I guess people need to mourn their defeats, but flicking around various TV channels’ coverage the comment that staggered me most was that of the prominent English historian, Simon Schama, who declared –  well before the result was clear –  “if Leave wins, it will be a repudiation of knowledge; a repudiation of reality’.

Or simply, perhaps, just a choice by UK voters to have their country governed by their own MPs, their laws interpreted and applied by their own judges, and so on.   Rather like New Zealand, Australia, Canada, or the United States.   Many other commentators have seen the vote as a vote against the Establishment,  which is no doubt true in part  – as the election of Jeremy Corbyn was, and perhaps the success of date of Donald Trump has been – but if so, comments like those of Schama, totally dismissive of the choices of his fellow citizens, might go down as a classic example of the sort of attitude and approach that many saw encapsulated in the EU model, and the way in which too many countries have been governed in recent years.

The market reactions so far seem hardly that surprising – except perhaps in highlighting the bounded rationality that had left so many (I was among them) almost unable to believe that, even though the polls had been a dead-heat for weeks, a Leave vote could actually happen.

The headline fall in the value of sterling is striking  – currently down 9.9 per cent against the USD.  But it brought back memories of the wild days of the New Zealand foreign exchange market, especially in the early years after the 1985 float.   But as recently as 28 October 2008, the NZD was down 9.3 per cent in a day (and more like 12 per cent against the yen).  The trend was strongly down in that global crisis and recession, but there was also a sharp bounce the following day.  I recall watching CNBC each evening during the 08/09 crisis.  It might be another few days for that  –  and to be glad it is “spectator sport” rather than something I have direct exposure to.

UPDATE: I thought this piece by US economics columnist Megan McArdle was a very nice articulation of views I share almost entirely.

UPDATE 2:  An absolutely fascinating set of results from exit-polling of referendum voters

UK voters go the polls tomorrow for the EU membership referendum.  Of the two polls of polls I follow, one has a very slight lead to the Leave side, and the other a very slight lead to Remain.

You might have thought –  rightly –  that New Zealand’s productivity performance over recent years had been pretty poor.  But here is what happens if we add the United Kingdom to the chart of real GDP per hour worked (labour productivity) that I ran the other day.

In their case, no productivity growth for eight years.

But even cyclically the story isn’t all bad in the UK.  Take unemployment for example.  Going into the 2008/09 recession, the OECD reckons that if anything the UK had a slightly larger positive output gap than New Zealand did.  British labour market regulation seems to generate a higher “natural” rate of unemployment than New Zealand’s does –  over the decades, the UK unemployment rate has averaged a bit higher than New Zealand’s.   And yet right now, not only is the UK unemployment rate materially below New Zealand’s, but it is right back to where it was – around 5 per cent –  going into the recession.

By contrast, in New Zealand the unemployment rate is still more than 2 percentage points higher than it was pre-recession.

The British productivity record in recent years has been pretty dismal.  Then again, taking a slightly longer-term perspective, we are the ones with something to complain about, not them.    There are no perfect starting points for any of these sorts of comparisons, but I’ve started this one from the end of 1990.  That was just before our 1991 recession, and before the stresses and disruption that Britain faced culminating in the exit from the ERM exchange rate system in late 1992.

I’ll take the British performance over that full period over ours.

Incidentally, I noticed George Soros yesterday suggesting that if the vote went in favour of Brexit, the outcome would be more disruptive for Britian than the ERM exit in 1992.  Even though that exit –  or rather the foolhardy effort to avoid it –  transferred a lot of money from the British taxpayer to Soros and his clients, the economic outcomes were generally pretty positive.  In the chart above, for example, there is no dip in productivity growth in 1992.  Yes, a Brexit would be quite disruptive, but were I a British voter I’m not sure I’d looking for advice from Soros as to whether to stay or go.

Despite my interest in immigration issues, the centrality of immigration in the Brexit debate has intrigued me.  Even in the UK context, I’m don’t find particularly persuasive the case that British citizens have had any particular economic benefit from increased immigration.  Then again, immigration to the UK has been on a much smaller scale than that to, say, New Zealand (or Australia and Canada), and the UK seems to face fewer of the constraints that lead me to question whether New Zealand’s immigration policy is right for us.

Part of the explanation is, no doubt, captured in this chart.

I showed the NZ and “more developed regions” of the world lines yesterday.  This time, I’ve added population growth rates for the UK.

For a long time, the UK was predominantly a country of emigration.  Yes, they had waves of inward migration  –  West Indian and South Asian in particular –  but it wasn’t until the policy changes of the late 1990s that the UK had had population growth rates even matching those of the advanced countries as a group.   With quite limited rates of natural increase, their immigration policy has now delivered population growth rates averaging higher than those experienced on average in the baby boom years of the 1950s and 1960s.  Whatever the economic impact of that change, seeing it in this perspective makes it a bit easier to understand the salience of the issue in the current debate.

The short answer to the question in my title is probably “less than we do”.  But at least we get to make our own decisions, not having subordinated a huge part of domestic law-making to unelected people in Brussels.

UPDATE:  A commenter provided a link to one academic’s perspective on how large (or otherwise) the EU influence on British law is.  I have no idea what the correct answer is, but I thought this piece on a fact-checking website was a useful perspective on trying to make sense of the issues.

