If I was British, I would vote to stay. I say this not because the E.U. is good and nice and stuffed with flowers and candies and such. The EU is a hideous abortion, an unaccountable, dysfunctional clusterjerk, an undemocratic Chancellery of weakness doubled upon futility.
But I say this because reform is not impossible, indeed it has never seemed more possible and in the interim, come what may, the U.K. has a permanent opt-out of the worst part of the E.U.: The Euro. The Euro is economically impossible. You simply cannot have a situation in which fiscal and monetary policy are so wildly unrelated.
For example the European Central Bank (ECB) cannot buy EU-member state’s bonds, except in proportion. Yet each member state sets its own fiscal policy (hello, Greece!) This prevents the ECB from effectively monetizing the debt. This defies the entire economic rational of central banking and fiat money. The situation is not altogether dissimilar to the doomed Bretton Woods System and we all know how that ended*.
Because the U.K. (And, also wisely, Sweden and Denmark) have opted out of the Eurozone (despite being eligible) they are insulated from the worst of the effects that could arise in the event of the demise of the E.U. itself and/or the Euro. The U.K. could mobilize rapidly to contain the worst effects.
However, should the U.K. exit the E.U. it would still feel most of these effects anyway, as Europe—vaguely or specifically—is still to be a huge economic reality for the country regardless of what the vote decides. Therefore, it is best for the U.K. to stay in the union because there are certain advantages that legitimately come from membership. The U.K. benefits enormously from membership in the common market, etc.
Moreover, should Britain leave it could provoke the near-term crackup of the union. Britain leaving a union which survives will be disadvantageous to both. But Britain leaving a Union that then explodes a year-down-the-line would be “mutually assured destruction.” Make no mistake, if the decision is ‘exit,’ and margin of victory is not as narrow as a hair, contagion will erupt. Ugly, illiberal nationalism and racism are on the ascendancy there as here. And, for once, Europe may be further down that road to perdition than we are.
* “The Nixon Shock”