By Earle I. Mack
“Democracy is the worst form of government, except for all the others.” Winston Churchill’s words ring with more clarity than they have in decades as the world absorbs the impact of the Brits slip on the existential banana peel known as the Brexit vote. (By the way, Churchill also said, never quit, never quit, never quit.)
The results of the Brexit referendum has been cast as “leave” versus “remain” (be careful what you wish for), globalists vs isolationist and upwardly mobile vs downwardly mobile. Perhaps it is best understood, however, as a contest between the contemporary and traditional outlooks on the world.
Traditionalists have been jolted from their apathy by economic stagnation, smoldering anti-immigration strain and real threats of terror. Whether it’s the failure to grow wages, manage financial crisis or provide security, traditionalists resent the repeated failures of contemporary politics and the elites who implement their agenda with what they view as smug disdain.
Now layer on top of that the fact that the onerous and ineffective rules of conducting commerce aren’t being foisted on you directly by your own government, but rather by unelected European Union elites in Brussels. They regulate everything from the curvature of a banana to setting in law the exact types of jam available for sale. (Tomato marmalade is sold on the black market.) This system of EU regulation, that tries to define all aspects of commerce, is understandably frustrating and ultimately a barrier to innovation.
But by voting “leave,” Brits are setting a dangerous precedent, and the parallels, well established on this side of the pond, should not be ignored. Having just returned from London, I have seen the same issues dominate the airwaves: immigration; wage stagnation; offshoring of jobs – the key factor being a general sense of unease amongst the older traditionalists that make up a huge voting bloc of both the United Kingdom and the United States. Those voting to leave think they are bringing job security, national security, and economic growth back to their country. They think by displacing the contemporary approach they can make the UK “great again.” Does that sound familiar? This is why, here at home in the US, these events, at least in the short run, buoy the candidacy of Donald Trump.
What the Traditionalists and their sympathizers on this side of the Atlantic, ignore, is that we live in a global economy. That is why an overwhelming number, 73%, of millennials who are tech savvy voted to remain. The most trade-dependent and least resilient parts of the United Kingdom’s economy are likely going to bear the brunt of the pain of the Brexit. Ironically, this means that a group of people desperate for economic growth, have voted for a policy that has already caused economic panic in Britain and the EU.
As a real estate developer, and being present before and after the voting, the effects of the British departing the EU are profound. By voting “leave,” Traditionalists are not bringing back manufacturing jobs long lost to automation. Textile production isn’t leaving the cost saving harbors of South Asia or South America. Global finance and banking, once synonymous with London (as a midway point between New York and the East Asian markets), could move to cities such as Frankfurt – which would be devastating to the British banking and property markets. Today we are left to wonder, who will fill all those buildings currently under construction in London and throughout the UK?
The effects of the British departing the EU opens the door for other members who may wish to revise the charter and/or exit. Relationships among those remaining will be re-evaluated. This could be a disaster for all of Europe.
As of this writing, over 4 million people have already signed an online petition to reconsider the “leave” vote.
Common sense tells you the Brits will come to their senses and hold a new referendum after absorbing the sobering, stark reality of life outside the EU – flipping protest votes to pro-growth votes. There will be changes in Brussels, there will be reforms, but at the end of the day will be able to eat bananas without a bend – just please don’t slip on the banana peel.
Mack is an American businessman and former United States Ambassador to Finland.