Brexit's Causes Are Global - So Are the Solutions

30/06/2016 13:07 | Updated 30 June 2016

[Co-authored with psycho-historian, Nick Duffell]

The 'Brexit' shock is traceable to three causes.

• First, the alienation of a cherished national identity that underlies immigration fears, especially amongst older and less privileged voters.
• Second, the widening gap between rich and poor, as reflected in London's desire to remain and the rest of England's to leave: effectively the divide between globalization's winners and losers.
• Last and perhaps greatest, the desire to punish the political mainstream for its decade-long failure to deal with these issues.

History teaches us that whenever there's a widespread feeling of impotence, voters' knives come out. History seems to have been ignored, and if we're to properly respond to these issues we must start with some deeper questions.

• By going for Brexit, have we Brits fired our anger at the right target, or have we perhaps mis-aimed and shot ourselves in the foot?
• In which case, what is the right target?

Although Britain's unique education system specialises in producing what we have elsewhere called Wounded Leaders, which structurally maintains the class divide, the above three causes are not peculiar to the UK. In the U.S. and across Europe, citizens are outraged at the inability of mainstream politicians to address their problems. The disturbing truth, though, is that it's not that politicians don't want to, but that they can't.

The reality is that the causes of Brexit - and therefore the solutions - are not to be found at a national or even European level. The problems we're angry about stem from a level our politicians can't reach - the global level. It's a bit like banging on the door of a house to be let in when there is no one inside to answer. Politicians try in vain to implement national or European solutions, but the problems remain, because the real cause - as former UK prime minister Gordon Brown also acknowledges - is globalization.

In today's globalized economy, capital, corporations and investors move their investments seamlessly across national borders to wherever the highest returns and the cheapest workforces are to be had. Now that labour is also on a global walk-about, enormous panic infects many developed countries. But for any national economy to prosper, each government must compete for these inputs. And that's the problem. To keep their economies 'internationally competitive' nations have to de-regulate and privatize more than their competitors, in a never-ending race to provide more attractive environments for inward corporate investment. We call this vicious circle destructive global competition.

Consequently, the policies delivered inevitably result in more immigration in order to provide a 'competitive' workforce and greater tax concessions for globally-mobile corporations and the rich. For any government, becoming uncompetitive is simply not an option, so the result is always the same: more immigration and higher taxes for nationally-rooted small businesses and the poor. Little wonder globalization's losers have rebelled.

Both immigration and the wealth gap should be understood as global phenomena resulting from this competitive vicious circle and impossible to manage from a national or European level. By going for Brexit, the UK has simply selected a convenient culprit, when, from a larger perspective, destructive global competition is clearly to blame. Now, with both the UK and the EU severely damaged, the global bond-market wolves won't only be circling the UK but eying the Eurozone's other economic weaklings. Neither Brexit, nor shoring up the EU can solve anything, for in a globalised world national politics is effectively impotent.

In fact, as a result of destructive global competition, we are now witnessing the demise of genuine democracy. Any party that gains power has little choice but to keep their economy internationally competitive, so ensuring the causes of Brexit become further entrenched. This was clear from the back-tracking reactions of some of the Brexit leaders. As they're realising, only more of the same corporate and market-friendly policies will be deliverable.

Little wonder that voters see little difference between mainstream parties - themselves in meltdown - and feel impotent, angry, and fed-up with politicians. But choosing extreme candidates of either persuasion won't break this mould. Neither Trump, Sanders, Farage nor Corbyn would have any other choice but to keep their national economies competitive. That's why Left-of-centre governments soon find themselves forced into the same 'market-friendly competitiveness' agenda as the centre-right, as in France: "After 18 months of stagnation under orthodox socialist leadership, [Hollande] confirmed that he was swinging towards the market-friendly policies adopted over the past 15 years by left-wing parties in Germany, Britain and elsewhere." (The Times, 15.1.14) Or try electing a far-Left government as Greece did, and you'll soon find you get the opposite: the toughest austerity measures that global markets could devise.

So let's be perfectly clear: destructive global competition has left us with pseudo-democracy. As we demonstrate in our forthcoming book, The Simpol Solution, it's pointless swapping leaders in the hope they can change things for they are victims of a system they're not in control of. They're imprisoned by an impotence they refuse to admit and we citizens have yet to acknowledge.

Paradoxically, both Leavers and Remainers, both Trump's supporters and Sanders's, both Right and Left across the world have much more in common than they suspect. The sad irony is that neither side realises that the deeper cause underpinning both their concerns is globalization. Whether it's the Left's concerns about multinationals not paying fair taxes and the lack of funding for public services, or the Right's about immigration, poverty and feelings of cultural alienation, both are symptoms of unregulated globalization: destructive global competition.

The irony, then, is that both factions could recognise how they share a common cause in getting globalization properly regulated. But this requires a shift in perspective and a willingness to expand, not shrink, identity. Our new book, published by Peter Owen in January 2017, has precisely this aim: how together we might regulate globalization. The National Commission on globalization that Gordon Brown proposes, or anyone else concerned with addressing the root causes of global problems, might want to check it out.