Ian Boyne | Brexit’s greatest threat
The fixation of the world on Britain's dramatic decision to exit the European Union (EU) again highlights the interconnectedness of the international community and the impact of globalisation. Politicians around the world continue to behave as though they exclusively determine national outcomes, but occurrences like Brexit demonstrate the decisiveness of exogenous factors.
Especially for small, open developing countries like Jamaica, our prospects for development are largely influenced by events outside our borders and control. Jamaica House responds to decisions taken in Washington, Brussels, Berlin, Beijing, Geneva, etc. And, frequently, by non-state actors such as international terrorist organisations whose activities greatly influence international developments.
The push towards Brexit was largely driven by the fear of, and backlash against, immigration, borne largely of Europe and America's experience with terrorism. It was also a result of many Britons' feeling left out of the gains of globalisation and believing that there was a need to clutch their country back from continental Europe with its supranational rules and obligations. It is a quest for what they consider lost sovereignty. Brexit was also a manifestation of a growing feeling of alienation among older, more conservative working-class people who are revolting against elites.
The Economist has an excellent, insightful piece in its latest edition (July 2) titled 'The Politics of Anger: The triumph of the Brexit campaign is a warning to the liberal international order'.
Donald Trump, in the United States, and Marine le Pen, of France, are part of this neo-fascist leadership exploiting popular ignorance and fear to ride to power. Liberal internationalism is facing another period of stress as isolationist tendencies and xenophobia grow. Says The Economist: "Anger stirred up a winning turnout in the depressed, down-at-heel cities of England. Anger at immigration, globalisation, social liberalism and even feminism, polling shows, translated into a vote to reject the EU."
The Economist is one of my favourite conservative publications because it is sophisticated and learned. And often honest. In this piece, all of those virtues are displayed. The magazine shows that there is justification for the disquiet about globalisation, as it has kicked many from the prosperity train. "Even when globalisation has been hugely beneficial, policymakers have not done enough to help the losers," The Economist admits.
"Proponents of globalisation, including this newspaper, must acknowledge that technocrats have made mistakes and ordinary people paid the price. The move to a flawed European currency ... led to stagnation and unemployment and is driving Europe apart. Elaborate financial instruments bamboozled regulators, crashed the world economy and ended up with taxpayer-funded bailouts and, later on, budget cuts."
The International Monetary Fund, the global protector of international capital, makes decisions that are sometimes injurious to the interests of developing and even developed countries, and it is the poor and marginalised in these countries who suffer. The elites make agreements with the Fund and the people pay the bitter price. Hence, political parties like the People's National Party are booted out of power by a people who buy into a prosperity message that certainly resonates over austerity.
The Economist makes some important points about the failure of neo-liberal economic policy and even of liberal democratic philosophy in practice. "The Right preached meritocratic self-advancement but failed to win everyone the chance to partake in it ... . The flow of goods, ideas, capital and people is essential to prosperity ... . Just as important is the need for politics to ensure the diffusion of prosperity."
This is the problem with neo-liberal economics and philosophy: It leaves ordinary people out, it creates alienation, and it neglects issues of equity and justice - issues that can't be left to the market where only the fit survive. We are not all fit, and whenever we dispense with the philosophical notion that there is a responsibility to protect and care for the unfit, we foster anger and revolt, which end up sinking the boat. The Economist no less counsels: "Hence liberals also need to restore social mobility and ensure that economic growth translates into rising wages."
The Economist goes on: "Most of all, the West needs an education system that works for everyone, of whatever social background ... ." But people must first have access, Peter Bunting, Ronnie Thwaites, Canute Thompson - you who are strong advocates of retaining auxiliary fees. The Economist fears that "Brexit risks becoming just the start of the unravelling of globalisation and the prosperity it has created".
Brexit represents the triumph of fear, ignorance and exclusion over even enlightened self-interest. All the studies and critical analyses show that Britain will be the biggest loser with its departure from the EU. As ›he Economist says in an earlier edition (June 18), while economists usually disagree, on Brexit they do not. Study after study from the most prestigious universities, institutes and think tanks show that Britain will have less trade, investment and slower productivity growth with Brexit. The Economist says in its editorial of June 18 that Britain's departure from the EU would likely make it "poorer, less open, less innovative. Far from reclaiming its global outlook, it will become less influential and more parochial".
Britain has fared well with EU membership. It is its own governments that have caused those same people who opted out of Europe to suffer more by dismantling the welfare state and carrying out aggressive neo-liberal reforms which have savaged working-class living standards. But Britain, as a capitalist state, has not done badly and even its unemployment and inflation rates have not been as bad as other European countries. Not to mention that it gets more educated migrants than any other European country. Its vote was irrational, misguided and visceral.
In 2013, Britain had the second largest stock of foreign investment in the world. Of the top 500 global corporations, Britain boasts the number two position. Using five measures of power - nominal GDP, stock of outward foreign direct investment, international banking assets and liabilities, share of currency in foreign exchange trading and military spending - Britain is second only to the United States and way ahead of China, Japan, Germany and France.
ILLUSIONS AND MYTHS
This has led one scholar to declare "the United Kingdom the last great European power", behind only the US and China. Britain risks all of that now through the vote cast on June 23. It shows what can happen as an overreaction and overcorrection to the excesses of capitalist globalisation.
The majority of people who voted for a departure from the EU are concerned about taking back their country and regaining sovereignty. Donald Trump and his clan are trumpeting the same things in the United States. It's the globalisation backlash. The Economist complains in its June 18 edition that there were a number of illusions and myths that were fostered in the campaign for the referendum.
"The most corrosive of these illusions is that the EU is run by unaccountable bureaucrats who trample on Britain's sovereignty as they plot a superstate." But The Economist answers: "In reality, Brussels is dominated by governments who guard their power jealously. Making them more accountable is an argument about democracy, not sovereignty. The answer is not to storm out, but to stay and create the Europe that Britain wants." The fact is that Britain played an important role in influencing European decisions. It was no bystander.
Competition policy, the single market and enlargement to the east, among others, were all championed by Britain. The US has lost a valuable ally in the EU with Britain's departure. Often within the EU, Britain was most un-European, siding with America in its War on Terror campaign and being more hawkish than other European states.
Britain's departure from Europe has geopolitical implications.
Some say the chaos and buyer's remorse following the vote two Fridays ago will actually hurt Donald Trump. People can now concretely point to the chaos, confusion and disorder that this xenophobic Brexit decision is having as an example of what isolationism and nativism can bring. You can't stop the globalisation train and get off. What we have to do is to better steer that train, ensuring that all its passengers are taken care of.
Brexit is a dangerous signal of the perils of isolationism, insularity and ignorance. But it is a warning of what can happen when the masses are left out of development and when they feel they have no stake in the political project. Political alienation is costly. We will see just how much in the months and years to come following Brexit.