The mean­ing of Brexit

Financial Mirror (Cyprus) - - FRONT PAGE -

The Brexit vote was a triple protest: against surg­ing im­mi­gra­tion, City of Lon­don bankers, and Euro­pean Union in­sti­tu­tions, in that or­der. It will have ma­jor con­se­quences. Don­ald Trump’s cam­paign for the US pres­i­dency will re­ceive a huge boost, as will other anti-im­mi­grant pop­ulist politi­cians. More­over, leav­ing the EU will wound the Bri­tish econ­omy, and could well push Scot­land to leave the United King­dom – to say noth­ing of Brexit’s ram­i­fi­ca­tions for the fu­ture of Euro­pean in­te­gra­tion.

Brexit is thus a wa­ter­shed event that sig­nals the need for a new kind of glob­al­i­sa­tion, one that could be far su­pe­rior to the sta­tus quo that was re­jected at the Bri­tish polls.

At its core, Brexit re­flects a per­va­sive phe­nom­e­non in the high-in­come world: ris­ing sup­port for pop­ulist par­ties cam­paign­ing for a clam­p­down on im­mi­gra­tion. Roughly half the pop­u­la­tion in Europe and the United States, gen­er­ally work­ing-class vot­ers, be­lieves that im­mi­gra­tion is out of con­trol, pos­ing a threat to pub­lic or­der and cul­tural norms.

In the mid­dle of the Brexit cam­paign in May, it was re­ported that the UK had net im­mi­gra­tion of 333,000 per­sons in 2015, more than triple the gov­ern­ment’s pre­vi­ously an­nounced tar­get of 100,000. That news came on top of the Syr­ian refugee cri­sis, ter­ror­ist at­tacks by Syr­ian mi­grants and dis­af­fected chil­dren of ear­lier i mmi­grants, and highly pub­li­cised re­ports of as­saults on women and girls by mi­grants in Ger­many and else­where.

In the US, Trump back­ers sim­i­larly rail against the coun­try’s es­ti­mated 11 mil­lion un­doc­u­mented res­i­dents, mainly His­panic, who over­whelm­ingly live peace­ful and pro­duc­tive lives, but with­out proper visas or work per­mits. For many Trump sup­port­ers, the cru­cial fact about the re­cent at­tack in Or­lando is that the per­pe­tra­tor was the son of Mus­lim im­mi­grants from Afghanistan and acted in the name of anti-Amer­i­can sen­ti­ment (though com­mit­ting mass mur­der with semi-au­to­matic weapons is, alas, all too Amer­i­can).

Warn­ings that Brexit would lower in­come lev­els were ei­ther dis­missed out­right, wrongly, as mere fear­mon­ger­ing, or weighed against the Leavers’ greater in­ter­est in bor­der con­trol. A ma­jor factor, how­ever, was im­plicit class war­fare. Work­ing-class “Leave” vot­ers rea­soned that most or all of the in­come losses would in any event be borne by the rich, and es­pe­cially the de­spised bankers of the City of Lon­don.

Amer­i­cans dis­dain Wall Street and its greedy and of­ten crim­i­nal be­hav­iour at least as much as the Bri­tish work­ing class dis­dains the City of Lon­don. This, too, sug­gests a cam­paign ad­van­tage for Trump over his op­po­nent in Novem­ber, Hil­lary Clin­ton, whose can­di­dacy is heav­ily fi­nanced by Wall Street. Clin­ton should take note and dis­tance her­self from Wall Street.

In the UK, these two pow­er­ful po­lit­i­cal cur­rents – re­jec­tion of im­mi­gra­tion and class war­fare – were joined by the wide­spread sen­ti­ment that EU in­sti­tu­tions are dys­func­tional. They surely are. One need only cite the last six years of mis­man­age­ment of the Greek cri­sis by self-serv­ing, short­sighted Euro­pean politi­cians. The con­tin­u­ing eu­ro­zone tur­moil was, un­der­stand­ably, enough to put off mil­lions of UK vot­ers.

The short-run con­se­quences of Brexit are al­ready clear: the pound has plum­meted to a 31-year low. In the near term, the City of Lon­don will face ma­jor un­cer­tain­ties, job losses, and a col­lapse of bonuses. Prop­erty val­ues in Lon­don will cool. The pos­si­ble longer-run knock-on ef­fects in Europe – in­clud­ing likely Scot­tish in­de­pen­dence; pos­si­ble Cat­alo­nian in­de­pen­dence; a break­down of free move­ment of peo­ple in the EU; a surge in anti-im­mi­grant pol­i­tics (in­clud­ing the pos­si­ble elec­tion of Trump and France’s Ma­rine Le Pen) – are enor­mous. Other coun­tries might hold ref­er­en­dums of their own, and some may choose to leave.

