The latest GDP figures show our economy grew in the third quarter, rather than shrinking as the “experts” predicted. Pundits tell us growth happened “despite Brexit”. Shouldn’t that be despite the technocratic elite’s unshakeable faith in the European project?
The data proves many “expert” predictions about the economic consequences of a Leave vote false. Supposedly authoritative sources, from the IMF to the OECD to the IFS, told us our economy would contract this year. Not after Brexit. Now.
Naturally, some are still trying to present their predictions as true. “Maybe the economy is growing now”, they say. “But wait until Article 50 is triggered. Wait until we actually leave the EU.”
Yet all their spin reveals is that the idea Brexit would cause an economic slowdown was never a scientific theory, to be tested against facts, but an article of faith.
In a sense, that’s not surprising. Economic models reflect the assumptions on which they’re based. The trouble is these assumptions are often absurd.
The 364 economists who incorrectly informed Margaret Thatcher that raising taxes to curb government borrowing would be economically disastrous based their warning on the dogma – derived from John Maynard Keynes – that government should borrow and spend during downturns.
As did the IMF three years ago when it wrongly warned that modest cuts to public spending would cause another recession.
Gordon Brown’s ludicrous belief that he had “abolished boom and bust” – shared by central bankers and economists at the time – was based on the monetarist mantra that bureaucrats can manage the money supply better than the market.
The Treasury’s forecast of a huge post-Brexit slump is based on the equally preposterous premise that the UK would fail to strike not just a free-trade agreement with the EU, but any new free-trade agreements with non-EU countries.
Throughout human history, the only thing that has consistently produced economic growth is economic freedom. The over-regulated single market restricts economic freedom. That’s a big reason why those of us who recognise the importance of free markets and free trade campaigned to Leave.
For all that Keynes was wrong about economic theory, he was right when he wrote that “practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist”.
Let’s not be slaves to the live ones either.