Friday, January 31, 2020

Bye Bye EU

In the early months of 2016 I was attending a couple of crowdfunding events in Europe. One in Amsterdam I remember particularly well for the conversations outside of the sessions and at the networking events. Lots of people asked me, being one of the few Brits there, what I thought would happen on the BREXIT referendum.

There was general surprise and disbelief when I told them that I fully expected the UK would vote to leave. At first they mocked and played along with what they thought was a joke on my part. The idea that the UK would vote to leave was completely unbelievable to this predominately young crowd who, when engaged with the UK, tended to do so via London and the metropolitan views so commonly expressed there which would have simply echoed theirs.

As it dawned on them that I was serious they at first thought I was crazy. But as I spoke to them about why I thought it would be the case the reaction moved to one of apprehension and, in some cases, fear.

As it turned out my prediction was correct.

Later in the year I was in Europe again at another fintech event and was told in no uncertain terms by some German EU reps that inspite of the vote that it, BREXIT, would never happen. The UK would never leave they told me and that I simply did not understand how these things worked. It seems I did know my country better after all.

I make this point today for two reasons.

Firstly there is an important lesson for anyone involved in the crowd economy, beware of confirmation bias and be sure you are listening widely when you try to engage with the crowd.

The second reason for mentioning it is because today we do begin that journey away from the strictures of the EU and for this I am wholly thankful as the regulatorily interventionist, bureaucratic and civic code model of the EU stands four square against the opportunity and promise of crowd economics.

For me the two points are in a way related. As it happens I not only managed to call that referendum, but the US presidential, two general elections and a Scottish independence vote pretty much spot on, much against the prevailing wisdom of pollsters and predictors everywhere. I am also not a fan of the EU.

How so?

As someone with numerous degrees, having lived and worked over seas for many years, being married to an immigrant I am by most estimations a “citizen of nowhere” by Goodharts rules and should in all probability share the prevailing pro EU views of such demographics and been wholly undone by finding pout that my iphone chatter was so out of step with the electorate.

But, I also failed my 11+, have trade tickets as a welder and bricklayer and have done more than my share of terrible soul destroying jobs to understand that real pressure is working back shifts in a foundry as casual labour worrying about making the rent. It is not sitting in a swanky office working hard as a well paid management consultant deciding who might get fired at a clients business.

As a result I have always managed to retain connections from people through out my life. I have good ties to both ends of societies spectrum White collar, gilded collar and blue collar and so I seem to have a reasonable feel for a broader swell of feeling than perhaps those that have a a lens dominated by social media and a group of like minded followees at that.

No, I have seen what has happened to my once proud little home town and not in the slightest surprised they said “enough” to politicians who seemed to despise them and hid behind the excuse of Brussels to not act in their interests.

This is, I think, an important lesson for anyone in the crowd economy. Social media is not the real world and it is, in large part, a low touch relationship. Use it as a barometer at your peril.

But my antipathy to the EU (not Europe I hasten to add – two very different things) runs deeper than simply the decline of my home town. No I think their instincts are all wrong for the crowd economy so freeing ourselves from that approach is a cause for celebration in my opinion.
When I was invited to debate the merits, or otherwise, of Brexit with an eminent Economics Professor and vice principle of Glasgow University last year, you will not be entirely surprised that we didn't see much eye to eye. Apart, that is, from the fact that we both agreed that to that point the negotiations had been very poorly handled.

The Professor was unwilling to engage with the dreadfully inaccurate predictions made by other eminent economic advisors to the Bank of England or the then Chancellor ( apparently he hadn't read them). Similarly he had no answer to why it was that Europe was not leading in the fintech arena or indeed how it had singularly failed to great a Microsoft, Facebook or Google. One wag suggested in the audience that a large American market to build from might have something to do with this, to which my counter was “so much for the much trumpeted single market eh?”

No the answer is, in large part, interventionist regulation. English common law has allowed the regulated aspects of crowd finance to flourish here in a way it hast under a civil law model. Similarly it is the EU's instinctive Luddite fear of allowing technologies liberating aspects to flourish which gives us bureaucratic failures like GDPR and “the right to be forgotten” and the disastrous copyright directives which we will thankfully be ignoring here in the UK.

No I wont lament our departure from the EU and I shall continue to use it as a real example of both the risk of narrow consultations, and the dangers of poor ill considered regulation in a world where innovation runs ahead of old protectionist regulatory models designed to favour incumbents and not to embrace the opportunities we could, and should, be looking forward to.