causing him that extra pain is actually reliving him from worse pain, soreness and possible infection in the long run. This is what is happening with our leaving the EU - we are getting out at a time when very few people understand that it is a gradually crumbling empire, and that in its current state it is going to have to eventually die before its constituent nation states can live.

Brexit will almost certainly set off a domino effect of other nations joining us with their own exit in the next few decades. It will be a slow dismantlement of the EU, but it is almost inevitable that it will happen, for reasons I talk about in greater detail in other Brexit-related blog posts. 

Don't misunderstand, I have no time for all the anti-immigration bile going around, and I'd hope that when the other nations follow suit and join us outside the EU that they'd do so because they can see how even more prosperous our nation becomes with independence, not under the influence of the plethora of extreme right-wing parties gathering momentum in the north-western European countries. But for the good of the continent, individual nation states need to save the EU from itself: it is stagnating, it is unsustainable by being inimical to growth, and no nation past or present that has copied its model has seen anything other than economic disaster.

Playing the long percentage game, with the exception of Germany, France and possibly Belgium and the Netherlands if things go their way, the majority of the EU countries are almost certainly going to trail behind the world's emerging nations in the next few decades, and it's for five main reasons.

Firstly, in a wider global market with most countries more actively involved than ever before, cross national competition is going hinder set-ups like the EU that impose tariffs against imports from non-EU countries.

Secondly, the market for consumable goods is steadily shifting away from Europe towards Asia, which will give them the advantage in the market for future consumables too.

Thirdly, the single currency (the Euro) ultimately works far better for Europe's big players - but it is in many ways a hindrance for the rest, which means Germany (in particular) is going to be involved in a lot more Greece-like scenarios as the predominance of the market shifts Eastward.

Fourthly, and this is a development of the second and third points, as the market predominance shifts Eastward, the quantities of advanced engineering products that Germany, Belgium and the Netherlands sell to China are going to diminish as China becomes the leading player in advanced engineering in the next two or three decades. And this won't necessarily be the case, but the yuan is the only realistic trading currency in the world that could become a gold standard.

Fifthly, the whole continent of Europe has a serious fiscal crisis in that it is catastrophically failing to restrain the pressures of increasing government spending with an ever-aging population. The tax burden necessary for a society of this kind is going to be severely detrimental to the economy even if it were a free trade area with the removal of barriers.

However, given that it's not a free trade area, it's a customs area under the thumb of a political superstructure that erects a common tariff bloc around its member nations and robs them of open trade with the rest of the world, I think we can replace the word 'detrimental' with the word 'ruinous' economy.

Forget for a moment about the world we do actually live in - the one where politicians, bureaucracy and establishment-interference is ingrained in our expectations - and consider this question. Why should the UK leaving the EU cause any market instability at all? To answer honestly is to admit that, it shouldn't, and that what's causing the bulk of the problems is the size of the interference in free trade of the politicians, bureaucracy and establishment-interference in the first place.

The moment we decided to leave the EU, nothing about the UK's productivity or its businesses' ability to create value changed. It's as not as though there was a national flood that drowned out the UK's commercial activity. When everyone awoke the following day they woke to the same physical UK. The big thing that changed, however, was that the EU, which regulates countless details of our exchanges became, in potentia at least, a different kind of obstacle for buyers and sellers to trade freely.

Moreover, the attitude of Eurocrats since Brexit was announced gives exhibition to the very reasons it was good to leave them in the first place. The reaction to the prospect of their not having such a big say in our lives, plus their threats of even bigger impediments to our free trade by further taxes, tariffs and social restrictions, demonstrates not just why we're better off out, it also gives a future hint of the fragility of the foundations on which its structure of constraint is built.

As long as each domestic government oversees the basic necessities of light regulation to protect consumers from any of the undesirable things that might affect a mutually voluntary transaction (trades description issues, health and safety breaches, quality of product, and so forth) - basically all the things that we as consumers wouldn't wish to be victims of due to asymmetry of information - there is absolutely nothing that prohibits mutually voluntary and beneficial trade between two people or two nations except the unhelpful constraints imposed upon them by politicians, bureaucracy and establishment-interference.

