Tuesday, 28 June 2016

Who is really to blame for Brexit?



Guest post by Tom Streithorst.


Brexit already looks a disaster. Sterling has plunged to the lowest level in thirty years, the FTSE fell more than 12% at the open, global equities lost $2 trillion in value in less than a day, and gold, the traditional safe haven in times of turmoil, has shot up. Uncertainly reigns. Firms are less likely than ever to hire or invest. It is going to get worse.

Who shall we blame?

David Cameron is the obvious villain. He did not need to call this referendum. When he promised a vote three years ago, there was no real call for Britain to exit Europe other than on the fringes of his own party, . Cameron made a purely political decision. He knew Brexit would be bad for his country, and still he promised a referendum merely to shore up support among Eurosceptics who might support UKIP in the general election. For momentary political advantage he gambled the prosperity of the nation. He lost. If history remembers him at all, it may well be as the Prime Minister who destroyed the United Kingdom and replaced it with Little England.

Jeremy Corbyn didn’t do much better. The Leave campaign was led by right-wing Tories, but they won the election with the votes of working-class Labour supporters. Corbyn never was a fan of the EU. He voted against it in 1975, and although he supported Remain this time, he did so neither vociferously nor effectively. Corbyn could have done much more to convince Labour voters that they would be better off in Europe, that austerity not immigration was the source of their pain. That he didn’t do a better job reflects both his own lack of conviction on the subject and his ineffectiveness as an opposition leader.

Boris Johnson, the Donald Trump of Britain, also deserves blame. Born in New York City, educated at the European School of Brussels, it was as the Daily Telegraph reporter covering the EU in the 1990s that he popularised the “unelected Brussels bureaucrat” meme that took over Fleet Street. Before Johnson, the tabloids mostly ignored the EU. After, editors demanded eurosceptic stories from their Brussels reporters. Silly tone-deaf bureaucrats made better copy than economic growth, increased trade, and grants to poorer parts of Britain. Johnson, driven by personal ambition and little else, betrayed his long time friend Cameron by leading the Leave Camp. He may well be rewarded with 10 Downing Street for his perfidy.

It is satisfying to curse our politicians for their selfishness and small-mindedness, but it should not blind us to a deeper failing. The split in votes was largely geographic. London, Manchester, Bristol, Scotland and Northern Ireland voted to stay. It was little England, the suburbs, countryside, and decayed industrial towns that wanted to leave.

Ultimately, I blame us, the educated metropolitan elite that mostly supported Remain. We profited from globalization. The poor outside of the metropolitan areas, not so much. Economic textbooks tell us, quite accurately, that free trade and free movement of people increase economic growth. Not everyone will be a winner, of course, but in the aggregate we all are.  The secret then, the textbooks continue, is to use some of that increased prosperity to relieve the damage done to the losers from globalization. That lesson we ignored.

The great civilizational split of our time isn’t between Islam and Christianity but rather between metropolitan cosmopolitans and the more parochial folk outside the great cities. It is England outside the M25 that voted for Brexit. Experts told them Brexit would make them poorer, but they no longer believe the experts. And why should they? The experts have not been concerned with their wellbeing for quite some time.

In his book The Twilight of the Elites, Chris Hayes asks why meritocracy has brought such a decline in the quality of the people who run things. He answers that first, meritocracy is mostly a sham, that the social class of your parents determines your income much more than meritocrats pretend, but that the myth of meritocracy allows the successful to pretend their prosperity is purely their own doing. This deprives them of any motivation to care about the less fortunate.

The second is that inequality makes everyone, even the affluent, feel insecure. When falling from the top 1% to the top 10% is a substantial drop, members of the elite are more concerned with their own professional advancement than any responsibility towards their country. Noblesse oblige is an aristocratic concept, available only to those who feel their own position is secure. Meritocracy makes none of us feel secure. A good year does not guarantee the next.

