Brexit: Is it Worth the Price?

London could stage 14 Olympic Games for the cost of Brexit to the public finances

Brexit is going to cost the British people at least 58 billion pounds, says Chancellor of the Exchequer Philip Hammond. Taking figures provided by the Office for Budget Responsibility, Hammond also announced that government borrowing will have to rise as a result of Brexit, by 64 billion pounds.

The final figure, when all is done and dusted, is likely to be very different, however. Given that experts tend to err on the side of caution with their projections, the real cost will probably be higher than the 122 billion pounds calculated thus far.

It’s difficult to comprehend, or imagine, the meaning of huge numbers such as these. Looking at those figures, is Brexit going to be an expense too far, or is it cheap as chips and worth the gamble? 58.7 billion sounds like a lot of money, but, given what Britain spends on infrastructure or public services, or on the EU, is it really?

During the Brexit referendum campaign we heard from the Leave side what they thought the EU cost Britain and how much we as a country might benefit from leaving. They said Britain could benefit to the tune of 350 million pounds a week, and suggested we should spend that money on the NHS – a worthy goal indeed. However, they abandoned that idea shortly after the referendum result was known.

To their discredit, the Remain side didn’t come up with a convincing counter to Leave’s very persuasive meme. All Remain did was argue over how much EU membership really costs. But, looking only at the figures themselves, who can really understand the difference between 16 or 10 billion, for example? So the Remain argument got lost in picky arguments over the details, and they appeared pedantic, negative, and boring. Leave were able to capture the high ground by making the more positive general point.

So, just as Leave were able to make the money we spend on EU membership 'real',and to introduce a bit of balance, I'm going to visualise what Brexit is going to cost the British people with this handy little guide. The figures below are calculated simply by dividing 122 billion by the actual cost of various public ‘goods’, and rounding up or down as appropriate to the nearest sensible number. It’s a fun method of understanding the cost of Brexit more clearly, and a slightly serious contribution to rebalancing the continuing argument over whether, or how, the UK should remain a partner in the European Union.

What could Britain get for the cost of Brexit to the public finances?

So, do you still think Brexit is worth the price?

Trump and Brexit: Or Be Careful What You Wish For - You Might Just Get It!

It is tempting to excuse away the result of yesterday's presidential election and say that racism, misogyny, lies and ignorance won in the United States on 8 November 2016. Granted, some voters may have been emboldened to vote for Trump for those reasons, but I don’t think that’s what happened. Most Americans don't vote out of sheer prejudice; they're far too sensible for that. So why did people vote for Donald Trump?

From the perspective of being a privileged middle-aged white British male in the top quartile of income earners in the UK, it might seem surprising that many women and people from ethnic and other minorities voted for Trump. But I think to stop at surprise, or dismiss it as prejudice, would be to miss the central message that this election delivers, and which found voice earlier this year in the UK too, with the vote to leave the European Union. Indeed, thinking more deeply through these issues may be the key to solving the puzzle of why so many people who should not have voted for Trump or Brexit, against their own rational judgements, did in fact end up doing so. And, in so doing, we might begin to develop a coherent understanding on which to build a new political order fit for the demands of the 21st century.

So what happened yesterday?

Yesterday the American people, like the British who voted for Brexit in June, delivered an enormous kick to the nether regions of their respective countries' established elites, and the conclusion is rather simple – and potentially optimistic – I believe.

Few except Trump and Farage saw it coming, in fact. The media was consistently wrong in its predictions and expectations, clearly biased in favour of the Clinton and Remain campaigns. Pollsters yet again failed to account for so-called ‘shy’ voters. And rationality failed once more to persuade those guided by their feelings and instincts.

In the run-up to the election on 8 November, Hillary Clinton didn’t promise anything substantive to change current living conditions for ordinary Americans. All she promised was more of the same; and what precisely did that mean? Well, to large numbers of ordinary Americans it meant falling living standards and a further widening of wealth inequalities in favour of a tiny fraction of the population. I doubt many Americans were very encouraged by that message, even if their lives have started to improve in recent months.

Yet, in 2008 Barack Obama had offered change. That was why millions of Americans voted for him. He overcame entrenched prejudice because he offered hope and change. But in the intervening period he didn’t change America enough. He had eight years to do so, but throughout six of those he was frustrated by an exceptionally obstructive Republican Congress. Wealth and income inequalities widened and, despite his achievements in health care and preventing a much worse recession occurring as a result of the economic crash, Obama leaves the Presidency without having done the one thing that he promised most of all to do, which was to restore hope for a better future in ordinary people’s lives.

Tens of millions of voters in the USA (the UK too) are disappointed, angry, bitter, and crying out for positive changes in their lives. They feel like they've been left behind by globalisation and, indeed, when one compares their life chances and experiences with those of the one percenters, they certainly have been. And they are still, more than eight years later, desperate to rediscover some hope that their and their families’ lives would improve if they work hard and play by the rules. Clinton didn’t offer them any hope beyond what they already have – which is hardly any at all.

Just as in the UK, in the USA the liberal media was complicit with the political and economic establishment in ignoring the voices of its readers and listeners and preferring the status quo. This is no surprise, given that media owners and executives have themselves benefitted handsomely from global deregulation of ownership. Why would they want to change that? Many have become billionaires because of it. Perversely, though, both Brexit and Trump have shown the media that there are limits to their ability to influence and cajole the electorate in their favour, and that in itself may be to the long term good.

