How Brexit Threatens to Turn the UK Into “Borisland”

Yves here. This post articulates one of my biggest reservations about Brexit: that UKIP and the Leave faction in the Tories intend to use Brexit to reduce worker rights even further…producing results the exact opposite of what most of the public that voted for Brexit wanted.

By Servaas Storm, Senior Lecturer of Economics, Delft University of Technology and co-author, with C.W. M. Naastepad, of Macroeconomics Beyond the NAIRU (Cambridge, MA: Harvard University Press), which recently won the Myrdal Prize of the European Association for Evolutionary Political Economy. Originally published at the Institute for New Economic Thinking website

Brexit is about much more than frustration about the E.U. and immigration. It is about a shortage of decent and secure jobs; an impossibly precarious labour market; inexplicable inequalities in incomes and wealth; closed access to affordable education, and a terrible deficiency of affordable housing; and it is about British Chancellor of the Exchequer Osborne’s single-minded austerity economics and the rule-free and tax-free space created for big banks and corporations.

The referendum result reflects a deep-seated anger and anxiety amongst large sections of the population who are disenfranchised and feel ignored, and who can no longer bear the economic burden of living in the Thatcherite free-market wasteland (alternatively known as Cameron’s “Big Society”) that Britain has become – sadly reinforced by the New Labour governments that began with Tony Blair. Media-savvy and facts-free politicians like Boris Johnson and Nigel Farage have tapped into this anger and frustration, playing immigration and antagonism towards “Brussels-bureaucracy” as their trump cards. For many Leave-voters, if not most, Brexit was the only way to express and articulate their protest against a failed system that has left them behind.

Decision-making in the European Union symbolizes a largely unaccountable, elitist and undemocratic system, which is why Labour Party leader Jeremy Corbyn was half-hearted in his support for a Remain vote. The recent examples of Greece, Spain and other southern European countries, all in a Brussels-induced economic lockdown, speak volumes against the political feasibility of “reforming the European Union from within.” The truly saddening denouement of the Leave vote, however, is that the sovereignty regained at the cost of deeply dividing the nation is unlikely to produce the more socially just and economically inclusive Britain that many voters sought – and that’s not because of a serious (or not so serious) recession being triggered by Brexit.

Rather, the hopes of progressives are likely to be betrayed as Britain is turned into “Borisland” – a deindustrializing nation dependent on trickle-down finance-led growth, but suffering from sluggish productivity growth, growing in-work poverty and rising inequalities and dualisms, and with government in permanent austerity mode. As George Orwell wrote so aptly in The Lion and the Unicorn, England “resembles a family, a rather stuffy Victorian family, with not many black sheep in it but with all its cupboards bursting with skeletons. It has rich relations who have to be kowtowed to and poor relations who are horribly sat upon, and there is a deep conspiracy of silence about the source of the family income. [….] It is a family in which the young are generally thwarted and most of the power is in the hands of irresponsible uncles and bedridden aunts. […..] [England is a] family with the wrong members in control – that, perhaps, is as near as one can come to describing England in a phrase.”

The bigger threat from the Brexit referendum is not to Britain, however, but to the rest of the European Union. Across the continent, there is a very similar anger and anxiety about jobs, austerity economics, affordable housing, pensions and inequality, and a worryingly similar democratic disenfranchisement of large alienated and voiceless sections of society is creating fertile soil for populist-nationalist left-wing but mostly right-wing movements led by the likes of France’s Marine Le Pen, the Netherlands’ Geert Wilders, Austria’s Norbert Hofer, Finland’s Timo Soini, Belgium’s Filip Dewinter and Germany’s Frauke Petry. Brexit is just the most recent manifestation of the growing strength of Euroscepticism, which found earlier expression in the Dutch rejection of the Ukraine-European Union Treaty in April (by a margin of 61% against and 38%) and the narrow defeat of the right wing Freedom Party’s candidate in Austria’s presidential elections in May (Norbert Hofer’s final score was 49.7% against 50.3% for the Green Party’s Alexander van der Bellen).

Polls show that between one quarter and one third of citizens across the 28 member states are now deeply hostile to the E.U. project, and there is fear that Brexit will fuel similar Leave-Remain referenda elsewhere – there is serious talk about Nexit (in the Netherlands), Auxit (in Austria) and Frexit (in France), framed and pushed mostly by the anti-immigration, anti-Islam populist-nationalist extreme right. Regardless of whether these referenda will be held (which looks unlikely), the extreme right will capitalize on the anger, frustration, anxiety and anti-elitist resentment of voters who feel they cannot live in the current system.

It would be a tragic mistake to read this resentment against the E.U. as only anti-migrant, racist or bigoted, because the racism and bigotry have grown in conditions of economic austerity, artificial job scarcity and crisis, rising unemployment, rising job insecurity, and exploding inequalities as social protection for workers, pensioners and families have been scaled down in favour of an expanded social safety net for TBTF banks and corporations. Almost everywhere in the E.U. — as in Britain — there is a polarization of the income distribution into a large number of low-income households and a much smaller number of very rich, while the middle classes have shrunk. There is a segmentation of employment into low-wage, unprotected and precarious jobs, mostly in low-tech services, and high-wage and protected jobs in high-tech manufacturing, finance, legal services and government.

Labour market reforms are turning European countries into “dual economies” — a trend fuelled by robotization and technological progress. The real message therefore is one of utter macroeconomic mismanagement in response to the global crisis and on-going rapid technological change, which – unfortunately not for the first time in recent history – has created the conditions for political instability, upheaval and social chaos. The massive social protests in France against the modernization of labour laws — newspeak for a reduction in the strength of French job-protection laws and social security in general — by the “socialist” Hollande government illustrate the point: The systemic dismantling of worker protection in the name of cutting wage costs and improving unit-labour cost competitiveness will certainly increase job insecurity, employment precariousness, and inequality without any further macroeconomic benefits. Despite uncountable attempts to do so, no robust relationship has been found between job-protection, on the one hand, and unemployment, economic performance and productivity growth on the other hand.

