A demonstrator holds a placard at an anti-Brexit protest in Trafalgar Square on Tuesday. The vote set in stark contrast the narrative of right-wing populism versus liberal globalization.JUSTIN TALLIS/AFP / Getty Images
The narrow victory of the Leave side in the Brexit referendum demands a profound rethinking of the liberal globalization agenda.
At one, highly disturbing level, the majority for Leave was a clear victory for the nativist, often overtly racist, populist right, and a clear defeat for the economic and political elites who overwhelmingly backed the Remain side. As widely noted, this underlines the lack of broad popular support for deep economic and political integration, which seems to be increasingly pervasive in both Europe and the United States.
Yet this narrative of right-wing populism versus liberal globalization, while broadly valid, requires nuance.
Of key importance is the fact that the vote boiled down to choosing the flawed European Union as it now exists, or returning to a Little England led by the right wing of the Conservative Party. The option of a more progressive and effective EU was not on the ballot and not much heard of in the campaign.
For all of the criticism of Labour leader Jeremy Corbyn, almost all Labour MPs and more than two in three Labour voters supported the Remain side, as did the labour movement and the vast majority of younger voters. But the leader of the Remain campaign was Prime Minister David Cameron.
He and the majority of Conservative MPs who supported him lacked credibility and appeal to many progressive and working-class voters after years of fiscal austerity, falling real incomes and attacks on the trade unions.
It is not especially surprising that a significant minority of older working-class voters in the blighted industrial heartlands outside London ignored the advice of the Labour Party and voted for Brexit. The EU is hardly the sole cause of high unemployment, economic stagnation and the marked rise of precarious work, but the current EU setup does work against active industrial and regional development policies to support good jobs and against greater regulation of the labour market.
Back in the 1980s, under the leadership of Jacques Delors, an attempt was made to build a strong social dimension to the EU based on setting a strong floor of minimum social and economic rights. But European Courts have recently ruled that these minimums are also maximums and have allowed British employers to heed "requests" from workers to ignore working-time standards. Migrant, so-called "posted" workers in Britain can legally be paid well below prevailing British wages, depressing decent employment and raising concerns about the economic effects of immigration.
The case for Remain was almost certainly undercut by the manifest economic and political crisis of the euro zone, which has not recovered from the 2008 economic crisis and where many countries are experiencing mass unemployment due to continuing fiscal austerity. The EU has come to be seen as an economic policy prison rather than a source of collective strength to deal with economic stagnation.
The Leave campaign had no coherent economic policy. Hence, Brexit will not resolve any of the underlying problems of the British economy and job market, and will, as Bank of England Governor Mark Carney and others have warned, be a major negative for manufacturing and for the financial sector. Still, the consequences are likely to fall well short of the more apocalyptic scenarios painted by liberal free traders.
In the first instance, a default to the World Trade Organization rules governing trade in goods and many services would limit the damage to a significant degree. Compromises are likely to be struck with the EU in any future negotiations given that both sides have an interest in maintaining two-way trade.
Further, a deal may well be struck prior to formal exit negotiations. While this is hard to reconcile with the democratic legitimacy of the Brexit victory, the fact remains that constitutional power remains with the House of Commons where supporters of the EU have, and will likely continue to have, a large majority of seats.
Neither Brexit nor the existing EU are good options for the British people. It is to be hoped that political forces across Europe are up to the challenge of making the EU a force for economic and social progress as seemed to be the case in the 1980s.
Andrew Jackson is an adjunct research professor in the Institute of Political Economy at Carleton University in Ottawa and senior policy adviser to the Broadbent Institute.