Serving the consumer as the captain of the economy is the price of entry to the dynamism of a market economy.
Britain Makes History
By Richard Samuelson
So yet another effort to put all of Europe under one government seems to be failing. From Caesar to Charlemagne to Charles V to Louis XIV to Napoleon and beyond the vision of unity has been a recurring theme in European politics. The latest effort, a union forged in the wake of two destructive and nearly universal wars, is different in some ways—although not democratic, there have been democratic elements in the EU. Moreover, and most importantly, expansion has been peaceful, featuring conquest by referendum.
All that notwithstanding, one can, quite accurately see the Brexit as the latest in a long series of rejections of a universal European empire, with Eurocrats in the place of previous would-be emperors. As in previous centuries, Cambridge and Oxford dons are more comfortable conferencing with their peers at the Sorbonne than with their fellow subjects, and once again the would-be coutiers they train look to the Continent for moral guidance. And, as before, many of Her Majesty’s common subjects resent it.
This historical perspective is a minority one. The more common historical perspective on the Brexit has been that to separate from the EU would put Britain “on the wrong side of history,” as the clichéd language of our day has it. From this perspective, the EU represents the alternative to a return to the older European tradition of regular, periodic war. By moving beyond nations and nation-states, the argument goes, the old disputes which made European history so bloody can be put into the “dustbin of history.”
Given this perspective, the “new class,” as it used to be called, views it a rejection of modernity itself. Some Britons are suggesting that the United Kingdom should imitate Norway, a member of the European free trade area, but not part of the EU. Another way of saying the same thing, is that Britain would be happy with what the EU used to be, more of a common market than a common government, pushing toward “ever closer union.” A writer for the Leftist New Stateman was expressing a more general view when he put it this way: “this was never a referendum on the EU. It was a referendum on the modern world, and yesterday the frightened, parochial lizard-brain of Britain voted out, out, out.” By rejecting the idea that the EU should grow “ever closer,” the British are rejecting the vision of History as a project of moving beyond a Europe of particular nations and toward the ancient vision of Europe as a unified state. Only “lizard-brained” reactionaries, who reject modernity itself reject the progressive view, otherwise known as “common sense,” the conceit goes.
Although the fear of a return to war comes up, one hears much more about the economic costs of the Brexit. The Economist, while denouncing a “senseless, self-inflicted blow,” notes that British voters “ignored the warnings of economists, allies and their own government.” The pound, they observe, has already tumbled to historic lows. They argue that “a permanently less vibrant economy means fewer jobs, lower tax receipts and, eventually, extra austerity.” Yet man does not live by bread alone.
The economic story is only half of it. More central, from the critics’ point of view has been xenophobia. As the Lefty American website Vox declares, “Brexit isn’t about economics, it’s about xenophobia.” A writer for Vox, after recounting a conversation with a drunken Bob at a Pub, argues that “Britain’s Bobs were driving force behind the successful Leave campaign. And the force that’s been driving them is xenophobia.” There is something ironic about Americans denouncing foreigners for xenophobia, and yet it’s hard to deny that anger at high immigration was very important to the “Leave” campaign. Even so, as Reihan Salam notes, dismissing the desire to limit immigration as “racist” gets in the way of understanding what is truly going on. One suspects that, from the critics’ perspective, any forthright British patriotism would be denounced as “racist” and “xenophobic”? Why? Because it cuts against the trans-national direction “history” is supposed to be moving. From this perspective, fascism is not nationalism gone wrong; it is nationalism itself. Yet that assumes it’s possible to do away with nations.
And that brings us to the existential issue at the heart of the controversy. The EU has been driven by the hope that human nature can be changed. The future of Europe can be fundamentally different than Europe’s past. Recall Ernst Cassirer’s comment that in the Enlightenment theodicy became a political question. The very idea that there is a “right side of history” to use the lingo, describes the resolution: modernity itself is a “progressive” project. By “progressing” we overcome the ills that have beset humanity in the pages of recorded history. From this perspective, to limit it is to end it.
In this new dispensation, history is the study of change—cultural, ideological, social—over time. It is not what it formerly was—the empirical branch of philosophy. Hence, the EU is not merely the latest in a long series of efforts to unify Europe under one government. It is a modern project; we no longer are “backwards” enough to believe the ancient dogma that history is cyclical, predictably so.
From the more traditional view of history, what is behind the Brexit? Men are tribal. There will be nations, or peoples, or tribes, call them what you will, and they will seek to persist and to defend their borders. Similarly, there will be something recognizable as “religion,” even if we do not use that label—which explains the post-modern drive to run traditional Christians down in the culture (ie: religious) war. Finally, when elites push too hard on the people, they will react. Cosmopolitanism has become, in our age, a tribal identity that is in self-denial.
