A Lesson in Economic Fallacies – Independence: Hype or Hope

Go Lean Commentary

Brexit Photo 4Now after the Fourth of July – American Independence Holiday – we focus on the many Caribbean member-states that are celebrating their independence in the next weeks and months. See list of Independence Dates in the Appendix below.

For a long time, independence was ‘all the rage’; but was it hope or just hype? With a world-wide emphasis on globalization, this commentary posits that the ‘rage’ needs to be interdependence. That African proverb rings so loudly:

If you want to go fast, go alone. If you want to go far, go together.

So, it is the assessment of this commentary that Independence is so overrated; rather than independence, the call is for interdependence. A model of this desired interdependence is the inter-state cooperation in the European Union (EU). But even that modeled structure is now in jeopardy

Brexit Photo 3 as a referendum in Britain (actually all of the United Kingdom) on exiting the EU passed the ballot test. A proponent for this Brexit or Leave campaign, UK Independence Party Leader Nigel Farage, declared that the balloting day – June 23 – would be Britain’s Independence Day. The assumption here is that the UK had lost its autonomy for too many governing matters and has therefore become occupied by the EU.

The detailed results of the balloting is explained in this article here:

Quick facts about the Brexit

• On June 23, 2016, the United Kingdom voted to exit the European Union by a 52 percent to 48 percent margin. There is no legal precedent for an EU member state to exit the Union, and a prolonged period of political and economic uncertainty is expected.

• Following the vote in the U.K., Prime Minister David Cameron announced he would resign, setting off a power struggle for his successor.

• Cameron said there would be no immediate change in the free movement of people, goods and services, both in and out of the U.K.

• The Bank of England stated it will enable British lenders to provide credit to businesses and households throughout the period of uncertainty. The BoE said it is also prepared to provide an additional £250 billion in liquidity to banks, in sterling and foreign currency, if required.

• Companies must continue to abide by regulations based on EU legislation until the exit is complete, which is expected to take up to two years.

What are some of the political implications?
Bernie McKay, Chief Public Policy Officer of publically-traded Silicon Valley-based company Intuit, Inc. said: “There are uncertain downstream implications about Britain’s future political leadership, which will take months to settle. But the governmental implications extend much further, including uncertainty about the future unity of the United Kingdom itself – watch for the revival of calls for Scottish independence, and for a referendum about the future of Northern Ireland. There is also the risk of exit ‘contagion’ in the EU – watch for movements in other member countries for EU exits.”

“There will be lots of speculation and rumors about Brexit implications for businesses, but it is again premature to reliably predict the real world outcomes, which will emerge gradually over the next several years as the dust settles. We will continue to engage and closely follow developments and implications.”

Source: Posted June 29, 2016; retrieved July 1, 2016 from: https://insight.intuit.com/IntuitNews/Lists/Posts/Post.aspx?List=874bdd47%2D5d8f%2D4fcd%2Dbd9c%2De4d70b533740&ID=4213&Web=d3d40795%2D7bb5%2D4e3d%2Db930%2Db6e2cf3191eb

There is a lot of uncertainty from this Brexit action – the subject of independence is turning out to be more hype than hope; see the VIDEO in the Appendix below.

This subject is presented in conjunction with the book Go Lean … Caribbean and its accompanying movement. The book serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU), a technocratic federal government – modeled after the EU – to administer and optimize the economic, security, and governing engines of the 30 member Caribbean states. The book and previous blogs are reflections of a regional interdependence movement. This is more hope, than hype!

A philosophical attack on the EU is therefore an attack on the Caribbean’s future. We must be aware … and on guard.

In truth, the EU has prospered; it has been a win-win for all of its members. It has endured hardships (consider for example, the sovereign debt crisis in Greece) that under previous European regime’s would have resulted in wars; on two occasions, World Wars. Now so much of the rest of the world – especially Africa and the MiddleEast – wants what the EU has. This is why one of the greatest challenges for the EU as a whole and for each individual member-state is immigration or refugee migration. A basic requirement of the economic integration of the EU is the free movement of labor. So anytime, a refugee finds his/her way inside EU borders, they can travel to any member-state. The only way to prevent this free movement is to exit the EU. This is the British decision!

The UK does not want economic stagnation; they way progress. But they have wrongly accepted the fallacy of economic independence.

Things in Britain will get worse before it gets worse.

Brexit Photo 1True, the EU is not perfect. They have some defects to fix. But the winning formula for fixing the governance is not shouting instructions from outside the trading group, but rather reforming and transforming it from the inside. But with Britain’s exit, they will have not further influence on the group, or the EU’s policies and procedures.

