Brexit and My Crystal Ball

24 Jun
Instant reaction to political events is a dangerous thing.  And when those political events are all-encompassing then nobody has the expertise necessary to call even short-run outcomes accurately.  Personally, I don’t even have the expertise to be sure of all my presuppositions, and I welcome corrections.  So please don’t start a political movement, invest your life savings, despair or move country on the basis of my improvised predictions.  And please don’t presume that I approve or disapprove of the futures I’m predicting, unless I say so.

Caveat over.

My crystal ball is showing me:

Indyref 2

An early proposal in the Scottish parliament for a second indyref.  Scotland voted around 62% to remain in the EU.  If an indyref proposal is approved in Holyrood, the Tories (and Labour Unionists) in Westminster will (mostly) attempt to strike it down.  If they succeed (at the price of alienating many of their own politicians and supporters) there will be a citizen-led attempt to organise a referendum outside the machinery of the state.  If that in turn is hampered too much by British parties, it could feasibly trigger a Unilateral Declaration of Independence.  Intelligent Scots will want all this to happen within two years of the British PM invoking Article 50, meaning they’d be – in one interpretation of the current situation – able to remain as European citizens without actually having to negotiate entry.

Polarisation

A surge in popularity for the far right – mirrored by a corresponding increase in popularity for the far left and for anti-racist groups and parties.  The political fence between left and right will become increasingly barbed and uncomfortable to sit on.

Marginal Short-Run Gains for the Poor

An entirely unpredicted (except by isolated lefties like me, and the far right) marginal and short-term rise in living standards for the poorest.  As long as they’re ‘White British’, ‘Black British’ or ‘British Asian’.  Why?

First, because it’s other EU citizens (and people coming to Britain via the EU) who have primarily been demonised in the Leave campaign.  We’re likely to see more of this, and it will be increasingly violent.

Secondly, because in the finance market falls so far it’s building companies that have fallen fastest, on the assumption that ‘buy-to-let’ is going to implode as borders tighten. The knock-on for property prices will mean less loans on property and more empty properties without the money to pay for security – hence rents will actually decline or remain at current levels – and there’ll be more places to squat when they don’t.

Third, a slight increase in manufacturing and primary material exports due to the weakening of the pound – because this is very short term, people will be getting taken on from amongst the local unemployed rather than from working people who have to give notice and relocate.

Fourth, governmental spending on firefighting financial instability will mean university cuts, falling student numbers, students staying at home to study, and therefore empty accommodation in University towns.  This will be exacerbated by EU students choosing not to come to Britain, and by the running down of European exchange programs such as Erasmus.

Fifth, as ‘liberals’, left-wingers and working-class communities recognise the coming bonfire of workers and minority rights, unions and collective bargaining – formal and informal – will gain a new swathe of members and activists.  This will, however, probably be more than balanced by a new assault on working conditions and increasingly insecure employment.

None of these gains are likely to be lasting ones (except possibly the last), as over recent decades the EU has become a prime  – if inefficient – redistributive mechanism within ‘British’ politics.

Ireland and Northern Ireland

Shifts in Northern Irish politics.  Voters there supported a remain vote, knowing perfectly well that a great deal of investment there is EU-managed and contingent on the ‘peace dividend’.  Sinn Fein has, naturally, already demanded a referendum on uniting Ireland. That won’t happen (and they couldn’t yet win it if it did), but the rebuilding of border controls between South and North – or even the process of negotiation over them in tandem with the tailing off of EU support -has the potential to gradually destroy both the peace and the dividend.

The End of Free-Market Economics

UK

At least in practice, if not in rhetoric.  The smaller the area you have to work with, the harder it is to sell the illusion that it’s ‘markets’ rather than naked power that decide economic outcomes.  And with the Bank of England having already announced spending and acquisition plans in response to the post-vote crash, it now has no choice but to continue that interventionist route.

With the flight of financial institutions from the City of London (they hate uncertainty, except when they’re creating it in other people’s lives) the role of government in economic management will become clearer.  Right-wingers will start looking for active promotion of trade and manufacturing, and will be desperately conscious that their short-run success has been dependent on poorer people voting for Brexit.  And, unlike the mainstream left, they’ll be happy to throw around slogans like “British Jobs for British Workers”, as well as breaking with current economic orthodoxy in order to keep power. The left will eventually follow, despite being hampered at every turn by old-fashioned and out-of-touch Blairites – as we already see with two Blairite MPs seeking to topple Corbyn over the EU vote.

EU

The early reaction from highly-placed EU politicians has been to insist on unity in the face of the crisis.  That won’t last longer than a few days.  And there’s a fair chance it’ll have broken down by the time I’ve finished typing this.

One result will be Eurosceptic parties campaigning for referenda of their own.  

Some will succeed.  Their most powerful tool will be the recent cavalier treatment of Greece by Europe’s finance ministers, who were operating with the presumption that the EU was unbreakable and that the power conferred by a strong position within it enabled them to dictate brutal terms to a nation in crisis.

I’d like to say that can’t be repeated – but it can.

And given that mainstream economics has something like the force of a religion amongst those to whom it’s most convenient, we’re likely to see another episode like it sooner rather than later as the crises unleashed by the UK vote starts to impact.  As each such episode unfolds, however, the economic orthodoxies will collapse in practice, with massive ad hoc spending disguised behind ‘restructuring loans’ and ‘stability packages’ that will superficially adhere to dogmas about balanced budgets and free markets; as well as superficially not breaching EU competition guidelines.  Financiers (and pro-market media) will be aware of the fudge, and will speculate heavily on making gains from destroying each settlement, whilst the populations of each State affected will be prevented from realising that help is actually being offered to them.

The net outcome will be a race between the movement to democratise the EU, and movements aiming to destroy it.

Party Politics

The next prime minister of the UK will, it appears, be unelected and be chosen from within the Conservative Party in Westminster.  That’s not going to look very democratic, which is a bit unfortunate in the age of referenda.  With EU institutions actively working on pulling out of their work in Britain in preparation for exit, the new Tory leadership will be desperately reacting to bad economic news on a daily basis – and that news will be reaching working-class people directly rather than via newspapers.

This will be good for the Labour Party – although not good enough for them to form an effective opposition without entering into cooperation with parties to their left, and admitting frankly that they have lost Scotland.  As for other consequences in party politics, I’ll leave that to a future post.

Refugees

Will continue to be vilified.  And press and politicians will continue to call them ‘migrants’ even as they drown whilst desperately escaping the wars that Britain helped to launch.

 

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