The British vote to leave the EU has been hitting markets hard since the results became final early Friday morning Washington, DC, time, although the wild swings moderated and the markets stabilized somewhat as the day went on. Doubtless some volatility will remain for awhile due to the uncertainty, which markets never like, but that will lessen over time. Armageddon is not taking place, despite the hand wringing in some quarters.
Many are decrying the vote as a vote for illiberalism, some voices going so far as to accuse British supporters of a Brexit of racism, fascism, etc. The claim has also been made by some that the UK’s departure from the EU somehow means that the UK no longer stands for “transparency and democratic values”. Nonsense, on all counts. Nor did the vote take place, as the Washington Post rather patronizingly implied in a story about Britons supposedly Googling “EU” in order to learn what they had voted to leave, because the Brits had no idea what they were doing. For some time now the EU has not been delivering on its promise of stability and economic prosperity, and Brussels has undermined the values of transparency and democratic governance that are supposed to be at the core of Europe’s cultural identity. This is one of the primary reasons for the euro-skepticism that has been growing throughout Europe. The vote was driven by concerns about transparency and representative government, the desire to bring decision-making over the rules governing Britain home.
There were also deep, and justifiable, concerns about Britain’s ability to control its own borders and have some control over the mass of migrants flooding the country, mostly from non-EU countries. This was a short-term stimulant, however, and not a fundamental cause of Euro-skepticism. Euro-skepticism has been a hallmark of British identity for decades, just as paralyzing labor strikes are a hallmark of French identity. The 17 plus million British voters (the election saw an extremely high turnout of 72%) who voted to leave the EU represented a broad and diverse coalition. They voted to leave in order to choose a restoration of British sovereignty and political and economic freedom over what they saw as a massive bureaucracy and a largely unaccountable (speaking particularly of the EU’s executive, the European Commission) central government that has grown up in Brussels issuing stifling regulations that have created a sclerotic business environment and severely reduced the possibilities for economic growth, and, most importantly, limited both economic and political freedom of choice.
Timothy Stanley of The Telegraph expressed this point of view well when he wrote Friday that “This is the day the British people defied their jailers”. In the wake of the vote Lord David Owen, the former Labour Foreign Minister who served in the period just after Britain joined the EEC,reminded young people, who tended to vote to remain in the EU, that “Young people do not realize how much they miss from not being able to govern their own country.”
The Brexit vote also needs to be understood within historical context. Britain made the decision to join what was then the European Economic Community (EEC) in the early 1970’s and finalized that decision with a referendum in 1975. At that time, Britain was beset by economic underperformance and uncertainty, as well as doubts about its national identity in the wake of its loss of empire, particularly marked by the Suez Crisis of 1956 and by its decision to withdraw from the few remaining positions it held “East of Suez” in the late 1960’s. Its people preferred the stability and security that was supposed to come from EEC membership. Britain, plagued by nagging self-doubts, widely perceived itself to be a nation in decline, and saw the EEC as a bit of a life raft. That is in marked contrast to the UK’s self-confidence and self-perceptions in 2016.
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