Hence, for the majority of American voters, what a Clinton presidency promised was four more years of a status quo dedicated to more globalisation and deregulation, the maintenance of a corrupt and fractured political system, and the American working and middle classes falling further behind - with the American Dream becoming not just an unattainable mirage, but a sick joke being played on ordinary Americans by the billionaire class.

It's fair to ask, therefore, what have globalisation and deregulation delivered for most ordinary working and middle classed Americans? Well, longer working hours, ever greater work intensity, reduced stability and security, and falling real wages and living standards; while a tiny fraction of the population is given reign to indulge itself in a wealth grab of epic proportions. The result has been a widening of economic inequality and political division such that a series of unbridgeable chasms now separate Americans from one another: men and women; black, Hispanic and white; young and old; college and non-college educated; rural and urban; Christian, Jewish, Muslim, and atheist; and most glaring of all, the fabulously rich and everyone else. It is consequently no exaggeration to suggest that America is now in a pre-revolutionary state.

Like Britain, for example, the American economic and political capitals are inaccessible to most of the rest of the country except as tourists. Few people can afford to live in the centre of London or New York; ordinary people have no effective access to political decision-making any more. The majority of ordinary people feel cut off from the opportunities and means of achieving them that they were once led to expect a democratic and fair society would provide. Is it any wonder that they seek to restore those opportunities by trying to get rid of the people that stand in the way? Clinton didn't stand a chance; though most of us had no more than the vaguest inkling of what was coming. This morning, perhaps thankfully, the situation is a lot clearer.

What did Trump offer instead?

Well, not much of substance. But what he does promise in spades is change, and in the current circumstances that Americans appear to find themselves in, that promise was enough to win the Presidency. After all, it is what Barack Obama offered but could only partially deliver on.

What I think most of Trump’s voters did yesterday was to hold their noses against the stench of his racist and misogynistic remarks, against his bullying and lies, and vote for him anyway; despite those aspects of his character and behaviour – and because for them the alternative was even worse. That’s why so many women and Hispanics voted for him. They didn’t vote for him because he hates women and is racist. They voted for Trump because, despite his bigotry and ignorance, he promises change and Clinton did not – and voters are desperate for change. Horrible though he is, he is the last ditch alternative to a candidate that represents a system of political-economy that is broken and bankrupt. That is what happened yesterday.

Why the optimism?

I am a green socialist. I don’t believe that Donald Trump will make a good President or that he will fulfil even a small fraction of the torrent of vacuous promises he made on the campaign trail. If he manages to drain the political swamp in Washington DC then he will have at least done something. But I think (is it hope?) he will end up being a one term President. He will not improve the economy and is unlikely to reduce inequality substantively. Moreover, what he does promise to do is revive the rust belt states’ fossil fuel and heavy industries in the name of jobs and community. If he does that, then say goodbye to climate change mitigation for the next four years, folks.

Nevertheless, Trump’s election has been a political earthquake for America and the wider world, and for the progressive Left. Ever since Bill Clinton and Tony Blair ascended to command the politics of the western world, the Left has stopped listening to the people that it wishes most of all to represent: the working classes, the vulnerable, and the downtrodden. The Left forgot its Base. In so doing it created a vacuum to be filled by Trump, Farage and Le Pen.

The Left has now an opportunity to rethink and become properly representative and inclusive of the wishes and needs of both ordinary working people and the middle classes who, after decades of declining or stagnant living standards now share a common purpose. That is where the political majority now lies.

And as for ‘big’ ideas to undergird rational policy decisions that produce fair and just outcomes, we now know that globalisation and deregulation do not mean the same thing. It is not only possible to regulate against unfair, discriminatory, and exploitative practices and still be an open and tolerant society – it’s a fundamental requirement.

Donald Trump is not the man to do these things for Americans, and neither is Farage in the UK. Trump is, after all a member of the billionaire class himself, even as he thumbs his nose at his own kind; and Farage was educated at public (private) school and is a former commodities trader in the City. Both are one issue protest candidates whose economic compasses point in the wrong direction for working people over the longer term. Lower taxes will not suddenly make trickle-down economics work, when it hasn’t for the last 40 years. Less business regulation will not suddenly make employers pay their workers higher wages or give them more stable lives, or encourage industry to invest in green and clean technologies. Selective health and education will not suddenly deliver equality of opportunity for all. Governments need to intervene, regulate, and organise to direct public and business decisions in directions that support equality, fairness, stability, opportunity, and prosperity for the majority. To step back from this task has been vividly shown to produce perverse and harmful outcomes on a massive scale. Trump and Brexit are the prima facie evidence for that.

Be careful what you wish for – you might just get it!

And that is the contradiction at the heart of these extraordinary few months that have seen the UK vote to reject membership of the EU, and now the USA to vote for the worst presidential candidate in living memory. In seeking to avoid the status quo Americans really had only one alternative, as did the British when asked whether they wanted to remain in the EU. On both occasions the two sets of voters chose change, because the status quo was too awful to contemplate. However, neither Donald Trump nor Nigel Farage are able or willing to produce the kind of change that voters are so desperate for. Which begs the final question.

If American and British people voted for Trump and Brexit because they want an improvement in their lives, then I think they may be disappointed in the short term. For the long term there are glimmers that the political classes now understand that they face angry and desperate voters, and that deregulation and globalisation, at least in their present guises, are dead concepts. Vast chasms of inequality and division can no longer be tolerated. If the political system as a whole has woken sufficiently to that realisation this morning, and goes on to put in place a social contract and economic structure that delivers progressive and sustainable opportunity for all, then Brexit and the election of Trump may have been worth it.