Trade, Development, and Immigration

The IEA and Brexit: recollections from the heart of the Tufton Street cabal (Part 1)


Earlier this week, we published an article entitled “Why Brexit was a mistake, from a libertarian perspective” on the IEA blog. It immediately went viral on Twitter, and, as is usually the case on that platform, virtually all the responses were variations of the same idea. To give you a flavour:

Extraordinary. Truly extraordinary. This is published by the shadowy Tufton Street gang at the IEA. The Brexit penny appears to have dropped with such a clang, it shook their worldview apart

What? The IEA has come to its senses? Am I dreaming?  Apparently not. This is the first IEA article to actually admit that they fundamentally misunderstood what the EU is and does, and called it wrong on Brexit

Quite bizarre that the opaque Brexit supporting IEA should write this

Dark money Brexit promoters the IEA flirting with the idea that Brexit was a mistake?

Nothing to see here. Just the #TuftonStreetMafia’s IEA admitting that their Brexit has failed

The #brexit ideologues admit it was a catastrophe. So, where do we go from here?

Look at this aboutface, quite incredible

Even the Institute for economic affairs (IEA) thinks Brexit was a mistake now!

These disappointed libertarians purposely targeted an ignorant section of society with an industrial scale lying campaign

They know the lies they told us. They know they do[n]t work anymore

[T]he shady Brexit backers suggest it was based on a false premise

EVEN in Tufton Street – IEA – the Penny has Dropped

[H]ere’s the Institute of Economic Affairs […] new take in the disaster it caused

[T]his is what the RW Think Tank who pushed for Brexit, now think about Brexit

Even Tufton Street is trying to distance itself from Brexit

So in short, Twitter is convinced that the IEA is “a pro-Brexit think tank”, or even a driving force behind Brexit, and that publishing a Brexit-critical article therefore represents some kind of seismic change for us.

In this article, I’ll explain why this is wrong at multiple levels. The IEA is not, has never been, and indeed, could not be, “a pro-Brexit think tank” (or, for that matter, an “anti-Brexit think tank”). That is not how the IEA works, it is not how “Tufton Street” works, and it is certainly not how classical liberalism works. I’ll also say a few words about how that misperception arose.

But let’s rewind the tape, and go all the way back to the beginning.

Before the Referendum

One of the interesting things about the EU Referendum was that the dividing lines ran across, as well as between, established political camps. Whether it is conservatives, social democrats, centrists, environmentalists, socialists, or classical liberals, every major political tradition had at least some Remain supporters, and at least some Leave supporters.

Why is that? How can there be, for example, a socialist case for, and a socialist case against the EU at the same time? Surely, the EU either helps the socialist cause, in which case all socialists should be Remainers, or it hinders it, in which case all socialists should be Brexiteers.

But it is not so clear-cut at all. Socialist Brexiteers argued that since the nation state is an instrument of the capitalist ruling class, by extension, so is the EU. They believed that if a future socialist government (by which, at the time, they meant a Corbyn government) were to embark on a socialist transformation of the British economy, the Euro-bourgeoisie would sabotage and crush that experiment. Brexit was thus a precondition for socialism. Socialist Remainers objected that “[t]he reality of Brexit is economic deregulation and scapegoating migrants”, and that “[o]nly by acting internationally can we challenge big capital”.

Thus, Socialist Brexiteers and Socialist Remainers saw fundamentally different things in the EU, and fundamentally differed in their assessment of the viability of “Socialism In One Country”.

The classical liberal side was similarly divided. It was true on the classical liberal side as well that different people saw very different things in the EU, and since the EU is not one coherent ideological project, it easily lent itself to that kind of ambiguity.

There had long been a tradition of liberal Euroscepticism. Liberal Eurosceptics favour decentralisation, and competition between smaller political units. Apply that logic to the EU, and you have a liberal case for Brexit. For them, the EU was simply another layer of government, and if you see the EU in that way, then of course the liberal case for getting rid of that layer seems like a no-brainer.

