The Brexit con

Brexiters told us that leaving the EU would be quick and easy and would save us £350m a week. With a chaotic no-deal looking a real possibility, however, Jacob Rees Mogg now tells us it could take 50 years to reap the benefits.

What he’s doing here is something con-men have always had to do – stopping their victim going to the police when the goods they have charged him for fail to arrive. This job is called cooling the mark out, as described (pdf) back in 1952 by Erving Goffman*:

An attempt is made to define the situation for the mark in a way that makes it easy for him to accept the inevitable and quietly go home. The mark is given instruction in the philosophy of taking a loss.

Rees Mogg is employing the method Goffman called “stalling.” He’s saying that the goods will turn up, but just a bit later than promised and at a higher price.

The thing is, this tactic could work. It plays upon several psychological mechanisms.

One is a desire for consistency. As Robert Cialdini says:

Once we have made a choice or taken a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment. (Influence, p57)

One aspect of this is that people hate admitting even to themselves that they were wrong. They therefore look for reasons to believe their decision was a good one, and downplay evidence to the contrary. Stock market investors hold onto losing stocks in the hope they’ll break even: wishful thinking causes them to over-estimate future returns. The same wishful thinking might cause Leavers to think a chaotic Brexit will be worth it eventually.

Secondly, there’s the “if it’s expensive it must be good” syndrome. Peddlers of textbooks and financial advice play upon this by charging extortionate amounts. They do so because it works. As Dan Ariely famously showed, expensive placebos work better than cheap ones.

It’s for this reason that college societies often have humiliating initiation ceremonies. Having borne the cost of joining the society, you value its membership more highly (pdf).

Relatedly, there’s the “ikea effect”. We tend to value things more highly if we have struggled for them; the home-assembled bookcase looks better than the factory-made one.

In this way, the very fact that Brexit is initially expensive might actually sustain support for it. People will think “if it’s this much trouble, it must be worth having.”

Thirdly, there’s simple sunk costs: “we’ve come so far and paid so much we can’t turn back now”.

And here’s the thing. A clever con-man can exploit these mechanisms and extort even more money from the mark. He can play the ancient Spanish prisoner (or advance-fee) con. The goods have been held up on route, he’ll say, and a small extra payment will release them.

In the Brexit context, this extra fee might well consist of labour market deregulation. To take advantage of the new trading opportunities outside the EU, they’ll say, we must be as competitive as possible.

It’s no coincidence that so many Brexiters such as Dominic Raab are also de-regulators.

Nor, perhaps, is it a coincidence that so many of them act just like con-men.

* Hat tip to Dan Davies’ superb Lying For Money.

Comments

[Keith]

"Nor, perhaps, is it a coincidence that so many of them act just like con-men."

In fact they are con men and women. Possibly soon to be extremely costly for millions. Aided and abetted by a corrupt compromised media. With added nationalistic stupidity.

[trev]

They (the Tories) also continue to peddle the lie/myth that it's entirely possible to work your way out of poverty. If you're poor it's your fault for not trying hard enough.

[Dipper]

An economist complaining that other people are con artists? Pots and kettles spring to mind.

Oh, and the duty of every voter is to look carefully at what they are being promised, and what most of the politicians in the link said is that is should be easy, not that it will be easy. A subtle but crucial difference.

[Dipper]

... and still more.

Rees Mogg is being widely reported as having said it could take 50 years to reap the benefits. What he actually said is "The overwhelming opportunity for Brexit is over the next 50 years”. Over the next 50 years. so that is a continuous period, not a bullet benefit at the end.

And all those folks from business telling us how much we will lose if we leave the SM, CU, or have no deal. Are they making promises about what will happen if we remain in the CU and SM? Is anyone promising more jobs? higher wages? No they aren't. These cost-free threats with no commitments of we agree is why people voted to Leave.

[Guano]

Dipper - "And all those folks from business telling us how much we will lose if we leave the SM, CU, or have no deal. Are they making promises about what will happen if we remain in the CU and SM?"

Why would they need to make promises? It is the status quo. The UK has been developed around membership of the SM and CU since Margaret Thatcher took the lead in building the SM and changing the character of the UK economy. The SM and CU are not going to change so there is no reason why the UK economy should be affected if the UK remained in them. There is, on the other hand, a clear likelihood the economy will receive a shock if it leaves them.