The responsibility for the economic and political mess in Britain, the E.U. and beyond weighs heavily on the shoulders of economists who insist there is no alternative to a globalized market economy (TINA!), with freedom for the rich and wealthy and unfreedom for the rest, and who out-of-hand reject serious progressive programmes to reform the system and make it more democratic and humane. The rush by many mainstream economists in the United States to reject Bernie Sanders’ economic policy agenda with remarkable sleight of hand is a case in point. We desperately need a new paradigm to reform the system and make it work for the majority, as Thomas Fricke has elegantly argued. Unless there is serious new economic thinking beyond austerity, deregulated finance, and a corporate dominated politics and state, social and political tensions will continue to build up within the E.U.

“Ill fares the land, to hastening ills a prey, where wealth accumulates, and men decay,” as Oliver Goldsmith (1770) wrote in The Deserted Village and Tony Judt (2009) wisely reminded us, shortly before his death. There are no easy answers – but economics urgently needs to start reforming itself, and asking the right questions.

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  1. Synoia

    There are no easy answers

    Import Tariffs and a “Made in England” economy. These are easy answers, but will be fought by the ruling class.

    The realization that differences create value, full employment a realistic goal, and empty housing a blight to be fixed.

    These are not new solutions. They existed before Neo-liberalism.

    What did not exist was an examination of management’s role in worker management conflicts.

    1. fajensen

      Import Tariffs and a “Made in England” economy.

      Believe me, it will take a generation or more for the UK to even approach the quality in manufacturing that China is capable of today. Today’s England cannot manufacture something in volume that is not: Kludgy, unreliable, expensive and just damn ugly. The talent and potential is still there, there are brilliant crafts and small-series people all over the place.

      But, the actual will to be realist about the situation, to build up the next generation of engineers and allocate resources to scale up / scale out local production does not exist any more and all has to be relearned.

      I often work with English colleagues and like most of them, The problem is that they arrive here with their old clunky stuff from 10-15 years ago with an overbearing attitude, making no serious attempts to understand that whatever they are selling is maybe no longer the solution we are looking for today.

      1. DJG

        fajensen: Yes.

        In the U S of A, companies import English (usually English) managers who then invent the wheel and condescend to their U.S. colleagues. But they have plummy Oxbridge accents!

        Almost inevitably, after wreaking havoc on a U.S. firm, the English cadres are sent back home. Then recovery begins.

        The Orwell quote in the article above still applies, it appears.

        1. RUKidding

          ha ha… I’ve run into that in a company that I work for very part-time. Said company wasn’t doing so well. Of course, no one bothered to ask the actual worker-bees for input because what would the serfs know? So they paid big buck$ to import all these Brits to sit in the big corporate offices still located in tony, expensive NYC. And they proceeded to make a hash of it.

          I was so frustrated with some of their idiotic “decisions” that I let loose on a company electronic bulletin board basically calling them on their incompetent shite. They were Not. Pleased… and sent my local manager to have a “word” with me. My manager advised me that when I wrote in such a way, I missed the mark and everyone stopped “paying attention” to me, so I was ineffective. I said: oh I beg to differ because all those highly paid individuals sitting in their Ivory Tower in Manhattan reached out and forced you to “talk” to me. I think they paid attention all right. They just didn’t like what they heard: the truth.

          I’m still perplexed as to why this company needed a cadre of overly paid Brits – who get paid to go “home” on vacay once a year – to run the company. Like, there’s no US citizens who could do this job??

          No offense to any of our cousins across the pond, but… why? Does the accent make them smarter to the Board or Wall St or something?? Because if so, here’s a tip for free: they’re not any smarter than US citizens with similar levels of experience.

          1. Ishmael

            TOSCO wanted to open a grocery chain in California so they sent their British executives over to do it. They did not want to hire any Americans who actually knew the market or understood the California shopper. They brought their head of real estate over from France (he was French). Nice enough guy but real estate for retail is local and it takes 10 to 20 years to understand California real estate. It was a total disaster and they sold the chain for a loss in a few years. For all I know they had to pay someone to take it because the leases were so bad.

            On the other hand I am kind of amazed that American companies want to bring British workers over. Yes, I have seen it first hand and it was a total freaking disaster. Maybe they like their accents. In the first place most of your well educated Brits come from what use to be called the Upper Class and they act as such. Well that goes over poorly when dealing with American workers. Also, the upper class Brit does not want to get his hands dirty do he does sit in his Admin office.

            Living in Europe I was given a project after it was started. The group I was working in was asked to give an estimate on a project without really asking what it entailed (I know– stupid), Then the project shows up and it is huge. I mean 100 times the budget. I call the office responsible in London and attempt to explain the situation and get this arrogant asshole of a Pommey telling me I just had to do it. I hung up the phone and said screw this. That project got shoved into a drawer to never be seen again. I could go on about such interaction but I will not.

            I believe getting out of the EU was a plus but the UK has a very tough road ahead of it but I would say that for most of the world.

            1. Tony Wright

              Yeah, we all make mistakes. Here in Oz we hired a US citizen named Sol Trejillo to run Telstra. He left with a bag of money, but Telstra was even worse off than before. And the US granted Rupert Murdoch citizenship too – think how different the US media landscape would have been without that?

              1. Another Anon

                Yeah, I remember that. If I recall correctly, Trejillo brought with him
                two henchmen whom the the press mockingly referred to as the “Three Amigos”.
                When Trejillo left, he said that the press will have to find someone else to make fun of. Yes, Telstra service went even further downhill on his watch.

                True story, a friend tried finding out how to pay her Telstra bill online and was having difficulty. The Telstra reps were not much help, but she had the brilliant idea calling Optus, a competing firm. The Optus Rep told her how to it and the problem was solved. Optus also picked up another customer.

          2. digi_owl

            Best i recall, it is up to the board of directors to pick who should manage the company.

          3. Mike G

            A British accent seems to be a stupid person’s idea of what a smart person sounds like (in the US that is — in Australia it’s more likely to elicit defensive reactions and derision). And like bringing in management consultants, the accent is superficially impressive to other stupid people who make decisions

      2. a different chris

        I agree with most of what you say but a generation? A decade, methinks. Nothing like a crisis to focus the (national) mind. Better than war, for sure.

