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Little Britain, After Brexit: UK Plunges into the Deep End of the International Market

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The central motif for the Leave campaign’s agitation for Brexit was that of sovereignty.

As the story went, membership of the European Union entailed a loss of sovereignty in diverse fields, from agriculture, fishing, and domestic economic policy to immigration management, foreign policy, and international trade.

The narrative continued with promises of an independent and resurgent (“Hopeful”) Britain, one, with a hint of nostalgia, that can stand on its own two feet on the world stage.

The audience was also tantalised with the prospect of a bonfire of EU regulations and the end of the allegedly remote rule of an “unaccountable” Brussels.

There were finally re-assurances that new trade deals would be negotiated, through the World Trade Organisation (WTO), and that Britain could position itself globally (not merely in relation to the EU) as a multi-lateral trading partner.  With the elimination of EU regulations, the UK would have the competitive advantage of a ‘flexible’ economy.

There are many problems with this story, not the least being the very meaning of the word sovereignty.  Indeed, in many senses, Brexit substantially reduces the sovereignty of the UK.  Not only will the new everyday situation be a more costly version of business-as-usual, but Britain itself will also exist in a more dangerous environment of risk.

Contrary to the tale of an independent, prosperous Britain is that of an isolated and exposed Britain – a vulnerable Britain, awash amid the harsh reality of the international market.  This avoidable self-exposure gives the UK very little moreover as much of the regulatory regime, for instance, will continue as is or slightly rebranded since it is underwritten by WTO trade rules and EU market entry requirements (55% of UK exports).

The challenges of globalism have been met by nations through regional and inter-regional associations, from Asia, the Americas, Africa and, of course, Europe.

Russia and China continue to integrate their economies and have developed a cooperative network of nations in Asia and around the globe through groupings such as BRICS and its fledgling New Development Bank.  This network was meant to include cooperation between China and the UK, viewed as the gateway to Europe, especially in financial services.  Yet, with Brexit, China is re-assessing its investment strategy and commitments in the UK.

With strength in numbers, nations have achieved a more tangible sovereignty, an existential security, if you will, through peaceful cooperation and sustainable development.  Stronger and better trade deals have been negotiated, by the EU, for example, providing members with greater discretion for democratic self-governance.

Of course, the UK could attempt to strengthen its own global network of nations, as with the Commonwealth and the Anglosphere.  Yet, such fantastic hopes fly in the face of the reality of the current international order.

With full Brexit (no European Economic Area, etc.), Britain will be required to re-negotiate its relationships with the EU and the WTO.  Any subsequent FTA’s would, moreover, take place according to WTO rules and governance.  In both re-negotiations, and in new free trade negotiations, Britain would have lost much of the clout that it derived from its membership of the EU.  Pre-Brexit, international trade deals were negotiated by the EU, and, as the world’s largest economy, significant concessions were won to limit the exposure of the more savage aspects of globalism.

Immediately after Brexit, Britain will be bargaining from a position of weakness, or, as in the case of China, from a new irrelevance. Disappointing or worse deals are likely.

The exposure of Britain, with a population of 65mil, to the savageries of the international market does not contribute to its sovereignty, but instead, undermines it.  In fact, Britain had already conceded much of its sovereignty long ago, at both a domestic and international level, through its membership of other global organisations such as NATO and the IMF, in its alignment with the United States.  That is not even to mention the exposure to the speculative movements of international capital, curtailing sovereignty.  It is telling that the Leave campaign did not complain about these other more drastic constraints on sovereignty.

If we want a glimpse of things to come, let us take as one example the potential collapse of the property market.  Since the referendum, at least five international property firms have suspended trading due to a massive rush to sell UK holdings.  This suspension merely post-pones a harsh transition of property values in the UK toward a new un-decided settlement.

Of course, a shake-up in the longstanding dear levels of property values could, if the political will can be mustered, lead to the relative and much needed democratisation of land.  Yet, if there is an absence of will among the landless many and farmers – and the political parties which purport to represent them – there could be less a “re-balancing” than concentrated corporate hierarchies in agriculture, tourism, business and housing.

70% of UK land is in agriculture.  A crash in the property market, exacerbated by a removal of EU subsidies to agriculture, could in theory lead to a wider distribution of ownership.  Yet, with the collateral economic calamity of such a crash, it is unlikely that the landless many or farmers would be in a position to take advantage of the opportunity.  The land instead will be swallowed up by the international property market, tourism and corporate agribusiness.

The remaining 30% of UK land will also be subject to international exposure.  Residential assets, business, utility companies, football teams – in essence, the ownership of the furniture of UK life falling into the hands of consortiums for speculative profit.

We are far along the neo-liberal pathway, a far greater threat to sovereignty than the EU, an institution which acted to resist the most extreme excesses of globalism.

Without political clarity on the adverse exposure of the UK, the sovereignty of citizens, both political and existential, will likely further diminish in what will soon become Little Britain.

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James Luchte is a philosopher, author and activist in the United States. He is also Visiting Professor of Philosophy and Aesthetics at Shanghai University of Finance and Economics. He is the author of Marx and the Sacred Revolution. His latest book is titled “Mortal Thought: Hölderlin and Philosophy” (Bloomsbury 2016).

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