Politicians and economists usually seem to arrive to their conclusions like a magician consults his own crystal ball to predict the future.
A brand expert does the opposite: he looks backward to see forward.
The future is to a certain extent predictable if you have a methodological approach in analysing all the recurrent patterns that describe a phenomenon by accepting however that certain variables are totally unpredictable. This is the basic distinction between risk and uncertainty.
The UK and the EU are incompatible from a cultural perspective.
The UK is the homeland of liberalism and of the first industrial revolution that led toward what we now define as globalisation: a global system of trade.
The UK has a specific positioning: it stands for a free deregulated economy and it has never belonged to Europe due to the lack of territorial continuity between the island and the continent.
The EU is the opposite of what the UK stands for.
To understand what the EU is, we must look at it as we have just done with the UK.
During the Second World War, the French Economist François Perroux, filo-nazi and pledged to build the National socialist protectorate of Vichy in France, disagreed with Hitler for having pursued the attempt of conquering Europe with a military campaign.
Perroux said that there was a more efficient strategy to conquer Europe that didn’t necessarily involve a military endeavour: by creating a single currency monopolised by a single bank based in a neutral territory and managed by an institution of non elected bureaucrats advised by a parliament with no executive power composed by the representative of the single nations.
That way he would have subjugated all Europe and realised his dream of the Great Germany.
Political Brexit Positioning.
Where are the European institution based and how do they work today?
Every institution or phenomenon must be historically contextualised to understand its positioning.
During the Twenties and the Thirties there was a huge cultural battle in Europe between the conservatives and the raising working class influenced by what was happening in Russia.
Trade unions where strong in factories and the purchasing power of the working class had grown due to bargaining between big factories and trade unions.
However, the wealthy wanted to pursue the opposite strategy.
They wanted to reduce on a gradual basis the purchasing power of the working class until the point where you cannot go on strike unpaid a single day otherwise you can’t feed yourself and your own family.
Thus, in the same years, we have the rise of the worse totalitarian parties in Europe: National Socialism in Germany, Fascism in Italy, Francoism in Spain. They were all socialist dictatorships sponsored by the most conservative class in their respective countries.
This is history and can all be easily documented.
What do we have now?
A European institutional architecture based on what Perroux suggested.
The EU institutions are based in Belgium. The European Single Currency is monopolised by the European Central Bank.
European policies are directed by the European Commission whose regulations are internalised even in the Constitutions of the countries without the need of national parliaments to agree on it.
The European Parliament has no executive power.
The European Single Market is a land of regulations that has created more and more opportunities for big corporation and less for small and medium enterprises. The middle class is dying and the salaries are in constant deflation. This means that the final output between the growth of salaries and the rise of inflation is negative.
People get poor while their salaries grow.
By stating that the UK and the EU are incompatible, I am not saying that the UK is better or worse than the EU or viceversa. They are simply different.
The UK has the opposite positioning of the EU from a political and economic point of view. The UK stands for deregulation and free market.
The EU stands for regulation and monopolies.
Just consider this: where do they want to go to work European workers?
In another European country like Poland, France, Spain, ect or in the UK?
Where is the most prestigious country where European students want to study?
Where is the most stable country where it is easier to open a business in Europe?
Where do European go to spend a weekend as a must during the year?
Where are the highest paid executive jobs in Europe?
In the UK.
I live with them and talk to them.
European workers came to the UK because the European countries where they come from weren’t offering them the opportunities they could find here. Polish builders do not want to go back to Poland. Italian barristers do not want to go back to Italy.
Greek engineers do not want to go to work in Athens. Bulgarian plumbers do not want to go back to Bulgaria.
Why does the UE seem to be winning on the Brexit negotiates?
Because they know how to do marketing more than Theresa May. People are moved to action by two fundamental psychological triggers: interest or fear.
The European storytelling is based on fear. Theresa May isn’t able to lead a political campaign based on interest.
Brexit will damage the UK economy in the short term due to the period of instability it will lead to but it will be a long term gain. The UK should use Brexit to increase its position of political and economic prestige even further.
Entry barriers have this purpose. What is for everyone has no value. Value is comparable to the degree of selection.
The question might be: does the EU will lose more than the UK with Brexit happening?
Of course it will.
I am an Italian citizen. During the Seventies in Italy there was a terrorist left wing paramilitary group called the Red Brigades.
They had a single policy:
hit one to educate one hundred.
The European establishment has seen nationalist movements grow on a yearly basis during the last ten years. They know how a huge percentage of people that can still compare what was the standard of living before the adoption of the single currency and after it.
Millions of people have no job.
Millions of people have a job but they can’t afford medications and not even their rent.
And who are they going to blame when the limit of tolaration will be reached?
Themselves or the EU? The EU needs to neutralise the UK to educate the other 27 because they know that the risk of a domino effect is high.
Theresa May is in a difficult position and she is the only one in her party that has accepted the historical and political responsibility of Brexit.
In 2016 the percentage of exports to European countries was 43.1 % of the overall exports while the balance between export and import with the EU was negative. Last year the EU was exporting to the UK 82.2 billions more than what the UK was exporting in Europe.
In the period that goes from 1999 to 2016 the UK exported in Europe an amount of goods and services that declined progressively by 11.6%.
Theresa May will certainly find some national politician available to deal with her without the intermediation of the EU in case of a commercial block.
This is one of the biggest fear the European establishment has: European countries export to the UK more than what the UK exports in Europe.
However, Brexit goes beyond mere economic issues.
Brexit represents a leadership problem that has undermined the European storytelling of the irreversible.
And this is somehow unforgivable from a political point of view: Europe isn’t anymore the last stage of history.
What should the PM do, then?
Theresa May should let European citizens arrive in the UK without a VISA for a period of three months with a touristic visa and allow European workers who are already working in the UK to stay in the country without restrictions as it is a bit complicated to replace four million workers in skills and taxes.
Theresa May shouldn’t be afraid of leading the Brexit negotiations.
The value perception of the UK with Brexit is going to increase even further and the overall economy will benefit of it without any doubt.
The UK will be in Europe what Singapore and Hong Kong are in Asia or the Emirates in the Middle East.
There might be a price to pay at the beginning but with rewardable long term gains.