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Brexit: The European challenge

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Brexit: The European challenge

Brexit: The European challenge

capesic Europe 13/02/2017 Comments

‘British people have had enough of experts’. Half of the UK’s population reacted with a mixture of bewilderment and amusement to this statement by Michael Gove; if not experts, many commentators wondered, who does he suggest should run the country? Yet, the statement deeply resonated with many Brexiteers who regard experts – and especially EU experts – as faceless bureaucrats failing to act in the people’s interests. In the continent, Europeans were still digesting the news coming from the British Iles, when they were struck by Trump’s victory in the US. The spectre of Marine le Pen in France is starting to loom larger, together with other so-called populist movements in Europe. In short, Brexit has triggered a political and social tsunami in the Continent, shaking the European Union to its core. But how did we get here? And what does this mean for the European Union?

BREXIT – MIND THE [EDUCATIONAL] GAP

The well-known statement ‘It’s the economy stupid’ summarizes the idea held by some analysts that the current shift in the political order can be explained in economic terms. Globalization has unleashed this current populist backlash, argues Dani Rodrik. According to this thesis, globalization has created winners and losers, and, to a certain extent, the latter have been ignored by the ruling class. The growing economic insecurity, inequality and social exclusion has led to a new political and social reality from which a good part of the population in the UK has felt excluded.

UK data supports this hypothesis, albeit only partially. While inequality increased in 1980s and the 1990s, it has decreased after the crisis, partly due to the hit taken by high-income asset holders. The data on household income doesn’t shed a light on this issue either. One the one hand, household income after the crisis has experienced sluggish growth, which could a priori account for the Brexit vote. On the other hand, and according to the Office for National Statistics (ONS), it is pensioners – who were more likely to vote for Brexit – the ones whose income has increased, while non-retired households still have less money than before the crash. In a similar vein, whereas cross-country studies find that the less well-off and the unemployed are more likely to back populist parties, those dependent on welfare benefits are found to be less likely to vote for populist parties. Instead, occupational data suggests it is the petite bourgeoisie – shopkeepers, small entrepreneurs, farmers – and not unskilled manual workers who are more likely to vote for populist parties.

Thus, it is of no surprise that some researchers do not fully accept the ‘economic insecurity’ thesis. Instead, some of them suggest that a ‘cultural backlash’ argument is more helpful in explaining the rise of populism and the Brexit vote. Unprecedented existential security levels in the period after World War II led to a massive change in values, from materialist to post-materialist values, with more and more individuals embracing cosmopolitanism, multiculturalism, liberal values and causes such as gender equality, human rights and environmental protection. Yet, not everyone has participated in what some authors call ‘a silent revolution’. The ‘culturally left behind’ are older, white and less educated, and feel that these values threaten their privileges and status.

A variable which seems to link both explanations – the economic and the cultural one – is the educational level. Indeed, the less educated have been, if anything, losers of the globalization phenomenon. At the same time, education is strongly linked to ‘socially liberal’ ideas. As David Runciman from The Guardian suggests in his highly recommended article, ‘the education divide argument is not about knowledge or ignorance”. Instead, “education divides people according to own self-interests” as well as “where they feel they belong”. Indeed, education levels turn out to be a very strong predictor of the Brexit vote.

UK SNEEZES, THE CONTINENT CATCHES A COLD

The EU’s reaction to Brexit has been firm since the beginning. After the initial shock, EU leaders confirmed their position that unless the UK accepted the four freedoms – movement of goods, capital, services and people – there could be no access to the Single Market. They are determined to use Brexit as an example of the fate that awaits other EU countries who may be thinking of holding referendums to leave the EU.

However, is a tougher stance on Brexit enough to deter other countries to follow the same path? Probably not. Populism is a rising trend in the whole of Europe. Marine Le Pen in France, Geert Wilders in the Netherlands, Frauke Petri in Germany and Norbert Hofer in Austria are some of the names currently shaking the liberal political order in Europe. While each country has its own economic and social particularities underpinning the rise of such leaders and parties, the diagnosis is similar to that of Brexit. Populist parties cater for people who feel threatened by globalization, technological challenge, diversity, migration and Islam, and at the same time feel ignored by the mainstream parties.

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Indeed, to fully understand the current challenges brought about by Brexit and the rise of populism in Europe, we need to turn to the ‘supply side of populism’; that is, to the changes that have occurred in the arena of political party representation. The pre-globalization ‘Old politics’ was marked by a clear left-right divide. As both Marxists and neo-classical economists would argue, market experiences dictated political preferences. Dichotomies described the advanced economies pretty well: the working class had opposed interests to the capitalists; the poor were at opposite ends of the rich, and so the former voted socialist or social-democratic parties, whilst the latter voted right-wing parties.

Globalization and technological challenges changed the rules of the game. Herbert Kitschelt and Pablo Beramendi and colleagues explain this metamorphosis of political parties at length. The working class grew increasingly fragmented, with employment in the high-skilled sector out-growing that in the low-skilled one, and deindustrialization and tertiarization changing the overall employment structure in advanced capitalist economies, including the UK. This, together with the abovementioned ‘silent revolution’ of values, signalled to social-democratic parties that they would gain by going towards the centre and embracing the socially liberal constituents. Parties that once had fought for the workers in the industrialized zones of the country now enthusiastically take up environmental protection, gay rights and gender equality.

