Friday, 24 June 2016

Brexit thoughts

For what it's worth, here are some thoughts on the "Brexit". To begin with, there are a number of comparatively limited issues where I suspect that the effect may be positive. For instance, the chances that the EU will adopt the TTIP will probably decrease.

Apart from this, it's hard to find anything to be happy about. Let's first look at the possible effects for the UK. Contrary to what many voters hoped, a Brexit is unlikely to help "ordinary" people economically. This is for two reasons. Firstly, Britain will be hurt economically. Secondly, and more importantly, I fear that outside the EU the UK will adopt an even more neoliberal policy that it already does. Why? Again this is for several reasons.

Firstly, the British dependency on financial capital (and London's role as a hub of global capital) will almost inevitably make policy-makers desperate to ensure as much "freedom" for financial flows as necessary after exiting the EU. Their overriding concern will be to prevent the Brexit from damaging these flows. I see a real risk that the UK will try to turn itself into a financial haven, ready to do anything to welcome global capital. Thatcher will be let loose. Here one might object: but isn't the EU already a neoliberal project? Just look at what it did to Greece. The reply here is: yes, that's true, but while the EU represents a form of "regulated neo-liberalism" - or roll-out neoliberalism, to use the terminology developed by Peck, Theodore and Brenner - the UK stands for a more unrestrained type. Outside the EU the UK will likely return to an even more ruthless, roll-back kind of neoliberalism.

Secondly, the Left will probably be weakened in the UK and unable to offer much resistance. Scotland leaving the UK is a real possibility and if that happens, Labour will be so weakened in the UK that the conservatives will rule the roost for the foreseeable future.

The racists in the UKIP who hope to stop immigration are happy about the result of course. That's just utterly deplorable and I won't waste more words on them.

Next, let us look at the consequences for the EU. On the one hand, there are federalists who hope that the Brexit will speed up EU integration. On the other hand, others think that it may signal further disintegration since Brexit will set an example for other countries. If federalists try to push for tighter integration, countries unhappy with that will try to follow in Britain's steps. To prevent this, federalists have been saying that a Brexit must be costly for Britain: if it exits, it can't expect any favorable treatment, no special exceptions and no easy, fast-track way back in in case it wants to rejoin. The results in regard to the EU, then, seem ambiguous.

Finally, how about consequences more globally, say for global capitalism and the "world-system"? The first consequence is more instability and fragmentation. Global coordination in all kinds of matters will probably become even more difficult than it already is, e.g. in the regard to the climate. A second consequence is a fall in the geo-political status of both the EU and the UK (in the latter case this fall will be even more dramatic if Scotland leaves the UK). A third consequence is that global capital will be able to play out political entities against each other more easily (especially if the UK opts for all-out neoliberalization). Despite the risk for an initial period of economic instability after the Brexit, I suspect many capitalists will be happy.

So if I'm so negative about a Brexit, how come I supported a Grexit just a few years ago? The answer is easy: a Grexit would have meant a set-back to the neoliberal govarnance represented by the EU. It would have meant a rejection of austerity. The greater economic freedom that Greece would have gained through a Grexit would not have been used to pursue a more neoliberal policy. It would also have demonstrated to EU policy-makers that there was a limit to how much they could humiliate small nations and force them under financial tutelage. With Britain it will be the other way round: Britain will likely turn in an even more neoliberal direction. Unlike a Grexit, Brexit won't be framed as a failure of austerity. It will be framed as a matter of British nationalism.

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