Possibly people should have noticed that the Vote Leave promises were bullshit: it was unlikely that the EU would give the UK a bespoke deal to have the same benefits but opt out of the rules of the SM. However the newspapers that most people read don't prepare them for the fact that people like Hannan, Gove and Johnson are con-men.

[Dipper]

@ Guano - well if its the status quo on offer I'll stick with my Leave vote thanks. The EU has brought us declining real wages, a housing crisis and public services crisis due to uncontrolled mass immigration, and a balance of payments deficit as factories have been moved wholesale to other European nations. To accept this is to say we can do no better than this. The poor should be grateful for their crumbs from the EU table. It is a message of hopelessness, political weakness, and condescension. No thanks.

[joe]

"Speaking to Channel 4 News Rees_Mogg was pressed on whether or not he would quit if predictions that the economy tanks following Brexit comes true.

Sidestepping the issue he said that we won’t know the “full economic consequences for a very long time” and that “the overwhelming opportunity for Brexit is over the next 50 years”.

What a total charlatan - increasing investments in Ireland, Russia and the Virgin Islands but reducing them in UK - and still pretending Brexit could be a success.

If we and Mogg do not know the consequences of Brexit why are we embarking on this madness? Were Leave not stating that economic forecasts are all wrong - yet Mogg forecasts over 50 years? If some predict the economy may tank why is Mogg taking no heed as a responsible person should? We know the benefits that EU membership have provided us over 45 years but Mogg wants us to go on a 50 year magical mystery tour for supposed advantages of Brexit with zero trade deals that no one is able to determine - even Danny Dyer is confused. We had the best deal ever in the EU. We already trade with the world and we already sell anything to anyone anywhere that wants to buy from us. A total shyster.

[Dave Timoney]

A) “if it’s this much trouble, it must be worth having”.

B) “we’ve come so far and paid so much we can’t turn back now”.

I doubt there are many leavers who would subscribe to A, but I suspect there are a lot who would subscribe to B.

I think the key con for the Brexit ultras is less likely to be "stalling" than "one more heave".

[joe]

Dipper confuses correlation with cause. Everything that has happened to UK over the past 45 years is not the cause of the EU just because we happen to be in the EU.

The EU has not caused UK wages to decline - the biggest cause is lack of UK productivity to pay for higher wages. That in turn is caused by a 1M+ lack of skilled workers; that 15% of adults are functionally illiterate and 25% have not a single education qualification to show after years of schooling. All UK controlled matters. The EU did not start globalisation that was USA corporations. The North Sea Oil high £ in Thatcher's day killed off much of UK manufacturing - it went to the Far East. UK's balance of trade suffered ever since. Again nothing to do with the EU. Germany thrives on manufacturing because it honours the skills and pride in producing quality goods. Germany has been in the EU longer than UK. The UK housing crisis is a wholly UK issue of selling and not replacing council houses and UK banks investing over 90% of funds into ramping up the cost of housing. There are over 350,000 planning permissions sitting there unused at the moment. Few migrants have any hope of owning a house but a lot of them supply the skilled workforce to build new houses.

Being in the EU was UK's last chance of being able to rebalance its economy and be a player on the world stage. All that they young have to look forward to now are more scraps off the zero hours table or migrating themselves. Again nothing to do with the EU.

[Dipper]

@ joe

"Dipper confuses correlation with cause" No I haven't.

Here's Anna Soubry in the Withdrawal Bill debate: "In some parts of our country a large number of people have come in, but these are invariably Polish people, Latvians and Lithuanians who do the work that, in reality, our own constituents will not do. It is a myth that there is an army of people sitting at home desperately wanting to do jobs. The truth of the matter is that we have full employment, and we do control immigration. How do we control it? It is called the market. Overwhelmingly, people come here to work. When we do not have the jobs, they simply do not come."

So that is Anna Soubry stating the case for the EU; that it provides an army of workers who can work for very low wages. Note she also takes the state of skills as a given, not something she as a legislator has anything to do with.

The result of all this immigration to fill jobs at uneconomic rates is a massive increase in population. The European Commission kindly provides the forecast of an increase in 16 million, that is 25%, between 2013 and 2060. That is not as high as some other countries, e.g. Sweden, but that is an extra 25% increase on current demand.

This immigration is creating a massive demand for public services. In 2016 28% of children born in the UK were born to immigrant mothers. that means in 2020 - two years time 28% of primary school reception classes are for children of immigrants. Given that we don't carry a spare stock of primary school teachers we will probably have to start importing immigrant teachers to teach the immigrant children, and all this in order to allow companies to employ as may people as they like at rock-bottom wages.

