Boris Johnson, Mayor of London, speaks in the House of Commons in London, following Prime Minister David Cameron's address in which he laid out his case for Britain remaining a member of the European Union. ©PA/PA Wire/Press Association Images
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It played out exactly as expected. Late night negotiations in Brussels. A deal. A referendum announcement. A media fest over which cabinet ministers would opt for the Brexit camp. Boris. And a continuing storm of commentary and opinion. There’ll be four more months of this, but will most people be any the wiser about the key issues regarding the European Union by the time we vote on our membership of it on 23rd June?
One thing that many agree on is that the terms negotiated between David Cameron and his EU partners will not swing the result. They were enough for the Prime Minister to claim progress as the basis for campaigning for "In," but the issues people are going to argue about are far more substantive than those he debated with EU leaders. Arguments will revolve around economic issues such as the single market, net EU budgetary contributions, and trading arrangements. And ultimately will revolve around whether the UK’s interests are better protected if we are in the EU or if we stand alone. (The odd thing is that, despite the fact that these economic issues will be central to the debate, few people understand them).
I can certainly appreciate that this isn‘t the hottest conversation topic to have over a beer at the Frog and Nightgown, over a latte at the cafe or even on Twitter. But this notion of a "trilemma," as formulated by Harvard Professor Dani Rodrik while he considered globalisation over ten years ago, is important if we are to completely understand this referendum. As a descriptive term, it fits the EU referendum like a pair of nice warm socks. This is what it is. Bear with me, it is not too technical.
Imagine a triangle. At the apex, you have deep economic integration, represented in this case by the EU and its array of economic structures such as the single market, plus all its laws and regulations, the most significant of which are embedded in European Treaties, agreed to by all member states. The other two points on the triangle are labelled "national sovereignty," and "democratic politics." Rodrik’s trilemma states that at best, you can only ever realise two of these three objectives unless you have robust and respected institutions that command universal support.
Self-evidently, some EU institutions are not popular or well respected; we are still in the wake of the financial crisis, after all. We can thus only hope to achieve two of these objectives. The popular view in Europe, which is on the whole still supportive of the EU, is that further economic integration would be a bad thing. Fears that there might be a European super-state (and that we in the UK had better quit before it is too late) are just scaremongering.
The main point, though, is that any level of economic integration involves giving up some of our sovereignty and our ability to exercise total democratic rule. To apply Rodrik's model to a couple of examples: a country without any economic integration with the outside world is North Korea. It is fully sovereign, but has no democracy. China, by contrast, has opened up and integrated into the global economy, succumbing to the rules and regulations (by and large) of the World Trade Organisation, the IMF, World Bank, Financial Supervisory Board, G20 and so on. At the other extreme, eurozone countries have chosen a very high level of economic integration, including a common currency and central bank, and have clearly been willing to cede considerable sovereign and democratic powers to new European institutions.
There is a trade-off to be made, then. In light of this, you cannot have an abstract discussion about sovereignty without saying what you are going to surrender in terms of economic integration and benefit. Brexiteers are free to discuss "taking back control," but they are then under an obligation to discuss the potential economic disadvantages of doing so.
Inside the EU, for example, the UK has access to the single market, struts as Europe’s premier financial centre, and participates along with other member states in everything from international relations and defence and security co-operation, to discussions on climate change, financial regulation, trade and investment and much more. The price of being at the table where, along with others, the UK shapes the lives of all the EU’s 510 million people, is that we have to implement EU laws and regulations—some of which are clearly unpopular or unnecessary. All things considered, people must decide whether these aggravations warrant an ill-defined grab for a vacuous notion of sovereignty.
If we vote to leave the European Union we may gain the power to forbid EU workers coming here to work, and to spend a long time abolishing and replacing all the EU laws and regulations on our statute books. The price, though, will probably be significant. The global economy is hardly in the best of health. Emerging markets have lapsed into a growth hiatus of unknown duration, and the potential losses to UK industry and finance from losing unfettered access to the single market would be considerable. The European Central Bank would have few qualms in stipulating that euro-denominated business be repatriated to banks with headquarters in the EU.
Norway is part of the European Economic Association (an academic organisation), benefits from the single market, pays contributions to the EU only slightly lower than those that we pay, yet has no representation in the EU. Switzerland, one of four small members of the European Free Trade Association, has a network of specific bilateral treaties with the EU, obeys relevant rules, pays dues but also has no representation.
In any event, as a significant military power, economy, trading nation, financial centre, and foreign investment conduit in Europe, comparisons between the UK and non-EU EEA and EFTA countries are misplaced. Our future prosperity is about much more than trying to boost trade with countries in a stressed global economy, and net EU contributions of £6 billion a year.
Even outside the EU, as this week’s Bagehot column in The Economist points out, the UK would still be subject to 700 international treaties, a member of the UN, WTO, NATO, IMF and World Bank, and subscribe to a swathe of nuclear test ban, energy, water, maritime law and air traffic treaties. The idea that leaving the EU would lead to a golden era of UK sovereignty and self-determination, is, it is fair to say, far-fetched at least.
As this debate rumbles on, remember the trilemma behind the decision that we will all have to make come June 23rd. Also remember though that while the visceral call of self-determination is an emotive rallying call, it means nothing in the abstract.
Read more: Rodrik Dani: when economics works and when it doesn't