The belief that human nature can be molded, and the related belief that history is the study of cultural change over time—a view that prevails among our teachers of history—blinds even our best trained statesmen to the realities of human politics. A more traditional analysis of nations, politics, and rivalries would point to a radically different view of the modern world, and rather than accept such heresy, many of our trans-nationalists would rather denounce ignorant boobs who, thanks to the modern democratic process, have just given them a slap in the face. Perhaps enough of them will sober up before the crisis gets truly out of hand.
Brexit: Against the Political Class
By Samuel Gregg
The reasons why a majority of British voters decided that their nation was better off outside the European Union were many and not always in sync. They range from those angry at successive British governments’ failure to maintain sovereign-borders, free-marketers who like immigration but regard bloc-economies like the EU as passé in a global economy, to those unhappy with British laws being supplanted by top-down directives mandated from Brussels. But if there is one theme that united the “Leave” forces, it was animus against the political class.
Perhaps one of President Barack Obama’s biggest mistakes (and an error of those “Remainers” who wanted him to speak against Brexit) was to imagine that his urging Britain to stay in the EU would somehow boost the “Remain” case. If anything, the President’s intervention—along with those of people like Martin Schulz, the President of the European Parliament, and Jean-Claude Juncker, the President of the European Commission—probably helped the “Leave” campaign. For people like Obama, Schulz, and Juncker (not to mention David Cameron) are increasingly viewed as part of the problem: as individuals who have done nothing with their lives except be career politicians and who have difficulty hiding their disdain for anyone who’s even mildly critical of the EU and, by extension, any number of transnational organizations and their largely unaccountable bureaucracies that happen to be populated by individuals who fit the same profile as people like Cameron, Obama, Schulz and Juncker.
I am skeptical that the European political class (a group that transcends Europe’s center-right/center-left party-political divide) will learn many lessons from Brexit. Any creative thinking that challenges the left-liberal consensus prevailing in such circles is generally unwelcome. The joint press-release issued by Juncker, Schulz, European Council President Donald Tusk and Dutch Prime Minister Mark Rutte in response to Britain’s decision will remind some of Talleyrand’s alleged quip about the Bourbons: “They have learned nothing, and forgotten nothing.”
As of June 23, however, such people’s views aren’t so important for Britain anymore. The more significant question will be the direction taken by those who have lead the UK out of the EU. It is one thing to know what you are against, quite another to articulate what you are for.
In that regard, splendid isolation for Britain isn’t an option. Nor did the Leave side ever propose it. That’s partly because of the City of London’s unique place in the world’s financial architecture but also because (1) economic nationalism isn’t in the UK’s public interest and (2) Britain remains an important part of the West in general and Europe in particular—a Europe which shouldn’t be casually conflated with the EU. Yes, all these points may be hard to make in a populist age. But they must be made, robustly and intelligently, if Britain’s choice to exit the EU is to become a true exercise in what that great Irish parliamentarian Edmund Burke called ordered liberty.
Anarchy in the UK
By David Conway
The United Kingdom’s departure from the European Union, accomplished by the 52 per cent majority vote in favour of Brexit in last week’s referendum, could well eventuate in the break-up of both political unions, the UK and the EU.
Thursday’s vote could lead to the dissolution of the United Kingdom because of the differing politics on the EU that its several constituent countries have. With the notable exception of London, the vote in England and Wales was uniformly in favor of Brexit. However, the reverse was the case in both Scotland and Northern Ireland. Already, the SNP leader Nicola Sturgeon has declared the result provides sufficient warrant for a second referendum on Scottish independence to enable the Scots to register whether they wish their country to remain part of the European Union.
While the majority of Northern Ireland voters who favored Britain remaining in the EU was smaller than the majority of Scottish voters who did — being 55.8 per cent as against Scotland’s 62 per cent, on the strength of that vote, Sinn Fein President Gerry Adams has expressed similar sentiments to Sturgeon about the need for a further referendum in Northern Ireland.
Adams’ Sinn Fein party is demanding an all-Ireland referendum on a united Ireland, a potentially explosive issue in every sense of the term. This is because one of the terms of the Good Friday Agreement, which ended the troubles in Northern Ireland, was the creation of an open border between it and the Irish Republic which would be put in jeopardy should the United Kingdom leave the EU while Northern Ireland remained part of it.
Meanwhile across the English Channel, Thursday’s referendum has encouraged populist Eurosceptic parties throughout Europe to call for similar referenda in their own countries. Marine Le Pen, leader of France’s Front National, has demanded that popular votes be held in all EU countries, above all in hers. Her party won more votes than any other in last December’s regional elections in France and a presidential election is but a year away there.
