The Guardian has reported in its morning email news summary today that:
Many areas of the UK that voted for Brexit will suffer the most from the economic consequences of leaving the EU. Researchers at the University of Birmingham studied regional variations in the share of labour income and GDP reliant on the EU, and found that areas in the Midlands and north of England, many of which voted for Brexit, had the greatest exposure to possible negative trade-related consequences. The study appears to contradict claims by the Leave campaign that London benefited the most from EU membership. Looking at Europe as a whole, the study found that an estimated 2.64% of EU GDP was at risk from Brexit trade-related consequences whereas 12% of UK GDP was at risk.
I would also draw attention to Sean Danaher's analysis of a BMG Brexit opinion poll on Progressive Pulse where he noted that by employment status opinion varied widely:
FT/PT Job: 62% remain to 38% leave
Self emp: 55% remain to 45% leave
Student: 87% remain to 13% leave
Out of work — 6m+: 43% remain to 57% leave
Retired: 38% remain to 62% leave
LT sick: 44% remain to 56% leave
What is astonishing is that those most likely to lose from Brexit, whether by geography or circumstance, are those most likely to favour it.
Please do not obsess about the precise numbers: they are, of course, open to doubt. That's true of all estimates. But, that said, I think the trends are not really questionable: the opinion polls are very consistent on the most vulnerable in the UK being pro-Brexit even though the campaign was led by those who are by far the most likely to harm the interests of those dependent upon the state for support, simply because most on the Right are most inclined to cut benefit payments and to oppose regulation that assists those whom the market has failed. The geographic evidence is also consistent.
So in other words, the Brexit phenomenon has been the most massive exercise in mis-selling imaginable, despite which we know those who have been persuaded to act against their own rational best interests are adamant in their commitment to what they voted for.
I cannot better the explanation for this offered by Simon Wren-Lewis. As he says:
Brexit would not have happened if it had remained the wish of a minority of Conservative MPs. It happened because of the right wing UK press. Brexit happened because this right wing press recognised a large section of their readership were disaffected from conventional politics, and began grooming them with stories of EU immigrants taking jobs, lowering wages and taking benefits (and sometimes much worse). These stories were not (always) false, but like all good propaganda they elevated a half-truth into a firm belief. Of course this grooming played on age old insecurities, but it magnified them into a political movement. Nationalism does the same. It did not just reflect readers existing views, but rather played on their doubts and fears and hopes and turned this into votes.
In other words, the vote for Brexit was not rational. The evidence is compelling.
But that's of enormous significance. First, it shatters the whole of the economics on which the logic of Brexit is based. Trade based growth assumes the existence of homo economicus, and yet the Brexit campaign proved the species' extinction.
Second, it shows that the campaign to recapture democracy (because I agree with the likes of Martin Wolf that this is what is at stake from the capture that this irrationality suggests exists) has to be driven with determination. As Simon Wren Lewis says:
Why the left rather than the centre? The centre will agonise over what this means for freedom of expression or freedom of the press and therefore nothing much will happen (see Leveson), as nothing happened under Clinton or Blair. That may be a little unfair to both leaders, because the danger of plutocracy may have been less obvious back then, and the media was more restrained. But with Brexit and Trump no further evidence is needed. The left should see more clearly how in practice this freedom is in reality just a freedom to sustain a plutocracy. Only it will have the courage to radically reverse the power and wealth of the 1%. I fear the centre will not have the will to do it. Although Anthony Barnett's focus differs from mine, he puts this point very well here: if all you want to do is stop Brexit and Trump and go back to what you regard as normal, you miss that what was normal led to Brexit and Trump.
And as he also notes:
I know from many conversations I have had that there is a deep fear among many of leadership from the left. Here the UK is ahead of the US. The story in the UK used to be that the left could never win, and it was a plausible story, but recent events have cast great doubt on it. That remains the story in the US, but there are good reasons for doubting it there too. There is no reason why all of the disenchanted who fell for the lies of the snake-oil salesmen could not support radical remedies from the left: identity and the media are strong but it is economics that dictates the swings.