        1. Left in Wisconsin

          Yes, with real commitment it would be a decade at most to develop a high quality manufacturing workforce. (After that, it’s all about the supply chain.) The real issue is commitment.

        2. vlade

          actually, if you really really wanted, two years. that’s what it takes (after getting the various permits and stuff) to build a fully functioning highly automted factory. which creates maybe 100 jobs.

          bringing manufacturing back may very well create no jobs. in fact, I doubt it would, net net.

      3. Winston

        They have delusion of grandeur problem.- also discussed in Sick man of Europe article I posted.

    2. vlade

      uk is not an autarchy. it needs to import food to feed itself, energy to run, and at least most of basic materials to produce stuff. it has to pay the world for these, so it has to export. the ability to export claims on future uk consumption (i.e. printing the pounds) has only limited useability.

      1. Larry Headlund

        Indeed. Seventy years ago George Orwell pointed out that an UK living on its own resources would have to subsist on potatoes and herring.

        The difference now is that the herring are mostly gone.

    3. James Levy

      Britain hasn’t been in that position since the 1840s and would find it impossible to return, even if you reinstituted the Corn Laws. It would make the need for “invisible exports” from the FIRE sector as great or greater than they are today in order to import food and raw materials. Britain can certainly improve its domestic production capacity to offset to some extent the dependence on FIRE and to gainfully employ more citizens. Autarky is impossible.

  2. Art Vanderlay

    Rather, the hopes of progressives are likely to be betrayed as Britain is turned into “Borisland” – a deindustrializing nation dependent on trickle-down finance-led growth, but suffering from sluggish productivity growth, growing in-work poverty and rising inequalities and dualisms, and with government in permanent austerity mode.

    Britain is already like this. That is what people voted against. The EU hasn’t protected them from any of the punitive changes to our employment rights implemented by the Tories and New Labour since 1979.

    The right wing of the Tory party have not come out of this as strong as many observers imagine. The parliamentary party was split two thirds remain / one third leave. The base is split 42% remain / 58% leave. There are extremely deep divisions within the Conservative Party. In fact, that was the front page story across the dailies before New Labour decided to send in the suicide bombers for their mass martyrdom operation.

    UKIP has 1 seat in the House of Commons. No doubt if Brexit goes badly they will gain more, but they won’t get the chance to do that until the next General Election. Which may not be until 2020.

    Inside the EU there are a number of laws about “state aid” or nationalisation that would prevent even a very basic left of centre manifesto being implemented. The left – by that I mean the real left and not mealie-mouthed bien pensant liberals calling themselves “progressives” and sneering at anyone who can’t pronounce quinoa – now has to win 1 election to implement an anti-neoliberal programme. Inside the EU they would have to win 27, or at least 14, across a whole load of different countries with their own cultures, languages, unique economic conditions and political outlook. The Accession countries in the East are extremely right wing. That is part of their appeal to the leaders of the EU: to act as a buffer against social democracy in western and southern Europe.

    The divided rump of the Tories can try and turn us into ‘Borisland’. That’s okay. I think, given the disunity within the party, that the chances of that are slim. And if they do erode some more of our rights? It just takes one election to win them back.

    Brexit has caused the Progress group (aka the Blairites) in Labour to completely lose the plot. This looks like it could be their final death spasm. We have a tremendous opportunity to build something on their ashes.

    1. Yves Smith Post author

      I think you are mischaracterizing his point. The progressives hope that Brexit would end that. He is saying Johnson and Farage would be able to push even harder, faster in the Thatcherite-neoliberal direction. And you are underestimating how dependent the economy is on the City and how long it would take to build up any substitute for that. We ran a post last week that showed that in the last period of sterling weakness, the trade deficit did not shrink. It will take years to get back anything resembling export industries. Worse, some of the little manufacturing that the UK does have now is foreign auto plants whose sole reason for existence is to take advantage of the UK’s weaker labor laws but still be in the EU common market. Leave the EU, those plants get shuttered and the jobs vanish.

      Labor voted nearly 67% for Remain. If Labor fractures, the rump that would go with Corbyn is too small to have any power. And he does not have the foggiest idea of what to do. Having integrity is not sufficient. He also needs to show leadership and I haven’t seen that from him.

      I think you need to get a grip on the realities. This battle is much harder than you imagine and the costs are much higher than you think.

      The Conservatives are tying to do a slow-motion shock doctrine. Let the economy go to crap with the uncertainty and watch workers take a hit. They are relying on the lack of solidarity among working people. I don’t see anyone giving realistic messaging regarding what Leave entails in terms of sacrifice and a long-term vision in the face of that. If I did, I’d take your line of thought more seriously. But it is easy to call for revolution when you are not on the front lines.

      1. Deep Thought


        If the UK withdraws from the EU freedom-of-movement, the ECB will revoke the City’s “passport”. They are already moving the European Banking Authority out - I would dearly like to see the UK’s reliance on financial services reduced, but this is not the way to do it!

        Labour has to disentangle itself from several self-contradictions, and do it sharpish. Forget the name, you might as well call it the Urban Party at the moment. In many post-industrial towns and traditional “Labour heartlands”, UKIP beat it to 2nd place at the last election. I guess that pattern would repeat in an election tomorrow, with UKIP possibly making it to 1st. Labour’s support mainly comes from big cities, which have younger demographics. Until Labour realise that, I don’t see how they come up with a strategy to appeal to their ‘original’ electorate.

      2. Mark John

        Fabulous article! You are correct that our neoliberal, capitalist system is causing many countries to stare into the abyss of the unknown, leaving alternatives that are at times horrifying. That’s the catch-22. We can’t stomach neoliberalism, but we can’t stomach the options put forward by the far right, which represents a large and loud portion of the opposition. I don’t have a clear answer to the dilemma. My hope is that we can move some of those of the Establishment Left, those in power, to relent on economic issues such as student debt relief, strengthening unions,
        cracking down hard on corporations and Wall Street, etc. and create the space for alternatives such as the Avalon project in Detroit, Mondragon industries in Spain, and the like.

      3. BruceK

        I don’t think it was ever a secret that Brexit Tories wanted to leave the EU get away from EU employment regulation (amongst other regulations).