In Europe, the call to pun­ish Bri­tain pour en­cour­ager les autres – to warn those con­tem­plat­ing the same – is al­ready ris­ing. This is Euro­pean pol­i­tics at its stu­pid­est (also very much on dis­play vis-à-vis Greece). The re­main­ing EU should, in­stead, re­flect on its ob­vi­ous fail­ings and fix them. Pun­ish­ing Bri­tain – by, say, deny­ing it ac­cess to Europe’s sin­gle mar­ket – would only lead to the con­tin­ued un­rav­el­ling of the EU.

So what should be done? I would sug­gest sev­eral mea­sures, both to re­duce the risks of cat­a­strophic feed­back loops in the short term and to max­imise the ben­e­fits of re­form in the long term.

First, stop the refugee surge by end­ing the Syr­ian war im­me­di­ately. This can be ac­com­plished by end­ing the CIASaudi al­liance to over­throw Bashar al-As­sad, thereby en­abling As­sad (with Rus­sian and Ira­nian back­ing) to de­feat the Is­lamic State and sta­bilise Syria (with a sim­i­lar ap­proach in neigh­bour­ing Iraq). Amer­ica’s ad­dic­tion to regime change (in Afghanistan, Iraq, Libya and Syria) is the deep cause of Europe’s refugee cri­sis. End the ad­dic­tion, and the re­cent refugees could re­turn home.

Sec­ond, stop NATO’s ex­pan­sion to Ukraine and Ge­or­gia. The new Cold War with Rus­sia is an­other US-con­trived blun­der with plenty of Euro­pean naiveté at­tached. Clos­ing the door on NATO ex­pan­sion would make it pos­si­ble to ease ten­sions and nor­malise re­la­tions with Rus­sia, sta­bilise Ukraine, and re­store fo­cus on the Euro­pean econ­omy and the Euro­pean project.

Third, don’t pun­ish Bri­tain. In­stead, po­lice na­tional and EU bor­ders to stop il­le­gal mi­grants. This is not xeno­pho­bia, racism, or fa­nati­cism. It is com­mon sense that coun­tries with the world’s most gen­er­ous so­cial-wel­fare pro­vi­sions (western Europe) must say no to mil­lions (in­deed hun­dreds of mil­lions) of would-be mi­grants. The same is true for the US.

Fourth, re­store a sense of fair­ness and op­por­tu­nity for the dis­af­fected work­ing class and those whose liveli­hoods have been un­der­mined by fi­nan­cial crises and the out­sourc­ing of jobs. This means fol­low­ing the so­cial-demo­cratic ethos of pur­su­ing am­ple so­cial spend­ing for health, ed­u­ca­tion, train­ing, ap­pren­tice­ships, and fam­ily sup­port, fi­nanced by tax­ing the rich and clos­ing tax havens, which are gut­ting pub­lic rev­enues and ex­ac­er­bat­ing eco­nomic in­jus­tice. It also means fi­nally giv­ing Greece debt re­lief, thereby end­ing the long-run­ning eu­ro­zone cri­sis.

Fifth, fo­cus re­sources, in­clud­ing ad­di­tional aid, on eco­nomic de­vel­op­ment, rather than war, in low-in­come coun­tries. Un­con­trolled mi­gra­tion from to­day’s poor and con­flict-rid­den re­gions will be­come over­whelm­ing, re­gard­less of mi­gra­tion poli­cies, if cli­mate change, ex­treme poverty, and lack of skills and ed­u­ca­tion un­der­mine the de­vel­op­ment po­ten­tial of Africa, Cen­tral Amer­ica and the Caribbean, the Mid­dle East, and Cen­tral Asia.

All of this un­der­scores the need to shift from a strat­egy of war to one of sus­tain­able de­vel­op­ment, es­pe­cially by the US and Europe. Walls and fences won’t stop mil­lions of mi­grants flee­ing vi­o­lence, ex­treme poverty, hunger, dis­ease, droughts, floods, and other ills. Only global co­op­er­a­tion can do that.

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