What we are in danger of is a self-fulfilling prophecy of doom, whereby pontificating about how troubled economy is going to be creates an insidious social instability which affects business and outside investment, which precipitates the more troubled economy for which everyone was blaming the opposition.

What we need, however, is to be smart and resolute, and understand that the freer we can be in becoming even more of a global trade power, the less turbulence we'll see in our economy, and the more other EU nations will begin to see how, in extricating ourselves from the union, and enjoying more mutually beneficial trade relations and increasing our status as dominant global economy, they too can follow suit and help signal the beginning of the end of many of the ways that politicians, bureaucracy and establishment-interference place unnecessary constraints on our lives.

Mark my words, here is what's going to happen - and I probably will be quoting this in a few years' time. After the expected volatility and instability over what people seem to be referring to as 'uncertainty', England (possibly without the union of Scotland, Wales and Northern Ireland, although they'd be mad to divorce us to become wedded to the crumbling EU) will be thriving with their improved global trade relationships, and perhaps (if our leaders are wise) a healthy attitude in not restricting the movement of people, goods and services in Europe.

Then, bit by bit, as the EU political union becomes ever-more precarious, and as more and more countries start to desire autonomy and obtain the domestic economic stability to break away*, the EU as we know it will fold in on itself, as Europe's nation states gradually claw back their ability to play to its market strengths outside the EU bloc, and as everyone gets wiser and wiser to the fact that models like the EU model just won't be sustained for longer than a brief-ish passage in humans' trajectory of gradual progression, less involvement by the establishment in their lives, and increased freedom and liberty.

* No one could have failed to notice what the Eurozone crisis has done to the likes of Greece, Italy and Spain.

Gross Domestic Whopper

I've been rather fed up with many of the false assertions made by both sides in the EU Referendum debate. I ended up saying this:

"While the Leave campaigners have also been pretty sub-standard, the Remain gang have been absolutely pathetic with their silly scare stories, facile post-Brexit predictions, and their making of outrageous economic claims that treat the UK voters like children. As for Cameron and Osborne, well, they, like the atrocious Hillary Clinton, will say absolutely anything to anyone to keep people on side and try to win support for their agendas, and have spent the last few years slowly draining themselves of any credibility as thinkers and as having even the remotest consistency in what they claim!"

Asking what the biggest whopper has been is a tough one. If pressed though I'd have to say George Osborne and the Treasury's claim that "Families would be £4300 worse off if we left the EU" -

Even if we overlook the fact that it's impossible to know what the future economy will look like if we leave the EU, when pressed on how they came up with this figure, it turns out to have been a little sleight of hand trick based on projected post-Brexit GDP (the size of our economy) in 2030, and dividing it per head.

If you're paying attention, you should already be able to spot the anomaly - families are not the same as individuals. A quick Google search tells me that the average household size is 2.4 people, which means the figure of £4300 per household is down to £1791 per head. But then you'd have to reduce the number further still because there will be far more households in the UK in 2030, which would make the number even smaller.

Even aside from that, trying to measure our nation's future well-being (let alone present well-being) by our GDP is a bit like trying to count the number of ants in an ant colony - you're just never going to capture all the data, and you are bound to miss loads. The crux of the matter is that we are a lot better off than mere GDP numbers suggest, just as all the things in a happy marriage amount to more than the sum of the couple's joint bank account.

Because GDP only factors in monetised exchanges, it doesn't factor in all the consumer surplus, and nor does it by equal measure factor in the proportion of profligate government expenditure that robs the nation of value. GDP only factors in the cost of what the government provides (education, health, social services, roads, defence, wars in other countries, etc) not the efficacy or desirability of those provisions.