        But why would other EU countries want to let the UK undercut them in the Single market? Surely it would make more sense for them to end all the UK’s various regulatory opt outs (Working hours directive etc) and increase UK employment regulation.

        That way the Brexit Tories have to eat s–t and the EU looks like the workers’ champion.

      4. Carolinian

        It sounds like he is on the front lines or at least British. Perhaps the Tories will indeed end up doing more damage to themselves than to the Left. I say Left rather than Labour because, as in this country, the ostensible left party seems to have been captured by the oligarchs.

        History suggests that overreach is the downfall of most tyrants. As Chomsky says, even dictators need the consent of the governed. These are all high flown abstractions to be sure, but maybe a messy and economically damaging revolution is the only way to shake the tree.

        Or maybe not. Thanks, in any case, for giving us both sides of the debate.

      5. Buffalo Cyclist


        I’m not sure that I agree with you on Corbyn. Corbyn has consistently opposed neoliberalism and warmongering and has laid out alternative visions for addressing the UK’s problems, including MMT type economic policies. He has inspired so many people that a rally of 10k supporters showed up outside of Parliament yesterday on only 24 hours notice. I don’t think that anyone else in UK politics could do that.

        He does not have much support in the PLP, mostly because the PLP is dominated by pro-war neoliberals. I also suspect that the pending publication of the Chilcot Inquiry is a factor in the coup currently being launched as Corbyn has rightly suggested that Tony Blair should face war crime charges. The Blairites don’t want Corbyn to be the leader when Chilcot is published.

        1. Kurt Sperry

          I too think the pending release of the Chilcot Inquiry report is in large measure driving the palpable hysteria in the Blairite wing to oust him so as to control the narrative within the party in the fallout. Corbyn is absolutely uninterested in protecting the New Labour crowd who supported Blair from taking the fall and if he is the party leader in two weeks time, it is likely to go very badly for them. I think all the spittle flecked hate directed at Corbyn right now from both within Labour and without is informed by the fact that he is the primary danger man they face. If he had no leadership potential, they’d be far less alarmed. He may be under withering fire right now, but name me one politician in the UK with a bigger backing in the electorate. Everyone else is plummeting, the Tories are tumbling in free fall and Corbyn’s supporters are steadfast–because if you exist on the left, there’s nobody else with a high profile to turn to. Nobody. The extremity of the invective directed towards Corbyn is precisely because he is–and particularly in a time when all else is falling away–a massive threat to the status quo. I interact with Brits a lot and he really has the lot of them agitated to a remarkable degree. If Corbyn can fend off the set piece revolt from the Red Tories, he may soon in the wake of Chilcot and the dissolution of the Tories, be the most powerful man in British politics left standing. No wonder they are all gone barking mad.

      6. JohnL

        Full disclosure – I’m a Brit living in the US for 30 years and in Holland for 6 before that. One of my kids (both were born in Holland) now lives in the house I grew up in in the UK.

        The article and Yves’s comment nails it. Shock Doctrine is what will happen. The financialization of the UK’s economy, the rising inequality, and the destruction of community and a sense of common purpose (lack of solidarity as Yves puts it) that started under Margaret “there is no such thing as society” Thatcher will continue until London looks like New York and the rest of the country like Michigan. Never let a crisis go to waste.

      7. JohnL

        Full disclosure – I’m a Brit living in the US for 30 years and in Holland for 6 before that. One of my kids (both were born in Holland) now lives in the house I grew up in in the UK.

        The article and Yves’s comment nails it. Shock Doctrine is what will happen. The financialization of the UK’s economy, the rising inequality, and the destruction of community and a sense of common purpose (lack of solidarity as Yves puts it) that started under Margaret “there is no such thing as society” Thatcher will continue until London looks like New York and the rest of the country like Michigan. Never let a crisis go to waste.

    2. m-ga

      If Labour split, then first past the post prevents any party other than the Conservatives from controlling the UK.

      If Labour eject Corbyn and replace him with a neoliberal, they will face near-certain defeat at the hands of the Conservatives. The exception is if a centre-left Messiah can be found who will combine the election-winning power of Tony Blair with none of the bad memories. I’ve seen no evidence of such a figure within the parliamentary Labour party.

      So, it does indeed look like Borisland. The only way out, I think, is if the pro-EU Conservatives win over the next couple of months, and an MP other than Johnson (Theresa May is in pole position) is installed as leader. If that happens, there may be some rowing back on Brexit, and a return to something like the Cameron-Osborne era.

      It’s bizarre to say this, but the Cameron-Osborne years may soon look like a halcyon period for the UK.

      1. Ed

        “If Labour split, then first past the post prevents any party other than the Conservatives from controlling the UK.”

        This is technically not true. Any political party can either deprive the Conservatives of a House of Commons majority, or get one on their own, simply by getting more votes in more seats. This has happened repeatedly throughout British electoral history. There is no magical properties with the electoral system that will always deliver a majority to the Conservatives. If Labour split, either fraction could get more support and come in first, the Social Democrats, though in Alliance with the Liberals, might well have managed that in the 1980s without the Falklands factor.

        But its not true in the sense the commentator usually means and which you often hear in these discussions, eg “my favorite center-left party would have won if not for those nasty splinters.” Take the 1980s. Thatcher came in after the 1979 election, when the SDP of course didn’t even exist. Assume no SDP at all, and the Tories still get 43% in each of the next three elections, and the Liberals, who existed well before either the SDP or Labour, still get at least their 1979 percentage of 14%, so no win for a united Labour. Even if you assume the Liberals merge with Labour somehow, polls have consistently indicated that the Conservatives, not Labour, was the preferred choice of a majority of Alliance supporters.

        If you go back to the 1931, you have the problem that the Tories got an absolute majority of the popular vote in 1931, and 48% in 1935.

        People greatly overestimate the effect of united front type arrangements in electoral politics all the time. It affects even professional pols, it probably led the the mistake in trying to appease the Blairites.

        1. m-ga

          You’re right. In UK politics at the moment, anything is possible.

