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A Brief Thought on Nigel Farage

05/07/2016
politics, UK

Nigel Farage, by far the most extreme of the mainstream cheerleaders for Brexit and certainly the political leader most comfortable with brushing shoulders with actual racism and fascism in his utterances, has resigned from the leadership of UKIP, the United Kingdom Independence Party. In UKIP’s moment of triumph, pyrrhic though it may be, Farage has stepped down from the party with which he is synonymous. It’s the latest in a series of resignations and retreats which have claimed the man who called the referendum, David Cameron, the man who led the Conservatives campaigning to Leave, Boris Johnson, and now the man who led the only political party to campaign in its entirety for Leave.

Where will Farage go? With Farage having met with media baron Rupert Murdoch the day before his resignation, speculation has inevitably turned to the possibility that his incredibly high media profile over the past few years (far outstripping anything justified by UKIP’s actual political representation) will now translate into a media job. It would make sense in many ways. Farage is nothing if not intensely egotistical (he’s dramatically stepped down as UKIP leader in the past, only to return to the job within days) and it’s hard to imagine that at this, the moment of his triumph, he would disappear from public life. A media role would let him maintain his profile and do what he loves best – lobbing grenades from the sidelines as Britain’s political establishment tries to sort out the mess (whenever they stop making new messes and get around to actually sorting anything out).

Regardless of what Farage does next – and it is also possible (if a little out of character) that he’ll fade away for a little while to spend more time with his £80,000 MEP salary – he won’t be gone for long. His departure now is a calculated one. Unlike Boris Johnson, who never intended for a Leave victory and whose best-laid plans were thrown into disarray by it (and by Michael Gove stabbing him in the back), Farage likely believed that Leave could win the referendum all along. He’s got a plan, not for Brexit – nobody had a plan for Brexit – but for himself and his future career.

Farage is a rabble-rouser, and he knows that the rabble he has roused is going to stay roused. Brexit isn’t going to deliver what Leave voters want, not least because what many Leave voters actually want is impossible by any means short of a full embrace of fascist authoritarianism. Britain will muddle through somehow – economically and politically damaged, perhaps outside the EU, and perhaps with the UK no longer intact. Migrants will still be there, though. Businesses owned and staffed by non-white people will still be there. EU regulations will mostly still be there. The people who have been left behind by successive waves of neoliberal policymaking over the past 35 years will, if anything, be even worse off than before. Their vote to leave the EU won’t have changed their economic misery or removed the visible manifestations of the immigration which they blame for that misery. Their anger with politics, with governments, with elites and with all of the institutions which make up the British state will only intensify and curdle as they come around to the belief that the politicians have screwed them again. They voted to leave, and the politicians found a mealy-mouthed way to wriggle out of it. The people, the real people, the proper English people, spoke, and all those lying experts and self-serving intellectuals and greedy politicians just found a way to ignore it.

Nigel Farage will be right there to nod, to listen and to focus that outrage, fear and fury – just like he did prior to the referendum. He wants to be out of politics for now, because he doesn’t want to be seen to have anything to do with the stitch-up that’s inevitably coming. In his absence, UKIP will likely fall into a terminal decline. It’s never truly been more than the Nigel Farage Party, with other senior figures like Douglas Carswell and Neil Hamilton having none of his profile, his charisma, or his political nous. It doesn’t matter; UKIP was a vehicle and has served its purpose for now. Farage gets to play the tired, noble statesman who has achieved his purpose, slide out of politics (whether into the media or into temporary obscurity is a moot point) and ready himself to step back in down the line. He’ll be just as outraged as the Leave voters. He worked so hard for this result, to secure the UK’s independence, and those grasping, sleazy politicians in Westminster have undermined it all and ignored the voice of the real English people. He will be the perfect chalice to hold their anger, their frustration and their hate, and they will power him onwards to whatever his next political goal may be.

We’re not done with Nigel Farage. The people currently scorning him for running away from his responsibilities as the UK falls asunder aren’t the people who matter; they’ve never understood or been in thrall to the cult of Farage the Everyman, Farage the Proper Englishman, Farage Who Only Says What Everyone Is Thinking. Those who have believed in him this far won’t see his resignation now as any kind of cowardice or betrayal – hasn’t he earned a rest, after putting it to those smug Eurocrats and Westminster slimeballs for so long? – and will embrace him with open arms and ample spittle-flecked fury when he returns.

