Brexit, Neoliberalism and Empire

BREXIT IS JUST ANOTHER SYMPTOM OF A DISEASED GLOBAL SYSTEM

Yesterday I sat down to make sense of the Brexit vote. This was asking a bit much as the “leave” vote seemed such a clear folly that it is mind-boggling that it happened at all. So I sat behind my computer and tried to concentrate on a single question. How did we get here? or more specifically, how did we get to a place where a group of people like the British would vote so obviously against their own best interests? And while I was pondering this, applying sociological reasoning, looking for connections with which to make sense of the nonsensical, my mind kept coming back to Trump.

From Scotland, Trump gloated about the the British vote and admonished us all to beware. This brand of political reaction is coming to a nation near you. Winter is coming!  Marine Le Pen referred to Brexit as a victory for freedom. Right-wingers and neo-fascists all over the world rejoiced. Frankly, those things that make the hard right rejoice should be held deeply suspect. It was clear to me that making sense of Brexit required an analysis of global structures that have been in place for a long time. Brexit is not a catalyst for a new world order. Brexit, and Trump for that matter, is a symptom of larger problems within a global system in crisis. If we don’t understand the overall disease, then we will all surely fall. And when we do, it will be Trump, Le Pen and their ilk who will be there to pick up the pieces.

Let’s face it, the Brexit vote boiled down to xenophobia and bigotry, variables we know all too well in the United States. On the one hand, Britons, especially the older set, didn’t like

the idea of British money going to “those people” rather than being used to benefit good, tax paying Britons. On the other hand, Britons were concerned about more of “those people,” specifically Eastern Europeans and Muslims, coming to the United Kingdom and ruining everything. Finally, where there is xenophobia and ethnic animus, you can always count on right-wing demagogues to invite themselves to the party and whip up the opposition. Ethnic tensions and the consequent scapegoating whipped up support for the otherwise marginal United Kingdom Independence Party and it’s Trump-like leader Nigel Farage as well as empowering right-wing separatists like Michael Gove and Boris Johnson, the latter of whom may well become Britain’s next Prime Minister.

 

That’s not to say that there’ weren’t some good, non-bigoted reasons for criticizing the European Union. As Paul Krugman notes, the European Union experiment had more than a few bugs to work out. Primarily, an economic union with a common currency was created without also constructing a unified governing body. Capital and labor could move freely across borders while national governments remained separate, expected to deal with their own fiscal issues. At the same time, monetary policy remained in the hands of the European Central Bank (ECB), requiring individual nations like Greece to borrow in what amounts to a foreign currency. It’s important to note that Britain, having retained the pound, does not have this particular problem. During the Great Recession it became clear that the ECB was a tool for the corporate elite, causing considerable suffering among every day citizens.

The European Union also allowed for member nations to travel freely across borders, which, under more prosperous times, is of little concern. However, when economies fail and economic resources are hard to come by, an unfortunate result is wariness of “the other.” The Other is often defined in ethnic and cultural terms and is seen as a competitor in the local marketplace. As workers from the most affected economies cross borders looking for economic opportunity each nation is, in essence, importing instant scapegoats.

 

That being said, these problems may have increased tensions in England, but, they are mostly policy issues that can be resolved through policy processes. They are not, in and of themselves, a reason to leave the European Union. This is especially true when you measure the economic costs of leaving with those of remaining. This would be akin to North Dakota leaving the United States because of the economic strains caused by the housing bubble that most impacted Florida and Nevada. Despite this, a majority consisting of mostly older English and Welch Britons believed that its fear of “the other” was worth the economic consequences of Brexit.

And that is what does not make sense.

Setting the Stage?

How did we get here? This is the key question. Look, it is clear that Trumpism is not unique to the United States. Here we have a significant part of the population that wants to build a giant wall in order to keep immigrants (brown ones specifically) from entering the country. England just endangered its economy and standing among nations, as well as the integrity of its own union with Scotland and Northern Ireland, in order to keep Poles, Romanians and Muslims out. Marine Le Pen and her neo-fascist National Front is calling for a France exit (Franxit?), mirroring Donald Trump. Right wing parties all across Europe are rejoicing the future demise of what has been one of the most ambitious multicultural experiments of economic and political unity in history. A right wing resurgence, including Trumpism, is a global phenomenon and must be addressed as such.

