Goodbye Euro Brick Road: The Bad Part of Globalization Defeats the GoodPhoto by Jeff J. Mitchell/Getty Politics Features
Britain has voted to leave the European Union. Why? The good part of globalization, the European Union, is being sacrificed because of the bad part of globalization, neoliberalism. Although noxious racism and xenophobia played a part, they were the symptoms, and not the disease. The EU and the world economy get yoked together in discussion. They shouldn’t be—a peaceful, federal political union of liberal democratic states is not inevitably tied in with an elite web of multinational corporate interests.
Understanding that these are two different systems will explain to us why Brexit happened. What sent it tumbling down wasn’t the racism or xenophobia of English burghers, but the continued indifference of the elite economic order to the suffering of British citizens. If we keep sneering over at marginalized citizens and labeling them as universal bigots – no matter how tempting that might be — we are missing the bigger story, and empowering those who put us in the mess in the first place.
After austerity, Iraq, and insecurity, they didn’t leave the everyday Brit much choice. Bernie Sanders had it right: “What worries me very much about Great Britain leaving the EU is the breaking down of international cooperation. On the other hand, it’s a sign that the global economy is not working for everybody.”
YOUR BREXITNESS IS MY BREAKFAST – JAY-Z, “DRUNK IN LOVE”
The thought of the British Isles turned into a densely-packed fratricidal knife fight, with cries of “What’s all this, then?” and “You wot, mate?” echoing from cobblestone street to street, monocles flying, warm beer spilling, fisticuffs breaking out, regional grudges dating back to the Middle Ages being acted upon, Altamont under a drizzly gray sky — why, it was enough to warm the hearts of every American. There was no real threat of the UK leaving. Ironclad science showed the Brexit to be thermodynamically impossible. The land of Alan Moore, William Shakespeare, and wherever they dumped Snape’s body would not give up on Europe. The British government, run according to dream logic, would dispatch with the referendum, and the Old World would return to its favorite sports, soccer and class war.
The political results were disconcerting, and then, confusion, horrifying certainty; markets running to the liquor cabinet, Euro in chaos. The young and old deeply divided. Rumors of the dragons returning from across the Narrow Sea. Would England become the fifty-first state? Nobody knew. The bizarre inbred cavefish Boris Johnson was seen dreaming of spring. Wails from London. Britain, unable to be half in half out, unlikely to follow Norway and Switzerland’s alternative models. Brussels, with bloodlust in its heart, ready to bring down the hard rain on Britain for bucking them. Cameron resigns; David has handed the responsibility for Brexit to its advocates. Dismembering the union will not be Cameron’s job.
Ahab must carve Moby Dick himself, he says, laughing. The Prime Minister’s last gunshot, fired from the burning wreckage of his sinking political career. From hell’s heart, he stabs at thee. Which led everyone asking, how did this happen?
STRANGERS IN A STRANGE KLAN
Bending over backwards to blame Brexit on England being full of secret Klansman is a curious game. As Greenwald put it, economic misery and xenophobia “are not mutually exclusive. The opposite is true: The former fuels the latter, as sustained economic misery makes people more receptive to tribalistic scapegoating.”
Which is why plutocracy is mad-dog dangerous. Saying that only hate motivates opposition to the international order is a way of letting our status quo get the dodge. Are there really more racists now than in the past? Are they really more intense and powerful now then they were decades ago?
Watching the shameful, lurching xenophobia of Leave surprises nobody, any more than notifying that lunatic Aryan jabberings play a large part in Trump’s rise. Of course part of the Leave vote was racist. Nobody with their head un-assed disputes this – why else would there have been shameful displays of racism after the vote, unless there were xenophobes who were encouraged by the vote?
But while racism is an undeniable part of the problem, it does not explain why. Torsten Bell did a breakdown of why the Brexit vote rolled the way it did. He noted that living standards since the early 2000s played a huge part in the loss of faith in British politics: earnings are still well below the point before the crisis. In other words, the recent past can’t explain everything. Bell found there was no relationship between an area’s prosperity in recent history and how they voted. What did correlate was how relative levels of pay mattered for how the public voted. These were chronically depressed area, who felt the impact of history’s hand heavily. Bell wrote:
So it’s not the unequal impact of the recent recession driving voting patterns – or indeed as some argue the impact of migration driving down wages in some areas. Instead, in so far as economics drove voters’ behaviour last night, it is areas that are, and have been for some time, poorer. Or to put it another way, it’s the shape of our long lasting and deeply entrenched national geographical inequality that drove differences in voting patterns. The legacy of increased national inequality in the 1980s, the heavy concentration of those costs in certain areas, and our collective failure to address it has more to say about what happened last night than shorter term considerations from the financial crisis or changed migration flows.
The reason it is safe to label them all as racists is because fixing the injustices of race, gender, and sexual orientation does not threaten the neoliberal economic order.
As a result of this vote, the EU is considered a doomed suicide pact. Which is unfortunate, because it’s a golden idea. Overall, it’s a great boon for civilization, considering most of the European societies spent the last thousand years disemboweling each other, crowning in the outsize murder sessions of this century.
Neoliberalism has to go, but political union doesn’t need to. They are not the same thing. Just because a system has been co-opted by bankers doesn’t mean it’s irredeemable. Currently, the idea of an international governing body is packaged together with this weird form of capitalism, but the two aren’t the same.
The nation-state is brand new in history, only about four hundred years old, established at point of the gun and bayonet. Europe decided it needed to have borders, central kings, and armies. This why the EU has been good for all the suppressed regional cultures of the West: the Basques, the Sami, Catalans, and other regional peoples. The rise of local autonomy is a plus, another reason a federated union is a good thing. One reason for America’s success is that it’s not a unitary system. We don’t have to channel all our power, treasure, and talent through one capital city, like Paris or London.