Needless to say, it’s not exactly reassuring that the politician who has most openly flirted with fascism is the only one who actually seems to have a game plan…

Brexit Stage Right: What Now?

24/06/2016
economics, politics, UK
1 Comment

As of a few hours ago, the United Kingdom has voted to leave the European Union. The BBC reports that the final result is around 52% to 48% in favour of Leave – or, to give it its catchy/annoying portmanteau, Brexit.

I’m writing this post largely because I’ve been asked pretty often by friends from outside the UK what this actually means, why it’s happened and what the next steps will be. If you’re a UK resident, you’re probably very well informed about what’s going on, and won’t find this terribly useful.

The Brexit Referendum was called by UK Prime Minister David Cameron, who campaigned for a Remain vote. History isn’t going to judge Cameron very kindly; he promised the referendum for purely party political reasons, because he felt that the only way to keep anti-EU rebels in the Conservative party from tearing the party apart ahead of the 2015 General Election was to mollify them with the promise of in “in-out referendum”. Cameron also calculated that this would reduce the threat to his party’s seats from UKIP (the UK Independence Party), a niche right-wing party which campaigned on anti-EU sentiment and threatened to overtake the Conservatives in a handful of seats.

Cameron, and much of the political establishment, assumed that a Remain vote would prevail. Polling suggested that voters actively opposed to Britain’s membership of the European Union were a vocal minority. Every major political party, business organisation and economic expert backed a Remain vote. Moreover, history suggests that voters in the UK are cautious when it comes to major change, ultimately preferring stability to uncertainty at the polls – in recent years, the UK voted to keep its existing (rather terrible) electoral system and Scotland voted to remain in the United Kingdom, both votes which skewed towards the status quo.

That assumption, that Leave was an outside chance, may explain why what happens next is so unclear. No country has ever left the European Union, just as no state has ever seceded from the United States of America. Procedures exist – Article 50 of the Lisbon Treaty outlines how a nation may leave the EU, and makes slightly grim reading for the UK, as it’s fairly clear that the terms of departure will be decided upon by the other member states in negotiations which do not involve the departing state. The EU, anxious to preserve its stability, isn’t going to be inclined to show the UK special favour in these negotiations. However, it’s not even clear whether this vote actually triggers Article 50 negotiations; the referendum was not legally binding, and the decision to leave the EU still needs to be voted upon by Parliament and formally announced to the EU authorities. Could the UK Parliament ignore the results of the referendum and stay in the EU? Legally, yes. Socially, politically; god knows. The ramifications of simply ignoring a referendum result are impossible to calculate.

Here’s what we can calculate. Firstly, David Cameron is toast. There is simply no way that a prime minister can survive losing a referendum such as this one, especially when the primary opposition he faced was from members of his own party. The Leave campaigners in his party, notably Boris Johnson and Michael Gove, may well negotiate to allow Cameron to remain for a while in order to let him soak up some of the flak that will inevitably come as a result of the chaotic days and weeks ahead. He is, however, now a lame duck and will have to leave soon. George Osborne may be gone even sooner; the Leave team will want a scalp, and while Cameron is useful to them for a little while yet, Osborne is not, and will be seen as a possible threat in a future leadership race. (Equally, both Cameron and Osborne could be defenestrated by the end of the day – it would be wise to keep Cameron on to maintain some continuity while things are figured out, but the Leave team are little if not impulsive.)

(Update: David Cameron has just announced that he will resign, but will remain in place as Prime Minister for a few months while the Conservative party selects a replacement. This does essentially allow him to absorb flak over the referendum – but he’s pushed the toughest part of the whole affair, the actual triggering of EU withdrawal, out into the long grass, saying it will have to be handled by the next Prime Minister. That leaves several months for Parliament to weigh its options and figure out if it really has the brass neck to simply ignore the referendum result and refuse to exit the EU. As for Osborne, no idea, but Cameron’s legislation probably protects him to an extent, and he’s a likely candidate for the Tory leadership from the pro-Europe side of the party.)

Secondly, the United Kingdom is toast. Of the four nations which comprise the United Kingdom – England, Scotland, Wales and Northern Ireland – only two voted to leave the EU. Every single district in Scotland was firmly in the Remain camp, and the country’s political leadership has been very clear about the need for another independence referendum should the UK leave the EU. A second referendum so soon after the first may seem crazy, but the notion that Scotland would not be permitted to remain in the EU should it leave the UK was one of the major arguments of the anti-independence campaigners last time around. With the UK now departing the EU, the landscape has changed dramatically; Scotland swallowed its pride and voted for stability, which England has now abandoned.

