When the British people voted to leave the dysfunctional European Union on June 23, 2016, I saw it as a massive opportunity for progressive forces to shed the neo-liberal chains that they have become enslaved by and narrate a new, inclusive manifesto for the future. The Brexit referendum was really a fork in the road for progressives – they could go one way and stay irrelevant and cede legitimacy to the rabid Right, or, go the other route, and reinvent themselves as the force of the future. The signs are they have opted to remain irrelevant. In doing so they have essentially conflated financial responsibility and competence with neo-liberal principles relating to the conduct of fiscal surpluses and the role of government in mediating the conflict between workers and capital. In the former sense, they have bought into the myths such as the need to run fiscal surpluses etc. In doing so, in relation to the latter, they have supported policy environments that are heavily biased in favour of capital and undermine the prospects for workers. And when the workers revolt, and, for example, use the Brexit referendum as a voice amidst their powerlessness, the progressives have turned on them accusing them of being ignorant and racist. The reality is that the lack of leadership within the political Left and their deep sense of inferiority (in the face the so-called mainstream economics experts who they mimic to sound smart) has left the door open for the Right to harness the working class anxiety and steer it in a very retrogressive direction.



The UK Guardian seems to be conducting a daily war against the Brexit outcome with its onslaught of articles each day about the doom that Britain faces if they do not reverse the decision.

In today’s edition, there are several anti-Brexit articles and in recent days we have seen predictions of that “Hard Brexit threatens global financial system”, “global economic growth at risk”, “brace for further Brexit price rises”, “UK at risk fo Brexit ‘catastrophe'” and so it goes.

The latest article (January 10, 2016) – The Brexit resistance: ‘It’s getting bigger all the time’ – is a pathetic, bleating story about Europeans who are worried they will be kicked out of Britain.

One German citizen, who has been in the UK for 10 years, didn’t take out English residency status, is now worried they will have to leave. She apparently loves England but “if the government starts throwing out EU citizens, I don’t want to live in this country any more”.

Which is a curious sort of reasoning. If the UK does act like that then what was there to love in the first place? But that is not the point anyway.

The article also questions the legitimacy of the actual referendum vote:

… a minority of the overall electorate voted to leave and that there is hardly the thumping mandate for leaving Europe some politicians talk about – and that, besides all that, Brexit will be such an economic and social disaster that it has to be avoided.

The strategy is, it seems, to throw in the disaster predictions as often as one can, even if they are not related to the point being made, which in this case was the turnout at the referendum.

When the referendum was put (June 23, 2016):

1. 17,410,742 voted to leave (51.9 per cent of the total votes cast).

2. 16,141,241 voted to leave (48.1 per cent of the total votes cast).

3. So there were 33,551,989 votes case out of 46,501,241 eligible voters – a turnout of 72.2 per cent.

4. There were 26,033 rejected ballots.

So what the UK Guardian journalist is now claiming, which is a popular refrain among those who voted to Remain, is that the Leave vote was only 37.4 per cent of the eligible electorate.

We could equally say that the Remain vote, using the same logic, was only 34.7 per cent of the eligible electorate – “hardly the thumping mandate” to stay in the EU.

We will never know how the ‘vote’ (leaning) of the 12,949,258 eligible voters who chose not to vote.

The Referendum was not binding on the British Parliament, which will have to legislate accordingly to give it operational meaning.

The notion of consent has long occupied the minds of political philosophers. The likes of John Locke, for example, argued that a citizenry is obligated to accept the dictates of the politicians only if they have given ‘free’ and ‘voluntary’ consent to the formation of that government.

In his Second Treatise of Government, Locke advanced his notion of tacit consent. He wanted to deal with the problem that not everyone actually (formally) gives their free and voluntary consent.

How does one determine whether what tacit consent is?

In the way Locke conceived it, tacit (or silent) consent means that if one accepts the benefits of government then they also accept the decisions (burdens) that government imposes on them (Second 119):

The difficulty is, what ought to be looked upon as a tacit consent, and how far it binds — i.e., how far any one shall be looked on to have consented, and thereby submitted to any government, where he has made no expressions of it at all. And to this I say, that every man that hath any possession or enjoyment of any part of the dominions of any government doth hereby give his tacit consent, and is as far forth obliged to obedience to the laws of that government, during such enjoyment, as any one under it, whether this his possession be of land to him and his heirs for ever, or a lodging only for a week; or whether it be barely travelling freely on the highway; and, in effect, it reaches as far as the very being of any one within the territories of that government.

[Reference: John Locke, J. (1823) Two Treatises of Government, London: Thomas Tegg. LINK

The hallmark of ‘democratic’ systems, where voting is not compulsory (and even when it is sometimes), people decide for whatever reason not to formally cast a vote.