If there are no affordable competitive providers for most of the country on many of the things the public sector provides, it is fairly safe to assume that the costs of those provisions are more than we'd pay for them. In a free market we know how much people in the UK value fruit, paint, Nike trainers, and cars by the prices, which are set in accordance with prices of competitive suppliers.

Not only that but in the absence of free market benefits, the government is bound to provide things that we don't even want. Naturally a full cost-benefit analysis would be too time consuming, but there are a few indicators - and we can arrive at them by asking if we'd pay for these things - many high-level public sector wages, extra police officers, renewable energy quotas, and so on - out of our own pockets or go without.

If the government wastes £500 million on a failed highways project then there is an awful lot of value lost in opportunity costs. On the other hand If you buy a laptop for £250 you are signalling that you value it more than the £250, otherwise you'd buy something else, which means value is not being recorded.

Suppose you value the laptop at £350, then the £100 difference between what you would maximally pay and what it costs is what is known in economics as your consumer surplus. That's £100 of value that's not being recorded. GDP only measures the equilibrium price in the market (as illustrated by the chart below).

Nor does it measure things like all the value Google and Facebook brings to our lives, and the access to all the world's news and knowledge we have, which also keeps adding more onto our net consumer surpluses.

The other point to factor in is that if John's cleaner becomes his wife, and Rita's gardener becomes her husband, then cleaning and gardening in those respective households may no longer show up on the GDP statistics, but that doesn't mean the two households are worse off (quite the opposite).

One of the many problems with Communism is that it erodes away almost all value for services, skills, products and human ambition. To keep the matter simple, suppose there was an island nation that was entirely self-sufficient because the government had closed itself off from all outside trading. If the ruling powers set the prices of everything; apples, wood, clothes, cars, paint, and so on, the nation would be robbed of something vital (this did happen to some extent in the old Soviet Union, in Japan, in Zimbabwe and in Cuba, to name but four places) - there would be no consideration of preference for the citizens.

In a supply and demand free market, prices are dictated by consumer value - so that if apples are too overpriced people will buy oranges until the price of apples come down, and if Jaguars are too expensive people will but BMWs until they come down. This happens in wages too - if a hotel porter earns as much as a heart surgeon then either the incentive to be a heart surgeon diminishes, or the proper value placed on specialised skills is diluted.

Given the foregoing, just like above, it is clear that the GDP of the old Soviet Union or Zimbabwe or Cuba only tells a bit of the story of the plight- it is an unreliable statistic in measuring human qualities, well-being and standard of living because it fails to factor in the value of lots of the economic output. Even though the UK is not a Communist regime, it still has the same issue.

The final thing to mention is that even our free market spending on consumption isn't always a measure of a positive action; if I have to pay to have the wing mirror on my car replaced after a vandal broke it, or buy a burglar alarm, or paint to cover up some graffiti, then these are not examples of good voluntary spending on my part.

The upshot is, GDP is in itself an inadequate measure of value in our country, so projecting a cost per head by dividing a future GDP projection by the current household numbers is about as misleading as it gets.



The EU Referendum: Remain or Leave? You Might Like To Ask The Question In Another Way

First a quick intro

While immeasurably worse off than modern times, generally speaking, one good thing in its favour was that in the late 19th century Europe was pretty much borderless, barring a few exceptions - it was a world of free trade, mass immigration, low taxation and hardly any regulation.

Then two world wars interrupted the free flowing migration of widespread trade, and as well as mass murder on an unprecedented scale, socialistic tyrannies were spread across lots of Europe via the Russian, German and Italian dictatorships. Consequently, many of the resultant post-war government interventionist policies that followed the world wars set precedents for the economically stultifying State meddling that we’ve become so used to in the past six decades. Once upon a time, the idea that Europe would need a bunch of unelected socialist bureaucrats for its nations to enjoy the free movement of people, goods, services and capital in a “single market” would have been ludicrous.

