Brexit Breakdown

Ir has been obvious for at least a month now that soft Brexit has won out in the UK, though the Prime Minister Theresa May would never admit such a thing directly. Government discussion of access to the EU internal market at its existing level, or very close, and keeping the border open between the Republic of Ireland and Northern Ireland (a fundamental of the peace settlement in the north) would at the very least require continuing regulatory alignment in goods (that is, following the rules made by the European Union).

It seems very likely that negotiations of the terms of exit with the EU itself would make even this partial alignment with the internal market inadequate in order to get the desired level of access. At the very least EU negotiators would demand some inclusion of services (financial services are the big issue here) and something at least resembling free movement of labour.

That inclusion would be full UK access to the internal market after exiting and would require at least a Swiss style relationship with the EU, in which there is full market access in exchange for accepting EU rules and something close to free movement of labour. Such a relationship would mean accepting judgments of the European Court of Justice even if they are not incorporated into UK law. The UK might not follow Switzerland into EFTA (European Free Trade Association, see paragraph below).

It has even been suggested that the UK might find it necessary to adopt a ‘Norway’ solution, in which the UK is directly a member of the European Economic Area. Norway has free movement but opts out of common agricultural and fisheries agreements. It is not part of the EU customs agreement. Like Iceland, Lichtenstein, and Switzerland, it is a member of the European Free Trade Area, which essentially harmonises regulations between these countries and the EU; that is, EU regulations are enforced by EFTA institutions.

It is clear that most Conservative MPs and businesses (though more large business than small business) regard something like the arrangements above, soft Brexit, as preferable to hard Brexit (trade agreement with the EU as a completely external country, possibility of no deal). These MPs and business people, along with most Treasury economists and economists in general, believe that keeping complete access to EU markets is more valuable than vague claims of a trade boom through deals with non-EU states across the world.

Hard Brexiteers believe that economic growth of other parts of the world requires breaking free of EU shackles on global free trade. The soft Brexit, as well as Remain, argument is that membership of the EU does not prevent trade with the rest of the world and that some EU countries are already doing that very well compared with the UK. On this argument, geographical proximity will always make EU trade disproportionately important so that limiting access to EU markets in the hope that non-EU countries will want free trade agreements is unnecessary and probably very damaging.

May’s drift towards soft Brexit after presenting herself as the guardian of hard Brexit has the support of most of the Cabinet, and Conservative MPs, but has been disappointing hard Brexiteers for some time. An agreement of the full cabinet at the Prime Minister’s country residence for soft Brexit has led to the resignation of the two most hard Brexit-oriented ministers.

It seems unlikely this this will deter May from a soft Brexit policy, which everyone agrees can only become more soft in negotiations with the EU to achieve an agreed exit. It also seems unlikely that most Conservative MPs will resist this policy. The biggest problem for May could be that the opposition parties want to vote against the government in call circumstances, so could vote with hard Brexit Conservative MPs to bring down any Brexit agreement.

At this point Brexit might completely break down, with the UK becoming a full member of EFTA, so in practice a member of the EU which exchanges some opt-outs for absence from the decision making processes and institutions. It might even lead to a suspension of Brexit, or a second referendum in which the electorate chooses between the exit package and staying in the EU.

At present, the most likely options in descending order are: 1. soft Brexit, outside formal association with the EU, but like that in practice, 2. formal association with the EU, maybe meaning membership of EFTA, 3. the complete breakdown of Brexit. This could change and so far change has been to move further and further away from hard Brexit.

Personally I support continuing membership of the EU. It is inevitable that large parts of the UK economy will ‘align’ with EU regulations, so it is best to be part of the institutions and processes which decide on these regulations. That is the most pragmatic version of my argument.

I am also a strong European integrationist, even a federalist romantic. The qualification of this idealism is that integration should not go further than public opinion or institutional capacity can accept at any one moment and that economic realities should guide the relationship with Europe for and against the kind of integration I favour at heart.

My own ideal is a kind of revival of the medieval dreams of ‘universal’ (i.e. European) Empire. The poet Dante was a great exponent of such a vision in his classic of political thought On Monarchy, which does not exclude city republics, even favours them under a high European sovereign. We can join it with Marsiglio of Padua’s slightly later call for an empire with elections to have something like democratic federation for Europe.

