#Brexit · 7:30pm Jun 24th, 2016
Cross-posted to my blog on Hubpages, with some edits made.
I am a democrat [proponent of democracy] because I believe in the Fall of Man.
I think most people are democrats for the opposite reason. A great deal of democratic enthusiasm descends from the ideas of people like Rousseau, who believed in democracy because they thought mankind so wise and good that every one deserved a share in the government.
The danger of defending democracy on those grounds is that they’re not true. . . . I find that they’re not true without looking further than myself. I don’t deserve a share in governing a hen-roost. Much less a nation. . . .
The real reason for democracy is just the reverse. Mankind is so fallen that no man can be trusted with unchecked power over his fellows. Aristotle said that some people were only fit to be slaves. I do not contradict him. But I reject slavery because I see no men fit to be masters.
-C.S. Lewis
I'm not a European or a Brit, but this is the research I've been doing so far, and I'll save you some time by sharing it. Of course, you could check the BBC's front page for everything.
Okay, so for those of you not in the know: Britain recently voted 52% to 48% in favour of leaving the EU. The voter turnout was a little over 70%, and Britain now has a maximum of two years to execute its departure.
Scottish centres voted wholly in favour of staying in the EU. While the vote was never unanimous, every single centre in Scotland reported a majority of Remain. You may have remembered a referendum a while back about them deciding ultimately to stay in the UK because of economic concerns; some say that a vote to leave the UK would destabilize their relationship with EU, and so they chose to stay. Now that the UK has voted them out of the EU, it is likely that Scotland will want to leave the UK at last.
The same goes for Northern Ireland. It is possible that we may see a reunified Ireland (whatever that means).
Sentiments are strong and rising on every side. I'll try and give you a snapshot of these from Reddit/etc social media, but first:
Why This Will Make The History Books
Countries like Italy and maybe France are Eurospectics. Seeing the UK break free will likely cause political commotion in such places. They will be demanding referendums, and depending on the decision of their governments, we could see a massive fragmentation of the EU in a relatively short time span. At the very least, it's going to affect general elections, particularly France's next year.
This split will likely also cause the fragmentation of the UK as we traditionally knew it. Scotland will become Scotland, and there will be no more Ireland in the UK. It's hard to say how long the sentiments will hold, or where they'll sway, but right now the consensus in Scotland amongst politicians of both stripes are to leave the UK and join the EU.
This is also the perfect setup for a classic historical entry: the referendum that led to this result was done by David Cameron, prime minister, who thought to use the referendum as a way to gain support for his party because he thought he would win. His gamble results in the fallout, and his reputation and legacy is now this.
On a larger scale, this will affect how people view democracy. I posted the quote because it resounds with me - let's be honest, the populace is dumb because they cannot be smart, not unless everyone's got a degree in economics. All the banks and financial institutions, local and global, have come out to say that it will be a very bad idea. Common sense tells you that uncertainty always leads to fear always leads to leaving always leads to crashing, and this is while the EU and thus Britain has just began to strengthen their previously crippled knees (enough for foreign investors like OCBC to tentatively suggest investing into them, or so it was when I talked to them in March).
Yet the people said: no.
We don't believe you. You're just trying to trick us. We're not afraid of you!
This is the message: that this is a proof of the people triumphing over the Other Side. It's in line with the anti-authoritarian sentiment worldwide; the difference is that people have chosen to vote with their feelings instead of statistics.
Whether or not it pays off will affect how the next generation looks to its leaders, and by extension, the intelligentsia.
Why This Matters Now
As of writing, the pound, the euro, emerging currencies, and Asian markets have all fallen in record drops. For the next two years, while the UK sorts itself and its trade deals out, this is not likely to recover - at least not due to foreign investment. Again, the market hates uncertainty, and the UK will be a big cloud of it for a very long time.
And the reason is this: David Cameron, rather than sitting out his term to work out the rest of the deals and lead the country, has chosen to resign instead. There will need to be a new prime minister, a new Cabinet, possibly even a new election if the opposition wrangles enough protesting in the chaos. Months and months of a leadership vacuum and bickering means not a lot will get done, and without a clear plan the market is not going near it with a ten foot pole.
This is doubly important because London's main business is financial services. More precisely, global financial services.
You can see the connection, right?
Now, you may think: it's still so far away though. Unfortunately, the markets are all linked, and everyone borrows from one another. The spread of fear has led a lot of people to put their money in gold, where it sits doing absolutely nothing in terms of returning flow to the economy. Gold is not a business. It does not create jobs or drive innovation. Money that would have gone to businesses are going to gold, and this means everyone's going to get squeezed from the top to the bottom. Money that would have kept you employed for another three years is not going to arrive any more. Money that would have kept your company alive for another five will not reach, by trickle or otherwise.
It is worth noting that American stocks are doing well, as well as that if you are in a sector based on a strong local demand, then you're maybe not as badly hurt.
If you have free income and holding power (at least 5 - 10 years), it's not a bad time to buy in. Nobody knows how far down it's going to go, and if Scotland leaves it may dip even further, but keeping an eye on it is a good start.
If your funds are tied up elsewhere, you're going to have to conjure up some holding power to wait out the ripples as they arrive.
If your funds are tied up in British/EU instruments... it's rough, really, especially if that's what your savings are in. A lower pound means inflation because more pounds are needs to buy a certain import, and the UK ha a ton of imports on account of nothing growing very much. Inflation means things get more expensive on both ends: on the value of the item, as well as the money you use to obtain it.