Working-class Leave voters are bitter, with good reason. Wages haven’t gone up in ages. Eight years after the financial crisis, the economy remains stagnant. Many naturally blame immigration.

The real problem is austerity. Britain is able to borrow at microscopic rates. We could have invested in our future, created jobs, and make our present more prosperous. But we didn’t. And now we will all be poorer.

29 comments:

  1. Oh stop it. Big Government fails at everything. Borrowing and spending money on infrastructure would a huge waste. The projects would be slowed by environmentalists; the costs would rise astronomically and all the money would be stolen or pissed away. And the national debt would rise. Just like the EU and Brazil.

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    1. Oh, you mean the UK has at least a low national debt (thanks to austerity)?

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    2. "Big Government fails at everything."

      Not in the U.S.?

      Table 1-1: Estimates of the Total Annual Benefits and Costs of Major Federal Rules by Agency, October 1, 2004 - September 30, 2014 (billions of 2001 or 2010 dollars)1

      https://www.whitehouse.gov/sites/default/files/omb/inforeg/2015_cb/draft_2015_cost_benefit_report.pdf

      P10-11.

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  2. The people that voted Leave should have blamed the people responsible for their lack of prosperity - the national government, not the EU. Aside from those in poverty, I read today of workers at the Nissan factory in Sunderland who voted leave, along with 60% of the rest of Sunderland. The reasons they voted Leave were absurd. Who will be to blame if the factory closes in the next few years because Britain leaves the EU?

    Frankly, we must now choose whether democracy is for adults accepting adult responsibility, or toddlers having a tantrum. It must be one, not both.

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    1. The "leave voters" have indeed blamed the people perceived to be responsible for their lack of prosperity.

      There was a tremendous amount of hubris running around the political and financial "elite" circles, all convinced that the "sheeple" would continue to follow the leaders and any stragglers could be hounded along by threats.

      The discontentment among the electorate with both the major parties has been expressed. It was evident before, but was ignored.

      Bob

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    2. There are quite a few toddlers' tantrums going on among people who don't believe the referendum result and who want it annulled or re-run. It's a bit troubling when all of a sudden democracy is called into question because a vote has gone against the will of those who called it.

      And frankly, who benefits more from Nissan's factory in Sunderland? The workers in Sunderland and their families (subsidised with welfare payments and other redistributions) or the shareholders of the company (subsidised by lax taxation)?

      It's long past time (30 years) for a new economics, for the North of England in particular. The laissez-faire (or rather laissez-mourir) approach to regional development has manifestly proved itself a failure.

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    3. @Joshua Miska
      Oh I forgot! all our money is in fact government money and they are gracious enough to lend some for us to live...Or is this the other way around? Tax=theft and government are just legitimised mafia?

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  3. I see references to "the elite" everywhere, but I'm struggling to find a definition. What's yours when you use the word Frances?

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    1. I'm not the author of this piece. I will ask Tom to reply to your question.

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    2. Ah, didn't spot the byline! I thought the style was different to usual :)

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  4. Who to blame? Easy: everyone who voted Leave or couldn't be bothered to turn out to vote Remain. But they seem to be the one group not mentioned in the post. Is that because the author thinks that they're not bright enough to be held responsible?

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  5. Great question, Daneel. I guess when I use the word "elite" I either mean rich people or people with disproportionate influence or sometimes just the winners from globalization. It is kinda like what that Supreme Court Justice said about pornography, "I can't define it but I know it when I see it." Tom

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  6. Always with the blame. Wrong word to use when asking a question. When blame is mentioned then heads go down and the people who might actually know tend to run for cover taking the answers with them. What is the point? As for stupid, people in glass houses shouldn't throw stones. Using that word is undemocratic to boot and breeds injustice and anger. The Dunning-Kruger effect should be taught in school as a subject and maybe we can learn how to learn things. If all we want are scapegoats then we are actually punishing ourselves as we will never really know and things will only get worse.

