Yves here. While Richard Murphy’s bottom line on where Brexit is taking the UK is sound, I have to differ with some of his logic. I don’t see the big reason for the coming train wreck as the result of habit, but as largely due to the lack of respect for and the resulting utter hollowing out of operational competence in government and in large swathes of the private sector. For instance, David and Colonel Smithers have both discussed how the civil service in the UK is a shadow of its former self. The importance of organizational capacity becomes even more important as more and more systems have been made more efficient, which also makes them more fragile. Just in time is a prime example, since eliminating inventory buffers makes production far more vulnerable to supply interruptions.
In other words, it would have been possible to have a much less chaotic Brexit, but it would have taken a radically different cast of characters and mindset, starting with a realistic vision of a possible deal with the EU rather than assuming a game of chicken would produce an EU capitulation. The Glorious Brexit and “taking back our sovereignity” could have been linked back to British examples of getting things done, like its early manufacturing prowess and its history of engineering advances. Ministers and their juniors would have talked to people in industry and transport to understand logistics and border regimes.
But even with a much more grounded view of end points and how to get there, the UK would have needed a war-level mobilization to prepare for life outside the EU. The additional activity would have been stimulative and thus provided many workers with better incomes (and hopefully a bit more tucked away) before hitting Brexit potholes. And more business leaders, managers, and front-line staff would have been in an anticipatory/problem solving mode, as opposed to confused, trying to arrange their business to avoid UK activity if possible, and/or braced for a crash.
But as Clive once described long-form, the UK practices managerialism with makes US rule by MBAs look good. It is apparently common for supervisors to dismiss workers who warn of expected or actual difficulties with company initiatives as dull and lazy, that someone clever could make it all go away. Pollyannaism as leadership is about to take a big beating.
By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally published at Tax Research UK
Every newspaper has the story that Honda has stopped production today. The issue is straightforward: port logistics are stopping them getting the parts that they need. And rumour has it that they are far from alone. All this is happening before Brexit adds to the woes come 1 January.
I do not wish to revisit Remainer sentiment. That some of us said this would happen is not the point. Unless, of course, it is. By which I mean that some of us said that this would happen not because we were Remainers but because it was entirely predictable that chaos would ensue from leaving the EU, and that was before COVID 19 was added into the mix.
It takes only a little understanding of the human condition, and what follows on from it about the business condition, to realise that most of the time most of us survive by a thread. The stresses of life seem to be pretty big for many. Whether they really are is irrelevant: perception is what matters here. That is what is actually real, because perceptions relate to how we see the world. And, if most of us, most of the time see the world as stressful then that is what it is.
How do we cope? Through the use of routine. We eliminate as many decisions as we can during days that demand we take more decisions than we might wish for by simply reducing the rest to the level of repetitive action to which little thought need be given. And that’s fine. Broadly speaking, most of us do not create destructive routines (or we would no longer be here) and so this process works.
The same is true of most of the remaining decisions, of course. We reduce them to the point where heuristics can handle most of the required choices. That leaves our energy for what is difficult. And even then those remaining decisions seem to be hard,
What Brexit was always bound to do was require massive degrees of decision making, almost none of which could be based on routine, and where the heuristics simply cannot work because the rules are not known. So, what Brexit was always going to do was increase stress. And it was always going to increase the error rate, because the great thing about routines and most heuristics is that we know that we can use them because mistakes do not happen when we do; experience has proven that. But now we have no such back ups.
So, right across the country right now very large numbers of people are flying blind. The government has not told them what to do, because the government has no deal, and so does not know what to say (and if in doubt, note that the Northern Ireland arrangements were supposedly agreed yesterday, weeks before being used and years after the need to know them was understood to exist). And, as is usual in life, training is absent and there is no time to read the manual.
Of course, such situations happen daily in life. But the ratio of routine and heuristic decision making to ‘flying by the seat of your pants’ judgement is usually quite high. Only now it is not. There is far too much guesswork in the system now. And that means the system will fail.
All human systems are, proverbially, as good as their weakest link. Right now there are vast numbers of ver weak links. Of course systems will fail. And the impact can and will be exponential. Once something has gone wrong the scale of decision making required grows, very rapidly over relatively short periods. And every one of those will carry a high risk of being called wrong. The risk of chaos is very high.
And that’s what is happening. This has nothing to do with Remainers, the EU, or anyone else sabotaging anything. With the greatest will in the world, this was likely. It has been exacerbated by the government’s refusal to reach an early deal so that the transition period could be used for actual Brexit preparation. And Covid has obviously not helped. But I stress, this was always going to happen. Asking literally millions of people to amend their routines and heuristics and simultaneously make decisions based on ignorance was always going to be a recipe for disaster. And disaster is what is unfolding.
I take no pleasure from this.
People will probably die because the government did not understand this.
Others will suffer considerable hardship.
And none of those is necessary. Even if Brexit was the right thing to do, and even if the vote was properly held (and neither is true), this could only have been avoided by having a deal agreed before a transition and then having as long a transition as possible before the new rules had to be used. Simultaneous systems would have made sense to the greatest degree possible. But none of that has happened. There has, in effect, been no transition period. There has just been an extended negotiation.
Who do I blame? It’s not hard to work that one out, is it? The UK government is, of course, responsible. It wanted Brexit. It created the chaos. It created the delay. It has not done the preparation. But most of all, the people in our government have no comprehension of the issues I have noted in this post. The idea that in the real world it takes time to make things work has clearly not occurred to them. And that is why they are to blame and no one else is.