[SCMP Column] Ahead Lies Madness

June 27, 2016

Not for nothing do Europeans see the UK as “Perfidious Albion”. Last Thursday, in the course of a single day, 17.4 million British people tore up the foreign and economic policies that have been crafted over half a century. In the cold light of Friday morning, few had yet realized the extent of the self-inflicted harm done in the course of 24 hours. We are facing “a million mad questions”.

Shocked as I am, it is worth remembering that Britain’s habit of “Brexiting” is a long-standing one. You can go back to Henry VIII, and his decision in 1534 to break with Europe (in this instance, the Church of Rome) over his lust for a second wife and a son and heir, to see a consistent Euro-skepticisim at the heart of the British psyche.

It was during the massive Greek crisis a couple of years ago that, driven by Alexis Tsipras’s precocious, naïve and fervent rhetoric, I was first introduced to “sophomoric government”. It was an adjective I had never heard of before, but it captured so completely the brilliant naïve craziness of events unraveling in Athens. This similar naïve craziness has exploded across the UK with similar force over the past three months.

Sophomores, as you may know, are students in the middle stages of degree study: by definition clever, intellectually fertile, they are encouraged to use this middle year to deliberately – and normally harmlessly –to play with “thought experiments”, question the foundations of our world, think heretical thoughts. In Greece, Tsipras let loose sophomoric government on the country’s political system with devastating effect. And the UK has just done the same.

As the Financial Times’s Martin Wolf noted two months ago: “Avoiding needless and costly risks is how adults differ from children.”  Last Thursday, British people voted as children, with a terrible temper tantrum, for which the price to be paid will be incalculable. Clearly the inchoate desire to hit someone, from a population that has felt patronized and manipulated by their political elites for too long, was irresistible. If Britain has left the EU in haste, it will now suffer the pain of separation at leisure.

So much has already been written, and so much more will be poured out in coming months, that it is almost impossible to address in one place the implications of the eruption that has just happened, but here are six key “takeaways” to get us going:
·         The battle for the soul of the Conservative Party. This referendum is a ballot that should never have happened. It was David Cameron’s naïve and regrettable attempt to purge the demons that have for 40 years troubled his conservative party. The split in the conservative party between pro-Europeans, and a xenophobic and nationalist wing has always existed, and in my view can never be purged. Cameron was naïve to think he could resolve the division in such a way. With a country split 52-48 on this, it is clear that the division in his party – and indeed in the country – is as deep today as it has ever been, and will remain intractable for the forseeable future – except that the nationalists, little Englanders and xenophobes will be empowered in the party’s leadership.
·         Break up of the UK? A nation divided: London and Scotland voted against the rest of the country. The divide is absolute. London does not have the option to think about going its own way, but Scotland does, and will. This referendum may have begun the break-up of the UK into four separate nations. At the same time, the divides in the country are profound: between the young and the old; between the rural and the urban; between a privileged and supine metropolitan elite and a traditional marginalized middle class; between pro- and anti-globalisation.
·         Impact on Europe. Europe is as much in trauma on the referendum as Britain is. The danger is now high of right-wing xenophobic and nationalist elements building real power in other major European economies – in particular in Holland with Geert Wilders, and France with Marine Le Pen. Anxieties are high that this could in due course return Europe to the bloody divisions and conflicts of a century ago. Anxieties are also high that the UK’s departure will inflict real economic harm – both directly as the EU’s second largest economy, and indirectly as a liberalizing influence.
·         Fallout from 2008. This catastrophe could not have occurred without the crash of 2008. The economic harm inflicted in the decade that has followed, in particular the loss of jobs and job security, has played a massive part in fanning the xenophobic flames in Europe. It has fueled support for eccentric and normally-marginal political forces like Nigel Farage’s UK Independence Party. The longer the recession lasts, the worse this will get.
·         A legal nightmare: a decade-long transition. There is already talk of a need to create an entire new Ministry in the UK to handle the exit process. Perhaps half of the UK’s laws are rooted in EU legislation, and are going to have to be redrafted. The EU’s “Exit Clause”, Article 50, may set a two-year deadline for exit, but in reality the disentanglement will take a decade or more. This is a good time to be a commercial lawyer.
·         Inequality and the marginalized middle. This almost goes without saying. The political upheavals occurring in different corners of the world – and even in the US where Donald Trump is fanning anti-elite flames with striking effect – are only going to get worse if the inequalities that have emerged over the past two decades are visibly and meaningfully tackled.
And beyond these points, so many millions more mad questions. After Cameron’s resignation, and a vicious internecine leadership battle now about to begin within the Conservative Party, we can be sure that there is going to be no early start to serious negotiations on Britain’s way forward. I fear for Britain. I fear for Europe. How justified my fears, only time will tell. 
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