Leaving my European romanticism aside for the moment, the current realities are that the UK’s exit from the EU has become more and more complicated by the disadvantages of disentangling complex and far reaching institutional and economic links, particularly when most people involved want to keep an open border with the Republic of Ireland and keep 100% of the current level of access to the internal market.

Latest thoughts on Brexit: Its Decay, Italy (and Ireland), Cars, and Giving up British Citizenship

The slow decay of Brexit: a Rule-Taking Country

I don’t mean that the UK will stay in the EU. I fully expect it to formally depart next year. If the poor performance of the UK economy compared with the Eurozone continues, I also expect the UK to rejoin in a few decades, when the growth divergence is not just in figures, but felt in everyday life, such as when people find it too expensive to travel in Europe or buy goods from Europe; if they do travel they notice that everything seems expensive and there are more nice things abroad than at home, while European tourists will seem to have huge amounts of money to throw around.

It might or might not work out like that, but the point here is that the UK, behind headlines about soft versus hard Brexit, is moving towards an ‘alignment’ with the single market and the customs union: not formal membership but keeping nearly all the rules. The short term losses in trade from leaving both the single market and the customs union, along with the Republic of Ireland/Northern Ireland border question, have combined to make de facto membership of the single market and the customs union inevitable. Hardening the border at all between the two parts of the island of Ireland is economically disruptive and very threatening to a Northern Ireland peace settlement, in which the Irish nationalist-republican side in NI can live with being part of the UK as long as the North and the Republic are unified via the EU and associated commercial agreements.

This is what I get from following Eurosceptic sources when they get round to proper conversation and analysis, rather than fighting the remain-leave battle. Brexit outbursts of premature triumphalism over Italy, or demands to abolish the upper House of Parliament because the Lords uses its constitutional rights to pass amendments they don’t agree with back to the Commons for the final decision, are a distraction from the collapse of full Brexit.

The idea of a ‘no deal’ walk-away from the EU has been abandoned and inevitably the UK will accept single market/customs union rules while the government makes a show of leaving everything. Because the UK very probably will not be a formal member of the single market (though there is a possibility of joining the EEA which would mean formally staying in the single market), it will be able to reduce migration from the EU (not a great thing to my mind), which will bring joy to a large part of the population (particularly the Brexit-voting part). No doubt the reality of moving to what Jacob Rees-Mogg (a well known, hard-Brexit Conservative MP) calls ‘vassal state’ status will be covered over with that issue, but the reality is the UK will accept rules for customs and economic regulation made by the EU indefinitely.

‘Indefinitely’ means ‘permanent’ though this is being covered up by talk of ‘transitional periods’. Alternatives to this have collapsed with the failure of ‘no deal’. The New Hard Brexit is to accept aligned rules on goods, but not on services, with the UK’s exceptional role in financial services in mind. However, there is no indication that the EU will give this kind of deal, despite the Brexiteer posturing about the UK being too powerful to push around, which has clearly been shown as empty by negotiations so far.

Over-excited Brexiteers getting Italy wrong (and Ireland)

So a new government formed without anti-Euro currency finance minister. 5 Star and the League (the coalition partners) are not impeaching President Sergio Mattarella. The idea they would is a bit of a joke anyway, as it would require the agreement of the Supreme Court and a vote of both chambers of the Italian parliament to achieve an impeachment. The issue behind the non-impeachment was that Mattarella had vetoed an anti-Euro candidate for finance minister: Paolo Savona (who now has another post in the government).

Some relevant facts here. 1. Italian presidents have the constitutional right to veto ministerial nominations and have frequently done so before 2. Recent Italian opinion polls show support for the Euro at over 60% 3. Neither coalition party ran on an anti-Euro manifesto.

Claims that Mattarella is some pathetic weak instrument of the European institutions who ordered him to keep Savona out are themselves absurd. 1. There is a shared preference of Mattarella, the Italian public, and European institutions for staying in the Euro 2. Mattarella is from a political family in Sicily, which went anti-mafia and Sergio Materall’s brother, Piersanti, who was head of the regional government, was assassinated by the mafia as a result. I think we can say Sergio is a character of substance to stay in politics after that.

