Occasional reflections on Life, the World, and Mathematics

Pareto’s revenge


Several months ago I suggested that no one could ultimately support soft Brexit, because the soft Brexit strategy — something like EFTA, formally outside of the EU, but still in a customs union and/or the single market, still recognising most rights of EU citizens in the UK — is, to use a bit of economics game-theory jargon, Pareto dominated by staying in the EU. Even if the damage wrought by a no-deal Brexit would be vastly better worse by a negotiated surrender, if you look at it category by category — rights of UK citizens, disruption to markets, business flight, reputation, civil peace, diplomatic influence, sovereignty over market regulations — staying in the EU would be even better. There’s nothing you can point to and say, this is what we got for our trouble (which is why Theresa May was at such pains to bash immigrants when announcing her deal). We’ll always have Parisians.

Apparently, some other leading Brexiters are noticing their Pareto trap. Earlier in the week Dominic Raab resigned in protest that the deal (that he was responsible for negotiating himself!) was worse than staying in the EU. Today it’s Shanker Singham, leading trade adviser to the Leave campaign, who says “From a trade policy perspective this is a worse situation than being in the EU.” (Much of the Guardian article explains how this leading intellectual light of the Leave campaign has a mostly fake CV.)

The effect will be zero. The Brexit dead-enders only need to keep Parliament in turmoil and run out the clock, until their glorious Thelma & Louise consummation. I’m sure Jacob Rees-Mogg has shorted the pound, and the FTSE, so he’ll be fine. Would that count as insider trading?

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