Many media commentators on the British referendum outcome to leave the European Union have zeroed in on the Brits’ frustration with the increasing intrusion of the unelected—unaccountable—EU super-government in their lives as the reason. (For an excellent example, see Terence Corcoran’s Financial Post column). The continual and growing stream of directives and regulations from Brussels is an undeniable fact, and I applaud the majority of the British voters standing up for their freedom and electing to reject the suffocating EU rule.

Since many of the EU regulations (in 32 categories!) are aimed at businesses, Brexit is a good news for business—but only if Britain will recall and implement the principles of individual rights and free markets and minimize government’s role in the economy.

Ironically, the European Union was established to promote free trade and free movement of capital and labor among its member countries. It has succeeded in doing so a certain extent—while at the same time undermining the principle of freedom with a million regulations. No, I haven’t counted them, but there certainly are thousands of regulations, covering everything from the size of wheat the farmers in the member countries should grow to energy production and use and to climate change.

There has been much debate about the cost of the EU regulations to the British economy, with the proponents of the Brexit arguing that the regulations cost more than what the benefits of being part of the European free market zone is worth. I haven’t examined the calculations offered by both sides, and neither would I put much weight on them in deciding whether it is beneficial for Britain to leave or to stay in the EU. Important in assessing whether Britain leaving the European Union is good or bad for business and people (in Britain and elsewhere) is to identify the basic principles involved and their impact on human flourishing.

The principle of free trade of products, labor, and capital that was at the core of the European Union’s founding is definitely beneficial for producing and trading material values—the essential functions of business that contribute to our well-being and prosperity. However, the principle of free trade is a derivative of a more fundamental principle upon which human flourishing depends: the right to liberty.

If government (or super-government such as that in Brussels) permits free trade to some extent but at the same time violates the liberty of companies to choose their line of business, their methods of financing and production, or whether to collaborate with other firms and how, how to price their products and what pay to offer to their employees, the companies’ ability profit and grow is diminished. Also diminished is the well-being of all those with whom the companies trade: their customers, suppliers, employees and investors, and ultimately of everyone participating in the economy as a producer or consumer.

Therefore, the Brexit presents a huge opportunity for the British. If their government manages to resist the temptation to substitute the intrusive and suffocating regulatory madness of the EU with their own regulatory state and instead adopts the proper role of government—the protection of individual rights of the citizens—the British businesses will be unleashed to create material values in an increased scale, enhancing flourishing for all.

Doomsday scenarios by collectivist supporters of the EU and lovers of the regulatory state depict an isolationist, impoverished Britain where British companies are not trading globally and face eroding profits. However, such scenarios do not match reality. Quite the contrary, leaving the EU will remove the yoke of its regulations and will allow the British firms to operate and trade more freely. Not being part of the European Union or the euro-zone is not an impediment to successful global trade, as the examples of Switzerland and Norway have clearly demonstrated.

British companies can even outperform those outside of the EU—if the British government does not compromise on the principle of liberty. That is the big ‘if.’ But the Brexit has opened up a huge opportunity for a freer, more prosperous Britain.

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Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada.She has lectured and conducted seminars on business ethics to undergraduate, MBA and Executive MBA students, and to various corporate audiences for over 20 years both in Canada and abroad.Before earning her Ph.D. from the Wharton School of Business, University of Pennsylvania, she helped turn around a small business in Finland and worked for a consulting firm in Canada.Jaana’s research on technological change and innovation, value creation by business, executive decision-making, and business ethics has been published in various academic and professional journals and books. “How to Be Profitable and Moral” is her first solo-authored book.

2 COMMENTS

  1. Airbus speaks up on the decision:
    http://www.aviationtoday.com/av/commercial/88090.html?hq_e=el&hq_m=3259106&hq_l=4&hq_v=6750c2abef#.V3AXCrnn_ow
    The pre-vote remarks speak to uncertainty of movement of parts and people to run its business. That depends on government trade and aviation regulation people.

    (Key parts of Airbus airplanes are built in the UK. That’s trade in general, for example parts of Bombardier’s new airliner , Douglas had wings built in Ontario, Boeing has wings made in Japan. (Though there may have been a country-subsidization factor for Airbus, as there was in the unprofitable Concorde venture which was based on nationalism not sound economics. Aviation needs ability to certify parts in one country for use in another, that improved after a Canadian and an American leader changed the tone decades ago.))

    Unfortunately one objection to EU was immigration. For some reason European countries like the UK and France ended up with ghettos and violence, whereas Canada and the US are still mostly a “melting pot” and people are productive from an early stage of their residency.

  2. Finishing the sentence:
    Parts of Bombardier’s new airliner are build in China, Ireland, Mexico and likely the US where it owns Learjet.

    One crazy example of EU bureaucracy was blocking selling of Saskatoon Berries because there had not been years of proof they were safe for European bodies.
    (AKA June Berries south of the 49th parallel. Similar to a high-bush blueberry but a purple tinge and a somewhat different taste.)

    Never mind tribal North Americans had been eating them for millennia, and immigrants from northern Europe (English, French, Orkney, Scottish included) for centuries. They were a staple in food purchased by the Coer de Bois of the Northwest Company from tribal people on their treks from eastern Canada to NW AB. Tribal people made pemmican (a dried food of meat, rendered fat, and in the deluxe version berries).

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