Blinking Into The Sunlight

Joe Guinan and Thomas M Hanna write:

Stagnant real wages, exploding inequality, poverty and hunger, collapsing public services, social atomisation, environmental destruction – the dashboard warning lights on Britain’s economy have been blinking for long enough.

And yet only with Brexit did political elites sit up and pay attention.

The vote to leave the European Union, accomplished in the teeth of an overwhelming establishment consensus favouring the status quo, was a true Peasants’ Revolt, a gigantic act of political retribution against a system increasingly regarded as rotten to its core.

Across huge swathes of Britain, the chickens of decades of top-down economic class warfare finally came home to roost. 

Outside London, every region of England and Wales voted Leave (Scotland and Northern Ireland are separate cases), but the scales of the referendum were firmly tipped by what were once the country’s manufacturing heartlands. 

Here community after community has been destabilised by successive waves of deindustrialisation, whole cities thrown away at tremendous capital, carbon, and human cost.

Before 1979, 6.8 million British workers were employed in manufacturing, accounting for 30 per cent of national income. 

By 2010 this had fallen to 2.5 million and 11 per cent. 

Boiling anger and an abiding sense of economic disempowerment meant that something had to give. 

Brexit became the instrument, with long-standing insecurities ruthlessly exploited by the racist and xenophobic right. 

Many who prescribed painful economic adjustments for Northern manufacturing communities are not so sanguine now that Schumpeterian “creative destruction” is being practised upon their own preferred order. 

And while Westminster and Whitehall must shoulder most of the blame for Britain’s socio-economic woes, Brussels, with its protected anti-democratic policy-making sphere, is also reaping what it helped sow. 

Neoliberalism did not begin in the EU. The testing grounds were Chile, Britain, and the United States. 

But from the Single European Act and the Maastricht Treaty on through the Stability and Growth Pact to the Lisbon Strategy, the thrust of European economic policy has been to extend the market through liberalisation, privatisation, and flexibilisation, subordinating employment and social protection to low inflation, debt reduction, and competitiveness. 

Post-financial crisis, agonising austerity has been imposed – especially on the periphery. 

Any attempt to create a different kind of economy from inside the EU has been forestalled through powerful legal impediments embodied in the treaties. 

An effort is now underway, especially on the left, to airbrush from history these market-fundamentalist aspects of the EU. 

It won’t wash. The record is too well documented. 

The extensive Commission-funded PRESOM study by academics from twelve EU countries concluded that “the EU has taken over from the WTO and particularly from the GATS the role of the avant-garde and driving force of further liberalisation and privatisation.”

Even the European Trade Union Confederation complained in 2010 of the “slow ‘creep’ of Commission and ECJ decisions,” warning that the European Court of Justice would “end up opening and liberalising all public services.” 

Brexit is symptom and not cause of a deep underlying malaise. 

It is also a historic opportunity for a “Lexit” (left exit) from EU market liberalism. 

The aftershocks of the vote have already destabilised politics-as-usual, and there is a real prospect of a Corbyn government. 

We ought to be busy developing a radical agenda, fleshing out John McDonnell’s promising “new economics.” 

The elements are increasingly clear. 

Instead of the concentration of wealth, the broad dispersal of ownership.

Instead of the icy-smooth frictionlessness of the single market, the rooted participatory democratic local economy.

Instead of the extractive multinational corporation, the worker- or community-owned firm.

Instead of asset-stripping privatisation, democratised public enterprise.

Instead of commodified migrant labour packaged as “free movement,” higher wages and workplace standards for all workers.

Instead of austerity and private credit creation by rentier finance, the huge potential power of public banks and post-scarcity sovereign fiat money.

Only through such political-economic alternatives can we institute genuine solidarity and true international cooperation.  

Doubtless all this will involve significant dislocations. Unwinding an economic order is never easy.

But unlike climate change, Brexit need not be the end of the world.

On the contrary, it may mean that Britain – the first advanced industrial economy to provide a laboratory for neoliberal policies – can now be the first to re-emerge, blinking into the sunlight, as the long dark night of neoliberal economics draws to a close.