Those that do cast a vote, more or less agree to accept the outcome of that vote and obey the legislation that the winning party brings in.

What about those who did not vote – the silent ones? They haven’t formally consented to anything. So do they have obligations to accept the outcome?

An application of Locke would suggest that it is the right to vote (rather than the act of voting) that creates the obligation.

Accordingly, through their silence the non-voters are giving the government tacit consent to act on their behalf.

I understand all the controversies in political philosophy about the nation of consent – when you give it etc. But the British voters who didn’t vote but could have were not forced to do that. They chose not too for whatever reason in full knowledge that the Referendum gave them a chance to formally consent to one position or another.

Locke understood that no person is obligated to accept tyranny – but the Brexit referendum was hardly that.

Of course, all of this might be moot, given that free choice implies knowledge and one can hardly impute that many of the voters knew what they were letting themselves in for – either way.

But the point is that non-voting is an action and the Remain lobby can hardly claim that the 37 per cent who didn’t vote were all in their camp.

As an interesting aside, Article 12(2) of the Rules of Procedure of the Council of the European Union (the governing body) says:

On the initiative of the Presidency, the Council may act by means of a simplified written procedure called “silence procedure” …

Which means that a “no response from a member of the Council by the time a set deadline expires implies acceptance of the adoption of the act in question”

Silence gives legitimacy. That is what John Locke’s notion of tacit consent was all about.

My view is that the Brexit vote was easily won by the Leave camp (1,269,501 votes) and the non-voters chose whatever outcome was generated in their ‘absence’.

Whether either side knew the ins-and-outs, lied, misrepresented might be an indictment on the state of British democracy but given the rules doesn’t alter the outcome.

The thing that really stands out has been the elitism of those who still want to deny the outcome.

For example, late last year (December 1, 2016), American commentator Barry Ritholz wrote “Popularism” as Farce where he intoned that:

Popularism is slowly being revealed as a farce, a grift of the uneducated, low information voter, coopted to vote in many ways against their own interests. This includes women, minorities, medicaid consumers, Obamacare subscribers.

A ‘grift’ is an American terms for swindle.

He was railing against the election of Donald Trump. As if the election of his competitor would have been a victory for the dominant elites in the financial markets etc who also swindle the common citizen.

But there is this sense that votes against the current establishment are ill-informed and cast by ignorant (poorly educated etc) voters who don’t have the same quality of judgement as the educated, middle-class who accept the advice of experts (including a raft of neo-liberal economists) that Brexit or Trump or whatever will be disastrous for the nation.

The term ‘popularism’ is now a perjorative term used by the elites to put down ordinary folk who have the temerity to vote according to what they feel and see in their own lives rather than the ‘equilibrium’ and ‘optimisation’ that the economists tell them about or the ‘growth’ and ‘jobs’ that the neo-liberal politicians tell them about.

The UK Guardian article (January 10, 2017) – One blunt heckler has revealed just how much the UK economy is failing us – by Aditya Chakrabortty (who typically makes sense), is worth reflecting on.

While the so-called ‘progressives’ point the finger at the hoy polloi as they sip another latte and suggest that popularism is a ‘right-wing’ movement built on racism and fascism, the reality is quite different, in my view.

That reality is that millions of workers are feeling let down by the system that the neo-liberals contrived to wrest any residual power that those workers enjoyed that allowed them to achieve better shares of the national growth process.

Not content with most, the top-end-of-town wanted more.

Aditya Chakrabortty’s article recycles a graphic that shows the regional growth performance in the UK since 2007. It is a salutory graphic account of why those outside of London are in the mood to take back control of their lives.

He summarises:

On statistical aggregates the UK is enjoying a recovery. But in reality this has been a recovery for owner-occupiers in London and the south-east. It has locked out those without big assets, such as the young, and those renting in the capital. It has penalised the poor. And it has impoverished those who have been forced on to zero hours or bogus self-employment.

But for the so-called ‘progressives’, the protest movement that is forming is just a snivelling mass of uneducated racists who should be silent.

I noted the other day that I have been reading about the demise of the Scottish clan system and the highland clearances, which followed the slaughter of Scots at Culloden in April 1746 and continued with the introduction of the Cheviot sheep onto the large estates (that had been amalgamated by clearing out families who had occupied the lands for centuries).

Clearing out is a really unfortunate euphemism. The traditional occupiers of the land (small farmers, crofters etc) were beaten, murdered, raped, exiled, tortured and more by the British upper class who wanted to accumulate more wealth from the land they expropriated.

The point was that the elites got away with it because the poor Scots did not have coherent leadership. They had anger, courage and resisted but their lack of strategic leadership led to their terrible demise.

The same could be said now, as the ‘popularism’ is not well thought out and the progressive side of politics has failed to step in and provide leadership to people who are the natural cohort for change but who they dismiss as mindless racists or somesuch.

