Lessons from Brexit, so far

Brexit, washed away

In the past week a short video clip of Laurel and Hardy’s struggle to get away on holiday, under the title ‘How England plan to leave the EU’, has gone viral (especially so in the German speaking world). Whilst an uncharitable view, European leaders are as I write, discussing a second Brexit extension, and the prospect of a Christmas general election in Britain is now high.

In my view the first part of Brexit is almost over, in the sense that terms now seem to have been agreed between the EU and London. The potential scenarios are now narrowing, and point towards a less disruptive form of Brexit in the near future. Against that backdrop, where I caveat plenty can go wrong, it is time to begin to draw some lessons from Brexit, especially as other parts of the world become more agitated.

In many respects Brexit is a global event because it was the first rupture in a world where the liberal order is being levelled, and where a sense of the fractured and chaos are now normal. The second such rupture was the election of Donald Trump, and today events in Hong Kong, Chile and Syria illustrate the emerging democratic, economic and geopolitical faultlines, where American policy in particular will be tested.

The savage and unpredictable political process that is Brexit has produced very few winners, but for observers outside the UK there are clear lessons.

One, which is ever important ahead of the 2020 election, is that unless issues like immigration, national identity austerity, declining human development (think education attainment and healthcare standards) are correctly channeled, they will destroy a nation. Britain is bitterly divided because of Brexit, as is the US by Donald Trump.

In Britain, previously sacrosanct roles such as that of the Queen, the functioning of Parliament and the Constitution has been pushed to breaking point, as it should be said, has any sense of ‘truth’ in politics. Like America, Britain’s checks and balances are just about holding up. That few political leaders today could pen something like the Federalist Papers is just one reason for Americans to revere its constitutional heritage. Hong Kong, and arguably the increasingly ‘managed democracies’ of Eastern Europe echo this tension.

Geopolitically, the European Union (EU) has emerged from Brexit with the lesson that when it is united, its size and technocracy are formidable. For all the castigation of the EU by British politicians, it has thoroughly outclassed London. The White House should take notice of this in case it considers a trade war with the EU.

In Brussels today, where a new Commission is soon to take office, Brexit is becoming a side issue and there is more and more attention being paid to the role that the EU needs to play in a multipolar world. Here it is stealing a march on the US and China, in two respects. The values of liberal democracy are more consistently being enunciated by European leaders, and the EU is fast becoming the first mover in setting the rules and regulations that govern new technologies.

More locally, one of the dramatic side-effects of Brexit is the way it has detonated the historic relationships between Ireland, England and Scotland. Scotland will very likely become an independent state in five years time, there is growing talk of a united Ireland, and Ireland itself will be the only EU country with strong cultural ties to the USA.

What happens to Scotland and Northern Ireland is a key part of the next chapter of Brexit. Scotland will need to think more clearly about its economic model as an independent country, and on the merits of being an EU member. Northern Ireland, whose socio-economic problems have long been neglected by London, arguably needs a Marshall style plan to transform its economy which is heavily dependent on state disbursements, and that needs to follow the example of social investment in countries like Sweden and Switzerland.

Then finally, what Britain (effectively England) does next after Brexit will be a vital lead indicator of where other countries can go in a world where globalization is being levelled out. One avenue is a purgatory of post Brexit recrimination, a lack of leadership to tackle underinvestment and a susceptibility to nationalism.

Another, more optimistic one that could reflect the best instincts of Britain is that a new generation of political leaders comes through to replace the likes of Boris Johnson and Jeremy Corbyn. They would then begin to tackle the many policy issues that have been given little thought as Brexit has raged on – the need for the UK to develop a new economic model especially one that focuses on the potential of its regions, what role the UK plays as a mid-sized geo-political power and the need to focus policy much more on human development issues like mental health and education.

You never know, the same might just happen beyond the shores of the UK.

