Wayne O'Leary

Brexitology 101

The almost hysterical reaction of America’s establishment media to the results of the United Kingdom’s national “Brexit” referendum in late June was both wryly amusing and totally predictable. As the tally (52% in favor of leaving the European Union, 48% against) became clear on this side of the Atlantic, the handwringing took on epic proportions.

At the TV networks and the national press outlets, the shock and disbelief was almost palpable; MSNBC’s Andrea Mitchell, Alan Greenspan’s spouse, looked positively stricken reporting the news. Opinion journalism on the center-left temporarily shifted its attention from condemning Donald Trump’s latest verbal outrages to expressing disgust with the irresponsible leaders of the “Leave” campaign and the low-information voters they supposedly duped, as well as worrying aloud about the stock market and the state of those high-earner IRAs and 401(k)s. Figurative tears were shed for poor UK Prime Minister David Cameron in his hour of travail.

The “liberal” mainstream media was, of course, taking its cues from the Obama administration and centrist Democrats in Congress, who are in general lockstep with the pro-EU forces of Western Europe, especially the now-teetering Conservative government of Great Britain. Holding this transatlantic free-trade coalition together is a mystical belief in the blessings of economic globalization, which is regarded as both beneficial and inevitable.

President Obama himself said as much during the recent North American economic summit meeting in Ottawa, when he dismissed the UK’s Brexit revolt as an essentially futile exercise in the face of an irreversibly interconnected world in need of only enlightened policies, such as the Trans-Pacific Partnership trade agreement (TPP), to correct momentary economic dysfunctions. It was the statement of a true EU-style technocrat.

The president’s fellow believer in globalization ideology, Canadian Prime Minister Justin Trudeau, doubled down, using the “P” word (protectionism) has his pejorative of choice against opponents of free trade. So did Mexico’s President Enrique Peña Nieto, who stepped up the rhetoric by comparing anti-EU Europeans and Americans of similar mind, such as Donald Trump, to “populist demagogues” Hitler and Mussolini.

Peña Nieto’s lumping together of Trump, the UK’s Brexit “Leave” campaigners, and the Continent’s Eurosceptics as incipient fascist dictators is a gross oversimplification. Unfortunately, globalization advocates worldwide are falling into the dangerous habit of reflexively labelling their opponents modern-day Nazis, with all that implies. Disagree with them on global trade or open borders, immigration or refugee policy, and you’re an ignorant, racist xenophobe ready to fire up the extermination ovens.

Defenders of the existing one-world free trade regime see pure nativism as responsible for its current political difficulties; rightist opponents of the system see freeloading immigrants and scheming foreign governments (e.g. Trump’s bogeyman China) as the culprits. In point of fact, both are wrong in their explanation for the dislocations of the global economic order.

The crux of the problem is neither that globalization empowers foreign governments and encourages migrant gatecrashers, nor that it emboldens backward, shortsighted isolationists ill-equipped to benefit from technological change; it’s that globalization (either formally implemented by EU treaties and bureaucratic rule-making in Europe, or informally implemented through favorable trade, tax, and immigration laws in North America) empowers multinational corporations — something globalization’s international critics on the left (Sanders, Corbyn, Tsipras, et al.) clearly understand.

In Europe, corporate empowerment was not the original intent. The EU, whose origins extend back to 1951, began as an effort to guarantee European peace and create mutual economic security as a bulwark against Soviet Communism. A half-century later, it had evolved into a single continental market with over two-dozen members, an independent governing structure, a common currency (the euro), and guaranteed freedom of movement across national borders.

Regrettably, its original purpose (peace and security) had gradually morphed by then into a project to reduce market barriers for the multinationals, especially by instituting labor mobility through internal migration between member states, which forced down wages and undercut unions. In the US, the same ends were met by economic deregulation, free-trade agreements, and open immigration, legal and illegal.

It’s all worked out well for large multinationals and international financiers, but not so well for ordinary people, both here and in Europe. The Brexit vote has been the most dramatic expression to date of the public’s disillusionment, but far from the only one.

A series of Pew Research Center polls conducted this spring in 10 European countries revealed widespread rejection of the EU’s stewardship of the economy, ranging from 55% disapproval in Britain to 65% in Spain, 66% in France, 68% in Italy, and 92% in long-suffering Greece. Overall, fewer than half of Europeans polled viewed the EU favorably. The US needed no polls, only a reminder of the Sanders and Trump insurgencies in this year’s presidential primaries.

When it comes to anti-globalization, the UK’s “Brexitized” political establishment, like establishments in most of the Western world, is basically clueless. The ruling elites, absorbed with their wealth, their stock portfolios, and their social prerogatives, all of which derive from the global economy, have lost touch with the needs and desires of their lesser compatriots. As an example, while most of struggling Britain was voting to exit the corporate-dominated EU, rich London, with its affluent citizenry and financialized economy, was voting 60 to 40 percent against leaving; the anti-Brexit vote in “the City” (London’s financial district) was 75 to 25 percent against.

Over the past three decades, elitist-controlled governments of both the center-left and center-right, here and in Europe, have abandoned their old, labor-intensive national economies and embraced the new global capitalism, opting for free trade, accelerated immigration, and low corporate taxes. In the process, they’ve cast their middle classes adrift and formed government-corporate alliances beneficial to those at the top, the celebrated One Percent. Now, starting with the UK, they’re reaping what they’ve sown.

Yet, some still haven’t gotten the message. Opponents of Brexit are slow-walking the disengagement process in hopes of reversing it. Meanwhile, the denizens of the City, whose speculative machinations helped crash the world economy in 2008, are reportedly on the hunt for the next EU financial capital to replace London. But there are certain requirements. The winning bid will necessarily include a “favorable regulatory environment” and lots of luxury housing.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, August 15, 2016


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