Friday, June 24, 2016

Brexit and the Unraveling of Peace Through Prosperity

by Neil H. Buchanan

Although polls indicated that the British referendum on leaving the European Union was likely to be a fairly close vote, somehow it did not seem possible that the vote could go the wrong way.  Maybe the surprisingly lopsided defeat of the 2014 Scottish independence vote made people too comfortable.  Maybe it was the sense that considerations of actual self-interest would somehow dominate paranoia and chauvinistic fantasies.  In any case, we wake up today to the shocking reality that the UK has actually voted to leave the EU.

My first thought upon reading the news -- that is, my first coherent, not oh-my-God-what's-happening, thought -- was that this is the most potent example yet that my biggest fear might be coming true, that the Great Recession and its aftermath have set in motion what could well become the disintegration of liberal democracy in the world.  Yes, that sounds like apocalyptic overstatement.  It now looks more plausible than ever.

It should be said that soon-to-be-former Prime Minister David Cameron deserves credit for fighting on the right side of this referendum.  True, he has been justly criticized for creating this problem, agreeing to the vote to mollify extreme members of his party while imagining that nothing could possibly go wrong.  Even so, he did campaign aggressively for the "Remain" side, which is what he should have done.

But if ever there were a case of too little, too late, this is it.  Cameron personified the disastrously smug response to economic despair that we have seen among conservative politicians in the UK, Europe, and the US ever since 2009 (and, really, since at least 1979 with Margaret Thatcher's election as British Prime Minister, soon followed by Ronald Reagan's presidency here).  Rather than try to deal with the ravages of the Great Recession, Cameron and others insisted on unlearning the hard-earned lessons of the Great Depression and decades of evidence and experience.

People are unemployed?  Not to worry, Cameron and his allies assured the world, because all we need to do is rely on "expansionary austerity" -- the completely evidence-free idea that all the private sector needs is for the government to cut spending, ushering in a wave of business investment that would more than make up for the government's retreat.  Why would businesses invest in a failing economy?  Confidence!

The Confidence Fairy never arrived, and workers everywhere paid the price.  Cameron was hardly alone, of course.  The Germans have taken the lead in forcing even more crippling austerity on weaker countries across Europe.  Chancellor Angela Merkel, who also deserves some credit for being less extreme than others in her country, similarly imagined that the biggest problem facing Europe was excessive government spending.

Now, with the Brexit vote on the books, the long-suffering Greeks are understandably talking about finally getting out from under Berlin's misguided policies.  And Scotland, which voted overwhelmingly for Remain, will now seriously reconsider breaking off from Britain.  In a few short years, regions and countries could break up, with borders sealed off and problems elsewhere left to fester.  An analogy to gated communities is tempting, but the atmosphere is hardly one that would call to mind anything resembling a community.

In some ways, Cameron and Merkel are "lite" versions of Republican leaders in the U.S., thinking that they could contain the nihilists in their ranks rather than being consumed by them.  Five years ago, I pondered what the billionaires who bought the Republican Party must have been thinking as the new Tea Party-led majority in the House rushed toward what turned out to be only the first of many debt ceiling showdowns.  None of this can be what the oligarchs had in mind, but these political crises are the inevitable result of what they set in motion.

Which explains, I think, why Donald Trump immediately treated the result of the Brexit vote as nothing but good news.  If logic mattered at all, Trump should not care about that issue.  What, after all, does it have to do with making America great again?  Having a dysfunctional, but intact, European Union is arguably actually better for the U.S., but it is at least not obvious how we would gain from the breakup.

But Trump knows that his power stems from the spreading of hatred and fear, and so he cheers for those who play the same disgusting, cynical game that he plays.  Sure, it might turn out that the collapse of the European Project could result in economic damage to the U.S. and even in the spilling of more blood in Europe and elsewhere, but why should Trump care?  The people who blame problems on Others are on the march, and Trump believes that that is good for him.

One of the more bizarre comments on the Brexit vote was offered in a New York Times news article (not an editorial) published immediately after the votes had been tallied.  The reporter wrote: "The British campaign featured assertions and allegations tossed around with little regard to the facts. Both sides played to emotion, and the most common emotion played upon was fear."  Can you smell the false equivalence coming?
"The 'Remain' side, citing scores of experts and elite opinion, warned that leaving the bloc, a so-called Brexit, would mean an economic catastrophe, a plunging pound, higher taxes, more austerity and the loss of jobs.

"The Leave side warned that remaining would produce uncontrolled immigration, crime and terrorism, with hordes pouring into Britain from Turkey, a country of 77 million Muslims that borders Syria and Iraq and hopes to join the European Union."
This is simply bizarre.  The two sides "played to emotion" because they both said that people have reason to fear the results of leaving or remaining.  But the fear that the Leave side was peddling was based on a never-ending onslaught of lies, from the false claims about the costs of the UK's membership in the EU to Trump-like assertions about terrorists pouring across the border.