Have a great week ahead,

Mike

The consequences of bad behaviour

Waiting for comeuppance

In chapter five (page 127 to be exact) of The Levelling I wrote about the apparently growing tendency for some politicians to be self-centered and incompetent, and drew a contrasting portrait of Boris Johnson MP and the late Peter Carrington. It went as follows…

‘A further contrast in political types might help illustrate this point further. In July 2018 Boris Johnson resigned as British foreign secretary. Britain no longer has an empire, but the office of foreign secretary is still respected. During his tenure, however, Johnson made a number of gaffes and was generally seen to have damaged rather than advanced Britain’s interests. Similarly, in the aftermath of the Brexit referendum, he was also seen as a natural leader of the Tory Party, but the way he has conducted himself since then has led many party colleagues to the view that, even by the standards of politicians, he is too self-serving, and he has lost support within his party.

The day after Johnson resigned as foreign secretary, the death of Lord Carrington (at the age of ninety-nine) was announced. Carrington had been British foreign secretary from 1979 to 1982. He was generally recognized as an exemplar of integrity in public life. Early in his political life, he had served in Winston Churchill’s cabinet of the early 1950s; later he was defense secretary for Edward Heath and then foreign secretary to Margaret Thatcher. To cut a long and good story (of his life) short, he resigned as foreign secretary three days after the Argentine invasion of the Falkland Islands on the grounds that the invasion happened on his watch and was therefore his fault.

As political resignations go, this one was seen to be selfless and principled and stands in contrast to the tactical maneuvering of some politicians today. Carrington, along with many contemporary central bankers (Paul Volcker, Ben Bernanke, Janet Yellen, and Mario Draghi, for instance), is a good example of sincere public service and his behavior stands in contrast to that of successors like Boris Johnson.

The distinction I wish to draw is to have policy makers who are more responsible for and focused on policy making than on their own personal advancement. Advancing oneself is, of course, prevalent across all organizations and institutions, but the difference with politics is that people’s lives are affected by bad policy making’.

At the time, I did not think Boris Johnson would become Prime Minister, though there was a good chance that this might happen. Further, given everything that has happened with Brexit so far, it was still hard to imagine that in a few weeks his government has managed to effectively destroy the Tory Party, the Union and the very large stock of goodwill that Britain has built up with neighbouring countries like Ireland.

I believe that the Tory Party will soon formally split, and that the nucleus of a new centrist party in British politics will be formed around the twenty one MP’s who were expelled from the Conservatives.

Another consequence is that the barriers to Scottish independence are falling. Most of the arguments deployed by Brexiteers for ‘taking back control’ appear logical in the case of Scottish independence. Everything the Johnson government does shears away at the moral and emotional ties between London and Scotland. Moreover, the departure of Ruth Davidson as head of the Scottish tory Party will hand back a number of seats to the SNP. The challenge for Nicola Sturgeon now is to convince Scots that the SNP can execute new policy ideas that will make Scotland more stable economically, and richer in terms of human development.

Then, both the Irish government and the EC will feel that their opposite numbers in London have no credibility and no sincerity. Whereas they were often puzzled by Theresa May, Boris Johnson has done nothing to encourage Brussels to trust him. That is a pity because once Britain leaves the EU, the truly complex business of negotiating its future relationship with the EU will only begin. This is apparently lost on the Johnson government.

To return to the distinction I drew between Johnson and Carrington, there is an emerging theme in public life that the consequences of bad behavior are in many cases low. There are many instances, Jeffrey Epstein is the latest, where individuals have engaged in enabled, persistent abuse. Politics is sadly becoming similar. The world stage is increasingly replete with examples, with little distinction between leaders in emerging or developed countries.

In time, very bad, divisive behavior in politics hits its limits and is sanctioned. What is disappointing is that those limits are being stretched to breaking point.  At times, markets can sanction bad policy by politicians, but bad personal behavior is seemingly harder to check. Infuriatingly, social media seems to amplify and reward bad behavior in politics.

A more profound policy issue is that the lack of real economic growth, and the poor distribution of its benefits (in countries like the US) means that voters will look beyond reckless policy in search of economic rewards. In the US specifically, few on the right are prepared to stand up to the President. They might do well to look at the example set by the likes of Ken Clarke, Jo Johnson and Rory Stewart last week. Boris Johnson himself might do well to look at the example set by Peter Carrington.

Have a great week ahead,

Mike