We haven't even started on the upward pressure on housing costs and the extra cities we have to build.

Everyone knows the key to improving the UK economic performance is productivity. Productivity is the output per person, so to invert it, it is a measure of the price of labour. If you want to increase the price of something, then you restrict its supply. So the route to a sustainable economic prosperity that allows us to build public services of the standard we wish is to restrict immigration particularly at the low wage end, and to start to treat our young people as valuable people we wish to invest in, not as failures we want to replace through immigration.

[Dipper]

One thing wrong with this analysis is that in a con you can, once you have realised you are being conned, get out and cap your loses. This situation is different. We cannot go back to a pre-referendum existence in the EU. Quite simply, if we buckle now we will never have any say again. The EU aren't going to let us have any say in our interest again.

I'm struck by the pro-EU pro capitulation side's complete lack of understanding of this point. Do Remainers actually think sovereignty is not important? Do they believe in some magical mechanism which is going to get good results for the UK if we accept EU conditions? It is absolutely blindingly obvious to everyone I know that if we accept EU terms now we are completely fucked. Why is it not obvious to everyone?

[Alex]

A very interesting analogy. Another analogy which may be worth considering is that of another low-life: the pimp.

A pimp needs to acquire girls for exploitation. Some steps:

Seduction: promise the girl love, riches, and freedom.

Separation: Get the girl to move away from her family, by emphasising their bad aspects

Point of no return: get the girl to do something which is, or she things is irrevocable.

Exploit.

I think these can be seen in the methods and messages of the Brexiteers.

Actual pimps also use physical or psychological methods to dominate their girls. We haven't seen that (yet?)

[Jo]

Wishful thinking is quite active already. Just look at the blog https://thecurrentmoment.wordpress.com/ Admitting the costs of 50 years is not the worst. The worst is people claiming that it was all just betrayal.

[m-ga]

Dipper: "This immigration is creating a massive demand for public services."

Immigration pays for public services. This is because immigrants pay tax.

Not only do immigrants pay tax, but they also use less public services than the indigenous population. Most obviously, their education has already been paid for (by their home country, who won't benefit from the expenditure). Immigrants are more like walking cash points than a burden on society. We're effectively robbing other countries of their workforce when that workforce moves to the UK.

The economy is not a zero sum game. Increasing the size of the economy (through immigration, or by other means) improves conditions for everyone.

[Peter]

This whole blog post is premised on a confusion between "in fifty years" and "over the next fifty years", which - contrary to this blog post - is what Rees-Mogg actually said (see below).

Saying the opportunity will be spread over the next fifty years is not only substantively different from saying the benefits won't be reaped for 50 years - it's closer to the opposite. You should publish a correction, Chris.

Full extract:
Rees-Mogg: “We will know at some point, of course we will. But it’s a question of timescale.”

Guru-Murthy: “So how long have you got?”

Rees-Mogg: “We won’t know the full economic consequences for a very long time, we really won’t.”

Guru-Murthy: “Of course not, but I mean we’ll have an indication. We’ll know if there’s been chaos, we’ll know if there have been job losses.”

Rees-Mogg: “The overwhelming opportunity for Brexit is over the next 50 years.”

[Dipper]

@ Peter - yes. and a confusion between "should be" and "will be". A lack of understanding of the English language now added to the Remain arsenal.

[Dipper]

@m-ga. I've given you facts about public services, and stated as a belief but I think accurate that people working on minimum wage generate very little in tax revenue. Immigrants have children, on average more than UK citizens, bring their elderly parents over, use resource, live in houses and flats increasing demand and cost of accommodation. Autorepeating wrong-headed arguments about immigrants who create no demand and generate massive amounts of tax just because they play for you side is not convincing anyone.

Every time we bring in a nurse from overseas, that's a young UK person who wanted to be a nurse, had the qualifications, being rejected from a place on a nursing course. How is that good for a country.

[rogerh]

Cannot understand why the rich types who govern the Daily Mail and the Telegraph have been pushing Brexit so hard. I can't see how the elite are going to benefit - apart from the temporary benefits from shorting the £.

There is much talk of 'sovereignty' but this seems an illusory benefit apart from a bit of flummery and writing laws in Old French. In practice we have to fit in with the rest of the world and like it.