Make no mistake, EU member-states are Britain’s largest trading partners. Like any kind of collaborative relationship, there must be some “give-and-take”. The masses who voted to “Leave“, seem to want to take and not contribute as freely to the giving part. See the related chart in the photo here.

Considering the EU as a model for the CU, a big lesson for us from this drama is that without a “give-and-take” ethos, no economic integration would succeed. This has always been a problem for the UK since the start of the European “Integration Project”. Time and again, they opted-out out of so many regional regulations/proceedings. For example, the EU needed a constitution, but some countries, the UK most prominently, balked at the idea, so the rest of the trading pact opted for modified treaties as opposed to an enforceable constitution. Britain wanted their “cake and to eat it too”. So hopefully now, with a true Brexit, the constitution effort can re-emerge.

Brexit Photo 2Then there is the issue of unity; the Brexit vote shows that some elements in the United Kingdom are not so “united”. Just two years ago, a referendum in Scotland to secede from the United Kingdom – and join the EU as a full member including the Eurozone Monetary Union – was narrowly defeated. No doubt, this Brexit vote will renew the call for Scottish Independence, and maybe even spur a similar campaign for Northern Ireland.

But the complaints of the British masses who voted to “leave” must be acknowledged. They are angry, dissatisfied and protesting the status quo. The Go Lean roadmap posits that globalization is less than perfect; it creates a lot of winners, at the expense of a lot of losers. Those who cling to their nationalistic orthodoxy tend to be among the losing classes. Change is afoot; there is the need to move from the status quo and position a community at the corner of preparation and opportunity.

The recent 2008 global financial crisis taught the important lesson that without preparation and planning the people suffer. The events of that year proved to be a crisis, one that still lingers even to this day. But the Go Lean book trumpets that “a crisis is a terrible thing to waste”. In the Caribbean, we want our homeland to be a better place to live, work and play, so we must avail ourselves to the crisis in the UK, EU and the rest of the world and apply the lessons learned here at home.

For 16 of the 30 Caribbean member-states – see chart in the Appendix of 5 actual British Overseas Territories – the United Kingdom is their colonial legacy. The sins of the parents – much of the UK’s “Leave” supporters were motivated by hate – should not fall to the children. While ‘Mother England’ balks at the EU confederacy, we in the Caribbean should embrace the confederacy of the CU, even though it is a model of the EU. Only then can real solutions be forged for the Caribbean region, like creating 2.2 million jobs across the integrated market of 42 million people and growing the regional economy to $800 Billion of GDP.

There are a lot of lessons in this Brexit drama for the Caribbean. Many of these lessons were codified in the pages of the Go Lean book; though the book was written in 2013, it anticipated opposition to any confederation effort. The book presents “sharing” or give-and-take as a community ethos – the fundamental spirit of a culture that drives the practices of society – that needs to be adopted. The book also details other ethos to adopt, plus the executions of the following strategies, tactics, implementations and advocacies to forge collaborations in Caribbean communities:

Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Promote Intellectual Property Page 29
Community Ethos – Ways to Bridge the Digital Divide Page 31
Community Ethos – Ways to Improve Sharing Page 35
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Confederate 30 Caribbean Member-States into a Single Market Page 45
Strategy – Customers – Member-state Governments Page 47
Strategy – Agents of Change – Globalization Page 57
Tactical – Separation of Powers – Member-state Governments -vs- CU Federal Agencies Page 71
Implementation – Year 1 / Assemble Phase – Integrate Regional Organs Page 96
Implementation – Ways to Deliver Page 109
Implementation – Ways to Impact Elections – For Federal Offices and a Constitution Page 116
Implementation – Ways to Benefit from Globalization Page 119
Implementation – Ways to Promote Independence Page 120
Planning – Ways to Improve Trade Page 128
Planning – Ways to Model the EU Page 130
Planning – Lessons Learned from the West Indies Federation – Previous Integration Effort Page 135
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Improve Governance Page 168
Advocacy – Ways to Better Manage the Social Contract Page 170
Advocacy – Ways to Improve Homeland Security Page 180
Advocacy – Ways to Improve Communications Page 186
Advocacy – Ways to ImpactBritishTerritories Page 245

The underlying spirit behind this Brexit protest is a quest to “appoint new guards” to make the homeland a better place to live, work and play. The Caribbean’s quest for societal elevation is similar; but instead of a call for independence, it is a quest for interdependence; so pronounced in this Declaration of Interdependence at the outset of the Go Lean book (Page 12):