In the UK now the story seems much more elemental: that somehow the left threatens the existence of capitalism and democracy. In truth there is no way Corbyn could persuade the Labour party to abandon democratic capitalism, just as there is no way Sanders or Warren could do the same in the US. All we are talking about is rolling back many of the results of neoliberalism. But it is difficult to logically convince someone the ghosts they see do not exist. In contrast to these ghosts on the left, the dynamic of plutocracy that I have described here is very real, and it requires radical change to bring an end to this dynamic.
I can but agree. This is the task that we face.
And don't doubt that it is a big one.
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The basic problem remains, and it has lingered on as it always would, of the people not being firstly aware of their power and secondly not enabled to use it via exclusion of choice.
Democratic capitalism will only very become the tool of undemocratic capitalists. It will particularly be suggested now, as democratic socialism gets a sniff.
Neoliberalism is such a failure, but its real failing us that it is the door opener to fascism. Things don’t just appear Orwellian, they feel and smell Orwellian, even in the subtleness of for instance our local news headlines.
Democratic socialism can provide capitalism in our society in the form of small business and co-op enterprise.
Keynesianism could be undone because it did not have the protective framework. Structure has to be biased one way, it needs to be the other direction.
Else we will have a big corporate-finance calling for ‘the left to shift its balance because its stubbornness is blocking progression.’
But really it will be a contrivance to stop progression. And a move to label progression as Democratic capitalism will be a capitulation that neoliberals and the Even Harder Right alike will see as a decisive victory. Before that they will use the sentence I just wrote to stir up progressives against progression by contriving ‘a prohibiting left blindness’ narrative.
With Brexit, Trump; war, asset-stripping and austerrity subscribed to by two supposedly opposite parties; MPsin both main parties with hard ties to corporates, media and ideological agenda, we need to trust in belief that the people will empower themselves and stay on that road or the propaganda machine will ‘expose’ progression as ‘admitting it was a bearded lefty’s pipedream’ and the board of HSBC will be the Cabinet.
I found much to agree with in Simon Wren-Lewis’s post of 2nd Dec. from which you quote extensively. But I fear it is excessively naïve to believe that the current members of Labour’s high command will relinquish their long-held opposition to capitalism and all its works, which they hold with religious fervour, and champion the effective democratisation of capitalism which will rely on effectively governed well-functioning market mechanisms and on effective regulation.
And, despite the undoubted energy and idealism of the young hordes in Momentum and the perfectly understandable disgust of so many voters at the Tories’ damaging antics, I suspect a majority of voters will not be that naïve. It is unfortunate that it was Tony Blair who seized on the aphorism of Richard Neville of Oz fame that “there is just one inch of difference between a Labour government in Australia and a government of the Right, but it is well worth living in that inch” and transposed it to Britain. But its validity and relevance is undiminished.
We don’t need revolutionary changes. We just need to roll back incrementally the most brutal impositions of this latest mutation of capitalism while securing the consent to be governed of those who oppose these roll-backs. That is the fundamental feature of a parliamentary democracy. But I have doubts about the adherence of the current Labour high command to parliamentary democracy. And I suspect a majority of voters also have their doubts.
So I fear we’ll have to live with this ragged collection of Tories in government for some time, until Labour demonstates a capability to govern within the framework of a parliamentary democracy.
This is nonsense
Labour’s leadership knows it has no way it can eliminate the business community in the UK
The suggestion that they wish to is ludicrous
I support your reply entirely. I am afraid your correspondent has fallen for the black propaganda of the rightwing media.
Eh? Where do I assert that they wish to eliminate the business community? All I’m saying is that they appear to have no knowledge of or interest in improving the functioning of market mechanisms and of regulation for the common good (and appear keen to rely in some sectors providing essential utility services on vague applications of collective/democratic/local/municipal ownership and control) and that their commitment to the primacy of parliamentary democracy is suspect (to say the least).
In any event, the great British public will decide eventually.
You were saying, as I read it, that they were entirely antithetical to business
I do not think that true
There are excesses of capitalism that they wholly appropriately want to address, but that is not the same thing, at ll
As to your suggestion that they have a suspect commitment to democracy – what the heck are you talking about? That is ridiculous
Paul,
The capitalist aspect of neoliberalism does not meaningfully support private enterprise.
