The EU – a club of former countries that encourages irresponsible behaviour and mutualises the resulting problems, making them worse

In the current ‘debate’ (or game of fear messaging and deceit) on membership of the European Union (EU), risk management is largely ignored.  Yet this somewhat arcane (or mysterious to politicians) subject is critical to understanding what we are letting ourselves into.   Its inclusion completely changes the actual or residual risks we face.  Its omission by the political class led by Mr Cameron is completely irresponsible. We could pay a very heavy price in future as a result by opting for the most risky option in the mistaken belief that it is the safest.

From prehistoric times, even our most intellectually challenged homo sapien ancestors quickly learnt that life is full of risks that need to be managed.  Hunting and progress needed successful management of risks, be it avoiding being trampled by woolly mammoths, chipping flints or cooking etc.  Cave-PM Cameron with his Project Fear would have led to our early extinction with dire warnings about messing with fire and the dangers of leaving our pre-historic EU cave.

Today business activity or enterprise, investment, not to mention scientific experimentation and medical progress, involve both risk taking and successful risk management. Government is no exception; policies come with downsides of unwanted or undesirable consequences and a likelihood of this happening.  Therefore risk management is necessary to mitigate these risks, and avoid mistakes becoming disasters.

One, not altogether effective but better than nothing, way of managing risks of government incompetence, malevolence or greed etc, is democracy and transparency – throw the rascals out. Parliamentary democracy is a step further, get a representative (an MP) to act on our behalf and use his or her brain to do the best for us and protect our interests. The nation state also acts as a tool of risk management since the more diverse a population is in culture, heritage and history, the easier it is to avoid serious risks of downsides to any particular faction. We are lucky coming from a background where over centuries laws, checks and balances have evolved, somewhat serendipitously, to provide more risk control and reining in of government and the state.

In the real world outside that of the ruling elite, we are actually world leaders in risk management. We have also pioneered many of the techniques and have legal frameworks where responsibilities and accountability for managing risks at source (a duty of care) are clear. Policy risk management at national level is inherently easier than at EU level hence residual risks can be made much smaller than the initial, apparent, risks.  The future outside the EU, should therefore, hold few fears because we can manage risks as and when they occur.

The EU is by comparison a basket case for risk management. It is not just that they ignore risk management; the actual set-up makes the task inherently more difficult and the consequences of failure more severe.  A localised problem, instead of being localised, can lead to far-ranging detrimental effects throughout the EU.  One size fits all policies devised by remote unaccountable bureaucrats and enforced by judges (all ideologically driven), are a recipe for risk, mistakes and floundering about afterwards making the damage worse. This pattern gets repeated time and again.

The more subtle effect is that of encouraging irresponsible behaviour by the unaccountable ruling elite, be it from politicians, bureaucrats, big business, vested interests, special interest groups or corrupt individuals.  Rather than act in the best interests of ordinary people (the common good), they use the EU as a means to an end, to avoid responsibility, exploit the people, follow their own, self-interested agendas and get drunk on authoritarian power. Commonly known as corporatism it amounts to government of the few for the few and re-distribution of existing wealth from the many to them. From a risk-management perspective, giving carte blanche to this EU-ruling elite provides a high risk to the wellbeing and prosperity of the many. The euro, energy policies and pricing, open borders and bureaucratic regulation as pursued by the EU have had disastrous consequences and show what this unrestrained ruling elite is capable of.

Continuing EU membership is a systemic high risk proposition that can only get worse as members of the ruling elite pursue their superstate goal and increasingly expand their unaccountable control.  Sadly the rot is far more wide-ranging in its effects because there is also irresponsible behaviour and contagion. A local issue somewhere in the EU, intentionally, cannot be localised and can turn out to have wide ranging consequences for us all.

Sadly all that Mr Cameron is doing through Project Fear is showing everyone that he knows very little about risk management and consequently is unfit to govern anything, something amply demonstrated by the devastation of the steel industry.  In any case, to build a prosperous future we need to be able both to take risks (business is always inherently risky) and to successfully manage risks. Mr Cameron’s ignorance is potentially very damaging to our future prospects – we could end up with the worst of all worlds, subject to a reckless EU and frightened of building our confident, prosperous and secure future.

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