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

The need for “new guards” have been frequently detailed in previous Go Lean blog-commentaries. Consider this sample:

http://www.goleancaribbean.com/blog/?p=8306 New Guards – Women Get Ready for New Lean-In Campaign
http://www.goleancaribbean.com/blog/?p=7896 New Guards for Disaster Relief
http://www.goleancaribbean.com/blog/?p=7789 New Guards for Global Trade
http://www.goleancaribbean.com/blog/?p=7749 New Guards for Regional Elections
http://www.goleancaribbean.com/blog/?p=7601 New Guards for Caribbean Sovereign Debt
http://www.goleancaribbean.com/blog/?p=7327 New Guards for Disease Control
http://www.goleancaribbean.com/blog/?p=6341 New Guards for Tourism Stewardship
http://www.goleancaribbean.com/blog/?p=6103 New Guards Against Deadly Threats
http://www.goleancaribbean.com/blog/?p=5183 A Lesson in History – Cinco De Mayo and Mexico’s Security Lapses
http://www.goleancaribbean.com/blog/?p=1531 A Lesson in European Dysfunction: 100 Years Ago – World War I
http://www.goleancaribbean.com/blog/?p=1193 EU willing to fund study on cost of not having CARICOM
http://www.goleancaribbean.com/blog/?p=833 European Model: One currency, divergent economies

The events in the UK and EU are important for us to consider … and learn. Truth be told, the Caribbean is in competition with this European world, and losing. We lose a lot of our citizens to these very same countries.

The quest to change the Caribbean will require convincing people to not act to their own detriment, as it appears the UK has done with this Brexit vote. Independence is not the answer; interdependence should be embraced more. This message must be trumpeted throughout Caribbean society – loud and clear. This is a mission of the Go Lean roadmap. This is a heavy-lifting task, but worth all the effort.

This is commentary 1 of 6 from the Go Lean movement on the subject of Economic Fallacies. This series presents the imagery of an animal – a dog perhaps – foraging for food, but then gets distracted and “chases a squirrel up a tree”. The squirrel in the tree will never be a meal; it is just a waste of time and energy for the animal. This analogy conveys the waste of time associated with frivolous and fallacious pursuits. The other commentaries are detailed as follows:

  1. Independence – Hype of Hope
  2. Austerity – Book Review: Mark Blyth’s “History of a Dangerous Idea”
  3. Education & Student Loans – Not a good Return on Investment
  4. Phillips Curve – Fallacy of Minimum Wage
  5. Self-regulation of the Centers of Economic Activity
  6. Casino Currency – US Dollars?

All of these commentaries are economic in nature. They refer to rules for managing the valuable resources of time, talents and treasuries. There are best-practices for winning and cautionary tales from losing. Normally these are discovered after the fact, not before hand. So examining the experiences of other communities, the winners and losers, can be extremely helpful to our Caribbean cause. This too, is a mission of the Go Lean roadmap.

Everyone in the Caribbean – citizens, institutions and member-state governments – are hereby urged to lean-in to this Go Lean roadmap. The end-result, once successful, is a better homeland to live, work and play. 🙂

Download the book Go Lean … Caribbean – now!

———–

Appendix – Caribbean Independence Dates

Member-State

Independence Day

Anguilla British Overseas Territory = BOT
Antigua and Barbuda November 1, 1981
Aruba Netherlands Constituent
Bahamas July 10, 1973
Barbados November 30, 1966
Belize September 21, 1981
Bermuda BOT
British Virgin Islands BOT
Cayman Islands BOT
Cuba May 20, 1902; Revolution July 26, 1953
Dominica November 3, 1978
Dominican Republic July 12, 192
Grenada February 7, 1974
Guadeloupe French Department
Guyana May 26, 1966
Haiti January 1, 1804
Jamaica August 6, 1962
Martinique French Department
Montserrat BOT
Netherlands Antilles Netherlands Constituent
Bonaire Netherlands Constituent
Curaçao Netherlands Constituent
Saba Netherlands Constituent
Sint Eustatius Netherlands Constituent
Sint Maarten Netherlands Constituent
Puerto Rico July 4th, 1776
Saint Barthélemy French Department
Saint Kitts and Nevis September 19, 1983
Saint Lucia February 22, 1979
Saint Martin French Department
Saint Vincent & the Grenadines October 27, 1979
Suriname November 25, 1975
Trinidad and Tobago August 31, 1962
Turks and Caicos Islands BOT
US Virgin Islands July 4th, 1776

Source: https://en.wikipedia.org/wiki/History_of_the_Caribbean#Independence

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Appendix VIDEO – Brexit Update: Last Week Tonight With John Oliver (HBO)  – https://youtu.be/aGL5sDg7b8Y


Published on Jun 27, 2016
The United Kingdom voted to leave the European Union, and it looks like it may not be an especially smooth transition.
EXCUSE THE PROFANITY!

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