          The messaging coming out of Labour yesterday was that there would be a general election. I’ve since realised that this was most likely done to support the coup attempt. Labour aren’t in any state to fight an election campaign at present. Suggesting that there will be a general election could weaken Corbyn support among the Labour member base.

          If Labour does split, it’s not clear at all which of the parties would inherit the bulk of their voters. It might well be the party that continues to be called Labour. This could be why Corbyn is hanging on despite overwhelming opposition from the PLP.

  3. m-ga

    This piece by Owen Jones is worth reading:

    It’s about the coup which is currently being attempted against Corbyn.

    The problem for Corbyn is that he is in charge of a parliamentary Labour party (PLP) which was installed following the Blair-Brown neoliberal vision of “New Labour”. It is very difficult for Corbyn to persuade these MPs to follow the policies he would like them to. As a result, there is mixed messaging coming from the Labour party. This is amplified by an unsympathetic media.

    The result is that Corbyn, even to some of those sympathetic to his policies, is now looking out of control. His position is precarious.

    The piece by Jones implies that the plan for Corbyn had been to wait until a Conservative initiative to redraw constituency boundaries in 2018. The likely intention of the Conservatives had been to redraw boundaries in such a way as to cement their control of England. However, for Corbyn it provided an opportunity to do some house-cleaning. This was possible because, with the new boundaries, Labour MPs would have to reapply. The Labour party procedures allow the Labour membership to deselect MPs during the reapplication process. Given Corbyn’s strong grassroots support, there was a very strong possibility that this would happen.

    The result would have been a fresh intake of MPs drawn from Corbyn’s activist base. With this support, Corbyn could have built a strong cabinet, reflecting his own views, which would contest the 2020 general election. It is even possible that one of the new MPs – perhaps a younger person, who could perform well on TV – would take over from Corbyn as Labour leader for the election campaign.

    This plan is in tatters following the Brexit referendum.

    If the Conservatives call a general election in 2017, as seems likely, Corbyn will have difficulty contesting it with the current PLP. If Corbyn loses a general election, he will be forced to stand down and the Blairites currently attempting the coup are likely to take back control of the party. That would signify game over for the left wing resurgency which has been led by Corbyn over the last year.

    1. Left in Wisconsin

      Naomi Klein’s “disaster capitalism” in action once more. Apparently the Labor MPs know the drill so well by now they don’t even need guidance from the money people.

    2. Yves Smith Post author

      I had a long conversation with someone off line that I may turn into a post. Although the usual rule in politics is “when your enemy is sinking, hand him an anvil,” under the new fixed term rules (2/3 majority to call for new elections or a vote of no confidence, which means the Tories voting against themselves), new elections are very unlikely. Labor is imploding just fine without elections.

      1. m-ga

        It is looking like no elections. Suggestions from the Johnson camp today are that Johnson won’t hold a general election. And the same came through yesterday from the Theresa May camp.

        Ordinarily when inheriting a party leadership, the main reason for holding a general election would be to seek a renewed mandate from the electorate. Dithering over this issue was fatal for Gordon Brown – if he’d held a general election immediately after taking over from Tony Blair, he would likely have won and Cameron/Osborne might never have happened.

        However, there are various considerations for the Conservatives in calling a general election now:

        • If Labour stand on a platform of overturning Brexit, then Labour have a fair to good chance of winning.
        • The Conservatives themselves can’t credibly stand on a platform of overturning Brexit, and may not even want to.
        • The Conservative majority was wafer thin last time, and the Conservatives may be unsure if they’d improve on it.
        • Calling a general election in the next half year or so only buys the Conservatives an extra 1-2 years (via the 5 year fixed term act) on the 2015 election.
        • The Conservatives have no no effective opposition at the moment, so don’t need to waste time and energy on a campaign.
        • Asking the public to go to the polls again, so soon after the hideous Brexit campaign, won’t help to pull the country together.

        You’ll note that these considerations aren’t exactly compatible. Which is why I suspect there’s speculation about whether there will be a general election.

        This may create a curious situation for Corbyn. If he can hold on after the vote of no confidence, Labour presumably has to split. 172 just voted against Corbyn, and 40 backed him. But let’s suppose a worst case: that, after the split, 202 abandon Corbyn, and Corbyn remains with a core group of just 10 MPs.

        (this move by MPs looks to be permissible:

        In this situation, Corbyn has custody of the Labour brand name. The 202 leaving would have to form a new party. They would almost certainly get the title of official opposition, along with the attendant commons privileges and media coverage.

        So, it seems like it’s over for Corbyn. However, the Labour brand is very strong in Britain. And, Corbyn would have carte blanche to leverage the brand, with a political direction very similar to the early British Labour movement, the support of his current activist base, and whatever remains in the Labour party coffers. He could recruit candidates for the next general election from his activist base, and would gain at least some voters who have “always voted Labour”. It might form the beginning of a grassroots left wing movement in the UK, similar to Sanders in the US.

        If Corbyn loses in re-election for Labour leader, he can do the same thing but without the Labour brand name, apparatus or funds. The task of building a movement would be more difficult. But, he could still leverage his media exposure over the last year.

  4. Jesper

    The choice was between doing something that would have an effect or doing nothing and hoping things would improve on their own. I have more respect for people who do something, even if they might have ended up doing the wrong thing. The people in the UK did something – they voted for a change to happen. Time will tell if the change turns out for better or for worse.

    For further changes, the Tory party can be voted out and the policies in the UK can be changed if the electorate makes an effort. The few good things with the EU can be, and was at times, opted out of by the Labour/Tory duopoly.
    Now, the question might be asked: Some voted to remain due to expectation of better things for workers in the UK, some voted out for the exact same reason. Will the fight between in and out might continue (it probably will) or will the ones with similar outcomes in mind find a way to work together for the common good?

    1. washunate

      Well said Jesper. I have a lot of empathy for people wanting change. Part of that is giving space for allowing some specific efforts at change to go wrong. Because of course, if our Anglo-American financial system is so weak that a Brexit vote can bring it down, then the fundamental problem is the design of the system, not the outcome of the vote.

  5. Gaylord

    Should they screw the masses even more, they will have a real revolution coming down on their heads.

