Today is the day—the day for the “Brexit” vote that you’ve been hearing so much about, against your will. What do you, the only very vaguely interested American, need to know?
What is “Brexit?” This grating term stands for “British Exit” (or perhaps “Britain’s Exit,” or “Britain Exits”—who knows?) from the European Union. This has happened once before; Britain joined the EU in 1973, and promptly held a referendum on leaving it in 1975. They decided to stay then and next thing you know, 40 years passed!
Is leaving the EU a good idea? No. At least not if you care about humdrum things like “the economy” or “avoiding an unnecessary immigration crisis of epic proportions.” Economists are virtually united in their assessment that Brexit would cut into Britain’s trading activity and do measurable damage to the economy and growth, at least in the short to medium term. It would force Britain to renegotiate all of its trade deals and whatnot with the rest of Europe, so it’s hard to predict its exact long term impact, but most believe that the eventual renegotiated deals would generally be worse than what Britain has now, so long term Britain’s economy could shrink. The economy of the rest of Europe could also shrink, to a smaller degree. Brexit would also probably cause Britain’s currency to fall—George Soros, who has been right at times but also wrong at times, warned it could cost the average British household more than $5,000 annually and trigger a recession. On top of all of this, leaving the EU would mean a big change in immigration status for the millions of EU residents currently living and working in Britain. It would be harder for non-British people to stay, and in the future it would be harder for them to travel to and from Britain.
So why try to do this crap, then? Brexit is propelled by the same vague anti-immigrant, nationalist sentiment that motivates a lot of Donald Trump voters. Polls say that immigration, not the economy, is the most powerful driver of “Leave” sentiment. It’s the old “my country first, we’re losing to the (brown) outside hordes, let’s go back to the imaginary good old days, for whites” idea, which clearly is just as strong in Britain as it is here in the U.S. Older, more conservative voters are more prone to want to leave, and younger, more liberal voters, less tied to the past and less fearful of newcomers, are more likely to want to stay. This ignorant, fear-based anti-immigrant outburst is despicable! On the other hand, the deeper motivation for all this sentiment is the fact that so many people have been left behind by globalization—its benefits have accrued to elites, millions of workers have suffered only its negative consequences, inequality grows, and people get angry. This is a foolish target for that anger, yes, but such lashing out against outsiders seems to be in human nature. (Humans are assholes.) One would hope that these sorts of flirtations with economic disaster driven by rage of the common man against enormous abuses of global economic forces might motivate the elites to make changes to ensure that all of the benefits of globalization are widely shared, would one not? But maybe we’ll just end up having some wars, instead.
Will Brexit actually happen, or no? The vote will be extremely close! But the very latest polls point to a “Remain” vote, although the margin now is just a couple of percentage points. For weeks, each poll pointing to “Leave” has sent financial markets down in a panic, and each poll pointing to “Remain” has had the opposite effect. Though polls are very tight, most voters themselves predict that Britain will remain in the EU, a measurement that tends to be even more accurate than traditional polls. So Brexit probably will fail in a squeaker, but the fact that such a lunkheaded idea came so close to being enacted should give you the same sinking feeling about the current state of the popular mind as when Trump was nominated. This sort of unfocused anger will make many bad things happen before it goes away.
What can we learn from all this? Inequality of gains leads to anger which can lead to many bad ideas based on the false identification of who is to blame. In the long run, global institutions are inevitable. Functional global institutions can be forces promoting peace, economic development, free movement of people, and general sanity. But we’re a long, long way from that now.