Brexit: “What Comes Next?”

[ref]Props to Brad Kramer for nailing the perfect Hamilton reference in his comments on the outcome. I completely and unshamedly stole it.[/ref]

What comes next?
You’ve been freed
Do you know how hard it is to lead?

You’re on your own
Awesome. Wow.
Do you have a clue what happens now?

Economist Emily Skarbek makes an important observation following U.K. voters’ decision to leave the European Union:[ref]Get caught up with The New York Times, Vox, and The Economist.[/ref]

No one knows just how this is going to play out. The longer horizon will depend on the course that is chartered in policy negotiations and positions adopted by the UK.

Many of the people I have discussed this with in academic and policy circles want a freer, more open society. This led some to vote remain and others leave, based on divergent predictions about which course of action would lead to a more open society. I take this as one reason for optimism amidst the fear.

The aftermath of this vote will require a broader coalition of liberals to push for an open trade and immigration policy. Trade policy that is crafted in the next few years will be crucial to the economic impact of Brexit. Britain desperately needs policy entrepreneurs, City of London, and leaders in Parliament to craft a solution that maximises openness to counter the populist, nationalist, and collectivist sentiments that may have got us here. It is hard to see this now, having just voted to leave the EU single market.

It seems that many of the “Leave” supporters were driven by the influx of immigrants over the last decade or so. In other words, xenophobia quite possibly led to the Brexit vote. It could also very well be that most didn’t know what the hell they were voting on. Furthermore, the uncertainty can (and is) lead(ing) to economic chaos worldwide. However, it is interesting that younger voters were more in favor of remaining. While they may have been saddled with a future they didn’t want by those going to their graves, this could also mean that the long-term future of Britain is in fact not nationalistic and xenophobic and far more open and liberal. As some supporters of both liberal trade and migration have noted, the EU has helped establish both in Europe. Some are optimistic about the vote. As the Cato Institute’s Marian L. Tupy remarked, “Moving forward, there is no reason why nations committed to entrepreneurship and free trade should not prosper outside of the EU. Switzerland has done so in the past and Britain can do so in the future. By showing the rest of Europe that it is possible to live in prosperity and peace outside the suffocating confines of the EU, Britain will lead the way for other nations – including Denmark, France, Holland and Sweden – that wish to regain their sovereignty and chart their own course.”[ref]You can read Tupy’s more in-depth analysis of the European Union here.[/ref]

The question is whether or not Britain will be “committed to entrepreneurship and free trade” (I’d add liberal immigration policies). The answer will ultimately determine the long-term outcome of Brexit.