    1. Ed

      Completely agree with wobblie’s succinct comment above.

      The 67% of Labour backed Remain is misleading in some sense, because its based on who voted for which party in the 2015 election. Labour lost a good chunk of its core vote to UKIP in that election. Exit polls on the referendum pretty clearly show the working class -and Labour was originally a working class party, though that seems to be changing- voting leave. Also relevant is that Labour has always been a more disciplined party than the Tories, and the leadership effectively campaigned for Remain (Corbyn’s opponents are saying they didn’t, but they are lying). The pro-EU part of Labour essentially consists of the MPs and Labour Youth. Corbyn has the unions and pretty much everyone else in his corner. If he keeps his nerve, he is going to be fine. The constituency party in the seat of one of his leading critics has just come out backing Corbyn.

      What will probably happen is a split similar to what occurred in 1931 and 1982. Contrary to popular mythology, neither split kept Labour from power. They just provided a vehicle for the most right wing MPs and activists within Labour to be absorbed into other parties, which they should have joined in the first place.

      As David Lindsay pointed out, the new Shadow Cabinet is made up of the people Corbyn should have appointed to those positions last year.

      Its also a pretty safe prediction that Farage is going nowhere in UK politics. He is an unconvincing bogeyman.

      1. Ed

        Thanks for the fix to this comment!

        My browser (Firefox as it happens) automatically enters my email in any form I try to enter something else in, so I always have to be on guard.

        1. William C

          the references to 1931 and 1982 should point out that it was 14 to 15 years before Labour got back and of course in 1997 it was New Labour, which many people think does not count.

          I am surprised you are so upbeat.

  6. Uahsenaa

    I have been extremely impressed by Owen Jones work on digging through the Brexit tangle, and his pre vote video was spot on in most ways, including, I think, the most important point, that right wing Tories will use the leave vote as a mandate for all sorts of neoliberal goodies, despite the fact that the vote had nothing to do with those things.

    And he’s not just some journalist. He worked for nearly a decade in Parliament, so he has a good idea of who the players are and what their underlying motives might be.

  7. That Which Sees

    ECON 101 easily proves that this article is incorrect.

    Eliminating non-UK citizens from the pool of available workers decreases ‘worker supply’. Employers with ‘work demand’ will have to compete for this limited supply. When ‘work demand’ is high and ‘worker supply’ is low, ‘wages’ go up.

    1. vlade

      a) all the eu migrants will stay, if they wish. any eu migrants which may have considered moving to the uk may still do so until uk leaves (who knows when)
      b) there is still a massive non-eu migration to the uk. until few years back, the non-eu migration was more than twice the eu one. it’s still larger, although now only just so (incidentally, eu migration was mostly dirven by old-europe countries in the last few years)
      c) non eu migration was driven by china and india. chances are, it will continue or even pick up as london, cambridge and oxford became cheaper for chinese
      d) you hire workers only if the business can support it. to requote you, if the demand for final goods is low, the number of laid off workes goes up, and the wages go down

  8. Carla

    The upshot of this post is that we need better economists?

    Please. Economists, just like the politicians, work for them what pays them. By and large, economists are the problem, not the solution.

  9. Victoria

    Here, in my view, is the core problem: labor competition reduces worker prices and reduces their ability to participate in the capitalist economy as consumers. Workers in more developed countries do not want to leave their homes and cultures to compete in less developed countries just to lower their cost of living, and will always demand to be protected from “free market” labor competition. Because leaving homes and cultures is so difficult, immigrants come from countries with poor economies and therefore are willing to accept much lower pay. The tensions are inevitable and in the long term all workers everywhere suffer. There is no rising tide, only a receding one.

  10. washunate

    …progressives are likely to be betrayed as Britain is turned into “Borisland”…

    Yves, I agree and sympathize with the overall point that UKIP and Conservatives/Tories (and the GOP on our side of the pond) are not friends of progressivism. I also agree about the battle being harder. That reality is something I have argued myself for quite some time now, that things are much worse, that the fascism is far more advanced in its capabilities, than most liberals are willing to acknowledge.

    However, I feel like the kind of intellectual narrowmindedness espoused by our economics profession in particular – even INET related thinkers – is really missing the bigger picture. The notion that Evil Rightists in the future are going to betray anything is a fundamental misread of the situation. We Anglo-Americans are already a wasteland of betrayal. I know on the one hand that may sound like small potatoes, quibbling over semantics, but I think it betrays a mindset of affluence and comfort amongst our entire intellectual class, a mindset rather divorced from reality in most of society, to think in terms of things getting noticably worse in the future, as if some inflection point to come is somehow different than what ‘leftist’ parties in London and DC have been doing for decades now.

    The problem isn’t Boris or Nigel. The problem is Labour and Democrats.

  11. craazyman

    “There are no easy answers – but economics urgently needs to start reforming itself, and asking the right questions.”

    They could start by asking themselves what money is. And if they do, and they think seriously about it, and they inform themselves by contemplation of ideas outside the traditional realm of economics — in anthropology, group psychology, cultural analysis, psychoanalysis (but not psychosis, that’s where they are now) — they’ll realize it’s not a Newtonian particle that flies around the world in flows like clouds of golf balls and collects in piles the way feces collects in piles in the hole underneath an outhouse seat. Instead, they’ll realize its an idea that mediates the boundary between cooperation and conflict. It’s not the only idea that does, nor is it the most potent, but it is likely the most abstract. If they do that, they might get somewhere. But until they do, they won’t.

    I’ll come and do it for you guys! Cause you guys evidently can’t do it yourselves or you would have done it already. Just give me an office and a title like “Director of Contemporary Analysis: Institute for New Edge Economic Thinking”. I really will think of stuff that’s new, not stuff that’s the same old stuff that pretends its new. That’s what you guys are doing!

    1. Left in Wisconsin

      Maybe you can get Soros to fund you. (I’d throw in $5.) Or VC, but only if you change your title to Director of Innovation Analysis.