The EU officials and their misguided desire to create a single homogenous European identity through stuffy centralised regulation rather than allowing the heterogeneity of individual nations to construct a Europe with their own strengths is bad – not wholly, of course, there are obviously some benefits to inter-relation cohesion – but given that by far the most successful vehicle for progression is the trial and error mechanism of competition and co-operation, the EU monolith is a project that does an awful lot to retard and in many cases jeopardise human progression, particularly in developing countries.

So what is this big question then? I'm glad you asked: The question is: Would you vote for the current EU if you didn’t have it?

With the above intro in mind I think the most helpful way to ask about Europe is not to think of us as currently in and deciding on whether to get out, but actually imagine there was no such thing as the EU in its current form and ask ourselves whether we would vote for such a thing if we had the chance. I think when the question is framed that way, there would be far more people in the UK saying ‘no’ to this EU proposition than ‘yes’, which rather suggests that if they applied their feeling of the proposition in prospect to the actual EU referendum question in retrospect the ‘leave’ contingent should be a lot more numerous than the ‘remain’ contingent.

Don’t get me wrong, I’m not wholly anti the EU – there are some good elements to it (which I mentioned in this Blog post), but the reason I’m voting to leave is because so much of the EU is inimical to free trade, as its unelected busybodies get about as much wrong with their analysis of markets as is possible to get wrong. When two countries, even slightly politically hostile countries, agree to trade, they sign up for a deal in which both have self-interest. Economic trade deals do not need to bear relation to political differences, they are largely transcendent of political borders. The idea of a single marketplace into which you have to pay to gain access to the benefits of trade with a fellow self-interested trader is quite bizarre, particularly when large chunks of the money actually goes towards paying for the bureaucratic centralised structure that we’d be better off without.

So although it is not without its positive elements, broadly I think if offered the chance to vote for it coming into existence, most people of today would not vote for a single currency (the euro) that’s so often inimical to successful free trade, nor for the imposition of a political monolith that tries to homogenise different and diverse countries within Europe as well as imposing stultifying restrictions on their economic well-being (both cases assume, of course, that the individual voting actually does understand these issues competently).

And then there are tariffs

The other big question just about everyone seems to be failing to mention is the one about import tariffs. For sure you’ll hear lots about to what extent we’ll be subject to tariffs if we leave, how many different ones, and what rates the tariffs will be, but I’ve heard no one actually stop and ask “Why the heck do we even entertain tariffs of this kind when it is so obvious (or should be) that tariffs harm both the importer and the exporter?" To me it beggars belief that their ubiquity is so lazily accepted without more pressure for a huge set of culture changes. Let me explain with a simple illustration how it is that import tariffs make both countries worse off.

Some people wish to trade pounds for dollars, or pounds for euros, or euros for yuan and so on. Let's simplify it and say x is one type of currency and y is another. If more x are supplied than demanded, the price falls; if fewer, the opposite. When supply equals demand, the price is at equilibrium, just as it is with bananas, blouses and laptops. To understand this in relation to pounds, dollars or euros you first have to understand why people want to trade currencies. Forget for a moment the incentive to invest in other countries (in land, shares, debt, and so on), and pretend that the only reason to buy British pounds or euros is to buy their goods.

For simplicity, suppose that with the present exchange rate most goods are cheaper in China than in Britain. In other words, Britain is uncompetitive compared to China. Many Brits want to trade pounds for Chinese yuan in order to buy Chinese goods, but not many Chinese want to sell yuan for pounds as very little in Britain is worth buying. Consequently the demand for yuan is greater than its supply, so the price of the yuan goes up. Yuan are now traded for more pounds than before, and pounds for fewer yuan.

The result? The fewer yuan you get for the pound, the more expensive Chinese goods are to the Brits, since Brits have pounds and Chinese goods are priced in yuan. The more pounds you get for the yuan, the less expensive british goods are to the Chinese. The exchange rate adjusts dynamically until pounds offered by Britain equals the quantity the Chinese wish to buy - or in other words, until the prices are on average the same in both countries. This means that by and large Brits export goods in which we have the comparative advantage, and import goods in which China has the comparative advantage - all of which is measured by production costs being low compared to the country with which we trade.