Just today (January 11, 2017) there was an article in the EUObserver – The 89ers and the battle against populism – which traces the ‘populist’ backlash back to “Poorly planned globalisation, occurring from the 1980s onwards” that “has impoverished small communities whose economies long-relied on one or two old-world industries. The damage was caused not by globalisation itself, as radical leftists contend, but by the form which it took, and also its speed.”

In our new book (to be published by Pluto Press later in 2017), we argue that commentators like to conflate globalisation and neo-liberalism as if they are the same process.

But the worst damage has been done by neo-liberalism not the rising global character of supply chains and increased commerical linkages between nations.

These ‘populists’ are apparently “nationalist” and “anti-EU” and the:

… left-right divide is sliding into insignificance, with the real conflict now between those who believe in an open, free and global society; and those who do not.

So if you protest against the ravages of neo-liberalism that has led to flat real wages growth in many nations, a massive redistribution of national income away from wages towards profits, mass unemployment, rising underemployment, degraded public services etc – you just don’t “believe in an open, free and global society”.

You are just an ignorant nationalist, racist dolt.

And, you need to be saved by the so-called “89ers” – the cohort of “European citizens born around the year 1989 and growing up in a Europe that is relatively peaceful and prosperous when compared with other periods”.

This was the year that the 1987 Single Market changes forced several nations, including France and Italy to abandon capital control, which had been the only policy tool they had to help maintain domestic stability in the context of the unworkable exchange rate mechanism they were tied to.

At that point they lost their macroeoconomic freedom and biased policy towards recession.

It was the year that Jacques Delors, who had long before abandoned any pretence to holding progressive ideas, took the neo-liberal Delors Report to the Commission. It was the blueprint for the disastrous Eurozone, which was accepted a few years later at the ill-fated Maastricht conference.

The writer’s is not joking (unfortunately). The ’89ers’ are now 28 years of age. Some of them might never have worked – given the crisis began nearly 9 years ago and youth unemployment rates in some European nations topped 60 per cent and remain around 45 per cent in Spain and Greece.

The parents of the 89ers went along with the monetary union plan foisted on them by the elites who designed a system that favoured the big financial interests and the top-end-of-town but would never deliver lasting prosperity for the bottom layer of society and would eventually eat into the well-being of the middle class.

The 89ers have every reason to feel dudded by the whole show rather than being vigorous supporters of the European Union and the monetary union in particular.

At least the EUObserver author recognises that:

… the EU is no longer able to provide the prosperity and security that was once its hallmark.

And the logic according to this journalist is that because the “elders are disinclined to embrace the European spirit, the responsibility falls to the 89ers to deliver the ideas and actions that will regenerate it.”

Well, the first point that the 89ers should grasp is that there is a difference between the EU, Europe and the Eurozone. These are often conveniently lumped together to divert attention away from real debate.

If Spain or Italy leaves the Eurozone it does not cease to be European. Membership of that and the European Union is not the qualification necessary to be European.

And note the ageism in the article – “the elders” don’t like what the elites are doing to them but their children will.

If we really want to get rid of influential right-wing, xenophobic, racist political voices then leadership is required.

The reason these voices have ears listening to them is because neo-liberalism has ravaged peoples’ lives and guaranteed their children a bleak future.

That is fact – the data tells us that. The graph that Aditya Chakrabortty recycled isn’t a chimera. It is real and the manifestations of the lines in the graph impact severely on real people.

The fact that they are mobilising politically now and being diverted into other broader struggles (anti-immigration etc) reflects the total failure of the political left to lead.

The political left has been too willing to be cute and embrace neo-liberal macroeconomic narratives that they think makes them look financially competent that they have failed to see that those very same narratives are why there is a problem in the first place.

Thinking one is financially competent because they seek fiscal surpluses etc is just a sign that the Left has an inferiority complex.

There is no valid case that can be made for pursuing, for example, as a rule, a balanced fiscal outcome across an economic cycle.

Thinking that makes one sound cool and competent is a delusion.

The only way that the popularism will be channelled into progressive ends is if the Left shakes off that inferiority and starts to articulate a non-neo-liberal macroeconomics as provided by Modern Monetary Theory (MMT).

Then people will understand that it is not that one opposes “an open, free and global society” but, rather, that national borders, which define optimal currency areas and empower the currency-issuing government to advance the well-being of all, are sensible constructs.

An open society is one where everyone has an opportunity irrespective of where you have come from. But, it doesn’t mean that everyone has the right to go to which ‘nation’ they choose.

Governments have to be entrusted with a population policy that allows the natural environment to sustainably support the social and economic settlement.

