Opinion: The inexorable power of the free market

Thank you to Truth Reporter for submitting this article to UNN

The inexorable power of the free market

The front page of this morning’s FT contained a superb piece of news. Nissan has revealed that if the EU imposes tariffs or otherwise makes the environment difficult for EU/UK trade in the post Brexit era then Nissan will close its production facilities in Spain and France and concentrate all its manufacturing in the UK where they believe that they can capture up to 20% of the UK market share.

There are many significant aspects to this development and all point to the strength of the eurosceptic argument. The most important and least discussed theme is that the machinery of the EU does absolutely nothing to improve the environment for productive industry. The much vaunted single market works very well for certain large corporations from Germany and France since their senior management and the EU bureaucrats work in lock step but even large concerns like Nissan can find themselves chasing the EU’s regulatory framework rather than constructing it.

This argument is a natural one, Nissan just wants to concentrate on building cars that people want to buy, whereas the EU functions only as a dead weight around such objectives with their continual stream of directives which place a frightening plethora of restrictions on what gets built and how it functions.

Again, the free market reveals how the EU’s directives distort and limit free enterprise. If you want a simple and direct example just check prices for a Henry vacuum cleaner on Ebay. You’ll see them selling second hand for almost as much as they were when new. Why? Simple – they work because they’re powerful enough for the job at 1400 watts. EU directives limited the power consumption of vacuums to 900watts which simply doesn’t get the job done.  You’ll notice that Dyson doesn’t even bother making mains powered vacuums any longer and has instead switched to battery driven models to evade the EU interference.

Before we spiral off into the intricacies of janitorial science it needs to be re stated that markets best select the products that we buy, not a panel of politicians in a room in Brussels. If I choose to use slightly more of my electricity which I pay for on a vacuum that works properly then I will do so and I’ll buy a refurbished 1400watt model from Ebay before I buy a 900watt one new.

Fundamentally, economics is a study of behavioural science in relation to how persons, corporate bodies or governments allocate their money or resources. The EU and its leviathan bureaucracy simply won’t admit that people have their own individual preferences and instead need to be constantly herded like sheep toward the ‘correct’ choices. Macroscopically the EU also feels the need to constrain business in a regulatory straight jacket with its one size fits nobody regulatory framework.

Project fear was a cynical tirade of lies and distortions that tried to sell us the narrative that the UK could never function outside of the EU. One by one their assertions fell by the wayside. Promised punishment budgets never materialised, growth was not halted and supply chains did not instantly break down. Any logical (and honest) economist who is worthy of the title will agree that Nissan’s example is instructive. A car manufacturer manufactures cars. They will do so where they can find the best market for those cars and where they can be produced at the lowest cost and at the highest quality. Clearly the Sunderland Nissan plant has shown that their cost/quality coefficient is superior to that on mainland Europe and therefore Nissan are prepared to leverage that advantage and move production wholly to the UK where they predict they could supply up to 1 in 5 passenger vehicles.

Multinational companies will soon be faced with similar choices, should they continue to toil in the stifling EU matrix or make the decision to break free? Nissan’s example comes early on and they have predicted that the EU will try to exact revenge for the UK’s temerity and courage.  It seems in this case that this revenge will be self defeating since Nissan will simply pull out of mainland Europe and consolidate its UK operation.

The EU paper pushers are masters of producing reams of legislation but none of them seem to have done a day’s hard work in their lives and do not understand its value. Business owners, be it small, medium or large do understand what it takes to make a product and sell it at a profit in the marketplace, we should take heed of their decisions and their actions for they reveal much about the actual environment we live in and enable us to see through the paper thin facade the faceless EU functionaries want us to think is reality.