Then there is the ability to control immigration, but that peak has gone by. On the one hand there might be another influx but we still look very unlikely to grow enough doctors, scientists and so on here in the UK. Much of the disatisfaction seems to arise from brainless housing policies and the lack of any joined up industrial thinking. Parliament is at the centre of our shortage of home grown doctors and nurses by setting artificial barriers on the numbers of places. No thinking and no brains from that same Parliament we will be relying on post-Brexit with no sign they have found any brainpower.

So, are the rich very very clever and can see some advantage us dimwits cannot. Or is there no advantage at all - apart from cheaper butlers and chamber maids.

[Dipper]

@ rogerh. the owners of the Daily Telegraph and Daily Mail have got rich by giving their readers what they want, which is a right-wing Brexit supporting newspaper (except for the Mail on Sunday which as Remain).

Sovereignty is not an illusory benefit. There is a difference between "fitting in with the rest of the world" and have the rest of the world make all your laws.

[m-ga]

@dipper, "I've given you facts about public services"

The statistic about live births in the UK to non-UK born mothers is a reflection that women of child-bearing age tend to have children. This shouldn't be a surprise to anyone. Also, take a look at table 2, here:

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/livebirths/bulletins/parentscountryofbirthenglandandwales/2016

You'll see that there's an approximately even split between live births in the UK to non-UK born mothers and fathers who are from within and without the EU. This reflects that UK immigration is approximately evenly split between EU and non-EU countries. In fact, immigration is a bit higher from non-EU countries.

This is an important point, because our non-EU based immigration is entirely independent of our EU membership. Any UK government at any time could have decreased immigration to the UK from non-EU countries.

The reason UK governments haven't restricted immigration is because immigration benefits the economy. As I explained, immigrants come to the UK at working age and with their education already paid for. This is a massive saving. And, when they're here, they use public services less than the typical UK citizen – for example, your typical Polish plumber in his 20s isn't going to use the NHS much, because people in their 20s have a much lower need for healthcare than people in their 70s and 80s.

It might be worthwhile to go and read up a bit about immigration :-)

[Dipper]

@ m-ga. I have read up about immigration, hence my comments.

I am aware of the amount of non-EU immigration. Two points; firstly, people who don't like mass immigration from the EU are also not keen on it from non-EU countries. The country voted for a much lower of immigration in the 2015 election. Secondly, bringing in lots of immigrants to improve the economy is making citizens already here spectators in their own country, or at best customers, not citizens.

Children take up lots of public services, all the way through from maternity through all those childhood diseases then into schools. And in our local schools, a Rumanian child is getting pretty much 1:1 full time attention to improve their English and hence allow them to settle in. Its magnificent, but it isn't a sustainable policy.

Finally bringing in immigrants to look after our old people, and for them to become old people here and then needing more people to come in to look after them is a strategy that requires unsustainable exponential growth of the population.

[m-ga]

@ dipper

You're describing global problems with an increasing population. This is a genuine concern. But it's not unique to the UK.

It's also not the kind of thing which will be solved by leaving the EU. Indeed, leaving the EU is likely to make it worse.

For example (and despite the promises of politicians) there is no prospect of less immigration to the UK. If less immigration was the goal, it could have been achieved within the EU. It could have been achieved by as simple a measure as reducing non-EU immigration.

One of the ironies of Brexit is that non-EU immigration is likely to increase. This will be necessary to make up for the shortfall in EU immigration arising from Brexit.

And it underlines that immigration is good for the economy. That's why it keeps on happening. Take the example of your Romanian child in your local school. The parent of that child didn't take up a UK school space, which is a saving to the state compared with children who have UK born parents who were educated by the UK state. So, already the child with Romanian parents is less of a burden than children in the same class with UK born parents. And it continues from there.

Like it or not, immigration is a net benefit to the economy. For that reason, immigration will continue under any government.

The disenfranchisement that UK citizens feel is more likely to be a result of bad government policy going back many years. For example, manufacturing is less than a third of what it was in 1980. The jobs many people used to do have been offshored. This has happened because the government sold off or closed down the industries, not because immigrants have taken our jobs (they haven't).

[Dipper]

@m-ga IT may be a global problem but it isn't an EU problem. Most of the nations of the EU are projected to lose population over that period.

When Blair opened the borders he did not say we are opening the borders because we need a 25% increase in population in just over half a century; he said only a few thousand will come and talk of more is alarmist.

The main economic problem with the UK is flatlining productivity. We need to get more out of existing people not import more people.We will not build a wealthy first-world economy with good public services by importing people to hand-wash cars.