    2. vteodorescu

      Yes, I wholeheartedly agree – until we (we as in the average guy in the street) do not understand fully what money is, we are not going anywhere in our quest for social justice, a better life and less inequality…

      Until then, the 1 percent will rob us in broad daylight, and we will applaud them! :)

  12. Brick

    I think this paints a very realistic scenario apart from two points. UKIP no longer has a reason to really exist and you might expect a number of their voters to meander back to the parties they voted for before.Secondly that no conservative appears to want the leadership except ban the unions Boris which could well lead to a vote of no confidence in the government. It is entirely possible that you could see Jeremy Corbyn lead UK instead, which might create a different set of issues or even the SNP moving into England and winning power (Now there is a funny scenario).

    1. BruceK

      UKIP’s version of ‘Out’ and the Tory version are poles apart. So if we take an EEA arrangement UKIP’s new reason will be ‘we were betrayed by the lying elite’.

      And if we don’t go down the EEA route we are apparently heading into the abyss.

  13. Ranger Rick

    Every time I see it bandied around as fact that the biggest industry in Britain is finance I shake my head. This is the postindustrial economy we were promised? Where fear and speculation can impoverish millions at the whim of a computerized trader?

  14. andrea casalotti

    “UKIP and the Leave faction in the Tories intend to use Brexit to reduce worker rights even further…producing results the exact opposite of what most of the public that voted for Brexit wanted.”

    Really? I have not heard many people saying they voted Leave because they wanted stronger worker rights.

    It seems you are painting your own narrative out of your Anglo-centric prejudices.

    This was a racist vote.

    I am an EU citizen, who has lived in London for 30+ years, and, let me tell you, the discrimination against Europeans is (generally) subtle but ever-present. Brits are dishonest and ignorant and still in denial that Europeans do most things better than them.

    1. Darthbbber

      “This was a racist vote.”

      “Brits are dishonest and ignorant and still in denial that Europeans do most things better than them.”

      Do you perceive any dissonance here?

    2. windsock

      That would be the London that voted overwhelmingly to Remain? And why would you want to live among people you think “dishonest and ignorant”? Are you making a good living off them?

  15. J7915

    Importing British talent is on the same level as importing arrogant German Dr Diplom Ing, types. They have brilliant minds and usually need very close supervision.
    Sorry for ranting, but as the owner of two VW Passat TDIs on the recall list I have a jaundiced view of European management.

    Almost a year and still no fixed prototype so I can consider my options. Sell back at pre-announcement market price would be great, with the small cash bonus. I had the car for 5 days the car; let them fix it? How will it function?

    If the software were open source the problem would be clear: some hackers would undoubtedly already “fixed” the software to provide a real world test.

    Sorry to go OT. However the fuel economy and pollution scandals are part and parcel of the financiation of the ecenomies.

  16. Brooklin Bridge

    There is a detail I can’t grasp. A number of people are speaking of the EU’s labor laws as better than those one might have without the EU. Why then are many in France engaged in an all out struggle against Hollande’s undemocratic labor law reforms? If the EU’s labor laws are so enlightened, then why did Jean-Claude Juncker, President of the European Commission, come to France to endorse Hollande and his decree on restrictive labor reforms? Why did Juncker state that these “reforms” (bulldozing labor rights and power) are, “the very minimum that needs to be implemented in a European country, the very minimum.”? Note, I’m pretty sure the URL below appeared recently in NC’s “links” section.

    These full frontal attacks on labor rights have already been used, pour encourager les autres no doubt (/Voltaire snark), in Spain, Greece, Portugal, and Ireland.

    If this enlightened use of the bulldozer is considered a reason to remain, I bow to the English sense of irony, but agree more than ever with the leavers.

    1. Paul Greenwood

      Hollande used Emergency Decrees – rather like Bruening in 1930 Germany ruling by Presidential Decree – because he had no parliamentary majority.

      Now, I don’t know if the protests are because he is by-passing parliament (Merkel is doing that too) or if French Syndicalism is back in business, I suspect a mixture of both. The creator of the Socialist Party, Francois Mitterand created this mess with his 35 hour week and feather-bedding of France with subsidy and layering French business with restrictive covenants. Personally I think we are seeing France in Revolution

    2. Yves Smith Post author

      I was in the UK when Maggie Thatcher broke the coal miners’ union. It was the beginning of the end of workers rights in the UK.

      The French have way stronger workers rights and are not giving them up. And that is because they have a fair bit of support in broader society.

      Vastly different baselines, in other words.

  17. Darthbobber

    Of course the article seems to assume that holding the EU together in its present form actually could be done.

    If that is not thought to be the case, Brexit simply affects the timing.

  18. Paul Hirschman

    So either way there won’t be enough jobs, and national budgets that support safety-net institutions will continue to feel pressure to cut back. Will there be more working-class power to resist these trends if England is free of Brussels or less? Not obvious.

    In the US the same dynamic exists: Repubs want to eliminate the safety-net asap (heart attack) and the Dems want to eliminate the safety-net slowly, so people can adjust (emphysema) to their own death.

    The world-historical conflict is once again becoming simpler and simpler, as it was from around 1875 to 1914. At this point we have a simpleton’s response and a simple person’s response. Sophistication itself is being used to obfuscate rather than to illuminate (except perhaps in some of the natural sciences and certain kinds of engineering). TINA or not?

    What can be done?

  19. Charles Peterson

    Just trying to help, where is the working class party, surely most in UK are in the working class, so where is their party? Divided up in as many ways as possible, it looks like, on identitarian grounds.

    It looks like disaster, but here it is, the first right+left vote, a non-coalition coalition, reacting to the world’s most intense neoliberal regime, and it’s strong tendency to disinvest in finance run economies (less so in Germany because of bottom up worker power?). Finally there has been some lever to pull at least partly against TINA, and they did it.

    But now that they have voted together, Humpty Dumpty can’t be put back together again, in any kind of right+left or left+right coalition that would promote worker rights and full employment through re-investment.

    That’s part of how the betters win I think, they must be behind all these divisions somehow.

