So, the first day of the new world created by the #Brexit has revealed a lot. Roughly $2 trillion were stripped out of the global markets, the pound sterling hit a 36 year low against the dollar, the FTSE and DOW are down over 3% and this is being proclaimed a success for Britain. If so, what does failure look like?
Global economy, meet irrational nationalism! The world’s economy grows when restrictions are lifted, not imposed. One reason for leaving the EU according to the “leavers” was to free themselves of the regulations from Brussels. Now these same people must implement regulations on immigration, trade, taxes and governance. They feel a small nation with limited industrial output can negotiate better deals with he US and China than a group of nations with 300 million consumers. Good luck with that delusion! Britain standing alone will get trampled or just by-passed. Which markets are more attractive to the US and China, the U.K. or the EU, or India, or Brasil? Pretty simple right?
There is also a desire for the 1 million immigrants who have entered the UK to be forced out, okay with Brexit that is fair enough. Just the same, the U.K. must be prepared to welcome home the 2 million Brits working in the EU who could be sent home as persona non grata and unemployed. What a great deal that will be for the UK. I don’t suppose those unemployed people will apply for the dole, because of a spirit of nationalism, but then again…
Finally, it is quite ironic that a country that created an empire out of domination and colonialism seeks to rid itself of immigrants and return to the good old days. The glory that was the U.K. in the early 20th century will never return. This blogger believes that before the exit is final, the Brits will realize that a common market, unified in the European Union is preferable to being marginalized as a country with the influence of a developing nation or less and they will revisit this referendum. If not, who will care what the U.K. has to say? With the influence held by a small insignificant power, who cares what they think, what they produce or if their economy struggles? Now the European Union on the other hand, with 300 million people…we must pay attention to.
Similar sentiments in the U.S.A. are a throwback to the isolationism and protectionism prior to World War II. Economic historians show that the greatest growth in the US economy occurred after that war, when our country engaged in the world and knocked down borders, walls and restrictions. Reverting back to isolation, walls and restrictions won’t bring prosperity but will deliver growth and restrictions similar to what is evident today in Russia.
How strange that our political system has reversed itself. As recently as the 1970’s the Republicans argued for less regulation, open markets, fewer borders and freedom of movement, Democrats opposed much of that. Now they seem to have traded positions. Whichever side of the divide you fall on, being an American in a flourishing economy is preferable to being an American in a strongly nationalistic, protectionist society with a perpetually anemic economy. It come down to nationalism at all costs…really at all costs. The cost of growth, lifting the poor out of poverty, diversity of society and global engagement.
We too can withdraw from the world but the world will forge ahead without us, just as we will forge ahead without the U.K. We can be proud Americans, engage in the world, welcome the immigrant, have societal diversity, remain safe and still prosper. Some candidates say we cannot do this, that Americans no longer have that capacity; we should be fearful and withdraw. Exactly what do the candidates want us to fear? Does that fear truly benefit the citizens of our country and the world? I believe it does not.