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  7. Dork of Cork, your ban extends to guest posts as well. I will delete everything you post here.

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  8. Okay, so culprit is inequality. Now we would expect a little more analysis by Mr Streithorst, but it seems he is out of words.
    For example it would be interesting to know whether he thinks that staying in the UE would mean being better off in reforming and making British society more equal? In other terms does Mr Streithorst think that remaining and hence accepting EU current ideology, which is austerity by the way, and basically an agenda to liberalize financial interests, done by unelected technocrats (but we’ll all become traders and software programmers, right?) , would be beneficial for the uneducated rural majority (of which, off course, he is not part!)? Does he think that Mr Schauble record shows a good effort towards a better welfare? Or a minimal consideration towards interests non German?
    It’s incredible to read a piece that identifies inequality as the cause of a problem, and at the same time affirms that remaining in EU is the answers! Talk about contradictions…

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  9. I think this piece is a concise and pretty accurate summary.
    Increasing inequality (of both economic and social values) ultimately leads to the collapse of the centre ground.

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  10. "Jeremy Corbyn didn’t do much better. The Leave campaign was led by right-wing Tories, but they won the election with the votes of working-class Labour supporters."

    Utter nonsense. Labour voters were 63% remain. Unless your making the patronising suggestion that most of the PLP make that somehow the "Labour heartlands" are just a lump of votes that any Labour politician should be able to deliver to Westminster. That's a big mistake, as they have already found. Blair lost 4 million votes after he took power, because he failed to represent the interests of those voters. They were the disenfranchised, as all major parties adopted a consensus on policies that affected them.

    The conceit of the PLP is that somehow Corbyn was meant to deliver these votes for remain, and yet these were the votes that the Blairites lost.

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    1. 'Within two weeks of praising Corbyn for "pursuing an itinerary that would make a 25-year-old tired" she was slamming him for making the case for Remain "with half hearted ambivalence". The sheer insincerity of such a volte face would be astounding if she was anyone but a professional politician, and stands in stark contrast to Jeremy Corbyn's track record of honesty.'
      http://anotherangryvoice.blogspot.co.uk/2016/06/is-angela-eagle-more-electable-than.html

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  11. There is of course enough blame to go around, but one institution is conspicuous by its absence in the above piece - the EU itself. Brexit happened not because British politicians failed to stop it, but because the EU made it happen through policies and actions that it is entirely responsible for. Even during the campaign the rhetoric from Brussels and beyond seemed almost deliberately designed to threaten and intimidate and thereby push the UK out. If this is the case then the inevitable conclusion is that the EU cannot be reformed from the inside because it will attack and destroy all those that try.

    The mistake our political elite continue to make is to delude themselves that they are right and that the voters got it all wrong. The voters voted for Brexit because it was the right choice, even if many did so for the wrong reasons. Many remain voters voted remain out of ignorance as well.

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    1. I quite agree with this: the real reason for Brexit is EU itself, and particularly the way its leadership acted.

      In the short term, Brexit brings all sorts of trouble, but to me (in a Nordic country that so far has shared much of Britains's concerns in the EU) it brings some hope: maybe we don't have to put up with the intolerable arrogance of Brussels, the manifest destiny of deepening federation and ever-ongoing expansion to Turkey and beyond, and ever-increasing micromanagement and industry-scale manufacturing of new regulations and restrictions on life.

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  12. Chris Hayes is a bright guy. I watch him regularly. His book, however, is just a hodgepodge of references to blog posts, news stories, personal conversations, and the like. He, like so many others, defines the problem and then quits. He has made a little money because of his media presence but he has contributed nothing new, especially he offers nothing new in the way of solutions or even a workable way forward. Oh, look! I have just done what I accuse Hayes of doing--I have defined the problem of elite authors who publish empty books. To expand on my definition of the problem, I say that the elites do not know enough to know what to do. I think they are largely trained to be expediters, to facilitate the workings of the current systems they get hired to work in. They are not trained to look at these systems, find the rotten parts, and the weak parts, and the good parts, and then design an entirely new system, and then provide a workable process for implementing the new design.