Liberal Europhiles, on the other hand, did not see the EU as just another layer of government, but as a mutual agreement to constrain the power of national governments. Seen in this way, the EU becomes, on balance, a liberalising force, however flawed.

These arguments already existed – including within the IEA – long before “Brexit” was even a word. When the EU Referendum campaign started, another dimension was added to it. Liberal Remainers were not wedded to the EU, and they never disputed that one could, in principle, imagine a Brexit Britain becoming a more liberal country outside of the EU. They just did not see that outcome as likely. Actually Existing Brexit, they argued, was not going to be a liberal project, but a nationalist, populist, collectivist project. Liberal Brexiteers, on the other hand, were a lot more optimistic about the prospect of a Singapore-on-Thames Britain, and/or more pessimistic about the future course of the EU.

The IEA often organises internal debates on subjects where different people at the IEA (or the wider “Tufton Street” think tank world) take different views, and publishes the results. Examples include the Culture Warlockdownthe voting agethe privatisation of statues and monumentsNet ZeroULEZimmigration, and compulsory social insurance.

So naturally, we did the same with Brexit. For example, in early March 2016, we published two articles on our blog that were not-so-subtly pitched against each other: “Free-marketeers should support Britain’s membership of the EU” and “Free-marketeers should oppose Britain’s membership of the EU”. Similarly in late March: “Hayek would have voted to remain” vs “Hayek would have been a Brexiteer”. And in April: “Why we must remain in the EU” vs “Let’s hear the positive economic case for Brexit”.

We also ran several events debating the subject: “Why Britain must remain in the EU” vs “Why Britain must leave the EU”, “Britain and the European Union – Better Off Out?”, and “Should supporters of free markets support Britain’s continuing membership of the EU?”.

And we filmed explainer videos: “Four Free-Market Reasons to Remain in the EU” vs “The Economic Cost of EU Membership”.

It would be wrong, though, to describe our discussions from that period as simply a matter of “Leave-vs-Remain”. A lot of it was orthogonal to that. Brexiteers often made the mistake of blaming the EU for things that were really self-imposed constraints, and Remainers often made the mistake of crediting the EU for things that Britain could also have done outside of the EU. In April 2016, we published the book Breaking Up Is Hard To Do, which looked at more than a dozen EU-related policy areas from first principles. Crucially, the authors were not asked whether they thought Brexit was good or bad. They were asked what – if any – the appropriate role of international institutions was, in their respective policy area, and how those institutions should ideally be structured. They were then asked to contrast that ideal to what we actually have. Some chapters lent themselves to an implicit pro-Remain or a pro-Leave conclusion, but others did not.

The IEA had lots of enemies in that period, but we were not yet specifically accused of being “too pro-Brexit” (or, for that matter, of being “too anti-Brexit”). If you search “IEA” and “Brexit” jointly on Twitter, and narrow the timeframe of your search results down to 2015, 2016, and the first half of 2017, you will find that in that period, hardly anyone mentioned the IEA and Brexit in the same tweet. (Or if they did, they were much more likely to talk about the International Energy Agency or the Irish Exporters Association.)

Nor was there much in the media. The one major exception was an article in the Independent, published in February 2016, which foreshadowed the future “Tufton Street” conspiracy theories:

“[A]n analysis of the connections between the think-tanks and the Vote Leave campaign reveals a nexus of right-of-centre organisations whose staff, board members and, in one case, offices are closely linked. […]

Civitas has offices in the same premises as Business for Britain – and where Vote Leave was originally registered. The building – 55 Tufton Street in Westminster – is […] home to eight right-of-centre organisations”.

But this was very much the exception at the time. The idea that the IEA was “a pro-Brexit think tank” was not a thing then, and it did not pop up until well after the Referendum.

 

Continue to Part 2

 

Head of Political Economy

Dr Kristian Niemietz is the IEA's Editorial Director, and Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).


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