Wednesday 26 December 2018

Brexit the next step

So with this latest act of procrastination by the British government, it becomes clear that we are drawing ever closer to the inevitable departure of the UK from the EU.  For a long time, it was not clear why both of the main parties seem to be so committed to this departure.  The stark political reality is that the age old tactic of all political parties (not just in the UK but also across Europe) of using the EU as a whipping boy for all major social issues continues to be a guaranteed vote winner.  At the end of the day, political organisations, like most organisations, work on the basis of incentives.  The incentive in politics is votes.  The votes guarantee we are on the way out because people in the UK continue to believe that they are going to be better off outside of the EU and the politicians that count are elected domestically.  Whether this is true or not will be seen but the real argument that mattered on this went on for the 10 years prior to 2016 and now, it does not matter anymore.

Now that we are set to depart, the temptation to blame the EU for our current ills will continue until we are out for a sufficient decade or so amount of time. Then, when things are not going well we will no longer be able to blame it for what we all, deep down, know are our own failings as a country.  No one wants to believe that their issues are their own fault because our immediate reaction is to believe that those failings are the fault of someone else.  Were it not for those others, we would be happy and better off.  The truth is more complex and more difficult to work through but this is act of complex collective psychiatry will unfortunately have to be experienced, it cannot be taught.

Following this inevitable (for it is, indeed, inevitable) course of affairs there will be a negative reckoning.  An apparently healthy country starts to suffer due to the slow degradation of its status versus it´s largest trading partner and its similar diminution in status versus countries which it historically bullied.  There are other countries which sit on the edge of major trading blocks and these have historically struggled to establish an identity (Hong Kong and Singapore are incomparable).  As a consequence of economic reality and the loss of a perceived safe haven status, the UK will likely eventually be forced back into the EU via one of the supra-national authorities we helped to establish such as the IMF.  This will then leave the same group of angry people who have been maltreated by a political class they helped to vote in as frustrated as ever.

Even then, the chances of this being avoided will only be arrested, relatively, by another EU member, such as Italy, exiting and causing such damage to the EU such that we would be able to say that in comparison to them we are better off.  But even then, both parties end up damaged.  Similar to a divorce or, heaven forbid, a war, neither party ends up benefiting from a dispute that ends up destroying more than it could ever have hoped to create.

Welcome to Brexit.  We hope 2019 will be better than 2018.  Somehow I doubt, politically,  that things are getting much better from here for at least the next three years.

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