The Danish People’s Party has called for a vote on their country’s continued EU membership (which doubled its vote in Denmark’s 2015 elections from what it had been in 2011 thereby becoming its second largest party), and by Gert Wilders, leader of the Dutch Freedom Party which currently leads opinion polls in Holland with an election due there next March. The leader of Sweden’s Democrat Party, the country’s largest party, has also called for a referendum on his country’s continued EU membership, as has the leader of the Italian Northern League.
Against the background of this incipient uprising across Europe such figures as Poland’s Prime Minister Donald Tusk, president of the European Council, and European Commission President, Jean-Claude Juncker, demand that Britain initiate the formal process of withdrawal by invoking Article 50 of the Lisbon Treaty. Only if and when it does can formal deliberations begin which will decide the terms of Britain’s post-Brexit relations with the EU. Clearly, they wish to set terms as harsh as possible as soon as possible to end the contagion effect of Britain’s vote.
Mercifully, in announcing last Friday his intention to step down as Prime Minister in the autumn, David Cameron made it clear he would not be invoking Article 50 before doing so. The new incumbent would seemingly not be bound by Cameron’s previously declared intention, had the vote gone the other way and he remained PM, not to use the British veto to block any further EU treaty changes designed to end the continuing crisis in the Eurozone. As long as Britain has not invoked Article 50, it retains considerable bargaining power to secure favorable departure terms, since the need for further economic centralization in the EU to resolve the crisis in the Eurozone becomes almost daily more apparent and urgent.
To add to all the confusion and uncertainty, the Labour MP David Lammy, former Higher Education and Skills Minister in the previous Labour administration, has called on fellow MPs, who are known mostly to be against Brexit, to vote against the referendum decision, arguing that it can only be advisory.
Free to Choose
By Robin Harris
The results were clear and decisive: 52 per cent for Leave, 48 per cent for Remain. The turnout was exceptionally high—at 72 per cent, it was greater than in any general election in the United Kingdom since 1992.
The bookmakers and the financial markets had been convinced Britain would vote to stay in the European Union. It is easy to see why. Leave had strong support in the British press, but every other powerful force was deployed for Remain. The leadership of the main political parties, the worlds of sport, the arts, big business, the governor of the Bank of England, and almost every notable foreign leader got in on the act. The decibels of desperation rose as the polls stayed stubbornly balanced. Yet “Project Fear” failed.
The outcome of the referendum has been likened to the American Declaration of Independence. The comparison is apt, because, as in 1776, the UK referendum on EU membership was about whether a country was to be governed by its own laws, made by its own representatives, or be part of a faraway legal order—in this case, one based in Brussels. Like 1776, the 2016 referendum in the United Kingdom will also generate a wave of change to thunder across the borders of other states and even continents.
The European elite fully understands the risk. For decades, it has centralized power in its own hands, reduced the scope for national nonconformity, intimidated electorates into ratifying— eventually, if not the first time round—what the European leadership wanted, and assembled the trappings of a super-state. Each setback has been met with a renewed drive for greater integration. The British public could see where the colossus was heading and they jumped before it reached the precipice. How many other nations will be emboldened to jump off, too?
The consequences for Britain are unpredictable, but not for the reasons threatened by the Remain camp. Trading relationships and financial arrangements will change but survive, despite any self-defeating spite by European politicians. The uncertainty derives from the fact that Britain will be free to choose. It can go toward a smaller state, de-regulation, unrestricted free trade, and stricter but selective immigration control, all of which seems likely; or it could go in some other direction. Neo-Thatcherism seems the most likely option; but anything is possible.
There is also uncertainty about Scotland, which largely voted to remain in Europe. There might be another Scottish referendum. The Scots might choose to be a failed, bankrupt state on the edge of England. That, too, is their choice. It will not much affect the rest of the UK.
But there is some solid certainty about the Conservative Party, which will be governing Britain for the foreseeable future. The grip that the “modernizing” faction secured on the Conservatives with David Cameron’s election as leader in 2005 is decisively broken. Whoever succeeds him will have a wholly different agenda. We can expect a greater solidarity between the new leader and the party and, after this result, the party and the country. Before long, and before Britain finally leaves the EU, a general election may well be used to reinforce that.
A View from Across the Channel
By Guillaume de Thieulloy
It didn’t really seem possible that the Brexit could win—at least after the brutal murder of Jo Cox. The media implicitly accused the Brexit camp of creating a xenophobic climate that was responsible for the slaying of the Labour MP. But the question is decided and we have now to measure its consequences.
First of all, it’s very important to understand the scope of this vote, which would perhaps be difficult for American readers. It was a vote in one country. But each time a country weighs in in this basic way on the merits of the European Union, those who live in the other member countries feel like this country votes for all others, who are not able to say what they think. It was true for Denmark in 2000 and just last year, for France in 2005, and for Ireland in 2008. With the Brexit also, many European onlookers were in a way voting by proxy. So what has happened is important not only for Britons but for all Europeans. We now know that the European integration process is not irreversible. We can choose self-government.
