13 December 2018 09:20:02 GMT

The Third Rock Forum - Economics

Article Title
Hints for Brexit negotiations
Author
Paul G
Topic Section(s)
Politics
Economics
 
Submitted : 21-09-2017 11:36
Amended : 00-00-0000 00:00
Status : Approved:  
Likes : 0
Dislikes : 0

1 If you tell the EU that, in your view, any deal is better than no deal, you guarantee they get the best deal and you get the worst deal.  

Why?  Well it’s very simple. 

Let’s say I want to but your car.  You say you want £6,000 for it.  But I’ve checked Glass’s and your car is worth only £4,000. I offer you £2,000. So far we have a normal negotiating situation.  The seller wants more than I wish to pay. We can now explore a possible compromise (e.g. £4,000).

But then, inexplicably, before we negotiate, I confess that, whatever happens, I’m going to buy the car anyway (i.e. any deal is worse than no deal.)

The minimum price I’m going to pay now is £6,000. If the seller is really ruthless, the price is likely to go up.  It certainly won’t go down because I’ve said I must buy the car whatever.

Geddit?

 

2. If you say that, at the end of negotiations, you will put the terms of exit to a ‘leave or stay’ referendum, you again guarantee the worst possible terms.

Why? Well, it’s simple.

I want to leave the Golf Club that my wife and I belong to but the Club want us to stay because we pay for a lot of the facilities.  I say I’m definitely leaving; the decision is final. 

But my wife who really wants to remain a member, says “Why don’t we wait to see how much compensation they’re going to demand before we finally decide?” 

I explain to my wife; “If you tell them we are going to reconsider our decision to leave on the basis of the terms they offer, obviously they will offer us the worst possible terms because they want us to stay. “

She smiles because, being intelligent, she knows this is true but doesn’t care because she wants to remain a member.  But then I point out that, given that we really are leaving, all she is doing it ensuring we leave on the worst possible terms - which really isn’t very helpful.

Geddit?

Replies

Status: Approved
Reply Date : 21-09-2017 13:51
Author : georgebundle
BREXIT negotiations

The arguments in Paul's latest article, as always, are absolutely logical. I find nothing else raleted to the BREXIT negotiations remotely logical. The reason is that all comments, coming from any direction, are the products of fortune telling with nothing to back them up, other than wishful thinking or prejudice. In consequence, they are all vacuous.

We do not know what is going to happen next month, let alone two years from now. What we do know is that we are still going to breathe oxygen and drink water in various forms - and the outcome of the BREXIT negotiations will be dictated by money. That means, trade between the UK and the EU with as little damage to the existing bases as possible.

A small detail, by the way. I understood the PM saying that "bad deal is WORSE than no deal". Am I wrong?

Regards,

GB.