John Oliver's "Last Week Tonight" this past Sunday brilliantly exposed the lies of the Leave campaign.  (Video available here.)  The problem is that the British press has spent decades stoking Englishmen's fears and hatreds toward Europe, which English expat Oliver also hilariously lampooned with a series of off-the-cuff putdowns of random European countries.  As Oliver would be the first to say, however, this is not funny.

Meanwhile, what is the fear that those Remain agitators were stirring up?  Apparently, they irresponsibly "tossed around" some "assertions and allegations" from those "scores of experts" who were saying that Brexit "would mean an economic catastrophe, a plunging pound, higher taxes, more austerity and the loss of jobs."  I guess it is possible that those experts will all be proved wrong, but this is simply not the same as fear-mongering.  It is a logic- and evidence-based assessment of the negative consequences of leaving the EU.

If one person tells you that he is afraid of the consequences of being shot in the face, while another person tells you that he is afraid that stepping on a crack will break his mother's back, are they both merely being emotional?  There is a difference between healthy fear and irrational fear, after all.

Obviously, all is not lost.  This could be a wake up call to those who have allowed themselves to believe that the emergence of fear-mongering, naked lies, and appeals to people's worst nature are merely an unfortunate spasm of temporary insanity.  Maybe even some conservatives will now remember that people are least generous when they are economically insecure, and that ungenerous people can easily be incited to do things that are dangerous for themselves and the world.  We can hope.


David Ricardo said...

The premise of this post and of much of the commentary on the Brexit vote seems to be that political union is necessary in order to have successful economic union. Such a premise is false. If one critical characteristic of economic union is unrestricted trade it is obvious that this can take place without political union, see the U. S., Canada and Mexico for example. A second critical characteristic, free movement of the inhabitants of several sovereign countries is also possible without political union.

The error in the evolution of the European Union was the movement to expand economic union into political union. Political dis-union has been a world-wide trend since the end of World War II. The independence of India resulted ultimately into three countries. The Soviet Union dissolved and a large number of independent nations took the stage. Yugoslavia no longer exists and in its place are a bunch of separate states with different ethnic make up. In place of one nation there is now the Czech Republic and Solvakia.

Quebec and Scotland are part of Canada and Great Britain in name only, and Scotland may soon be separate. There are two serious separation movements in Spain. The twin pressures of trade and immigration are driving various regions and nations, including the U. S. to assert more sovereign power. So Brexit is not an isolated event, it is part of a decades long trend towards political separation. This trend is accelerating.

But the good news is that European economic union should survive regardless of the status of the EU. The EU has fulfilled its role of producing peace within Europe; for the first time since pre-humans migrated to the continent the prospect of a bloody destructive continental war no longer exists. History will show that had the EU stopped at economic union and worked only to create a peaceful region and maintain national sovereignty it would have been a historical success. That success is likely to last for decades if not centuries, but over-reaching by the EU to create a political union when that was not possible has produced an ugly stain on that success.

Shag from Brookline said...

David, in your closing paragraph starting with "History will show ... " is a prediction on your part. Hindsight is not always 20-20 as interpreted in various ways. Foresight and predictions may be myopic. Also, I'm not clear on what you mean by over-reaching of the EU to "create a political union."

On a separate Brexit point the steps required for exiting the EU are to be negotiated. I've read that each of the remaining EU nations may have a veto. This brings to mind the unanimity amendment provision in the Articles of Confederation that led to the 1787 Constitutional Convention. What if, say, Greece were to object in its concerns if it were to decide to exit?

David Ricardo said...

Let me clarify

What today is known as the EU began as a drive to create a European Common Market. In this vision trade barriers within Europe would be reduced and eliminated, with the belief that free trade would bring the twin benefits of economic prosperity and the end of European wars. And this was incredibly successful, resulting in a peaceful Europe for the first time since, well since forever and an economic recovery from WWII that was truly astounding.

But for some reason the leaders of Europe wanted to go further, to add a political union and a common currency on top of the economic union. This sounded great on paper, but was undone by the lack of controls on immigration and the inabilityl of the nations of the EU to conduct their own monetary and fiscal policies. The lessons learned here are that (1) political union among previously independent nations with different cultural heritages does not work and (2) political union is not necessary for economic union and the macro-economic benefits of free and open movement of goods and services.

Think about NAFTA. The goal was to produce a North American common market, and to a large extent, for better or worse it has done so. But NAFTA had no impact on the self rule and sovereignty of the U. S., Mexico and Canada, and had it tried to do so it would have been a horrific destabilizing catastrophe. Even with its very limited impact on national sovereignty the WTO hangs precariously in world affairs, and as a result multi-lateral WTO sponsored global trade agreements are unlikely to be enacted in the future.

Yes, the conclusion that the future will look back upon the creation of the modern EU as a huge over-reach is a prediction, but one that is very likely to be realized. That history is being written as we speak.