The Brexit will have also another positive aspect: It’ll demonstrate that European countries can work together on a bilateral and flexible basis. I recall, by the way, that many of great European successes, like Airbus, have not been EU successes but successes of bilateral or trilateral cooperation.
In any case, the chaos and the apocalypse predicted in case of Brexit will not happen. It won’t be the end of trade between Great Britain and the EU. We won’t see barbed wire on the British borders. The dramatization was all part of the campaign leading up to the vote, not a real threat. When this becomes apparent it will, of course, only decrease further the people’s confidence in the politicians who predicted doom.
And speaking of the gap between elites and peoples, one point has to be noticed. As everywhere in the Western world, the Brexit campaign showed the impressive levels to which this mistrust has risen. It’s a political reality in many European countries—especially in France, where the success of the Front National or, on the opposite side, of the extreme Left, owe much to this mistrust. (Mihail Neamtu’s post on this subject for Law and Liberty is well worth rereading.) And EU elites are, in a way, a caricature of political elites, knowing better than the people what is good for the people and living in a totally different world.
At this stage, it’s difficult to anticipate the reactions on the Continent. Two scenarios are possible. First, the EU and, generally speaking, the political and financial elites listen to the earthquake of the Brexit and move to actually apply the subsidiarity principle that is in fact part of the EU’s founding doctrine. Heretofore, it’s been applied upside down: whatever the EU hasn’t wanted to do it has surrendered to member states. In this case, Brexit would mean not only self-government for Britons, but also for other European people.
The other scenario would be to go, most unwisely, in the other direction: imagining that Europeans are incapable of pursuing their own best interests, the “Eurocrats” could decide to accelerate the integration and build by coercion a new supranational entity.
It goes without saying that the second scenario is not my favorite one . . .
From Brexit to Quexit?
By Jacqueline Pfeffer Merrill
Having avoided the economic disruptions that would have followed Quebec separation, Canada is bracing for economic disruption following Brexit. So pity Canada a bit.
My native country (I am from Alberta, though I have lived in the United States since 1991 and have dual citizenship) was once something of an international novelty in holding referenda on breaking up its union. The votes by the Quebecois took place in 1980 and again in 1995. On both occasions (the second by a very small margin), they chose to remain in Canada.
Such referenda are no longer a novelty, of course, from post-Cold War referenda in Slovenia in 1990 and Ukraine in 1991, to the Scottish referendum on independence in 2014, and, now, last week’s Brexit vote. But consider what an outsized effect the latter will have on Canada. Brexit is a threat to the Canadian economy because her prosperity has always been dependent on trade: today, trade represents the equivalent of more than 60 percent of Canada’s GDP.
And, while the United States is by far Canada’s largest trading partner, the EU is her second largest trading partner, accounting for 9 percent of Canada’s trade. But while trade with the EU is important to Canada, trade with Canada is not nearly so important to the EU: trade with Canada represents less than 2 percent of the EU’s trade.
However, Canada had a key EU partner in the United Kingdom, which is Canada’s largest EU trading partner. Her partnership with the United Kingdom was essential to the successful 2014 conclusion of negotiations of the Canada–European Union Comprehensive Trade Agreement (CETA), an accord that would be a boon to the Canadian economy.
Americans might be surprised to learn that Canada has a free trade agreement with the EU when the United States is still negotiating its own free trade agreement with the EU, the Transatlantic Trade and Investment Partnership. But Canada has built an impressive portfolio of free trade agreements starting with the 1989 Canada–U.S. Free Trade Agreement. In the last decade, free trade agreements between Canada and Korea, Norway, Switzerland, Jordan, Columbia, and several other countries have come into force.
But while negotiation of CETA was concluded in 2014, the agreement had yet to wend its way through the complex European ratification process, although it looked on track to be implemented in 2017. Now, with the EU to be focused on negotiating the exit of the United Kingdom, with CETA so much less valuable to other EU countries than to the United Kingdom, and the EU busy with trade negotiations with the United States, many think that CETA will never be ratified.
Prime Minister Justin Trudeau put a brave face on the outcome of last week’s vote, asserting that Canada’s economy “is strong, it is diversified, and it is resilient.” But the Canadian dollar—known as the “loonie”—had a bad day on Friday, at one point during the day falling more than any day since 2010, and closing down 1.37 cents against the U.S. dollar. As for the Toronto Stock Exchange, it had its worst day in months. Canada’s economy has been projected to grow at 2 percent, but it is still suffering due to the collapse of oil prices in late 2014 (and growth was further set back by the Fort McMurray wildfires in northern Alberta).
Brexit will likely not throw Canada into recession, but it will be a further strain. And could bigger strains be yet to come? Some of the Quebec separatists see an example here, which makes one wonder, could Canada now face a Quexit?