By Jeff Deist
This interview is a transcript of last weekend's interview with Godfrey Bloom. It has been slightly edited for clarity:
Jeff Deist: Godfrey Bloom, thank you so much for joining us this weekend. I have to get right into this because I'm seeing today that the "remain" camp appears to be using this tragedy of this bizarre stabbing of a labor MP yesterday or the day before yesterday to generate support against the "leave" folks. Do you think this will work?
Godfrey Bloom: Well, I don't know. There's absolutely no connection whatsoever to the "leave" campaign and the eyewitnesses are saying that absolutely this guy had nothing whatsoever to do with it. He didn't shout anything, but he is a disturbed individual. He's a madman.
I know politics is a low game, I've been in it for 10 years or was in it for 10 years, I didn't think it could get any lower. It's a terrible tragedy. This relatively young member of Parliament has been murdered by a psychotic and people are using it for political capital. I don't believe this could have happened in my country 30 years ago. I think this is a sign of a moral decline in western democracies, which astonishes even me.
JD: I wonder if it says more about The Guardian and it will actually backfire on them.
GB: So far, everything that the "remain" camp has done has backfired. They've suggested, fascinatingly, that almost everything will happen to us if we leave the European Union: asteroids crashing into us, all our firstborn children will die of the plague, they virtually left nothing unturned and of course, most people, most Brits are still relatively down-to-earth common sense people and they've just laughed it all off. And of course, we've had five weeks of this and the whole campaign is being turned around. "Remain" started this campaign ahead and now it's "leave" that's moving ahead and it's because I don't think you can continue lying to people on the scale that the "remain" camp has lied.
JD: We're seeing some polls that sound very favorable towards "leave." If you had to handicap today, Godfrey Bloom, apart from the merits of Brexit…
GB: I would say it was even money, as a betting man, as a horse racing man, and I so occasionally bet on the horses, I would say this was as close to even money as you can get and if you get bets on even money, it's not a bad value bet. So, that would be my take at the moment. But of course as you know, we're not that much different from the United States. A lot can happen in the next five days, can't it? A lot of funny things can happen in five days. They could be in "Leave's" favor or they could be in "Remain's" favor, we don't just know.
JD: Do you think that the mess that the ECB has created, the sovereign debt crisis in Greece, for example, do you think the fact that the Euro and the ECB are both a mess influences Britain's on this?
GB: This has been another very interesting five weeks. I think possibly the most interesting five weeks in politics I've ever spent. And that is, we are now finding the real problem of having had 90 years or so of Keynesianism. We've had 90 years of failed economic theory. Who'd have thought that it could have gone quite so long and now we have a situation, of course, where there are no politicians, none of the media, no journalist actually understands that the reason we are in this appalling mess across the globe, not just Europe, but across the globe, because of the pursuit of an economic theory that is deeply flawed and this is one of the problems.
I've been at lecture halls, I've been at town halls, I've been trying to explain to people the sort of things that we Austrian economists take for granted. People seem to think that exports are absolutely vital to their well-being. They don't seem to understand that the economy, their economy, the economy that they live in - and the Americans too - are the butcher, the baker, the candlestick maker, the hairdresser, the cab driver.
This is the economy. I shouldn't think, in this country, more than two people in 100 have anything whatsoever to do with exporting manufactured goods to the European Union and yet they're being told the sky will fall if we're not a member of what is not a free trade organization. This is something some of my friends on Wall Street say that it's easy to understand, that this European Union is not a free trade area, per se. It's a customs union, which puts tariffs on goods coming in from the rest of the world. This isn't about free trade, this is about protectionism and I don't think this is fully understood, certainly on your side of the pond.
JD: No, it's not just the way NAFTA was misinterpreted by a lot of supposed capitalists. But, when you talk about the sky is falling argument, I wonder if those of us who favor Brexit aren't equally overstating the case. In other words, is this really part of a bigger anti-globalist trend that includes Trump, that includes secessionists movements around the world or are we overstating this? After all, the UK is not leaving Europe, it's just leaving this unholy… potentially leaving this unholy European Parliament. So, are those of us who favor Brexit, are we also overstating the meaning of it?