This is where it gets a bit tricky. The fact is that proto-fascists and xenophobes are always present in every society. Enlightened societies can usually shame and shun this fringe into the most hate-filled margins where they can largely be ignored. Periodically, however, such groups do expand their following. When conditions are just optimal to maximize fear and anxiety, that’s when the ravings of the far right fringe becomes a legitimate discourse that must be contested. It’s usually a process that takes some time to develop.

The genesis of our current crisis rests in the rise of the American right wing and the Reagan Revolution of the late 1970’s and early 1980’s in the United States. This corresponds with the rise of Thatcherism in England. During this time, the United States and England were feeling the first gravitational fluctuations from a global economic realignment as industrial nations destroyed by World War II started to get their manufacturing sector back on track. The United States was reeling from its Vietnam War expenditures, the Nixon Shock from coming off the Gold Standard and the fall of domestic oil production vouching OPEC nations a market mechanism through which to protest U.S. support of Israel. The result was economic stagflation in the 1970’s, a condition in which England and the United States suffered grievously. It’s not coincidence that Reaganism and Thatcherism arose around the same time.

Reagan-Thatcherism were presented as the only solution to what was, in essence, a difficult, but not out of the ordinary global realignment. Conservative institutions, now serving a growing corporate elite, presented the hardships of the 1970’s as the natural result of socialism masquerading as progressive liberalism. Governments were not competent to control the economy in quite the way that corporations could. Instead of taking care of the economy, the government was transferring wealth from those who deserve the wealth, and giving it to those who were undeserving, the Welfare-Queens. The welfare state had destroyed the incentive to work and government spending was crowding out private investment. Keynesian economics was abandoned for what used to be fringe economic policies of Friedrich Hayak and Ludwig von Mises from Austria and selective readings of Milton Friedman as well as, believe it or not, mediocre novelist Ayn Rand in the United States.

What Reagan and Thatcher offered was a particularly unpopular philosophy, a brand of elite corporatism based on a meritocratic myth. The wealthy were so because they worked hard and deserved their riches. Anyone who was not wealthy was simply not good enough to be wealthy. Each person would rise or fall according to his ability. Government efforts to redistribute the wealth not only constituted a theft from the deserving, but was either misplaced, rewarding the lazy, or fruitless, allowing the stupid to survive longer than otherwise justified. In essence, Reagan and Thatcher gave voice to regressive Social Darwinism that had long been rejected.

Others had tried before them, but Reagan and Thatcher were able to couch their insidious Social Darwinism in rhetoric of freedom and moral superiority. Big government was dangerous to liberty. It was, in essence, Stalinism intent on making everyone serfs to the all powerful state. The solution was a small government that did nothing more than provide for the national defense and otherwise had minimum interaction with the people. Of course, this was great boon to the economic elite who were in the best position to compete against everyone else. In short, Reaganism-Thatcherism was dedicated to redacting the New Deal philosophy that government should act as a check against corporate power and exploitation and repealing the laws and structures that did just that.

The consequences of such a system were clear. That’s why Barry Goldwater failed so spectacularly. But conservatives had learned a thing or too about messaging. The underlying message that Reagan and Thatcher were so adept at conveying was the myth that you, yes you, were really part of the elite. You would benefit from less government, a smaller social safety net, a government dedicated to law and order. After all, your hard earned tax money was going to “those people”, the undeserving. If not for “those people,” in the United States this largely meant “black” and “brown” people, you would be fine. If those people weren’t being handed entitlements that you paid for, you could spend that money on yourself. Liberals don’t care about you, they only care about “those people.” The xenophobia was set. This racial and ethnic scapegoating was the focus of Richard Nixon’s “Southern Strategy” and has been a centerpiece of conservative politics since.