From all of the foregoing, it ought to be obvious that import tariffs make imported goods more expensive for the nation imposing the tariffs (something Donald Trump can't seem to grasp at the moment with his election rhetoric), which affects the goods we buy and the demand for the currency. A British import tariff against Chinese imports would mean the price of the yuan measured in pounds falls, making British goods more expensive to the Chinese, which reduces demand for things priced in yuan and reduces demand for yuan, making UK consumers worse off.

Obviously the reason the Chinese want pounds or dollars is not just to buy our goods, it is to invest; in shares, land, businesses, and government bonds, all of which require our currency. Therefore demand for pounds on the currency market consists in part of demand by the Chinese who want pounds or dollars to buy goods, and in part to invest.

Tariffs do have a bearing on our decision because the EU rather closely resembles a protectionist trade bloc, where a tariff wall has been erected around EU member states which raises the prices of protected goods, making it worse for both buyers and sellers. The economist Patrick Minford suggests consumers waste around 4% of GDP on excessive costs because of EU protectionism, because the EU marketplace has prices fixed significantly above world market prices, and because of this, it distorts the flow of our economy towards these EU-protected goods and away from better value in the marketplace outside the EU.

The consequences of which, as I illustrated above, means inside the EU bloc we produce more of the goods and services over which we do not have the comparative advantage, and fewer goods and services over which we do. Or to put it in even simpler terms, we produce an excessive amount of the things we are less good at producing, and insufficient amount of the things we are better at producing.

There is nothing unique about competition that comes from non-EU producers that necessitates politicians to treat it differently from competition that comes from EU producers or producers in one's own country. As long as suppliers adhere to the requisite standards (standards that can be enforced in their own country pre-export) then there is absolutely no need for any cross-border penalties (tariffs) from politicians.

What about a post-Brexit UK?

Although I’ve given several reasons why I think we should vote to leave the EU, some may feel that I haven’t answered sufficiently the question that everyone seems to be asking: what precisely will a post-Brexit United Kingdom will look like? The reason I’ve not gone into lengthy prose on this is that, truthfully, no one actually knows for sure – quite simply because we don’t know what our government’s policies are going to be if we do exit, nor whether the UK will begin the process of breaking up, particularly with Scotland being so pro-EU, and Wales starting to show more support for remaining in too.

We don’t know what the effects of Brexit will be because we don’t know who’ll be governing the UK if we leave, what economic policies they will adopt, to what extent we’ll remain under certain regulations, what policies will accompany any unilateral free trade we have, or whether immigration levels will drop to the detriment of our economy. Because the truth is, even if we leave there are still a lot of unknowns.

To compound this point, consider leaving the EU and being governed by someone like Jeremy Corbyn - someone even more economically illiterate than many of the EU regulators. Corbyn is a man who wants to renationalise most of our industry, impose further price controls, artificially subsidise our manufacturing industry and bail out any UK industries that lose out to foreign competition. If you are the sort of person that cares about economic growth then Corbyn is a very dangerous leader to contemplate having.

While this doesn't in any way endorse the overall structure of the EU, one tiny thing in its favour is that some of the EU regulations would keep the wolf of Corbyn's Anglo-centric economics quite far from the door, as EU competition law prevents member countries from granting the kind of Corbyn-esque special treatment like subsidising, bailing out ornationalising domestic firms over competitors from elsewhere in Europe (much of this is thanks to Margaret Thatcher and Leon Brittan in the 1980s, both of whom knew the dangers of this).

For me, despite some obvious interruptions to normalcy as we gradually extricate ourselves from much of the EU influence on our laws, regulations and trade, the post Brexit UK probably will go on to be in an even more prosperous nation, and this in spite of the fact that seemingly any party that runs our country is a country mile away from a proper endorsement of the free market (one might say they are all socialists).