GB: I think perhaps we probably are. People want to leave the European Union for all sorts of different reasons. There are left wing, folks on the left, the severe left, you know, the rabid socialists are for "leave" because what they want is a UK highly protected nationalized economy, so they're for "leave." There are people like me, of course - Austrian complete global free traders - who want to leave. We've all got our own reasoning and so yes, there is that dynamic and of course, the other thing and I've said this on many a platform as well, Brexit isn't a silver bullet. Most of the problems that we have are in our own politicians, who are, general speaking, these days, who had a very limited education, traditional education, who don't understand the law, they don't understand economics and they devoted their life to politics, but they have never really been involved in anything other than politics.
So, it isn't a question of us being over-regulated by Brussels. We're overregulated by Westminster. You know, this government, British government, a so-called conservative government, agonizes there were too much sugar in a drink. You know, they worry about so many tiny aspects of our lives and of course, Brussels worries about mite problems, vacuums, toasters. The whole economy is so tightly regulated and what we should be saying is yes, leaving the European Union is one small step. It's only a small step in the right direction.
It's not going to solve all our problems until we have a government in Westminster that doesn't believe that they should regulate everything, not Brussels. We don't want any regulation, please and along the street, I've been out on the stump campaigning and ordinary working people who said to me, "Why can't they leave us alone? If I want to smoke a cigarette with a drink in my pub and it's alright with the landlord of my pub, let me do it. If I want to drink sugary drinks, that's nobody's business but my own."
And this is coming from ordinary people now and I think they're just saying, leave us alone, stop over-regulating us, do what you're supposed to do, which is defense of the realm, mild administration of the country, cut public spending by at least half and leave us alone. But of course, as you know, Jeff, nobody knows better than followers of Austrian economics, that it doesn't matter much whether we leave the European Union or not. It's doomed to failure and it's doomed to failure through the banking system.
The ECB is broke 3 trillion pounds. The Germans have 900 billion pounds owed to them by shadow banking. The ECB are buying 80 billion pounds worth of junk bonds every month. They've already bought something like 380 billion. You simply can't go on like this forever and our own government in the UK and nobody's talking about this, Jeff. Nobody is talking about this. We are the second most indebted nation in the world after Japan and I see pundits talking about our debt being 80% of the GDP, but they're not taking into consideration unfunded public pensions and public funding initiatives which have been running for about 10 years.
If you take everything into consideration and of course, the businessman listening to the cast, will know that if you leave off international accounting standards, your liability for your pension fund and anything else, it's illegal, it's a criminal offense and you'd go to prison. It doesn't really matter what we vote on Thursday. The clock is ticking and the whole thing will collapse in a few years.
JD: Well, we certainly agree with that, that the game is over with central banks. Do you think a "leave" vote might actually hasten a Eurozone nation leaving the Euro?
GB: Yes. It isn't just the British, but sometimes the spin from the left wing British press, the Euro foreign press, and the press on the continent, try and make this look like it's a British thing. The European Union is deeply unpopular with the French for different reasons, admittedly. They're equally unpopular with the Germans. If and when we leave, we will lead a massive exodus and there will be demands for referenda all over Northern Europe, certainly and probably Southern Europe and out of it will come something which is more practical, more pragmatic and it will be based, I suspect, on what might have been known as the old Hanseatic League, the Northern German states, Northern European states, which are much richer and whose economies function much more in line. The southern economies can go their own way and this is a natural progression. But whether or not we do that will be dependent on Brexit. If the British vote for Brexit, that will follow the French and the Dutch and maybe the Germans and the Danes and possibly the Swedes will follow very quickly.
JD: Well, indulge me on this. You spent a little bit of time in Brussels. You were a member of the European Parliament and so you've seen some of these folks up close. Do you take a little bit of pleasure in the thought of them losing a bit of turf in the form of the UK? Wouldn't it gall them if Britain actually did this?
GB: Yes, it would, but I'm of a generation now, I'm 66 years old, the schadenfreude, as it were, is not so sweet in my palette as the fact I've saved my country or I've helped in some small way save my country because I was a founding member of the movement, back in 1992.
So, this is a combination of 25 years hard work and quite a significant amount of my money because we've had no money. The out campaigns never had any money, so people of my age of the professional class have done nothing but dig into their pockets for many years on this. Yes, I wouldn't mind rubbing their noses in it, but that feeling is only going to last, perhaps over a few beers in the pub. What we need to do if we do get out is just construct how are we going to move forward from here? And of course, you may or may not know, you probably do, that they had a vote, they had a poll in Switzerland and 70% of the Swiss said that they hope the British vote for Brexit, they hope they vote out and they hope we join the economic free trade… the European free trade area with Switzerland to create a whole new idea of free trade, which is not based upon protectionism or tariffs like a customs union, but we can work together for free trade within Europe, but also trade with the rest of the world.