Matt Stoller made an argument that global trade came out of the same altruistic impulses as the EU. He argued that the Powers that Be spent the last fifty years trying to prevent another cataclysm. They gazed over the ruin of the early twentieth century, nations beating ploughshares into swords, cities atomized, and decided enough was enough. Thinkers like George Ball — diplomat, banker, anti-Vietnam ideologue — believed multinational corporations could be a force for good, believed interwoven trade would fulfill Norman Angell’s dream of an enduring peace, by taking the grim war-power from the nation state, from parliaments and presidents, lapping the human race in universal commercial slumber. Nobody is a warrior, because everyone is a consumer. No battle. Only Etsy.
After the war, this transnational vision happened to jive with the biggest fact of the post World War II world: some kind of peaceful political structure was needed in Europe, since the next war would be the last, everybody had to pitch in to rebuild the continent, plus uh, the Soviets. After the Second World War, the Allies got together, signed a contract that governed the money rate between countries, fixed it in terms of gold. Whatever your crazy uncle says, gold isn’t the important part. The point is that there were concrete rules governing commercial and financial relations between the great industrial powers. Ball’s virtuous corporations existed in this arranged economic greenhouse.
To understand what happened to the Western economy as a whole, you have to understand what happened in America. And in America and everywhere else, Bretton Woods worked. In 1973, poverty in America hit its lowest point, 11.1%. It’s never been that low since. America dominated economically. Best of all, the mammoth wealth was shared between its people. Everybody got a cut. Pretty sweet. Workers and their unions did well. Management did well. In 1974, “For the first time since the end of World War II, Americans’ wages declined,” Harold Meyerson wrote. It’s been downhill since then. For almost all workers, real wages have not budged for half a century. Adjusting for inflation, the wage in 1964 equalled out to $19.18. In 2014, it was $20.67. In Obama’s America, non-durable temp jobs reign.
Compensation, in terms of benefits and wages, rose in line with the economy as a whole. Since 1973, Worker productivity grew 72.2%. Typical pay rose just 9.2%.
What happened in the seventies? There are many reasons for it, including communication technology which allowed for management from afar. But one of the biggest reasons was the lack of megafat profits in manufacturing. This needn’t have resulted in offshoring. But it did. Banks stopped doing what banks did — invest in someone’s vanilla mortgage — and began to play the weird game of finance. High-tech, deindustrialization, off-shoring, financialization. And here’s where globalization took off. Globalization, we’re told, is a force of nature which can’t be restrained. The free market! But that’s okay, right? Because it will tear down walls, and that’s a world we all want. But “globalization” does not seem to practice what it preaches.
Adam Smith of Scotland – that country that’s about to leave the United Kingdom — wrote that any free market, the kind of market globalization claims to practice, would never restrain “the free circulation of labour and stock, both from employment to employment and from place to place.” We’ve never had that. Capital can go anywhere. Labor can’t; gets chained in one place. Funny enough, offshoring doesn’t seem to happen the doctors, attorneys, CEOs, and financial planners. There are 1.3 million lawyers in America, and 1.2 million lawyers in India. American lawyers earned $133 thousand dollars on average in 2014. A high-level Indian barrister’s salary is a tenth of that.
Do globalization’s advocates not believe in fair play? Could it be that globalization is only for the blue collar, and not the white-collar? What of bonds, and stocks, derivatives, free from the sales tax? There is immense protection for intellectual property, media, pharma, corporations, DVDs and digital rights. What is called “globalization” are actually trade agreements dedicated to bypass the popular will. TPP and NAFTA are investor contracts, and little else. Gobalization is not a law of nature, anymore than Pepsi’s marketing is the same as gravity.
The curious innocence of the globalist camp is telling. As Stoller suggests, Ball’s DNA is still there; this is the war that big-money fantasists like Tom Friedman live in. The globalizing elite sees the state as an illegitimate actor; they are the peaceniks: “What the UK did just isn’t done by polite people, can’t you see that? My God, do you people want war to come?”
What they do not see, as Meyerson says, is that in “In 2013, America’s three largest private-sector employers are all low-wage retailers: Wal-Mart, Yum! Brands (which owns Taco Bell, Pizza Hut, and Kentucky Fried Chicken) and McDonald’s. In 1960, the three largest employers were high-wage unionized manufacturers or utilities: General Motors, AT&T, and Ford.”
The gap between popular will and elite action grew so wide that nobody could pretend anymore, just as the parties abandoned the populace. The Dems left the workers and The GOP left the shopkeepers and went a’courtin to Wall Street. And the institutions across the English-speaking world – Labour and Democrats, Tories and Republicans, lost credibility.
TEARS FOR FEARS
Blame the Midlands. Blame blue-collar workers. Blame xenophobia. Blame Trump, blame Bernie, blame millennials for not showing up, blame the old, blame democracy. But you cannot blame everyone everywhere. Eventually, even the dullest hack in London, Brussels, and the Beltway will admit the neoliberal order does not work.
As Michael Caine says in The Dark Knight, “You crossed the line first, sir. You squeezed them, you hammered them to the point of desperation. And in their desperation, they turned to a man they didn’t fully understand.”
Dismissing the votes of terrified and heart-sick people as nothing but red-meat xenophobia is the most repulsive condescension. Start from the premise that most human beings are not morons, and you will gain a very different way of looking at the world.
You may not be interested in Brexit, but Brexit is interested in you.