To Escape Death Star, Take This Brexit
June 23rd, 2016 may well join a list of significant events in European history. On that day the United Kingdom, in a national referendum, voted to leave the European Union. That had never happened in the forty plus years of the EU’s various iterations, and has acquired the moniker Brexit, for British exit. Euroskepticism, as it’s called, has been building for some time, and not just in the UK. Who wants their country’s policies dictated by faceless bureaucrats in Brussels (HQ of the EU)? Last year, during what appeared to be a close national election, UK Prime Minister David Cameron promised that if reelected he would call for the referendum. His advisors had assured him that “Remain” would win by 10-15 points. He kept his campaign promise, the only one he kept. Maybe he didn’t count on a record turnout of 72%, and “Leave” won by 52% -48%. Gee, a politician misreading the mood of the public. When has that ever happened? As predicted by most pundits, Cameron resigned next day, effective in October.
The following day, Google Trends had the top question from the UK as “What does it mean to leave the EU?” which is understandable. But the 2nd most asked question is not: “What is the EU?” You mean you just voted for the Brexit without knowing what the hell you were voting for? Really? Over the weekend a petition to take a re-vote got over 2 million signatures, leading to the coinage of another term, Bregrets. The UK has the 2nd largest economy in the EU, and 5th in the world. The morning after the vote, the British pound sunk to its lowest value in thirty years. The shock wave ran through global markets too, wiping out over $3 trillion by Monday the 27th, $800 billion of it in the U.S. Why all the fuss?
The reasons are many. First, though, some clarification. What’s the difference between the UK and Great Britain? Great Britain (England, Scotland, & Wales) and Northern Ireland make up the UK. Ireland the republic has been independent since 1922. What’s the difference between the European Union and the Eurozone? The EU has 28 nations, but only 19 of them use the common currency of the Euro, and they make up the Eurozone. The UK retained its own currency, the pound sterling.
One reason for the Brexit, played up on the corporate media, is anti-immigrant sentiment. It shows when you break down the demographics. Only 19% of voters aged 18-24 voted to leave, compared to 59% of the elderly, which they call pensioners. If you read many of their vicious, xenophobic tweets, you’d think you were at a Donald Trump rally. And hate crimes increased over the next weeks, too. If we thought only Americans could be that ugly, we were wrong. Anti-immigrant and especially anti-refugee feelings run strong in Europe, and have contributed to the rise of Right-wing movements across the continent. It’s interesting to break down votes by country in the UK, too. Scotland voted solidly to remain, and are considering another national referendum to leave the UK (last year’s referendum narrowly failed.) Northern Ireland also voted heavily to remain.
Xenophobia was undoubtedly a factor, but what the corporate media aren’t telling you is what the European Union has become. To understand that, we need to go back to the beginning. World War I devastated Europe, 10 million soldiers were killed and another 20 million wounded. The League of Nations was founded in 1920 as a forum for resolving international disputes (despite urging by Pres. Wilson, the U.S. never joined). But it lacked an armed force of its own, depending on the great powers to enforce its regulations, which they were unwilling or unable to do. After all that horror, twenty years later it happened all over again with World War II, around 50 million dead. Europe was a smoking ruin.
There was a strong desire for a unified Europe, where cooperation in trade and economics would make future wars unthinkable. In 1946 former Prime Minister Churchill gave a speech in Zurich, Switzerland, calling for a “United States of Europe.” Much of the credit is given to Jean Monnet, a French political economist, known as “The Father of Europe.” In the 1950s he came up with the idea of a “European Community,” to end wars and enhance the prosperity of all the nations. Another figure was Jacques Delors, chief of the European Commission, who spoke of a common currency, and that Europe must create common economic policies, “founded on the cooperation of the member states.” It all sounds so high falutin’ and noble, doesn’t it?
Enter the neoliberals. Whether they were in it from the beginning, or gradually eased themselves into power, isn’t clear. The UK’s Guardian ran an intriguing article in June 2012 by Greg Palast, titled “Robert Mundell, Evil Genius of the Euro.” He was a former U. of Chicago economist (think Milton Friedman). Palast credits him for coming up with the blueprint for a common European currency. The agenda follows the Chicago school to the letter: blow away government regulations and labor unions, so that predatory corporate capitalism can proceed unchecked. Sound familiar? The only thing liberal about neoliberalism is free-market enterprise. Sound familiar? Mundell once said, “It’s very difficult to fire workers in Europe” (because the workforce was about 70-80% unionized). A country in the Eurozone, under the common currency, has no control over its own country’s economy. It can’t go into deficit spending, because EU regulations forbid spending beyond 3% of your GDP. It can’t print more money, or pass a stimulus bill to reboot the economy. Mundell: “It puts monetary policy out of the realm of politicians.” That’s a scary statement if I ever heard one. So the only way nations can keep jobs is by competitive reduction of business, environmental, and labor regulations. It’s a race to the bottom. This is why Palast calls the EU an economic leper colony.
The idea of open borders where workers can come and go may sound good, until you consider British workers displaced by cheap labor from Poland or Eastern Europe. I discovered years ago that if you want to understand a complex situation, just ask: who benefits? The main beneficiaries of the EU are billionaires and trans-national corporations. Their false theology is the same as Reaganites, the idea that, unhindered by government, the free market is self-correcting. It’s never worked anywhere in the world before, but these people are true believers. That’s why it’s really a theology, a belief system. So the EU as it is today is the economic equivalent of the evil empire’s Death Star. Everything is a commodity, including human life. Martin Blyth, professor of economics at Brown University, says that the long term effect of the Euro is to drive Western European wages to the level of those in Eastern Europe.
It’s the same thing over here with the Reaganism, the idea that cutting taxes on the wealthy will increase government revenue, because they’ll put those savings back into their businesses. What they actually do is put those savings into offshore accounts in the Bahamas, or Swiss banks. We constantly hear Republicans pushing for less intrusive government regulation, doing away with workers’ rights, and all that. So a lot of the Euroskepticism sounds much like the same things Bernie Sanders has been talking about.
There’s another important question, too: Is the referendum legally binding? No, it’s not; it’s considered “an advisory,” but to go against the will of that many people would be political suicide, so the government will abide by it. But it will take awhile. To initiate formal withdrawal the UK government must invoke the 2009 Lisbon Treaty, and all the meetings and paperwork takes about two years. The EU is in a hurry to get on with it, but that won’t happen until after the new election following Cameron’s resignation this October. So the UK will remain in the EU for some time yet, keep that in mind. I’m sure Germany will keep it in mind, as the UK is their 3rd largest export market.
Two weeks later, the markets are recovering (except for the pound), and everyone is wondering what the eventual result will be. Perhaps the Brits will be exchanging one rigged system, the EU, with the old one. Will other European countries take the exit, too? From EU to Eww!? One can imagine the nicknames to come: Departugal, Oustria, Finish, or Czech, please. And how will the Brexit affect Hogwarts? What the Brexit may represent is the beginning of the Luke Skywalker rebel alliance against globalization, which is what I think the elder President Bush meant by the expression “New World Order.” Globalization itself is probably a good idea, and is probably inevitable, but it isn’t sustainable unless it’s more equitable to all. So buckle on those light-sabers, and may the Force be with us.