And of course, another thing that my Wall Street chums don't seem to understand is that we would get our feet back on the WTO. The British are in the top 10 of major economies, global exporting economies. We don't even have a seat on the WTO. I don't know a single American who would put up with what we are having to put up with at the moment. I often find over many years and of course, as you know, I've spoken in America many, many times and have a lot of American friends, just how woefully ignorant the average American is, even the American businessman is now how Europe actually works and indeed, European history.
JD: Well, it leads us to a cultural question. If a Texan travels the world and is in the Far East and says where are you from, he probably said Texas and he might say I'm an American, I'm a Yankee. When you travel the world, I assume you say I'm an Englishman and perhaps you say you're from Britain. You don't say, "I'm a European."
GB: No, of course.
JD: But it seems like these people in Brussels hate national identity, let's just be frank. Would you agree?
GB: Yes, I do because the problem that we have here is that the European Union is a secular union, it's an ideal, it's a political ideal, which is almost dealt with, with a religious fervor and these people are true believers and when you interrupt, and I've been thrown out of the Parliament on many occasions for actually stating the truth or cross examining people who I think are lying to the Parliament, you get thrown out. It's not in an English Parliament, but that's all part and parcel. The European Parliament, you actually get thrown out. So, in the same way that you would be thrown out of the cathedral, if you interrupted mass, that is the reaction that you get.
It's a religious fervor rather than the common sense or pragmatism or realism, all that is not part of the European Union. They don't feel reformed yet. It isn't a question of people saying ah, well you can reform. I worked out there for 10 years, I was a member of the Economic and Monetary Affairs Committee. They do not feel they need to reform. You have regulations being made or amended, for example, on things like hedge funds, by a committee that consists of Danish housewives, Romanian trade unionists, trying to regulate or put a regulatory book together on hedge funds and that's only when somebody stood up, usually me and explained what a hedge fund is. But you tell them what and within an hour, they're regulating it. These people are absolutely stark staring bonkers.
I explained the concept of fractional reserve banking… and these people don't even understand the fundamentals [of banking], and this is part of the problem. Nobody is looking for an alternative system of fair currencies, in the form of central banks, getting rid of the central banks, using hard currencies - all the things that are second nature to you and me, Jeff - are witchcraft, as far as they're concerned.
JD: Well, I can only add that there are many members of the US House of Representatives who sit on committees that have jurisdiction over subjects they know nothing about. So, I will leave you, Godfrey Bloom, with one last question. Mises talked about the right of self-determination and succession. If it were practicable, down even to the individual level, speaking in the abstract there in theory, do Britains see this Brexit vote as something having to do with self-determination or are they just focused on the economics?
GB: I think it's a mixed bag. When it started, it was just about economics and the Brexiteers didn't field anybody who could really make the economic case because the Brexiteers don't have anybody who is two things:
First, we need good economists. But the problem is we need economists who are television-friendly, and we have few of those. There are only about two people in the entire country who understand economics and understand money who also know how to perform on TV and I am one of them. We just didn't do the right things.
So, what actually happened, the campaign then moved to immigration, which is a big problem here because you can't have an immigration policy without welfare reform and one of the problems that we have, of course, you can't have an open door immigration policy unless you have some form of welfare reform and we believe as Austrian economists in the free movement of labor, but it can't work if you have state run education, state run health, cradle to grave welfarism, you can't run it on that basis when people in Eastern Europe were living on maybe $10 a day, so you can't do that and nobody is quite had the nerve to talk about welfare, both social welfare and corporate welfare reform. So, it's swung around now to being maybe a fear of immigration, which is leading the game and add that and people are beginning to realize now after five weeks of this campaign, that they have lost self government.
The average person didn't really understand that, but they're beginning to understand it now. So, it's been a bit of everything really, it's been a little bit of everything.
JD: If you want to know everything that's happening with respect to Brexit, good, bad and ugly, I suggest you follow Godfrey Bloom @goddersbloom on Twitter because I'm finding your Twitter feed, Godfrey, to be an excellent source of information on this. We appreciate your time, ladies and gentlemen, have a great weekend.
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
Disclosure: No positions.