The problem with this so-called “small government” philosophy dedicated to freedom is that the United States and England both had an entrenched, imperial, history and the United

States was the military arm of capitalism during the Cold War. A strong military, especially in the United States, still the largest military in the world by far, had to be maintained. But a philosophy that pretends to small government must also have a pretense for a large military, such as defending democracy and freedom from communism, now a war on terrorism. The latter is brilliant, because a war on terrorism, a tactic, can never end, can never be won. It’s self-perpetuating. So a key component of Reaganism-Thatcherism is militarism. Reagan, of course, had to deal with the phantoms of America’s last military adventure, Vietnam. As he engaged in a small and unnecessary military campaign in Grenada he was legally blocked from military intervention in Nicaragua. Thatcher also boosted the British military and instigated a war with Argentina over the Falklands. For Reagan and Thatcher, the military also provided the Keynesian stimulus their economies needed without the whole bleeding heart liberal stuff.

 

With the end of the Cold War the above above philosophy, corporatism, social Darwinism and militarism incorporated into a larger, global vision of neo-liberalism, what became known as the Washington consensus. Globalism wasn’t new. The first post-war forays into a sustainable globalism was decided upon at Bretton Woods. Bretton Woods was a banker’s dream, but with memories of fascism just over their shoulder as well as uncertain competition from Russia and later China, Keynes played a role in the Bretton Woods system. Nixon ended the original Bretton Woods agreement upon abandoning the gold standard. The stagflation of the seventies served to upend the influence of Keynes.

With the fall of the Soviet Union and the reforms of Deng Xiaoping in China, the capitalist system claimed triumph. Socialist influences in the post-war globalization that contributed to a consumer society and economic stability were not only relegated to the memory hole, but were scapegoated as a source of instability in the capitalist system that had to be completely rooted out. Globalization, which could have been a democratizing force in the world, instead focused on neo-liberalism and transnational corporate hegemony. Victorious and vainglorious neo-liberals pursued free trade agreements, corporate rights, and rolling back any concept of a collective commons, including natural resources, social safety nets and collective action.

Now this philosophy remained hugely unpopular. Many nations rejected and continue to reject the Washington Consensus and neo-liberal policy. However, neo-liberalism was the doctrine of choice among multi-national corporations, national monopolies and, especially, international banking and finance institutions like the World Bank, the International Monetary Fund (IMF) and the European Central Bank (ECB). During the post-Cold War years, these institutions exploited what Naomi Klein so deftly defined as the Shock Doctrine. In essence, those nations that rejected the kind of corporate dystopia promulgated by the new globalization could be transformed using good, old fashioned blackmail.

During times of crisis, economic collapse or natural catastrophe, the World Bank and the IMF would come to the rescue, as would Milton Friedman’s Chicago School economists. This rescue, however, wasn’t free. In order to get the help that was necessary to save lives and rebuild nations, governments would have to concede to neo-liberal requirements of privatizing the commons and rolling back social safety nets. Loans from the IMF were to be repaid even at the expense of the national welfare. This system of global financial blackmail was also be used against underdeveloped nations. John Perkins, in his book Confessions of an Economic Hit Man, elaborates the malign influence of international finance in a corporate imperialism unlike nothing the world has ever seen. A corporate imperialism that was militarily enforced by the United States and its most loyal ally, Great Britain.

What could possibly go wrong?

The stage was set. Cold War structures, including brutal dictatorships supported by the United States and its NATO allies because they could suppress their communist and socialist influences remained in place despite the fall of the Soviet Union. The end of the Cold War eliminated any small check against corporate exploitation that may have existed. Neo-liberal trade agreements and the advancement of telecommunications technology made it possible to crush private sector unions in nations that were willing to cooperate with the corporate agenda. The United States and England were noteworthy in the collapse of union participation. Growing global institutions fully abandoned any concept of a social contract and replaced it with market libertarianism. The neo-liberal order was ascendant, defended by American and British corporate elitism.