For example, Australia has a very sensitive ecology – it is an arid nation and frequently succumbs to drought. It is a large land mass that is incapable of supporting a commensurately large population.

That has to be understood.

That doesn’t mean that our government should ignore our international responsibilities to reduce poverty and hardship. But migration is only one way to pursue that objective and probably in many nations not the best way.

To say those things does not mean I oppose “an open, free and global society”. But I recognise the limits of national currency sovereignty.

They went well beyond those limits when they created the Eurozone and didn’t even try (for ideological reasons) to make the creation work properly (for example, by creating a federal fiscal capacity that is the hallmark of all successfully functioning federations).

Conclusion

The Progressive side of politics has to jettison its simplistic idea that popularism is anti-democratic and essentially racist.

In fact, the opposite is the case. It is the underlying machinery of democracies starting to work again after being muted by the self-serving manipulation of the elites.

The lack of leadership on the Left side of the debate is allowing the Right to pervert the angst that a failed, neo-liberal economic system has created among the workers.

It is not a sign that the workers are dolts, rather than the Left is gutless and riddled with inferiority complexes.

The series so far

This is a further part of a series I am writing as background to my next book on globalisation and the capacities of the nation-state. More instalments will come as the research process unfolds.

The series so far:

1. Friday lay day – The Stability Pact didn’t mean much anyway, did it?

2. European Left face a Dystopia of their own making

3. The Eurozone Groupthink and Denial continues …

4. Mitterrand’s turn to austerity was an ideological choice not an inevitability

5. The origins of the ‘leftist’ failure to oppose austerity

6. The European Project is dead

7. The Italian left should hang their heads in shame

8. On the trail of inflation and the fears of the same ….

9. Globalisation and currency arrangements

10. The co-option of government by transnational organisations

11. The Modigliani controversy – the break with Keynesian thinking

12. The capacity of the state and the open economy – Part 1

13. Is exchange rate depreciation inflationary?

14. Balance of payments constraints

15. Ultimately, real resource availability constrains prosperity

16. The impossibility theorem that beguiles the Left.

17. The British Monetarist infestation.

18. The Monetarism Trap snares the second Wilson Labour Government.

19. The Heath government was not Monetarist – that was left to the Labour Party.

20. Britain and the 1970s oil shocks – the failure of Monetarism.

21. The right-wing counter attack – 1971.

22. British trade unions in the early 1970s.

23. Distributional conflict and inflation – Britain in the early 1970s.

24. Rising urban inequality and segregation and the role of the state.

25. The British Labour Party path to Monetarism.

26. Britain approaches the 1976 currency crisis.

27. The 1976 currency crisis.

28. The Left confuses globalisation with neo-liberalism and gets lost.

29. The metamorphosis of the IMF as a neo-liberal attack dog.

30. The Wall Street-US Treasury Complex.

31. The Bacon-Eltis intervention – Britain 1976.

32. British Left reject fiscal strategy – speculation mounts, March 1976.

33. The US government view of the 1976 sterling crisis.

34. Iceland proves the nation state is alive and well.

35. The British Cabinet divides over the IMF negotiations in 1976.

36. The conspiracy to bring British Labour to heel 1976.

37. The 1976 British austerity shift – a triumph of perception over reality.

38. The British Left is usurped and IMF austerity begins 1976.

39. Why capital controls should be part of a progressive policy.

40. Brexit signals that a new policy paradigm is required including re-nationalisation.

41. Towards a progressive concept of efficiency – Part 1.

42. Towards a progressive concept of efficiency – Part 2.

43. The case for re-nationalisation – Part 2.

44. Brainbelts – only a part of a progressive future.

45. Reforming the international institutional framework – Part 1.

46. Reforming the international institutional framework – Part 2.

47. Reducing income inequality.

48. The struggle to establish a coherent progressive position continues.

49. Work is important for human well-being.

50. Is there a case for a basic income guarantee – Part 1.

51. Is there a case for a basic income guarantee – Part 2.

52. Is there a case for a basic income guarantee – Part 3.

53. Is there a case for a basic income guarantee – Part 4 – robot edition.

54. Is there a case for a basic income guarantee – Part 5.

55. An optimistic view of worker power.

56. Reforming the international institutional framework – Part 3.

57. Reforming the international institutional framework – Part 4.

58. Ending food price speculation – Part 1.

59. Ending food price speculation – Part 2.

60. Rising inequality and underconsumption.

61. The case against free trade – Part 1.

62. The case against free trade – Part 2.

63. The case against free trade – Part 3.

64. The case against free trade – Part 4.

65. Moving on from the post-modernist derailment of the Left.

66. The Left lacks courage and has become riddled with inferiority complexes.

The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due in 2017. The book will be published by Pluto Books in London.

That is enough for today!

(c) Copyright 2017 William Mitchell. All Rights Reserved.