That is to say. The sort of small and medium sized businesses that make up an important element of the capitalist free enterprise model are not the Conservatives target beneficiaries, neither are they the Labour Party’s target for nationalisation. To even imply that is absurd.
No Labour Party, ever, wanted to nationalise the corner shop!
The beneficiaries of Tory policies are the big businesses which are inimical to the health of the smaller business sector. The multinational supermarket chains for example, that push small shops to the wall.
Amazon is adding to this process and attacking the base income of the big boys now, but that’s a new story unfolding. Amazon is a different sort of big boy on the block and could actually reverse the trend of small business decline by dint of its distributive network. See what it did to the book sellers.
The big corporations are not doing the business for the wider economy. They are siphoning wealth, strangling competition and they make much of their profits directly from government spending . They are the truly parasitic benefit scroungers and they are very effective in their abuse of, and consumption of, the wider social budget.
A Labour government would threaten that benefit culture, and that explains much of the right wing media frenzy. The right wing media agenda is not pro capitalism, it is pro state capture.
And they are winning.
Whatever the reason for the Brexit vote, the plain fact is that the vote was to leave and Article 50 has now been triggered. The question now, is what route gives us the best chance of attaining the radical reforms that we all agree are necessary — are these most likely to occur within or outside the EU.
To be honest, I don’t think this argument is even close. Within the EU we will have to sort ourselves out at home AND construct and marshal a pan European movement capable of addressing the neoliberalism embedded in treaty after treaty in the context of an overwhelmingly powerful European Commission, the dominance of certain key states and the corporate capture of most of the significant institutions (most notably the ECB with it’s 95%+ base of corporate advisers). This will, of course, all have to be negotiated by a UK government who will likely have few friends left in these institutions.
I had a look at the Commissions latest ‘roadmap’ to see what direction they may be heading in and it’s entirely the wrong one — essentially it’s more leeches in a more ‘streamlined’ framework which likely would mean fewer democratic controls.
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52017DC0821
(Bill Mitchell has just given a timely examination of the EU documents — which I wish I’d seen before wading through their guff myself).
To make a significant step forward outside the EU, then all we have to do is make sure that the currently most popular party gets elected next time and that we continue to push at the, if not completely open, then the thoroughly well-greased door for all of these reforms. As a returned Labour member I can confirm that the appetite for Courageous State style reforms is tremendous down here in Brighton and other members confirm as much in other places too.
In short, the best way to confront the ‘There Is No Alternative’ institutionalised codswallop of the EU is to show that the ‘ there IS one and the best way to do that rapidly is from outside.
I thin k it is misleading to say that certain areas ‘suffer the most from the economic consequences of leaving the EU.’
It is not, fundamentally, leaving the EU, that will cause this but rather:
1. Austerity economics and free -market fundamentalism-leaving the EU may (or may not) worsen it as it is worsening anyway.
2. Monetarism is utterly useless as a policy tool to ameliorate these issues yet the EU is wedded to it -why be part of that?
3. The more we focus on Brexit (rather than the underlying issues) the more we dissipate the enrgy to focus properly on what needs to be done – a fatal error.
4. Let’s be clear – neo-liberalism loves a decoy! Brexit is doing the job!
5. The Left are confused over the EU because they still have fantasies that it is fundamnetally progressive if you keep peeling off the layers of neo-liberalism you will eventually get their -a progressive EU disappeared with Delors.
6. The Left in Europe is dead and utterly useless and gormelessly allowing the Right an ascendancy -this is an utter failure of intellect.
7. If we don’t see the EU as a failed project and for Left alliances as a basis of a new ‘version’ then there will be no improvement in economic conditions.
The UK is an outlier at present with the only real Left leaning Party with substantial support in Europe. It is a great opportunity to nudge Europe in the right direction -but only after we have left.
I do think you missed the point: the study looks at the effect of Brexit on top of existing failure
Absolutely, Richard- which is why we have to emphasize the existing failure and that Brexit is only of value in relation to that.
The point I am making is that obsessing about Brexit itself takes the focus off the underlying parameters. So the discussion should be about:
1. The advantages of a sovereign currency.
2. The failure of the so-called ‘social Europe.’
3. Fiscal expansion the only game in town
4. Escape from the artificial monetarist straight jacket of Maastricht/Lisbon.
5. how the EU makes nationalisation more difficult.