As I noted in my post on Saturday, were I British I would be voting for Brexit, and so I’m pleased to see the polls moving that way.  Should that cause succeed, there is likely to be considerable disruption, both to Britain, the other EU countries, and to the wider world economy and financial system.  Perhaps it will be the episode which illustrates the point I and others have been making for several years: when interest rates are already at or very near the effective floor, and there is little fiscal room left, any new serious adverse shock will expose countries as having few tools left to respond.  Central banks and governments that have done nothing about removing the near-zero lower bound would then have something to answer for.

In the Telegraph a day or two ago, Ambrose Evans-Pritchard had a powerful column articulating his own reasons for voting to leave the EU.  It was all the more powerful because it recognized and gave full weight to the transitional disruptions that are all but certain, and to the possibility that even in the medium term there might be some economic costs.  The cause of freedom –  the ability to set one’s own laws, appoint one’s own judges, and toss out elected leaders  –  might have a price, and he thinks it is a possible price worth paying.

In my post the other day, I noted that there were other examples of people being willing to pay such a price.  By the end of the 19th century Ireland was an integral part of the United Kingdom, with full representation at Westminister and unrestricted markets in goods, services, people, and capital.  And yet the cause of Irish independence gained strength rather than abated, and the south eventually gained independence, as the Irish Free State, in 1922.   Ireland kept on using sterling, and kept close economic ties to the UK –  as one would expect, given the proximity of the two countries and the previously highly-integrated economies.  But no one thinks Irish independence was good for Irish material living standards in the subsequent decades.

Here are the data in the Maddison database for GDP per capita.  The first observation is for 1913, before the disruptions of World War One, and the subsequent unrest leading up to independence.

I’ve also shown the data for 1929 (the eve of the Great Depression) and 1939 (the eve of World War Two, which Ireland stayed out of).  There is always a lot else going on, so the whole story of Irish relative economic decline isn’t (the policy choices/constraints that followed) independence.  But much of it was.   Today, of course, Irish real GDP per capita is higher than that of the United Kingdom.

Was independence a mistake?  Well, it had a cost, but most things people count worthwhile do.

I got curious about some other post-colonial episodes, each involved economies much less integrated with the UK than Ireland’s had been.

India, for example, became independent in 1947.  In the late 1920s, full independence probably appeared to be many decades away, and probably wasn’t influencing investment choices or other economic decision-making.

Independence came at a cost –  wars in addition to any economic cost – but with hindsight would the Indians have chosen continued colonial rule?  Almost certainly not.

I spent a couple of years working as an economic adviser in Zambia.  At independence in 1964, Zambia had had GDP per capita as high as those of South Korea and Taiwan.  By the early 1990s it was something of a byword for basket cases (Zimbabwe’s true awfulness was still to come).  But here are the comparisons with the UK –  not, itself, a great economic success story over these years.

There were a few people who regretted independence – my colleague, the (local) chief economist lamented to me one day that the British had left when they did.  But it wasn’t a very common sentiment (or one that was politically acceptable to voice).

How about Rhodesia/Zimbabwe?  There was a two-stage process.  The white-minority government declaring unilateral independence in 1965, and then full legal independence with a universal franchise came in 1980.

In the first few years after the UDI there doesn’t seem to have been a material economic cost.  Those who supported UDI probably thought of it as some sort of win-win.  It didn’t last  –  the country soon descended into an insurgent war –  and of course the economic consequences after independence in 1980 are all too apparent.  I can imagine that quite a few Zimbabweans might really regret the course of the last 35 years –  though not, I imagine, too many members of ZANU-PF.

My final example is Bangladesh.  At Indian independence in 1947, what is now Bangladesh became East Pakistan.    But in 1971, after brief but awful war Bangladesh became independent.

Pakistan has scarcely been an Asian tiger –  model of economic transformation.  Bangladesh has done worse.

Inevitably this has been a rather limited exercise, focusing on countries in which I had an interest (NZ Baptist churches have had missionaries in what is now Bangladesh for 130 years), and where there is accessible –  if probably no better than indicative-  data.

I didn’t include New Zealand, Australia, and Canada because in all three cases there was no clear point at which the countries broke away from Britain.  It was an evolutionary process.  Perhaps in an ideal (economic) world, if Britain were going to pull back from the EU it would do so in a similarly evolutionary way.  But that option doesn’t seem to have been available.

And there may well be other examples of countries which flourished with independence –  Singapore is perhaps the striking example (although productivity growth in Singapore over say 1960 to 2000 was very similar to that in Hong Kong, which was British-ruled for almost all that period).  My point is not to argue that independence, or taking back parliamentary sovereignty, is inevitably or even generally costly.  I’m sure it isn’t.  But it can be.  And that may well be a price that citizens, even with hindsight, think is worth paying.

The relationship of Britain to the EU today isn’t that between, say, colonial Zambia and the UK, or even East Pakistan to West Pakistan.  But, equally,  Britain has strong established institutions and, if Brexit happens, every motivation, and plenty of opportunity, to secure pretty good economic outcomes.  If Brexit happens, I suspect that in 30 years time  –  perhaps 100 years time – scholars will still be debating what the long-term economic consequences of exit were (as indeed, they are still debating the economic consequences for Britain of entering the EU 43 years ago).  If so, perhaps the economic issues are not of first-order significance.