Then 9/11. As the great Chalmers Johnson predicted in his book Blowback, American imperial ambitions contributed to the formation of terrorist networks, many previously trained by the CIA, intent on striking against the last global superpower. In the 1980’s the United States funded and fueled the Mujaheddin in the last great struggle against communism based on the Domino Theory. The Mujaheddin combined guerrilla warfare with fundamentalist Islam in a dangerous brew.  In 1991, when Saddam Hussein posed a threat to the neo-liberal order by invading Kuwait, the United States and Britain put together an unnecessary military coalition to confront him. In the process, American troops were stationed in Saudi Arabia. The presence of foreign troops in the Islamic Holy Land, and blind U.S. support for Israeli imperialism inspired Osama bin Laden and his al Qaeda, a former CIA asset, to turn against its erstwhile patron. This culminated in the deadly attack on 9/11, the worst such attack  on U.S. soil since Pearl Harbor.

The United States, the world’s foremost military power, decided to respond militarily. It’s not that it had to. Al Qaeda, in essence a criminal syndicate, could have been confronted through more appropriate means. Instead, the United States decided to invade Afghanistan, a nation which had nothing to do with the attack on 9/11 except for the fact that this was bin Laden’s last known address. The United States, however, had to invade not because it was tactically the best option, but because imperialistically, the empire cannot be seen to be weak before the world. It didn’t take long for the U.S. military to topple Afghanistan’s ruling Taliban government.

What became more complicated was the resulting instability and the inability of the United States or any outside force to install a friendly government that was at the same time legitimate to the people. To do so, required first the elimination of the Taliban. It would not do for the Taliban to simply come back once occupying forces were gone and take over the government again. Like it or not, the United States and its allies, Britain among them, were stuck in Afghanistan and had to expand their military footprint to bordering nations like Pakistan.

To add insult to injury, however, the Bush Administration, blood dripping from its fangs, were anxious to sink its teeth into another victim–the much hated Saddam Hussein. It’s hard to say why Hussein was such a reviled figure to the ruling neo-cons of the Bush Administration. He really was a mostly tin-horn dictator, again, a former U.S. asset turned acrimonious. That he was sitting on the second largest oil reserve in the world at a time when the United States was reeling from high gas prices certainly played some role. Regardless, every effort was made by the Administration to invade Iraq. It did so in 2003 under false pretenses.

The attack on 9/11 was the international equivalent of firing a bee-bee at a bull in a china shop. Most of the damage was to the China. U.S. and British military performance in Iraq mirrored its success in Afghanistan. Unfortunately, it also mirrored its failures. Toppling a government is one thing, establishing a governing body that has legitimacy in the eyes of its people is quite another. The resulting insurgencies and the associated costs in deaths, mutilations, psychiatric disorders and dollars were more than Americans were willing to bear. They also created power vacuums in a region that was politically shaky from almost a hundred years of Euro-American patronage. These power vacuums advanced the agendas of groups that were in the best position to exploit them, namely heavily armed, well trained, religiously motivated gangs and syndicates, most notably ISIS as well as al Qaeda offshoots.

It also destabilized the political order of the entire Muslim world, a world precariously held together by brutal regimes serving the interests of the United States and NATO. These governments often had their origins in British and French mandates after World War I and American patronage during the Cold War in the face of nationalizing, anti-colonial forces. In 2010 an international movement known as the Arab Spring spread throughout the Middle East and North Africa. Nations like Egypt and Tunisia overthrew their U.S. sponsored dictators. In Lybia, NATO corroborated with local forces to overthrow and ultimately kill a former asset gone rogue, Muammar Gaddafi. Nations like Saudi Arabia and Iran managed to weather their own uprisings through force and political coercion. The biggest victim, however, was Syria.