It’s worth mentioning too that growth of non-EU economies has outpaced the growth of EU economies in recent years, and looks set to continue at an even greater extent, which means future indication is that leaving the EU would free up Britain's non-EU trade potential, enriching us along the way (since we've had a floating exchange rate the balance of trade is less important than it used to be, as a trade deficit simply means we are up on consumption, which is the primary benefit of trade). A situation in which we treat the most emerging countries like China, Brazil, India and Russia less distantly and patronisingly in deference to Brussels is highly likely to be beneficial to the future UK economy, particularly with our proficiency in exporting services such as in education, digital technology, neuroscience, financial and litigation expertise and the sciences as we are well poised to do.  

How do trade deficits fit into the equation?

Well currently the UK goods trade deficit with the EU is over £77 billion, last I heard, plus we have a service trade surplus of over £15 billion, which means an awful lot of trade to and from, which obviously all agents involved will want to retain, irrespective of whether we leave the EU or not. In other words, by themselves, the arguments that leaving the EU will be terrible for trade are almost certainly spurious.

The other thing you need to realise is that a trade deficit is a good thing, because it means we are consuming more than we are exporting. A lot of people think the net benefit is when the opposite occurs, but they have misunderstood the purpose of trade which is ultimately consumption. I'll explain it with an analogy about my life. I live in Norwich, and I like our market. I like it particularly for the food I often buy there when I visit the city centre. Given that I don't work on the market, but do spend money there, I have what's called a trade deficit with the market. A trade deficit is the amount you spend in a particular place minus the amount you earn there (a trade surplus is just the opposite).

In recent times many Brits have argued that we are worse off because of a trade deficit with China. But by that same logic I would be better off without Norwich market. When people are able to trade to acquire things they want, value is created in their lives, and it makes them better off. Whenever trade increases between James Knight and the Norwich market stalls both James Knight and the market stalls are better off. Similarly, whenever two countries are able to trade to acquire things they want, value is created for its citizens (note, I'm talking about open, mutually beneficial trade).

That's also why trade deficits are not the bogey so many on the left imagine. Recently I bought £750 worth of shirts for £330 in a sale. I earned nothing that Saturday so my trade deficit for that day was £330. By the logic some of the 'Remain' campaign use they would have to tell you that I had a bad day - but, in fact, I had a great day - I bought shirts that I value much more than the money, and the clothes store had a good day because it made a profit on the merchandise (albeit a limited one, it was a sale - but still a profit nonetheless).

Nations consist of millions of people all doing as I am doing. They work to earn money and they buy when they value the goods or services more than the money (the exact opposite is true for sellers). Hopefully you can see now, if you couldn't before, that there is no reason why coming out of the EU should have a negative effect on our trading or our economy, providing the British government's post-Brexit polices are favourable to its citizens. 

To compound the point, here's an exercise for you. Think about all the transactions you've ever undertaken in your life, and then consider whether any of them had the remotest positive bearing to whether we were in the EU or not. I'll bet, like me, you'll find it is virtually none of them. In reality, the reverse is true: when you consider the huge expense, subsidies, trading tariffs and countless regulations that hamper the process of free trade - not to mention the hugely excessive bureaucracy these things create - you'll find the balance sheet has an almost uncountable negative bearing on our transactions.

Note: I haven't mentioned immigration, but will do so in an imminent blog post.

EDIT TO ADD: Personally I suspect that even if we do leave the EU, the Brexiters won't exactly have many reasons to do cartwheels. If the politics of the present day socialist Tory and Labour parties are anything to go by, the post-Brexit UK government will probably actively mirror most of the annoying interferences that are currently present in the EU from which they are filing for divorce.

* To give you a microcosmic example of the cost of overly-bureaucratic political interference by looking just at America, Dan Mitchell of International Liberty (who is about as well researched as anyone on these matters) shows how Americans spend 8.8 billion hours every year filling out government forms, how the economy-wide cost of regulation is now $1.75 trillion, and how for every bureaucrat at a regulatory agency, 100 jobs are destroyed in the economy’s productive sector.