Re:Member of The European Union
by JumpCrisscross on Monday June 20, 2016 @11:53AM
(#11938814)
> It feels a little like there should be a simple, rational argument from politics and economics for retaining the EU as a single unit
According to Ronald Coase, people begin to organise their production in firms when the transaction cost of coordinating production through the market exchange, given imperfect information, is greater than within the firm [1].
One could extend this concept to subsidiarisation. People should elevate decisions to a higher level of government only when transacting/negotiating with other effected parties at the same level of subsidiarisation becomes costlier (e.g. the New York Area's MTA and Port Authority in comparison with the Bay Area's lack thereof).
Note that a conclusion around "always coalesce" or "always devolve" doesn't appear across all parameters. If Britain's and her trading partners' institutions were more efficient than the EU's, it would be rational to leave.
According to Ronald Coase, people begin to organise their production in firms when the transaction cost of coordinating production through the market exchange, given imperfect information, is greater than within the firm [1].
One could extend this concept to subsidiarisation. People should elevate decisions to a higher level of government only when transacting/negotiating with other effected parties at the same level of subsidiarisation becomes costlier (e.g. the New York Area's MTA and Port Authority in comparison with the Bay Area's lack thereof).
Note that a conclusion around "always coalesce" or "always devolve" doesn't appear across all parameters. If Britain's and her trading partners' institutions were more efficient than the EU's, it would be rational to leave.
[1] https://en.wikipedia.org/wiki/Theory_of_the_firm