Keynes’s shadow is looming over Brexit

Keynes’s shadow is looming over Brexit

October 27, 2018 0 By Michel Santi

“When the facts change, I change my mind”: this was one of Keynes’s maxims that became an established way of thinking. What would his attitude to Brexit have been? For or against it, he would nonetheless have been part of the negotiations to try and extract the best agreement possible, despite the strongly unfavourable conditions that his country is faced with. In fact, having represented the UK during the Versailles Peace Conference in 1919, then leading the country’s delegation at Bretton Woods in the mid-1940s, which saw the reformulation of our monetary system, John Maynard Keynes was an unrivalled negotiator. He was indeed one of the only people on the winning side in 1918 to criticise the unrealistic reparations imposed on defeated Germany. Likewise, he urged Britain to show flexibility and understanding regarding America’s isolationist temptations, by encouraging his colleagues to be empathetic with their American counterparts.

The current British negotiators should take inspiration from this and understand that the European leaders’ main and final objective is to preserve the Union, and to discourage – by making an example of the UK – any other attempts of a country wishing to leave it. In looking beyond their simplistic messaging on Brexit, the British might understand that the symbolism of the deal is just as crucial as the deal itself! They might realise that, in reality, the two parties involved (the EU and the UK) must make an effort to understand each other’s position in order to come to a balanced agreement, which unfortunately seems to be getting further and further out of sight as each day passes. To do this, the UK must convince Brussels that it will remain a high-quality trading partner and an indispensable political ally. Here too, Keynes can teach us some valuable lessons.

Keynes who, in 1945, thought that the best strategy for his country was not to constantly highlight its contribution to the war effort, but rather to embrace and steadfastly face up to the new world that began after the Second World War. A figurehead of Keynes’s moral fibre is sorely lacking from the complex and pain-staking conditions of the Brexit negotiations, and it is now vital that all those involved in the negotiations take note of the importance of the relationship between Europe and their British neighbours, on so many levels. And also of the major issues of Brexit since – in fact – no nation has ever before left a free trade zone, and this is counting since Bretton Woods! Brexit therefore represents the very first test for de-globalisation that humanity has to confront in this world of hypercomplexity. This is because no other free trade zone is as integrated (with regards to trade, services, capital flows and free movement) as the European Union.   

Keynes and his mental agility might have been able to carefully navigate through the minefield that is Brexit, even if you’d bet money on him being staunchly against it. He often warned against the temptation of sacrificing today’s wealth for better, but very uncertain, future prospects. From the age of 21, he had in fact highlighted our deficient skills of prediction.