Wednesday, June 29, 2016

Brexit Post-Mortem

The reason the neoliberal status quo has been around for as long as it has -- 40 years and counting, ten years longer than the social democratic consensus following World War Two -- is that it has proven agile at quickly adapting to threats.

Two recent examples. First, the Arab Spring, which, after stunning victories in Tunisia and Egypt, was completely rolled back thanks in large part to the export of jihad by the U.S. client states of the Gulf Cooperation Council. Next, the Occupy Wall Street movement, which was easily co-opted by Obama's 2012 presidential campaign, with a hefty assist from New York City's Finest.

What is happening in the case of Brexit is more of the same. The neoliberal status quo lost the vote last Thursday but has been winning ever since. The first significant casualty might have been Podemos in Spain's parliamentary elections on Sunday. Going into the vote, many predicted that Podemos would replace the Socialists as the number two party behind the ruling conservatives. It didn't happen. While Podemos didn't lose ground, neither did it gain any. The Popular Party actually picked up seats. The reason for Podemos' lackluster showing is being explained as voter risk-aversion following the currency and equity markets turmoil on Friday following the Brexit vote.

The markets have calmed since. Brexit will not be another Lehman Brothers. The narrative that is cohering to the point that it is close to being chiseled in stone is that the successful Leave campaigners, leaders like UKIP's Nigel Farage and Tories Boris Johnson (BoJo) and Michael Gove, have not a clue what Britain is to do now that its people have actually voted to separate from the European Union. This confusion is crystallized in a much-cited column written by BoJo for The Telegraph, "I cannot stress too much that Britain is part of Europe – and always will be," where he basically dismisses the reasons for a Leave vote by both the right and the left: Immigration will continue and so too will free trade. Britain will negotiate for itself a Norwegian membership in the common market.

Cameron must have been mindful of this dearth of leadership atop the Leave campaign. His 90-day exit is looking like the smart move at this point. Given another week like the last one, the Leave Tories will be so discredited they will not be able to govern. Cameron's Remainers will keep control of the Conservative Party, better able to join Labour's parliamentary putschists -- assuming they are somehow able to rid themselves of the troublesome Jeremy Corbyn as party leader (which I don't think they will be able to do) -- to finagle avoidance of Article 50, whether through a re-vote or artful negotiation.

The problem in all of this are those hard-shell anti-neoliberal voters, both left and right, who have grown deaf to the mellifluous hymns sung in praise of unfettered markets. Bigger is not better. And I would argue that a solid majority of voters in countries throughout the West have come to believe this, which is a real problem for the governing elite. This majority can be tamped down here and there by means of fear and focusing on division within its ranks, but it will not go away.

I would guess that over the next few years the major parties in the capitalist core will continue to splinter.

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