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Brexit Is a Call for Help Echoed Around the World

Remainers Offer No Respite

Avinash Persaud (apersaud@me.com) is chairman, Elara Capital Limited and emeritus professor, Gresham College, London.

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It was lunchtime on 29 March 2017, nine months after Britain voted to leave the European Union (EU), when Sir Tim Barrow, Britain’s permanent representative at the EU, handed Donald Tusk, the president of the European Council, a letter that began the two-year timetable for Britain’s exit from the EU: Brexit. Under Article 50 of the Treaty of Lisbon, any of the EU’s 28 member states has the right to exit from the EU, but, once star­ted, only an agreement by all 28 countries could halt the process.

A two-year conveyor belt that was hard to step off was designed to dissuade countries from starting the process, but once they had started it, they were required to hasten an orderly negotiated exit.  But, that was just theory, for no one had tried to exit before. We are now only seven months away from Brexit, and the world’s ninth largest economy seems to be about to crash out of the world’s largest trading bloc without an orderly negotiated arrangement for the future relationship between the EU and the United Kingdom (UK). This should matter to us all.

Three Lessons

There are three essential lessons we have learned over the past 17 months. If these lessons were heeded, it could point Britain and other countries to a better course than the present one. The first dismal lesson is that Brexit has revealed the shocking incompetence of the British mandarins. The global financial crisis came close to knocking the wind out of the UK’s overconfidence in its abilities, but Brexit is the establishment’s denouement. Britain has gone into one of the most critical negotiations in over 40 years with no practical vision, no thought-through negotiating strategy, and no clear plan. It has been as painful and reminiscent as an episode of Fawlty Towers.

How long have the fineries of King Charles Street shrouded the fact that the emperor is wearing no clothes? Should it have been evident after the disaster of the Iraq war, or maybe the Suez Crisis, or the 1947 partition of India? The list of brazen British foreign policy accidents that continue to cause global havoc is long. Cultural psychologists may wonder whe­ther it all boils down to a preference of the British upper classes to improvise, than to appear prepared. The three leading Conservative Brexiters—Boris Johnson, Michael Gove, and Jacob Rees-Mogg—are all Oxford graduates who exhibit different hues of buffoonery. The point is that the veil has been lifted. We can place no faith in the British Foreign Office at the last minute to pull a rabbit out of a hat and deliver a sensible Brexit. They do not know what they are doing or where they are going; it did not seem to matter before.

The second lesson is that a psychological–historical fantasy lies behind Brexit. The Brexiters wish to free themselves from the yoke of the EU. One of their redlines is that the European Court of Justice’s arm must not reach Britain. To “make Britain great again,” they say, for they want to return Britain to 19th-century free trade, when Britain ruled the waves. But, what may have been described by some in ­Oxf­ord as free trade were imperial preferences backed by gunboat diplomacy, which is why the ruling of the waves was significant. At the heart of any modern free trade arrangement is an agreement to follow international rules. How long will the Brexiters love the World Trade Organization (WTO), the guardian of trade rules, after a WTO tribunal imposes a fine on a British firm? The Brexit coalition is held together by a historical, psycho­logical fantasy that will fall apart if Brexit arrives.

The third thing we have learned is that it is not just the Brexiters who are living a fantasy. Two years on from the referendum and the Remainers remain sore losers. They say the people were sold lies, including a brazen campaign promise to put the money saved from EU membership into the National Health Service. What they need to move on to is asking why the people were so willing to believe these lies. The Remainers say with a smug elitism that Brexit voters are just ignorant. They appear unwilling to try to understand the motivations and the call for help of those who voted for Brexit. 

Brexit voters are the precise set of people who lost from international trade: the less skilled and older workers. They are the same group that voted for ­Donald Trump across the Atlantic and have powered the sharp rise of anti-immigrant parties in Germany, Italy, and Spain. The Remainers are not going to lecture them into believing in immigration and the EU. Supporters of Brexit might love the EU more if the EU trained them into the higher skilled, high-wage jobs that the immigrants are getting; and, this is the rub. The real issue is not Brexit or remaining with the EU. Brexit is a cry for help, not a solution, and the Remainers are offering little response to the cry.

The problem is how Britain or any country uses the benefits from trade to compensate the losers or transform them into winners too. Economists would say that it is easier to do this within the EU with its social and environmental protections, but Britain’s neo-liberals, many of whom support Brexit,argued that these losers were indeed losers and did not deserve state support. Until the losers from trade become winners too, inside or outside of the EU, in Britain or elsewhere, the clouds hanging over the world economy will continue to darken.
 

 

Updated On : 13th Aug, 2018

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