Regarding constitutions and democracy, constitutions establish limits on the power of temporary majorities through rules and institutions designed to embed basic rules about rights and the use of power. This is why democracy of a kind worth having is referred to as ‘constitutional liberal democracy’. You cannot both be in favour of constitutional democracy and complain when constitutional constraints express themselves in the action that Mattarella took, which is well within his formal powers and previous precedent.

Many of the triumphalist Brexiteers in the UK, who were shouting about Mattarella as an enemy of democracy who was about to be punished, are admirers of the US ‘constitutional conservatism’ which, on the face of it, advocates very strict restraints on the actions of elected bodies according to the supposed original meaning of the constitution. You can’t have it both ways. And even if you think democracy means the unrestrained right of a majority, there is no majority support for leaving the Euro in Italy and no manifesto mandate for the coalition to leave the Euro.

You could argue that Mattarella made a mistake about perceptions and had been outplayed, that had some plausibility for a few days but does not look so correct now. Mattarella has got what he wanted and will not be impeached. It’s true that the League has strongly increased its support since the election in opinion polls, but that mostly precedes the ministerial crisis. Brexiteers are still clinging to an attempted triumphalism over Italy. The Italians are standing up to Brussels, which supposedly is a lesson to Britain to be tougher in Brexit negotiations. Well it is a bit soon to say whether the Coalition in Italy represents Eurosceptic triumph and hard to see what this has to do with Brexit negotiations.

What loud mouthed Brexiteers in the UK say about Italy is in some ways not very important, but what is important is the presumption to know more than they do and circulate false assumptions about European politics in the UK, which in turn distorts our debates and assumptions, and which can then pop up amongst Proper centre-right journalists and commentators Who Should Know Better.

Something similar has emerged with Brexiteer attitudes towards Ireland’s attempts to keep an open border with Northern Ireland. Manipulated by the EU institutions with naive and incompetent leaders (rather reminiscent of old prejudices about the Irish being stupid) has been standard opinion, and then there was the claim by a senior Conservative politician, Iain Duncan-Smith, that the Irish position is to do with a forthcoming presidential election. 1. The Irish president has no political powers whatsoever 2. There may not be an election, since no one has announced a wish to run against the incumbent so far and it may suit the major parties in Ireland to leave it like that. Funnily enough all those stupid naive Irish leaders manipulated by the EU have given Ireland much greater economic growth than the UK. What an economic miracle there would be in Ireland if they were as clever as Brexiteers!

It’s difficult to stop Brexiteers from 1. using simplistic rhetoric about majorities and Will of the People to suit their immediate anti-EU goals without concern for consistency and the values of liberal democracy 2. Living in an imagined world where European politicians they disagree with are stupid and/or slaves of the European Commission, conspiring against democracy. These views should be challenged and left with the true believers, away from informed debate.

Brexiteers and German car companies

UK enthusiasts for leaving the EU have a strange obsession with German car makers. They export so many cars to the UK, they will MAKE the German government which will MAKE the European Commission give us the exit deal we want. This has been going on from all kinds of people ever since the Leave Referendum (maybe during the campaign as well, but I missed that). It is an expectation that has obviously been falsified by the course of negotiations in which the EU has got 10s of billions of Euros from the UK to even start negotiations (though the UK tries to pretend otherwise) and has refused the kind of market access the Brexiteer enthusiasts assumed they would get automatically thanks to Volkswagen, BMW, and Mercedes (!).

Even today, listening to the Telegraph Brexit podcast, I heard Christopher Hope (the highly affable and mostly reasonable chair) keep on about how German carmakers were going to make Brussels gives the UK what it wants. The guests, pro-Brexit people from the Telegraph, were clearly bemused as they had been explaining how the UK was going to remain ‘aligned’ with the single market. Clearly if the UK is already de facto accepting the ‘indefinite’ (i.e. permanent) application of single market rules, German car makers have no incentive to MAKE Merkel give the UK another deal preferable to hardcore Brexiteers.