Syrian strongman, Bashar al Assad inherited his father’s  (a former Soviet asset) dictatorship in 2000. With his western education and professed desire to “liberalize” the Syrian economy, he was tolerated by the west. His anti-democratic position was also embraced by Russia as a check against NATO expansion and an opportunity to influence Middle Eastern policy.  In 2011, resulting from a severe drought and democratizing forces of the Arab Spring, Syrian citizens mobilized for relief and reform. Assad responded by slaughtering the protesters. U.S., NATO and Russian political intrigues have since turned Syria into a bombed out ruin. A perfect locus for ISIS to play out their power games.

The consequence of neo-liberal imperialism in the Middle East, as well as Central and South America and Sub-Saharan Africa, among other places, combined with global climate change has created a massive migration crisis. We may be looking at one of the most intensive demographic transitions in modern history. MSNBC reports that “Nearly 60 million people are on the run for their lives, stateless and scared, fleeing war and persecution, according to the United Nations.” Under the best of circumstances, accommodating what amounts to the population of Italy, with more on the way, would be daunting. But these are not the best of circumstances.

In 2008, the entire neo-liberal facade collapsed, bringing the global economy with it. Part of this had to do with deregulation driven by Reaganomics, allowing financial institutions to create wealth using obscure securities instruments rather than by actually investing in productivity. Part of this had to do with very real shortcomings of the European Union common currency. Regardless, what we had was a global recession involving deleveraging and debt overhang. In other words, it was a crisis that demanded Keynesian stimulus because Friedman style monetarism, using banking mechanisms to stabilize the economy, could not work. Instead, the response from policy makers was a demand for austerity to secure investors, the very institutions that caused the crisis. Austerity is the universal economic remedy of neo-liberalism even if it is, as it was in 2008, the exact opposite of what is needed. Cut spending and balance budgets and Krugman’s satirical Confidence Fairies will come and make everything okay.

The United States under President Obama and a spineless Democratic congress did squeeze out a pathetic stimulus that did have the predicted effect, but was far too small to actually turn the economy around. Europe, however, under the misguidance of the European Central Bank and core nations led by Germany insisted on austerity, rolling back significant benefits for the people in order to stabilize investments that benefited the global 1%. Policy makers in Europe and obstructionist conservatives in the United States, thus condemned the western world to almost a decade of economic stagnation. Even where leftist parties took control, like Greece and Spain, the power of the European Troika (the European Commission, the ECB and the IMF) could not be ignored. This has not been lost on European citizens.

Brexit is just a symptom of larger global trends

So what we have is a situation in which the establishment players are totally delegitimized in the eyes of the people. And for good reason. The establishment was set up to support a small sector of the global corporate elite at the expense of our natural resources and to the exploitation of our working men and women. The foundations of western society, corporate dominance, imperialism and militarism, have collapsed more or less at the same time culminating in a complex, multifaceted crisis of global proportions. On one hand, we have economic instability, with an increasing amount of wealth being concentrated into the coffers of a tiny minority. At the same time we have people representing other cultures, displaced by social instability, and looking for opportunities, competing for what we see as a shrinking pie.

But we really don’t deal with complex, multifaceted crises of global proportions. Instead, we tend to be attracted to simple, localized crises that we can point a finger at. We want a scapegoat. Such conditions are historically ripe for right-wing demagogues to enter the fray and sort out the complexities for us. The problem is “those people.” Look in that direction. If we can just get rid of those people by either building a wall or separating ourselves from them, then everything will be all right. And so long as this perspective serves to prop up the corporate elite, the more media attention this discursive construct gets, further legitimizing what amounts to bigotry and fear, but doing nothing to actually resolve the large global issues that requires us to confront the corporate elite.

The problem is that right-wing demagogues often become a force on their own right. They become the equivalent of Dr. Moreau’s Monsters. They serve to distract us from burning down the edifice of corporate power, but they demand to be fed.  Enough of a following means independent power structures in the hands of a virtual cult figure like Trump or Farage or Le Pen. These are dangerous times. Brexit is not a catalyst, however. Rather it is a symptom of a more significant rot that could easily spread throughout the western world. Left unchecked, it can completely derail what remains of enlightened civilization.