    The experts, the elites, are in over their heads. Systems guys and gals are the ones we should turn to. With a few actuaries thrown in as the economists are thrown out. Systems professionals are accustomed to solving problems. The elites are accustomed to finding ways to profit from them. Which do you want?

    If you want to move civilization forward, you must devise a process that answers these questions: Where do we stand? Bloggers and reporters can do this one.

    How did we get here? Some historians can do this one, but superficially.

    Where do we want to go? More difficult than it sounds. We have to want to go somewhere that is really reachable--that really will be there when we arrive.

    How do we get there from here? For engineers only.

    Don't get me wrong, I like Hayes, that is why I bought his book as soon as it came out.

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    1. The EU wants freedom of movement to continue I do not see a problem with movement or people seeking work but should not expect any UK support whilst doing so.

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  13. Chris Hayes is a bright guy. I watch him regularly. His book, however, is just a hodgepodge of references to blog posts, news stories, personal conversations, and the like. He, like so many others, defines the problem and then quits. He has made a little money because of his media presence but he has contributed nothing new, especially he offers nothing new in the way of solutions or even a workable way forward. Oh, look! I have just done what I accuse Hayes of doing--I have defined the problem of elite authors who publish empty books. To expand on my definition of the problem, I say that the elites do not know enough to know what to do. I think they are largely trained to be expediters, to facilitate the workings of the current systems they get hired to work in. They are not trained to look at these systems, find the rotten parts, and the weak parts, and the good parts, and then design an entirely new system, and then provide a workable process for implementing the new design.

    The experts, the elites, are in over their heads. Systems guys and gals are the ones we should turn to. With a few actuaries thrown in as the economists are thrown out. Systems professionals are accustomed to solving problems. The elites are accustomed to finding ways to profit from them. Which do you want?

    If you want to move civilization forward, you must devise a process that answers these questions: Where do we stand? Bloggers and reporters can do this one.

    How did we get here? Some historians can do this one, but superficially.

    Where do we want to go? More difficult than it sounds. We have to want to go somewhere that is really reachable--that really will be there when we arrive.

    How do we get there from here? For engineers only.

    Don't get me wrong, I like Hayes, that is why I bought his book as soon as it came out.

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  14. "The real problem is austerity." Not so. The real problem is the bizarre belief that sovereign nations have a limited supply of money and that they must borrow to have money and they must tax to repay the money they borrow.

    Sovereign nations have an unlimited supply of money. They have more money than there are subatomic particles in the universe. The financial "experts," the economists of the world are killing civilization.

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  15. Well, since you decided to remove my humorous post, I can continue to enjoy your blog without sending you any money.

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  16. I blame the labour party. This is all about class struggle. Open borders and free trade suit the rich and kill the poor. The tories are delivering for their constituency, with a bit of internal confusion over how best to do this! Abandoning job security, refusing to point out the link between "deregulated labour markets" and big inward migration, reacting with distaste to the whole migration issue, Labour has walked away from its constituency and its historic mission. Pragmatic left-leaning governments, ready to tilt against mamon, have delivered huge progress, but the labour party just dropped the ball. Undefended, unrepresented, manipulated by a media batting for the other side, for sure the reaction of the left-behinds is not going to be edifying.

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  17. A birds eye view.

    http://thearchdruidreport.blogspot.co.nz/2016/06/outside-hall-of-mirrors.html

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  18. Thank you for sharing such great information. It was very informative and has help me in finding out more detail about IDBI Bank Latest News!

    ReplyDelete
  19. Frances, please find a better verification process than this useless image captcha one. I cannot work with this, and will not have anything to do with blogs that use it.

    ReplyDelete