Of course the saddest expression of this muddled thinking came from Boris Johnson (the notoriously attention seeking and inconsistent foreign minister) when he claimed Italian prosecco wine manufacturers would make Rome/Brussels give the UK a Brexiteer-friendly trade deal. It turns out demand for prosecco in Italy is greater than supply and the makers can easily live with reduced demand in the UK.

The German car industry is of course much larger and not dependent on the supply of a particular kind of grape. Still, just one seventh of German cars are sold in the UK. Now obviously it would be very bad news to lose one seventh of the market, but there are no circumstances in which German manufacturers would sell no cars in the UK, the drop would never be as great as one seventh. Sales of German cars are already declining in the UK and given weak UK economic performance compared with Germany, the decline is likely to continue. Anyway, it should now just be really bloody obvious that German car manufacturers have not united to force Berlin/Brussels to accept a hardcore Brexit agenda! There is clearly a very big stream of reality distorting national self-obsession amongst Brexiteers who believe this kind of thing. Well it has now been shown to be thoroughly incorrect, let go now!

Brexit Bureaucracy and Renouncing UK Citizenship

UK nationals living outside the UK in the EU are applying for citizenship abroad to retain rights they lose after Brexit. Some of these countries forbid dual citizenship so UK citizens are renouncing UK citizenship. The Home Office takes the opportunity to raise fees for renouncing citizenship, though evidently its revenue is already increasing because of charges for renouncing citizenship. Didn’t Brexiteers tell us Brexit would reduce state bureaucracy?

2017: Year in Review

Well folks, another year has come and gone. 2017 was Notes On Liberty‘s busiest year yet. Traffic came from all over the place, with the most visits coming from the US, the UK, Canada, Australia, and India. (In the past, India and Germany have vied for that coveted 5th place spot, but this year India blew Germany out of the water.)

NOL is a voluntary cooperative, and as such this year saw the introduction of 6 new Notewriters: Kevin Kallmes, Nicolás Cachanosky, Ash Navabi, Tridivesh Maini, Matthew Bonick and Trent MacDonald.

Michelangelo invited Kevin to join, Nicolás is an old grad school buddy of Rick‘s, I reached out to Tridivesh, and Ash and Matthew were invited on Vincent‘s initiative.

Speaking of Vincent, 2017 was his year. He had Tyler Cowen (MarginalRevolution), Mark Thoma (Economist’s View), Anthony Mills (RealClearPolicy), Barry Ritholtz (Bloomberg), Don Boudreaux (Cafe Hayek), John Tamny (RealClearMarkets) and Pseudoerasmus (a well-regarded economic historian) all link to his thoughts multiple times over the course of the year. His Top 10 list for best papers/books in recent economic history (Part 1 and Part 2) were legitimate viral sensations, dominating the top 2 spots on NOL‘s most-read list. Other huge posts included “Did the 30 Glorious Years Actually Exist? (#5),” “The Pox of Liberty – dixit the Political Economy of Public Health (#9),” “James Buchanan on racism,” “The GDP, real wages and working hours of France since the 13th century,” “Did 89% of American Millionaires Disappear During the Great Depression?,” and “A hidden cost of the war on drugs.” My personal favorite was his “Star Trek Did More For the Cultural Advancement of Women Than Government Policies.” Dr Geloso’s thoughts made up 40% of NOL‘s 10 most-read 2017 posts.

My favorite posts from Edwin this year were his analyses of Dutch politics – “Dutch politics, after the elections” and “North Korea at the North Sea?” – but the reading public seemed to enjoy his posts on Ayn Rand, especially her thought on international relations, and his summary of Mont Pelerin Europe more than anything else. Van de Haar’s day job is in the private sector, so his blogging is understandably light (especially given his incredible publishing output in academic journals). I look forward to what looms ahead in 2018.

Federico’s most recent post on artificial intelligence and the law got love from some major outlets, including FT‘s Alphaville blog and 3 Quarks Daily. His question “Does business success make a good statesmen?” and his report on a Latin American Liberty summit are worth reading again, but my personal favorites were his comments on other Notewriters’ thoughts: first jumping in to add some historical clarity to Bruno’s post on Latin American conservatism and then to add layers onto the debate between Mark and Bruno on the Protestant Reformation. Federico has been invaluable to NOL‘s welcoming, skeptical culture and I cannot wait to see what he comes up with in 2018.

