This Article is From Jun 28, 2016

Brexit Is What A Dark Age Feels Like. Here's Why.

Elites in the West are in trouble. Their careful curation of the polity and economy is coming badly unstuck. Their credibility in delivering consumerist goodies is shattering. They have worked so assiduously to eliminate and denigrate all alternative social models that the frustration people now feel has no where to go, no reasoned idiom in which to express itself, so it comes out all over the place. 

This is what a dark age feels like.

The only alternative grand narrative to the liberal market that withstood its celebratory march was nationalism. Especially after 9/11, nationalism of a particularly conservative kind was consistently mobilized by elites in the West in order to create the conditions for an aggressive foreign policy and as a complement to the panglossian idea that unfettered markets created the best of all worlds. Nationalism and neoliberalism were mutually reinforcing up to the point where capitalism continued to deliver the goodies. Once the goose stopped laying those eggs, this dynamic became antagonistic. This is what we are seeing today.

There is an old trope in left politics that the working class fail to act and vote in their own interest thanks to the smoke-screen of nationalism. Workers of the postwar world failed to unite across national borders, and instead forged alliances with their own national elites, out of love for nation rather than their fellow workers spread across the world. 

The reality is more prosaic. These elites, fearing a leftward slide of their own working classes, were convinced to share some of the spoils of capitalism in the interest of maintaining their own hegemony and maintaining the social peace. Workers of the West took the deal, gaining the welfare state and steady employment in return. Nationalism served as a useful framing device for what was, at base, an inter-class alliance, one that survived as long as the economy delivered the goodies.

In the course of this arrangement, something called "economic growth" became a common-sense, desirable thing. Yet, the obsession with growth on the part of those already rich, something we now appreciate as potentially world-ending, has a straightforward political root. In the absence of unceasing growth, the commitment to deliver more goodies to working people could only be make good through redistribution. If the pie isn't growing, the only way you can give a majority the larger slice you promised is by giving someone else a smaller one. And growth started to hit the rails in the 1970s with oil shocks, labour unrest, and general economic maturity after decades of postwar prosperity. Elites were faced with a stark choice: redistribute, or find another source of growth, quick.

The solution they found was given the rosy name of "globalization." Moving the manufacturing sector, which tended to be powerfully unionized, overseas to "emerging markets" with authoritarian control over their own working people was the solution. It was the elites of the world who united. Those of East Asia benefited from access to lucrative Western markets and created their own growth miracles, while Western elites were able to discipline their working populations with the threat of outsourcing, even while restarting the growth engine through the delivery of cheaper-made goods and the import of well-behaved immigrants grateful for a chance to work in the West. New technology and a new geopolitics of oil assisted this new global arrangement.

This was always a fudge. Western elites were just "buying time," to quote German sociologist Wolfgang Streeck. The myth of a flexible labour force able to be retrained into the burgeoning service sector was just that: a myth. The legacy of postwar industrialism is a working class with no work; once proud industrial cities now turned to rust dot the north of England and the American midwest. The fix worked so long as capitalism delivered the goodies, first with cheaper goods, then with public debt, and most-recently with private debt that was delivered on a scale so far unimaginable thanks to developments in financial engineering and planet-sized pools of saving streaming in from East Asian growth.

The Crisis of 2007 brought the latest fix to an end. Without the ability to pump out debt to a majority with chronically stagnant wages, Western elites could no longer deliver the goods to rustbelt populations. So convinced of their stranglehold on the polity, elites badly miscalculated the post-crisis clean-up by having the government bail out the banks - and then paying for the resulting ballooning in the deficit by slashing an already-bare-bones welfare state. They crashed the economy and made working people pay for it. The mask had slipped. The national pact now turned sour.

Because the inter-class pact was forged in the language of nation, while other narratives went by the way side, the complaint at its shredding was also voiced in that language. It was not that years of low investment had decimated the welfare state; it was that immigrants were placing undue burdens on it, whatever the facts might say. The irony in the UK is that because of a lack of investment in domestic human capital, the UK has to import most of the labour that runs its National Health Service; the crown jewel of the welfare state is run by immigrants. 

Without growth, nationalism was the lone pillar on which the post-industrial order in the West could stand. And nationalism came to be the preserve of those left behind. Metropolitan elites, already spatially segregated from the rest of the country by astronomical housing prices in cities, sneer at the rest of the country as simply being another country. London, the south-east of the UK, and the American coasts are indeed plugged in to a different global order, one only nominally attached to the rest of the legacy nation-state. Those cities that successfully made the switch to globalized service industries developed a cosmopolitan, worldy ethic, while the rest were left to resent broken promises of strong national economies.

Those left behind by the new settlement still had one last asset left, however - their vote. Their anger had to be managed. In adversarial political systems, their resentment could be exploited by political opportunists. It was precisely the fear that such opportunists would flank the Tories from the right that made David Cameron gamble on the referendum to begin with. The gambit was to meant to give vent to the issue - and then squash it at least for a generation. That it failed, albeit narrowly, is again testament to how elites, cosseted and isolated in their world cities, can make serious errors of judgement. Needles to say, Trump is testing the Republican political establishment in much the same way.

Nations are political units but increasingly, they are not economic ones. World cities are connected to developing-nation industrial belts and resource-rich hinterlands in other nations to form a global economic order on its own. Elites from across the world coordinate in ever-deeper ways. Cutting across this global economic order is the vestigial grid of nation states. This contradiction between national polities and global economies will continue to throw up earthquakes like Brexit.

The elite-run press wail at the death of reasonable discourse, the failure of experts to convince the public with technocratic arguments, the perfidy of opportunists who weaponize peoples' misery with sheer lies. Yet the simple truth is that reasoned arguments never held the political order together; this was always a liberal myth. The order held together because it delivered the consumerist goodies. And it could only continue to deliver by means of increasingly-fragile fudges. These are now over.

People want a new order in which a sense of belonging and a sense of security, nationalism and economics, go together. There is nothing intrinsically wrong with this democratic desire. At base, this is what this vote is about. The British people are of course not alone in this search. In searching for a vision in which nations can be economically strong in a connected world, some opportunists will pair up with genuinely racist elements to make political capital. But to see this as merely the resurgence of some archaic, parochial, provincial populism is to miss the wood for the trees. 

The saddest irony of this vote, however, is that although the underlying impulse is a democratic one, the result will be anything but. Eurocrats will want to punish the UK in order to make an example of it, while British elites themselves will now double down on the slash-and-burn of the welfare state in the name of boosting the economy. Unchecked by the remnants of European social democracy and with the Labour party in shambles, the right-wing of the Tory party will sense that it has the field to itself. The resulting economic pain will of course only further incense those already angry. With the nationalist card now played, the stage is set for old-fashioned class war in one country.

(Anush Kapadia is a social scientist at IIT Bombay.)

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