Northern Ireland also voted to remain in the EU, but that’s a far trickier situation – one which creates a political and constitutional mess that it’s going to take very delicate work to untangle safely. Voting in Northern Ireland was to some degree along old sectarian lines; nationalists voted to remain in the EU (of which the Republic of Ireland is also a member, of course), while unionists voted to leave. As soon as the results became apparent, Sinn Fein demanded that the UK leaving the EU should trigger a referendum on the reunification of Ireland – which Sinn Fein believes should count votes on the entire island of Ireland, Republic and Northern alike. The details will need negotiation (a plebiscite simply of the people of Northern Ireland seems more reasonable at first glance), but with Scotland likely winning its independence, it will be incredibly hard to deny Northern Ireland a referendum on its future – and that would represent a change to a status quo which remains very delicately balanced. The Good Friday Agreement which largely ended terrorist violence in Northern Ireland is almost 20 years old, and that period of peace has hopefully been long enough to endure through fresh political unrest; but whatever happens next in Northern Ireland, whether it’s a referendum (likely to be won by the Nationalists) or the denial of a referendum, it’s going to seriously upset one side of what used to be a very bloody conflict. So yes, David Cameron could end up going down in history as the prime minister who accidentally withdrew the UK from the European Union, broke up the United Kingdom and destabilised Northern Ireland after nearly 20 years of peace. I suppose at least he can console himself that with all that to discuss, most history books won’t have room to address the whole “intercourse with a dead pig” issue.

Thirdly, the impact on immigration will be minimal. While much of the Leave campaign has been focused on controlling immigration or “taking back control of the UK’s borders”, the reality is that the UK’s membership of the EU makes zero difference to its ability to control migration from outside the EU; and freedom of movement within the EU is a condition of membership of the single market. Non-EU members like Norway have to accept freedom of movement (along with most EU laws and regulations) as a condition of participation in the single market, and there is absolutely no way that the EU will permit the UK to enter the single market without also continuing to honour those rules.

There’s good news and bad news here. The good news is that for EU citizens living in the UK, and UK citizens living in the EU, the impact of Brexit is likely to be minimal – at least in terms of their right to live and work. The nightmare scenario of EU citizens being deported from the UK in droves while the millions of British people who live in the EU are forced to return will not come to pass; access to the single market is simply non-negotiable for Britain’s economy, and Britain’s exit from the EU will of necessity include making whatever concessions are required to retain this. In practice, this will be humiliating for the UK; it will essentially be forced to accept whatever rules the EU passes in future, without having a place in the negotiation or the ability to veto proposals. Dressing up the EU exit as a triumph for sovereignty and nationalism will be a fig leaf for this, but the truth of the new arrangement will hit home eventually.

Fourth, this will cause a serious economic shock. Already we’ve seen an enormous loss to Sterling’s value, trading ceased on stock markets in the USA and Japan, a collapse in the value of several commodities and a rise in the value of gold as investors run for the world’s oldest safe haven. Whether this is just a short sharp shock, or the beginning of a loss of confidence that turns into another slump comparable to the one triggered by the collapse of Lehman Brothers in 2008, nobody really knows. We’ll find out soon enough.

Either way, these things seem abstract, but they have real world consequences. People are going to lose their jobs, and they’re going to see their spending power seriously eroded. A weaker pound has some benefits – it’ll mean British exports are more competitive – but it’ll also mean that imports are much more expensive and that British consumers’ buying power is much lower. Moreover, pulling out of the EU will end EU subsidies for many regions of the UK and for many sectors including agriculture. Remaining in the single market will probably mean that not many companies actually leave the UK en masse, but many deprived regions of the UK will likely be surprised to discover just how much of their industry and infrastructure has been backed by funding from the European Union, not from the UK itself.