6. How the EU fails its own citizens and installs oligarchy.
All that keeps happening is the catastrophising about Brexit while the catastrophe has already happened with wrecked lives, a creaking health service and real intergenerational debt caused by this. Let’s keep hammering this because the message is not getting across as yet -all that happens is a grossly mis-informed debate about the EU.
OK, I accept that’s a good argument
@Simon Cohen
I read your post and subsequent addition and had a real sense of ‘I wish I had said that’.
The idea that Brexit is the cause of all that ails us is so pronounced that I find myself thinking that if those that can make a difference don’t address why most voted for Brexit then the fire will keep on burning.
I think that is very definitely a point well made
Which is why I have raised the issue of migration and the left – which far too many will not talk about considering it racist to even think about it when in fact every government has always controlled migration into this country
Simon & Roger
I agree with your points but your context is very wrong in my view. It is not some amorphous entity called the EU that practices these ‘underlying parameters’ – it is that these ‘underlying parameters are practiced amongst the member states and therefore find themselves expressed in a treaty framework called the EU.
The neo-lib paradigms that you describe are paradigms amongst the MEMBER STATES (sorry to use tautology and capitals as I cannot do italics on this system – I’m not shouting at you). This is how well neo-lib ideology has infected domestic governments.
Just remember – the ‘underlying parameters’ you rightly point out start at home – in our government and others. It is about time people got this in my view (sorry).
But let’s just take this a little bit further. Even if the UK gets a BREXIT (hard or soft) it will now stand alone between a ‘soft’ neo liberal Europe and a ‘very hard’ neo-liberal USA dominated global trade system. Now just remind ourselves what has just happened to the US tax system for example?
Tell me – is that a good place to be? Because it would be a high price to pay just to be free of Europe. We should be in Europe and tackling the issues that Streeck recently discusses from Chapter 4 in his book ‘How will Capitalism End?’.
To see the Left doing that whilst acknowledging the benefits of the EU is where I would rather be – no more false or contrived arguments with the EU to make it look as though the UK is pushing for reform. We need to challenge the real issues (push for REAL reform) in the EU – and you know what these issues are because you’ve listed them.
Just happened upon this article from earlier in the year by Prof. Sheri Berman, which I think has some relevance to both this blog and your last one re. Trump’s new tax law. https://www.socialeurope.eu/europes-centre-left-risks-irrelevance.
Thanks
I have sympathy with it
Richard,
You use a term ‘democratic capitalism’.
Sounds warm and nice.
Care to elaborate?
I’ll have something in the morning….
I agree with this. We’ve gone far enough trying to find some form of market dominated nirvana and it has not worked. Markets are simply dominated by money-power which itself can be a threat to democracy if allowed to become unchecked (which they have).
There are places in our society at the moment where the market’s presence is just not appropriate. We need to think about rolling back the market – not the State.
Here’s some good places to start perhaps? :
http://blog.spicker.uk/time-to-turn-back-the-clock/
Everyone is probably already aware of professor Mark Blyth from Brown University but I wasn’t until recently and in my opinion he talks a lot of sense about all this. So just in case here is a link.
https://m.youtube.com/watch?v=Bkm2Vfj42FY
This lecture covers his ideas well but is pretty long. Although worth watching. There are plenty of other interviews with him on youtube for those who want something shorter.
Alberto says:
December 20 2017 at 2:08 pm
“Everyone is probably already aware of professor Mark Blyth from Brown University………”
I wasn’t. Thanks for the link.
https://m.youtube.com/watch?v=Bkm2Vfj42FY
I feed stuff like this to my parliamentary representative.
Here is a 7 minute clip from earlier in the year where Mark summarises post WWII economics up to the current date – ambitious but useful – https://www.youtube.com/watch?v=8rxrjhWTdv8 – 7 minutes
Other clips from the same interview
https://www.youtube.com/watch?v=nSWS10kQMjg – 3 minutes (Policy Goals, Trump, and China)
https://www.youtube.com/watch?v=z5Cz3jqaBsE – 4 mins (Generational Voting Preferences)
https://www.youtube.com/watch?v=gDi3tyWczgs – 5 mins (Global Populism, Trump, and the Democrats)