‘Brexit’ and globalization

The British vote to leave the European Union is likely to trigger a chain of complex reactions whose impact cannot be fully calculated. It has already caused a steep drop in the value of the pound sterling and of shares in the London stock market.  That was expected. But the ripple effects in the rest of Europe’s markets have been just as bad, if not worse. This was not foreseen.

In voting “Brexit,” the British intended to “take back control” of their country from the Brussels-based EU bureaucrats. But, this control could turn out to be illusory.  Brexit will not arrest globalization, certainly not its economic processes. What it does is set back attempts to subject these global processes and their effects, particularly the pernicious ones arising from the unrestricted financialization of capital, to the discipline of collective policy.  This is a function that goes beyond the powers of a single national government; it requires cooperation among nation-states.

Greece’s former finance minister, the outspoken Yanis Varoufakis, has described Britain’s conflicted position quite sharply.  “The very sovereignty that Britain’s political forces of both Left and Right want jealously to preserve within their cherished House of Commons is put under pressure by the exigencies of its most powerful social groups: traders, manufacturers and of course the City of London, for which Brexit is fraught with dangers.”

Beyond this, the exit of Britain from the European Union could set off a separatist contagion among the other member-nations that can only bode ill for the future of European integration.  It also promotes a populist nationalism that encourages people everywhere to turn inward, focused on protecting an idealized version of a way of life that has long slipped from their grasp, rather than with helping solve the problems of the world’s poor, marginalized, and displaced.

Brexit is one of those events that were thought to be improbable mainly because they seemed to go against all reason. Yet, everyone would have known that British ambivalence toward Europe had been there for a long time. While being part of the 28-member bloc, the United Kingdom of Great Britain (England, Scotland and Wales) and Northern Ireland was never completely sold on the idea of a United Europe. It stayed out of the monetary union by keeping its own currency, even as it freely traded in a European Common Market. It chose not to be a part of the Schengen visa system that allows non-EU citizens to travel to EU member-countries on a single European visa.

But it was the panic over migration that evidently tilted the balance toward this formal break.  Many observers believe that Brexit was a proxy vote against the free flow of people, particularly from Eastern Europe, into Britain.  In 2015 alone, net migration to Britain stood at a record high of 336,000. More than half came from the European Union. Refugees from the Middle East and North Africa, who flooded the European continent recently, formed an insignificant part of the migrant flow into Britain.  They never posed a threat to British borders. Still, it is not farfetched to imagine it was their miserable image that haunted those who voted Brexit.

Certainly, the European Union as a center of power is far from democratic.  Many of its decisions are remote from the daily lives of the ordinary European.  Its rules and regulations seem more tailor-made to the requirements of the central banks, traders and investment houses that control the levers of the European economy than to the needs of Europe’s peoples.  But, if these are the problems, then their solution might lie in democratizing the EU’s political structures and enhancing their power rather than in abandoning the union altogether.

The problem, however, ultimately stems from the global nature of the processes we are dealing with here.  For all the possibilities it liberates, the European Union, like the Asean (Association of Southeast Asian Nations), is still a regional response to what are basically the exigencies of world society.  In the end, as the theorist of modernity Niklas Luhmann notes, “regional entities cannot win a struggle against world society; they suffer defeat in the attempt to hold their own against its influence.”

This is far from saying, however, that regional alliances are useless.  For indeed they open up opportunities that hitherto had been blocked by the restrictive boundaries of the nation-state.  But, they, too, are subject to dysfunctions, a fact that prompts societies to go back to traditional structures. I view Brexit as a return to the familiar moorings of the nation-state—provisional at best, and offering little practical advantage as a vehicle for navigating the complex terrain of a functionally-differentiated global society.  Britain still needs to trade with Europe, but now it has to negotiate a trade pact with every single country.

The phenomenon Brexit represents is not strange to societies like ours, where the persistent dissatisfaction with the perceived inefficiencies and wrong priorities of the modern nation-state finds expression in calls for subnational autonomy under a loose federalist setup.  Similarly, even in the most modern institutional settings, we often find decision-makers turning to flexible networks of family and personal contacts for solutions in the face of corrupted or rigid organizational systems.

But, in the end, there is no way of escaping the reality of world society. Scotland knows this only too well.  The Scots voted overwhelmingly in this referendum to remain in the European Union, even as they continue to wage a campaign to secede from Great Britain.

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