  20. Russell

    One out of the Grateful Dead & Woodstock Dreams, Was it Jerry Garcia: “We never said there wouldn’t be casualties.”
    All I saw that led me to think they intuitively were right to get out was what happened to Greece. Since the vote the reaction of the top dogs in the EU to the UK has sounded vindictive and without any desire to face any of the reasons a nation would not want to be under the thumbs of German Bankers.
    Yanis Varoufakis talked with Chomsky about it. When he said I can’t support this because Greece is bankrupt he was overruled and so he resigned. He had been for the UK staying in, I figure rightly because they still had the pound.
    Len Deighton gives a perfect description of what happened in 1840 just as Rochdale workers were organizing new to the Industrial Revolution.
    FIRE can move the money.
    Workers never have the means to jump as the fact is they are human beings and there is language and an exchange rate.
    Engineers in the US were told they could move to India and work. Of course it was for whatever they use for money in India and at the local rate, so, how they going to come home for the holidays?
    Workers of the World Unite?
    I had a card for an international, Canadians speak English well. All they have to say is how much better they are. Undercut locals in the US but then Free Speech and gunslinging isn’t their thing. LA and California took all the work back and only venture out of the state if the bribes are good enough.
    Workers of the World Unite? Pivot to Asia, yeah. Well how did Communism turn out. Just like Capitalism, with censorship. Wage slavery under the communists or wage slavery under the Capitalists? Wherever there is free speech left is a bit better.
    Whoever controls the TV wins. Look at Trump. A real TV star.
    Putin too, and when in Cuba you could watch Castro for hours.
    Let us see who of the workers have the jobs and the money and keep their mouths shut.
    Where is the model?
    It is the pilots. If they ever wanted to they could say what was what and help grow the model. What if they made all the regs that run their world run the world for labor?
    All White and all from money since there is Private Education paid out of pocket in the US, or if you got the pilot jobs from flying freighters or fighters.
    I could go on about what nations keep their pilots loyal to the nation by paying for their tickets. Were no airplanes for the Romans but they bought off the warriors and gave them public horses even, sometimes.
    There the military overruled the Senate from soon into it.
    By now DARPA keeps all its inventions and R&D is now done by the Universities. The US is hollowed out.
    But if there is a dual set of rules and the issues get so deeply entrenched there is only violence to set something right, though there is wage slavery plenty after chattel slavery ended out of that bloody Civil War.
    Then & now what changed after Spartacus? Like I said Virgin probably would have got him to Sicily when he wanted to quit the fight.
    The weather and the nukes and Antartica are more than the economy but what protects workers & the bankers but all the Force?
    Will the UK go to work for the US and be the N. Korea to the US as North Korea is to China?
    Who knows where the high ground is and what it will cost? 2020 is nearby.
    Scientists do say we will have to work together or all perish and only the engineers can fix our problems. I believe that.
    I believe we need a second UN. Still it is all so far gone. FIRE has it figured for the way to get all the deeds and charge rent everywhere for it all.
    All the rich have the money to fly. How many planes does the UN have? What if they can’t get fueled? Was de Margerie just killed in an accident? He said their was no reason to depend on the Petrodollar?
    All of FIRE is emboldened since Blankenstein could wreck AIG, and make a crypto currency, and still be the main dealer for US Securities.
    We can act like Rome did and even look forward to the Dark Ages, but it could well be worse than that.
    What will it take to prevent the Apocalyptic Riot? It will take looking at the real world models, like as the CIA & MI6 run for their Fronts, and hiring poets to write instructions for the systems the engineers throw together the way they did with duct tape for Apollo 13.

  21. VietnamVet

    I admit I stayed up to see the final results of the Brexit vote. I am in “this is the beginning of the end” camp. Neo-liberalism cannot continue without the consent of the governed. What is striking is the similarity of the politics across the West. The major political parties in the USA and Great Britain are facing existential break-ups. “This is the best of all possible worlds” propaganda has stopped working. The western working class nominated Donald Trump and voted to leave the EU. Can the peoples’ right to “Life, Liberty and the pursuit of Happiness” be regained through the electoral process or will it be through violence? The wealthy residents of gated communities on dark nights might well consider that G4S, the leading American security company, hired Omar Mateen to guard them.

  22. Paul Greenwood

    Merkel made an interesting comment in 2012:

    “If Europe today accounts for just over 7 per cent of the world’s population, produces around 25 per cent of global GDP and has to finance 50 per cent of global social spending, then it’s obvious that it will have to work very hard to maintain its prosperity and way of life,”

    SHE however switched German public spending away from Infrastructure towards Welfare undoing what Schroeder had done with Agenda 2010 which is why Germany has crumbling roads and collapsing bridges and decaying schools and stinking sewers……but which has attracted millions of Arabs drawn by the promise of free houses, cars, and incomes.

    The EU has spent 25 years going off the rails, destroying industry by giving China tariff-free access……….go read Sir James Goldsmith “The Trap” – he warned in 1994 that the welfare State could not be financed at Chinese wage rates. The huge expansion of public sector jobs to compensate for loss of industrial jobs has repeated the Bacon & Eltis Thesis 1976

    The situation is that THE WEST must undergo a massive drop in living standards – perhaps to the early 1970s if not the late 1950s – to recover ground and freeze out exports from Asia by removing demand. That schoolchildren can carry $900 iPhones having never worked is beyond comprehension unless you see the parabolic increase in Debt since 1964.

    The Welfare State supports aggregate demand and gives the Unskilled the highest living standards in the world. Never in human history have people lived so well materially without working, never have they had medical care and incomes comparable to this period since 1980. Never has the worker paid so much in taxes in peacetime.

    I think BreXit is the start of Revolution in The West just as Oliver Cromwell being the first in Europe to behead a King and create a Republic was the precursor to France 140 years later and what sympathetic historians falsely see as the Dawn of a new Era without seeing the French Revolution as the outcome of a State rendered bankrupt by Louis XIV funding Insurrection in the Americas against Britain and the refusal of French Elites to pay taxes thus levying the poor with ever greater imposts.

  23. Winston

    Brexit boat led by right wing of Tory-which is saying a lot right there. The voters were useful idiots.

  24. Lee Dalo

    The engineering feat that re-created a ferocious carnivore, now bound for D.C.’s Natural History Museum. SuperFan badge holders consistently post smart, timely comments about Washington area sports and teams.

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