Barry was generous enough recount the situation in Turkey after the coup earlier in the year, and fruits of this endeavor – Coup and Counter Coup in Turkey – can be found in six parts:

  1. First of a series of posts on Turkey since 15th July 2016 and background topics
  2. Immediately after the coup and party politics
  3. Gülenists and Kemalists
  4. The Kurdish issue in Turkey
  5. Jacobins and Grey Wolves in Turkey
  6. Presidential Authoritarianism in Turkey

Dr Stocker also began writing an appendix to his six-part series, which resulted in a first post on authoritarianism and electoral fixes. Barry is hard at work on a new book, and of course the situation in Turkey is less than ideal, so I can only hope he has a bit more time in 2018 for NOL.

Michelangelo had a banner year at NOL. His #microblogging has been fun, as were his post analyzing relevant data from his surveys: What libertarians think of climate change, for example, or urban planning in Oregon. Michelangelo also utilized NOL to play around with concepts like race, marriage markets, data, Spanish language services, affirmative action, and freeware, to name a few. My absolute favorite Michelangelo post this year was his excellent “Should we tax churches? A Georgist proposal.” Michelangelo is a PhD candidate right now, too, so if he ever gets some time to himself, watch out world!

Rick also had a banner year at NOL. His post arguing against Net Neutrality was one of the most-read articles of the year here (#4), and many of his wonkier thoughts have been picked up by the sharp eye of Anthony Mills (RealClearPolicy) and the excellent Chris Dillow (Stumbling and Mumbling). Rick is my favorite blogger. Posts on cycling in Amsterdam, subsidies, management and measurement, linguisticsmore subsidies, and my personal favorite of his for the year, “Why do we teach girls that it’s cute to be scared,” always make me think and, more importantly, smile.

Bruno’s blogging was also amply rewarded this year. His thoughts on some of the problems with postmodernism brought in the most eyeballs, but thankfully he didn’t stop there: Articles introducing postmodernism and highlighting the origins of postmodernism also generated much interest. RealClearWorld picked up his post analyzing Brazil post-Rousseff (he had more analysis of Brazilian politics here and here), and his post delving into whether Nazism is of the left or the right provoked quite the dialogue. Dr Rosi was at his best, though, when prompted by Mark to further advance his argument that the Protestant Revolution played an integral role in the rise of the freedom of conscience. Times are tough in Brazil right now, so I can only hope that Bruno continues to play a vital role as a Notewriter in 2018.

Chhay Lin, now in the private sector, had his post about Bruce Lee’s application of Taoist philosophy head to the top of reddit’s philosophy sub, and his post on Catalonia and secession got love from RealClearWorld and Lew Rockwell (Political Theater). I hate to be *that* guy distracting a man from making his money, but I hope to see Chhay Lin pop in at NOL much more often in 2018!

Zak has been busy with a number of different projects, as well as attending Michigan-Ann Arbor full-time. He still managed to have one of his posts, on “libertarian” activist hypocrisy (#10), highlighted in the Guardian, the UK’s premier left-wing mouthpiece. His post on The Nancy MacLean Disgrace earned him plaudits from the online libertarian community and Don Boudreaux (Cafe Hayek), and his posts on open borders and income inequality show just how much of a bad ass he has become. I had a tough time trying to pick out my favorite Zak article of 2017, so I’m just gonna highlight all three of them:

  1. Immigration, Cultural Change, and Diversity as a Cultural Discovery Process
  2. Why I’m No Longer A Christian…
  3. Against Libertarian Populism

They’ve all got great self-explanatory titles, so do yourself a favor and read ’em again! Hopefully Zak can continue to work NOL in to his many successful ventures in 2018.

Jacques continues to amaze me. He’s been retired from academia for – as far as I can tell – at least a decade and he’s still producing great material that’s able to reach all sorts of people and places. His post on the Ottoman Empire and libertarianism (#6), which was featured at RealClearWorld and much-shared in Ottomanist corners of Twitter – took aim at popular American libertarian understandings of decentralization and seems to have landed pretty squarely on target. My favorite post of Dr Delacroix’ this year was about French Africa (also featured at RealClearWorld), but his late-year book review on Christopher De Bellaigue’s 2017 book about Islam might end up being a classic.