Fifth and finally, this isn’t just about the UK. Brexit has come about as a consequence not so much of the European Union or its policies, but as an expression of a general anger and dissatisfaction that has also reared its head across much of the developed world. It’s not unreasonable to compare the UK’s Leave campaign with Donald Trump in the USA, Le Pen in France or Wilders in Holland. Voting for Brexit was characterised by nationalist sentiment and a strong desire to “take back” Britain’s sovereignty from the ill-defined others who have appropriated it. It thrived in communities that have seen widening inequality and economic malaise even as they watched political leaders turn up on TV night after night to talk about economic recovery; communities that may have been delivered a mortal blow by the 2008 recession and the austerity policies which followed, but which had already been suffering from neglect and economic abuse for decades before that, as successive governments tore up more and more pages of the post-war social contract in favour of the shiny new religion of markets and efficiency. There was a time when those communities turned to left-wing movements for their salvation, to unions and to the Labour party; with much of the power of the unions broken and the Labour party pursuing aspirational middle class voters, opportunities have been opened for new and far less savoury political movements to take root. At their core is a deep dissatisfaction and anger not just with individual political actors but with the very institutions of democracy and representative government; a deep conviction that it is not merely that specific parties or policies that have caused people’s quality of life to decline, but that the whole system is stacked against them. Thus, anything that’s seen as part of the system – be it politicians, the media, or even academics and independent experts – is suspect. It is not an attitude that calls for political change, for a new party in power or a new prime minister; it is an attitude that calls for the tearing down of everything, and offers nothing with which to replace it. It is frightening precisely because, in its absolute conviction that the institutions of democracy themselves are a vast conspiracy against the common man, it ends up being insatiable; even if today’s Brexit leaders become Britain’s leaders, in doing so they will become part of “the system” and face the anger of the same people who now cheer them on. The cycle will continue until someone turns up with the capacity to tame the monster that has been conjured up by economic hardship, inequality and unthinking nationalism. Unfortunately, the lessons of the past tell us that such a person is unlikely to be benevolent.

None of this is unique to Britain, and none of it can be fixed by anything less than a fundamental rethink of how we have chosen to structure our society and our economies. Even as market capitalism and globalisation have done wonders at lifting the world’s poorest people out of poverty – an achievement for which capitalism does not get remotely enough credit – it has begun to run out of rope in the developed world. In nations from Japan to Western Europe to North America, inequality is growing and standards of living are slipping. Labour market reforms have turned whole generations into disposable people; I can’t blame British people for laughing off the notion that the EU has protected them in the workplace, when companies like Sports Direct have based their business model off exploiting every loophole, legal and otherwise, no matter how desperately cruel and inhumane, that might allow them to wring more money, more profitability out of their vulnerable, poorly paid staff. “If you leave the EU, you’ll lose your workers rights!” is no argument at all to someone whose zero-hours contract leaves them in desperate financial instability, or whose exploitation by an avaricious, unscrupulous employer has been rubber-stamped by the government itself in the form of a Workfare deal.

The Brexit vote wasn’t just a rejection of the EU; it was a rejection of the whole system, of the whole establishment, of the whole set of institutions and practices that make up the developed world. It was, in ways, a rejection of modernity – a demand to turn back the clock. Turning back the clock isn’t in anyone’s power to deliver. If we want to break this dangerous cycle of economic inequality, social cleavage and political extremism before it rolls out of control, though, it’s beholden upon our countries and institutions to start paying attention to inequality, to public services, to quality of life and to the huge swathe of the electorate for whom every mention of the phrase “economic recovery” in the past two decades has just been salt in the wound.

Greece: Debt Relief is the only way forward

06/07/2015
economics, politics

The Greek people have voted in a landslide to reject further austerity measures demanded by the “Troika” (the European Commission, the European Central Bank and the International Monetary Fund) in return for financial aid that would allow it to continue repaying its debts. This leaves Europe, and indeed the world, in unknown territory; nobody really knows what happens, or can happen, when a sovereign state that belongs to an international currency threatens to default on its debts after rejecting the proposals of the ECB et al. Conservatives and neo-liberals, unsurprisingly, are predicting apocalyptic scenarios; the complete collapse of the banking system and economy of Greece, the confiscation of all bank deposits over €8000 in the country, the expulsion of Greece from the Eurozone and potentially even the collapse of the Eurozone itself. Greece, the neo-liberal lobby wails, is risking the entire European Project through its intransigence.

French economist Thomas Piketty is having none of it, and if you read one thing about the Greek situation this week, it should be Piketty’s absolutely searing and on-point interview with German newspaper Die Zeit. Piketty’s core point is that Europe’s success stories in the post-war 20th century were all based on exactly the kind of debt relief which the Troika now seek to deny to Greece. Germany’s debt burden in the immediate post-war era was around 200% of GDP, but within ten years, it had fallen to 20%, largely thanks to negotiations which cancelled huge swathes of German debt. That debt relief was given with the understanding that an economy simply cannot grow and thrive (and thus have any hope of paying off its debts) while it is shackled by enormous public debt, and the so-called German “economic miracle” of the mid-20th century was a product of the willingness of German’s creditors to forgive its debts in favour of peaceful growth and stability. Exactly the same logic was applied as recently as the 1990s, when former Warsaw Pact countries such as Poland (whose political leaders now parrot German’s hard-line on Greece) saw the majority of their huge debts cancelled in order to support their growth and development.