[m-ga]

@ dipper

Agree with most of that :-)

[Mike w]

m-ga,

'Like it or not, immigration is a net benefit to the economy. For that reason, immigration will continue under any government.'

1) Does the model that there is a net benefit to GDP through mass immigration assume full employment at the time of the migration in the host country?

2) Were we were approaching full employment at the time Blair opened UK borders? You agreed with Dipper. I am not clear.

3) Is this good migration of youngsters for us, good for the country they leave?

[BobbySmith]

Immigration is irrelevant in Brexit. Many of its supporters were ex-immigrants. Enough of these idiotic posts. "Brexit" was pushed via Israel/Lukud connection back to the global plutocrats. They saw a opening after it was clear credit markets would not fully recover from the crisis and took it. Putin and the eastern europe oligarchs didn't even get involved until 2013 though when they ran with it, they ran with it.

It was basically a global neoliberal scam to deregulate and degenerate the "Kingdom of England" into a tax haven and sleaze racket for underage sex. That is what will happen as the UK dissolve. You also can't tell me many EU members wouldn't like this as well. I can see black african plutarchs raping fair skinned "English" and Mogg/Farage smiling. They hate the Germanic peoples and always have.

[Arthur Murray]

It seems that mass immigration is making the UK a Bad Place. Is the solution then the reverse of this---mass emigration ?

Yet I can't help feeling that mass emigration would reduce the UK's GDP.

So if we want to increase our GDP we need mass immigration?

[Mike W]

m-ga, cont, (includes some assumptions because you have not come back)

4)assuming (at the moment here) young folks leaving country a, in EU, for country b, is a future disaster for a, equal to the benefit to b,. The question becomes, what sort of EU Remainer are you anyway? Does the project for European Federal integration as a whole benefit from your ideas. If so, in what way?

5)You say: 'Like it or not, immigration is a net benefit to the economy. For that reason, immigration will continue under any government.The disenfranchisement that UK citizens feel is more likely to be a result of bad government policy going back many years.' I agree of course, but that is a shocking thing to be able to predict about the future course of our Democracy isn't it? How have you managed it?

6)Also, I always worry when folks say 'feel disenfranchisement' because implicit in this is the idea that the serfs haven't actually been objectively disnfranchised. But many working class people here have haven't they, over a whole range of issues? So the problem becomes, could the succesive implmentation by Red and Blue British governments 'immigration policy' since the 1960s (often outside the paramiters of your economic model) be an example itself of the kind of 'bad policy' you hint at, that has led us to Brexit?

So, going all the way back in the thread, how do you in fact engage Dipper? He/she clearly stated: 'So the route to a sustainable economic prosperity that allows us to build public services of the standard we wish is to restrict immigration particularly at the low wage end, and to start to treat our young people as valuable people we wish to invest in, not as failures we want to replace through immigration.' One hopes you response is not a Mainstream, Neo-Liberal, Fuck Democracy and fuck those lefties and righties who would agree with this argument!

[Mike W]

m-ga

How about some ancient history from 2009? Third paragraph down may interest you in particular, given your role. The conclusion concerns everybody else!

https://www.telegraph.co.uk/news/uknews/law-and-order/6418456/Labour-wanted-mass-immigration-to-make-UK-more-multicultural-says-former-adviser.html

[Guano]

I sometimes engage with Dipper when he does a Gish Gallop through a selection of Brexit talking points, so I will briefly engage here.

The aims that he outlines could probably be achieved in the political culture that we had up to the 1970s, a kind of Butskellist politics where the state had some control over the movement of labour, capital, goods and services, and had the capacity to impose some direction on the economy. It is very difficult to go back to that world, and not just because of migration and the EU. I don't think that Brexit can take us back to December 1972 - it is more likely to take us into the world of the muddled writings of Dominic Cummings.

Brexit is an argument between two kinds of neo-liberals - those who want to remain in the EU because it enforces competition but also enforces reasonable standards of safety, environmental protection and worker protection, and those who want to leave because they don't like the second part. The second group are enthusiasts for Thatcher, who was very keen on Europe right up to the moment that Delors opened up the possibility of European cooperation going beyond enforcement of competition.

I am more likely to support the former group because the latter group are completely untrustworthy and are trying to take us even further away from a political culture that can work towards the aims that Dipper outlines. I am not even sure that they are really committed to immigration control.