Bill’s 2017 here at NOL was productive and he continues to impress. His “Speech in academic philosophy: Rebecca Tuvel on Rachel Dolezal” brought in thousands of readers, but it was not his ability to draw crowds that I found impressive. His ability to tackle tough concepts and tough issues came to the forefront this year: drug use, “vulvæ,” more drug use, party culture (my personal fave), schooling (another personal fave), more schooling, and music (personal fave). Bill’s ability to weave these trends together through the lens of individual freedom is so much fun to read and important for fostering a culture of tolerance and respect in today’s world. I can’t wait to see what 2018 has in store for him!

Nicolás came out firing on all cylinders this year. With excellent dialogues between himself and Vincent, as well as between himself and guest blogger Derrill Watson (who I hope will be back for more in 2018), Dr Cachanosky’s passion for teaching has shown through clearly and brightly. I hope 2018 – his first full year with NOL – is filled with much more hard-hitting but insightful blogging from Nicolás.

Ash brought the heat, too. Check out the subject matter of his first few posts here at NOL: “A Right is Not an Obligation,” “Physical Goods, Immaterial Goods, and Public Goods,” “The Economics of Hard Choices,” “Markets for Secrets?,” “A Tax is Not a Price,” and “A Radical Take on Science and Religion.” Like Nicolás, Ash’s first full year at NOL is coming up, and if 2017 is any indication, readers can look forward to an interesting and engaging 2018.

Mark’s first full year here at NOL was a definite barnburner. His debate with Bruno on the Protestant Reformation (#8) brought in a bunch of eyeballs, including from RealClearHistory, while his “The Return of Cyclical Theories of History” also brought in thousands of readers, thanks in large part to Robert Cottrell’s excellent website, the Browser. Dr Koyama’s review of Aldo Schiavone’s The End of the Past also caught Mr Cottrell’s eye and the attention of his readers. Mark’s post on geopolitics and Asia’s “little divergence” is well worth reading again, too. Like Zak and Bill’s posts, I couldn’t choose just one favorite, so I give you two:

  1. Political Decentralization and Innovation in early modern Europe
  2. Some Thoughts on State Capacity” (an especially good criticism of American libertarian understandings of the “state capacity” literature)

We’re lucky to have Mark here at NOL.

Kevin, like Ash and Nicolás, brought the ruckus for his first few posts here at NOL. Kevin’s very first post at Notes On Liberty – “Rules of Warfare in Pre-Modern Societies” (#3) – ended up on the front page of RealClearHistory while his “Paradoxical geniuses…” earned a spot on the Browser‘s prestigious reading list. Not a bad start. Kevin will be finishing up the second half of his first year of law school (at Duke), so I doubt we’ll see much of him until June or July of 2018. My personal favorite, by the way, was Kevin’s “Auftragstaktik: Decentralization in military command.” His posts on taking over Syria – Roman style, the median voter theorem, and inventions that didn’t change the world also got lots of love from around the web.

Nick’s post on public choice and Nancy MacLean (#7) earned a nod from Arnold Kling (askblog), Don Boudreaux (Cafe Hayek), Chris Dillow (Stumbling and Mumbling), Mark Thoma (Economist’s View), and pretty much the entire online libertarian community, while his post analyzing the UK’s snap election earned a spot at RealClearWorld. Dr Cowen’s thoughts on school choice and robust political economy, as well as a sociological analysis of Trump/Brexit prompted by Vincent, all garnered love from libertarians and scholars around the world. My favorite Cowen post was his question “Is persecution the purpose?

Overall, it was a hell of a year here at Notes On Liberty. I’m really looking forward to 2018. Here’s to a happy, healthy you. Oh, and my proudest piece this year was “North Korea, the status quo, and a more liberal world.” HAPPY NEW YEAR!