Compare that to the situation of Europe’s so-called “PIIGS” – Portugal, Italy, Ireland, Greece and Spain, the countries which lost out most severely in the 2008 financial crash and which were forced by the Troika to assume the enormous private debts of their banking systems as public debts. Each of these cases is different – Ireland, at one extreme, had a very low and manageable level of public debt which was then completely destroyed by the nationalising of debts from the country’s huge, failing banks; Greece, at the further extreme, had serious problems with national debt all along, which it attempted to hide with manipulation of its public accounts, but were compounded by the forced nationalisation of huge amounts of private debt. Each was dealt with similarly, however; the Troika forced the national government to take on private debt from failing banks as public debt, then demanded that the country impose incredibly severe austerity in order to service its now-enormous debt burden.

That austerity has been absolutely horrific in its effects. Pensions, education and health budgets and support for the sick and disabled have been slashed. New, regressive taxes which target poor and middle-income people have been imposed. Infrastructure projects have been halted. As a consequence, unemployment has risen drastically (especially youth unemployment, which is now a full-blown national crisis in countries such as Greece and Spain), the economies have shrunk, and the vicious cycle has continued – because a shrinking economy makes it even harder for the government to pay back its debts.

It’s all apparently become too much even for the IMF, one of the members of the Troika, which broke with the party line at the start of this month and published a draft report which said what everyone in Greece has known for years – the country’s debt burden is unsustainable. It cannot and will not be repaid. Attempting to torture the money out of Greece – for that is precisely what the austerity measures being imposed right now amount to – isn’t going to work; the astonishing economic pain which countries such as Germany wish to impose on the Greeks will just result in an even smaller economy with even less capacity to pay back its debts. In other words, the left-wing government of Greece, which just received a resounding vote of confidence from its people in the referendum, is absolutely right to reject the Troika’s demands. Whatever happens next, even if it is as bad as the neo-liberal doomsayers predict, will be a short, recoverable shock compared to the many, many decades of stunted growth, harsh austerity and drip-fed ECB handouts that lie in store for Greece in the Troika’s plans.

None of this is to say that Greece is a poor, abused and angelic figure; the country falsified its accounts for years. However, it wasn’t ordinary Greek people who have lost their pensions, their healthcare and their public services who did this. It certainly wasn’t young Greeks whose employment prospects have completely evaporated who did it; they were children when it happened. The austerity tortures devised by the Troika would go so far as to extend the punishment to people who aren’t even children yet; decades from now, the private debt nationalised at the demand of Europe’s fiscal masters and the public debt held over Greece like a weighted sword will still be being repaid, at huge personal economic and human cost, by people who haven’t yet been born. This is precisely the scenario that led to the debts of countries like Germany and Poland being forgiven; yet it is seemingly a scenario that moves few hearts in Germany and Poland today.

Whether hearts are moved or not may not matter. It’s entirely likely that Greece simply cannot be removed from the Euro, whose currency union mechanisms were originally designed to be irreversible, and that the Troika – already fragmenting thanks to the IMF’s draft report – will be forced to return to the table with the Greek government and work out something different. That “something different” will have to include debt relief in some form; and yes, the rest of the PIIGS will demand that the same rules apply to them. There will be howls of protest from neo-liberals in Germany and elsewhere; but not because some natural order has been upset or some terrible debt-dodgers have been allowed to “get away with it”. Rather, the howls will be because the great neo-liberal con perpetrated in the wake of the financial crisis has failed; the con which demanded that all the money which the wealthy had placed in too-good-to-be-true financial instruments and dodgy banks should be indemnified and protected from risk by the national governments (and thus the ordinary people) of the countries in which those banks were based. The wealthy individuals and corporations threatened ill-defined economic chaos if governments did not allow them to use ordinary taxpayers and public services as “human shields” to protect them from the storm of their own making; governments, in thrall to neo-liberal thinking, acquiesced across the board. If Greece wins its argument with the Troika and receives a debt relief settlement, and the other PIIGS follow suit, it will be a sign that after seven long years, that neo-liberal bluff is being called.