Wed | Aug 23, 2017

Byron Blake | Brexit and globalisation

Published:Monday | July 11, 2016 | 7:00 AM
Byron Blake

There is no disagreement that the Brexit vote was a protest vote. Incidentally, so is the support for Donald Trump and Bernie Saunders in the United States presidential race.

But, back to Brexit. Was the protest against:

(1) Immigration (those foreign people who have moved in, taken away my job, or make it dangerous for me to seek an increase in my wages or get my children into school)?

(2) Regionalisation (the EU whose member states export to the UK and the loss of power of the British Parliament in policymaking to Brussels)?

(3) Globalisation (Cheap imports from Asia)?

(4) Downing Street growing oblivious of the voters' concerns?

These are visible and easily identifiable targets. Singly, or taken together, they would have played a role. But these, certainly the first three, were all developments which a few years ago were hailed for fostering growth and prosperity. The UK entered the European Economic Community (EEC) voluntarily in 1973 for this reason. The economy grew, even though this was the beginning of the first global oil crisis. When the UK fell into economic difficulties in 1977, Germany and France ensured that it received the best deal possible from the IMF.

The EU, including the UK, and the United States fashioned the World Trade Organization , and its rules guarantee access to the markets and resources of the developing countries for their technology-driven, super-competitive industrial and even agricultural products, for their service providers, investment capital and even hot money.

The global economy and global trade had one of the longest of growth. For a period, the share of the developed countries grew faster than that of the developing countries. The developing countries protested against the rules. Things came to ahead in the streets of Seattle in 1999. The developing countries demanded change, but these were the halcyon days, and the developed countries, including the UK, stood firm.

 

CURRENT FRUSTRATIONS

 

The real seeds, not the symptoms, of what is driving the current frustrations worldwide were being sown. They were clear to the naked eye, but the majority of decision-shapers and decision-makers were being mesmerised by the cleverly devised propaganda of the decreasing number of real beneficiaries of the system.

A new economic philosophy emerged based on unbridled competition where the winner takes all. This was accompanied by the emerging reality where political decision-making was being determined by the wealthy few. These movements were taking place at a time when the rhetoric of democracy and participation was at its loudest.

Recall the days when CEOs were sought, employed and rewarded for their ability to merge and downsize corporations, that is, to reduce employment? These were jobs being lost not to migration, but to increase returns to directors, stockholders and the small cadre of CEOs and top executives.

Remember the days when Ronald Reagan and Margaret Thatcher emasculated and destroyed the trade union movement? Behind that were workers being set up for exploitation and wage minimisation, and not just by the public sector.

 

INCREASINGLY POORER

 

Remember also the structural adjustment programmes initiated in the 1980s under the Washington Consensus and the various generations since. The core of these programmes is the reduction of government expenditure after debt repayment and servicing. The effects include reduction in the access of more and more of the population to the basic social services such as security, health care, education, transportation, housing, and even roads. An increasing number of persons, especially in the middle classes, are feeling increasingly poorer.

The global campaigns to reduce taxes on incomes apply the same rates to all income earners, abolish subsidies and shift from direct to indirect taxes under the guise of simplicity and equity. These, in reality, translate into the poor bearing a proportionately higher share of the burden of financing the countries' operations. Income inequality is not only high but is increasing in almost every country on the globe.

When we superimpose income inequality on the stranglehold of the rich on politics and policymaking, the tensions and frustrations and the seizing of every opportunity to vent can be easily understood. The problem is that the venting is against symptoms rather than the root causes. Neither migration nor regionalisation, nor globalisation in itself, is a fundamental cause. The real cause adheres in the economic philosophy of brutal, competitive capitalism without a moral underpinning.

The British will soon need another set of proxies, and so will Jamaica.

- Ambassador Byron W. Blake is former assistant secretary general of CARICOM. Email feedback to columns@gleanerjm.com.