Of course, a lower pound also means better tourism and actually potentially more trade, as other countries seize the rare discount opportunity. On the other hand, the EU has laws and controls and things that probably disincentivise doing so, and again, uncertainty - I might buy UK goods, but I'm not going to buy into UK businesses until I know that the economy is fertile enough for me to get a return. There is almost certainly a net loss of income as long as the details remain unsorted.
There is also some vague hope of an academic nature that the pound will, in its devaluation, return to its "true" value, as it has been historically strengthened by London's status as a financial player. Put another way, it's going to be like oil which will fall and actually never rise up to its old highs again.
Here is a nice take on the impact of the pound devaluing.
Long term: ???
Sentiment
Here's a good summary of the reasons why Brexit won. On social media, it's much less civil.
One side is fighting for sovereignty, going against the evidently corrupt upper echelons controlling their economy. The open border "single economy" nature of the EU has meant more access to the UK for citizens of less wealthy countries like the Greeks, the East Europeans, and supporters want the ability to control their borders once again. They see little of their money coming back to them, and feel that it is unfair.
This same side is also painted as xenophobic and racist, flared up by notions that multiculturalism isn't a thing, that "they're taking our jobs", that the ones who voted for Brexit - a majority of which are 55 and older - are just an older generation yearning for the good ol' days because they don't understand anything but a biased rhetoric.
The lesson to learn about perspectives is damning. The Brexit campaign used exaggerated, overblown numbers that did not reflect the nuances and complications of the EU economy. They did not bring to light the steps David Cameron had been making to negotiate better terms with the EU on all aspects, choosing to proclaim that nothing short of leaving the EU would work. Norway, a country they had been touting as an example of why they should leave, came out and said that the UK shouldn't do it because they become subject to its policies but lack the voting rights.
These are hard proven tested statistics. These are blatant lies exposed, used to manipulate and stir up sentiment. Not that the other side was any better... just less sentimental, and mostly pattering about.
And so sensationalism won.
The obvious parallel is to the US elections. Trump is a horrible person who lacks ethical plans that people still support because they feel he is the only way. Blinded by sentiment and lacking even an ounce of optimism, they believe that getting a destructive force is better than a decaying one.
I've crossed and spoilered out the following section, because it's all doomsaying and really no better than anyone else. I feel still that I must leave it up, in the spirit of being honest and open about my thoughts, so please take the following understanding that I'm aware (and somewhat ashamed) of it.
Personal opinion time:
It's all very easy for to want to feel like revolutionaries. It's all very easy to not give a damn about the next generation studying, trying to build careers, about those who will grow up in a world increasingly lacking resources, and all the while the older ones judge them and label them as the worst in terms of music, culture, attitude, the whole freaking shebang. Here is the complete lack of concept of being conservative and having the decency to pass options along.
Currently: "I know the economy's doing bad! It's just a temporary thing! We took the short term pain for the long term stability!"
In the future: "I know the economy's doing bad! It's all the fault of the EU who are pressuring us! We were right to leave! What to do about now? I don't know, we had it better because we worked harder unlike you lot! I'm retired so none of my business lol"
I know that the banks are corrupt. I know the government's corrupt. But dammit, that is not a good enough reason to end everyone. It's folly to think that you can escape unscathed, and it will be more stupid folly when they deflect the responsibility away from themselves.
It's all about deflecting responsibility, isn't it? We would rather let someone else destroy it all than try to fix the system. Fixing is too hard. Doing things the slow way is too hard. Iterations of policy improvement is too hard. No, we just press the reset button and hope the circuits don't fry.
Learning the truth is too hard. Learning the facts and figures and mechanisms in place is complex, yes, and not impossible, but it's too hard. We would rather surge with emotion and feeling and pithy yet pitifully inaccurate slogans than make an educated decision.
I get it. I know that it's hard to trust the powers that be any more. But dammit you're no better, and much more clueless. Because for all their evils, they can exercise their evils because they have the power that comes from knowledge. And knowledge is needed to operate the system.
Yes, the UK government has up till now housed pedophiles and - notably - blamed a lot of its problems on the EU it has now tried to support. It's tried to play both sides. They should be punished, but the consequence of that punishment should not be a crippling of your own economy. And if you say "well I voted for Leave because these guys who support it now told me they're the cause of our problems before" - at least have the decency of not acting as if you were somehow enlightened. You are admitting that you fell to petty deflection that you yourself didn't even believe in, because now you're taking it out as some sort of excuse.
Notable Bits
The referendum is non-binding. It's just a show of what the people want.
Of course, to ignore the will of the people is political suicide. It's basically saying you're undemocratic. So every party will be working to this end, because if you don't you are unrepresentative (and I agree with this).
There is the possibility of someone trying to weasel their way out and say that the split of 52-48 is not enough to form a mandate. There is also the possibility of the Queen reinstating absolute monarchy. Both of these are extremely tiny.
One of the main reasons the EU was formed was to keep Europe from going to war over each other. This is not implying that European countries will go to war should the EU break up.
Really, the only thing is to wait and see. Not just months, but years, to see if the economy recovers, if Britain will rise or fall due to trade and immigration, if this signals the end of the EU. It's emotional to form an opinion so quickly, especially when it's nowhere near me, but it lines up to my current frustrations and blah.
Do what I do and game the system by having no funds at all! :D Here's to the restored monarchy!
One thing to note: article 50 allows for the negotiation period to be extended if all parties agree. It is likely that this will be the first item on the agenda when negotiations commence.
4046849 Could that be used to stall the process long enough for a second referendum to be held, or would that be politically impossible?