Worth a gander

  1. good piece of American sociology by Jeffrey Friedman (h/t Alberto Mingardi)
  2. Daniel Larison on the devastation in Puerto Rico
  3. Don Boudreaux has the best take I’ve read or heard on the Trump-pro athlete fiasco, and remember when conservatives blasted Obama for sticking his nose where it didn’t belong when cops killed a black kid in Baltimore?
  4. Chris Dillow explains Leftist confusion about Brexit
  5. smart Leftists talking about smart things (penguins, of course!)

Could the DUP push UK Conservatives towards a ‘Norway Option’?

Last year, Britain voted to leave the European Union under a banner of anti-immigration and protectionism. Since then, both social democrats and classical liberals have been waiting to catch a break. Ever the optimist, I hope they may have just got one, from an unlikely source, the Democratic Unionist Party. They are a Northern Ireland-based Protestant party that is usually at the margins of national British politics. Thanks to the outcome of the latest general election, they may be in a position to force the British Conservatives towards a more trade and immigration friendly Brexit.

In April, Prime Minister (for now) Theresa May called a snap election. She didn’t need to face the electorate until 2020, but decided to gamble, thinking that she would increase her working majority of Conservative MPs. Instead, as we discovered yesterday after the polls closed, she did the opposite, reducing the slim majority that David Cameron won in 2015 to a mere plurality. This was against one of the most radically left-wing opponents in decades, Jeremy Corbyn.

This was a dismal failure for the Conservatives but the result is a relatively good sign for liberals. I feared that Theresa May’s conservative-tinged anti-market, anti-human rights, authoritarian corporatism was exactly what centrist voters would prefer. It turns that Cameron’s more liberal conservativism actually won more seats. Not only is an outward-looking liberalism correct, de-emphasizing it turns out not be a popular move after all.

Without a majority, the Conservatives need to form a coalition or come to an informal agreement with another party. This seems likely impossible with Labour, the Scottish Nationalists or the Liberal Democrats who have all campaigned heavily against the Conservatives and disagree on key issues, such as whether Britain should leave the European Union at all. This leaves the DUP.

In terms of ideology, the DUP is far to the right of most British Conservatives. Their opposition to gay marriage, abortion, and occasional support for teaching creationism, means that they have more in common with some Republican Christian groups in the United States than the secular mainstream in the rest of the United Kingdom. Historically, at least, they have links with pro-unionist paramilitaries that have terrorized Irish Catholic separatists.

There is, however, one way in which the DUP are comparatively moderate. While content with the UK leaving the European Union, they want to keep the land border between Northern Ireland and the Republic of Ireland (an EU member) open. Closing it would reduce critical cross-border trade with an economically dynamic neighbor and re-ignite violent tensions between the Protestant and Catholic communities in Northern Ireland.

How could this be achieved? Leaving the EU while keeping a relatively open trading and immigration relationship is similar to the so-called Norway Option. Norway is within the single market but can exempt itself from many parts of EU law. In return, it has no direct representation in EU institutions. If the EU could accept such an arrangement, then the DUP may be able to make Conservatives commit to it.

Of course, the DUP will extract other perks from their major partners as part of any deal. But their social policy preferences are so far to the right of people in England, Wales and Scotland that this will hopefully have to take the form of fiscal subsidies to their home region (economically damaging but could at least avoid infringing civil liberties).

It might seem paradoxical that an extreme party may have a moderating influence on overall policy. However, social choice theory suggests that democratic processes do not aggregate voter, or legislator, preferences in a straightforward way. Because preferences exist along multiple dimensions, they are neither additive nor linear. This can produce perverse and chaotic outcomes, but it can also generate valuable bargains between otherwise opposed parties. In this case, one right-wing party produces an authoritarian Brexit. But two right-wing parties could equal a more liberal outcome.

That’s the theory. Has something like this ever happened in practice? Arguably, Canada is an outstanding example of how a minority party with many internally illiberal policy preferences produces liberal outcomes (see the fascinating Vaubel, 2009, p.25 for the argument). There, the need to placate the separatist movement in Quebec involved leaving more powers to the provinces in general, thus keeping Canada as a whole much more decentralized than Anglo-Canadian preferences alone could have assured. Will the DUP do the same for Britain? We can but hope.