Brexit Fix

If it ain't broke, don't Brexit.

   Many believe the European Union is failing and the only way healthy members can survive is to leave. This is especially true in the United Kingdom, where a vote will be held next week on whether to remain or leave.
   But Adam Smith, the founder of modern economic theory, showed that the best way for nations to survive is for each to focus on what it does best and allow free trade with others. One example he used in his 1776 book, The Wealth of Nations, was the comparative advantage Spain had in making wine, contrasted with Britain's advantage in manufacturing. This was not to say that manufacturing could not take place in Spain or that wine making could not take place in Britain. But for those who have ever tasted British wine, the choice is clear.
   In the European Union as now set up, trade between nations is easier, and workers can easily move from one to another, following job openings. If the UK leaves the EU, that will mean that many who now work in England, taking jobs that native Britons do not want, will have to return to their native countries.
   For example, if the UK leaves and the Republic of Ireland remains, citizens of Ireland who work in the northern part of the island that is still part of the United Kingdom, will have to deal with border crossings every day. And restaurant workers in England, such as cooks, servers, cashiers, and cleanup personnel, will have to return to their home countries, which could include Spain and Portugal or several Eastern European countries, where jobs are scarce.
   Clearly, there are economic problems worldwide, Europe and America continue to recover from the worst downturn since the Great Depression of the 1930s.
   In the UK itself, however, there has been good progress, according to the International Monetary Fund.
   "The economy in the United Kingdom has performed well in recent years," the IMF said in a new report, even as it faces "important challenges and risks."
   Growth has been "near the top among major advanced economies," the report said, and employment "has risen to a record high" as the unemployment rate remained low.
   One of the risks and a major source of uncertainty, moreover, is the possibility that the UK may abandon its membership in the European Union. As a result of this uncertainty, "economic growth slowed in the first half of this year," according to the IMF report.
   If UK voters approve the plan to exit the EU, negotiations on how to accomplish this as well as set up any future relationship with other members of the union could drag on for years.
   Meanwhile, confidence among workers and companies could well suffer as they wait for things to settle down. Economic growth could well go negative, spending could drop and jobs would be cut -- two clear symptoms of an economic recession.
   A side complication would be increasing pressure in Scotland to break its centuries-old political link with England. Polls suggest more Scots want to remain in the EU, while many in England want to leave. If next week's referendum results in the UK leaving the EU, a consequence could well be that Scotland might leave the UK, retrieving full independence. And that would mean more complicated negotiations to establish border and customs crossings between Scotland and England, in addition to reopening border crossings between the Republic of Ireland and the six counties of Northern Ireland that remain part of the UK.
   
   On this side of the pond, America in 1776 defined its split by declaring itself as thirteen "free and independent states." But initially, the new nation made the mistake of allowing each state to erect trade barriers and to issue its own currency, which meant that money acquired in one state could not be spent in another. Fortunately, that situation last only a few years under the Articles of Confederation, and was resolved when the Constitution of 1789 took effect, and eventually monetary unity was established.
   In Europe, there have been several steps toward full unity, but not all members use the euro, so full monetary unity has not yet happened. Fiscal unity is still a goal, and political unity remains a dream, held back by nationalistic fervor.
   And it is this nationalism, recently reviving and growing in many member countries, that is likely to be the final straw in the breakup referendum, beginning in Great Britain.