This shift from social-democratic parties towards the centre has been coupled with what the late Peter Mair called ‘a widening gap between responsive and responsible government’. Responsiveness entails listening to the demands of citizens and then, when in power, responding to them by implementing the policies of their choice. Responsibility means that governments follow known rules and conventions, and act from a sense of duty and moral responsibility. This involves an acceptance that, in certain areas, the leader’s hands will be tied by prior commitments made by the previous government, such as the commitment to EU Treaties – including the four freedoms – to independent central banks, to WTO accords, and so on. Therefore, there is likely to be a trade-off between responsiveness and responsibility.

While this trade-off has always been there, it has been exacerbated by two main factors. With the professionalization of politics, parties have grown increasingly distant from a more and more fragmented civil society, thus becoming less representative and less responsive to the electorate. At the same time, Europeanization and internationalization of policy matters have meant that governments find themselves increasingly constrained by non-domestic institutions – such as the EU, the Eurozone, and the IMF – thus increasing the number of actors towards which governments must act ‘responsibly’.

The shift from social-democratic parties towards the centre together with the shift from mainstream parties towards ‘responsible’ government has left a political gap which is gradually being filled by parties whose main reclaim is to be fully responsive and representative of citizens’ preferences. Some of those parties are pluralists and bring about new ideas of participatory decision-making. Others seem to have a tendency for antipluralism. Or, borrowing from Jan-Werner Müller, some state ‘We are also the people’, and others claim ‘We, and only we, are the people’. The former could be called ‘democratic activists’; the latter ‘populists’.

THE EU AS A DEPOLITICIZED POLITY

What has been the role of the European Union as a polity in all these changes? The previous paragraphs have suggested that the EU has acted as a ‘constraint’ to governments’ responsiveness. This is surely a controversial statement to make. As Phillipe Legrain argues in his book The European Spring, the EU has ‘largely reunited in peace and democracy’ and rendered war unthinkable in a continent once ‘devastated by two World Wars, disgraced by Nazi genocide, disfigured by fascist dictatorships and divided by communist ones’. Europeans now enjoy freedom of travel, study and work anywhere, they have a wider and cheaper choice of products, including flights and mobile tariffs, taxpayers money is more efficiently spent thanks to government contracts being open to competitive tendering, and the EU is a big player in the world affairs.

And yet, Europeans are less enthusiastic about Europe than ever. To understand why, it might be useful to recall where the EU gets its legitimacy from. EU scholars use the concept of input and output legitimacy to express the idea that the EU, like any other polity, can get its legitimacy from two sources. On the one hand, argues Fritz Scharpf, legitimacy comes from the trust in institutional arrangements which are ‘thought to ensure that governing processes are generally responsive to the manifest preferences of the governed’. On the other hand, it comes from the fact that the policies adopted will be effective solutions to common problems which affect citizens. The former is input legitimacy, or government by the people, and the latter is output legitimacy, or government for the people.

Input legitimacy has always been an object of concern amongst EU academics, leading to an endless debate on the so-called EU democratic deficit. Are EU citizens actually represented by the sui generis EU institutional trio of the European Commission (EC), European Parliament (EP) and the Council of the European Union? While a full discussion is beyond the scope of this article, we can say that, if anything, EU input legitimacy has gradually increased with time (e.g. with the increasing role of the EU Parliament in the decision-making process and its involvement in the choice of the President of the EC).

Theresa May

Instead, it has arguably been output legitimacy which has lately suffered a big blow with the Eurozone and refugee crisis. The Eurozone institutions managed to turn a global financial crisis to an EU public-debt and banking crisis. And the refugee crisis has only added insult to injury showcasing a disjointed EU marred by collective action problems. This becomes an even bigger concern considering that the EU has been largely presented to citizens as a depoliticized body that enhances economic efficiency by internalizing cross-border externalities. The single market is meant to increase efficiency by removing barriers, and a similar argument applied to the creation of the Euro. Regulation of telecommunications, environment, financial sector and energy, to name but a few areas of EU regulation, is also made in the name of efficiency.

In the face of such depolitization, many citizens do not quite know how to build an opposition in the EU. In other words, opposition not only demands an institutional setting that allows us to vote, but it also demands political debate. And for years, citizens have felt that there was within the EU what Robert A. Dahl and Otto Kirchheimer would call respectively ‘a surplus of consensus’ and a ‘waning of opposition’. And when opposition in the EU is not possible, argues Peter Mair, ‘we are then almost forced to organize opposition to the EU’.

BREXIT AS A WINDOW OF OPPORTUNITY

While an immediate solution to the current political and economic crisis endured by the EU is not at hand, if the diagnosis above is correct, the resolution of the crisis would involve increasing output legitimacy in the EU and starting a comprehensive overhaul of the way democracy works both at EU and at national level; a new way of doing politics in which citizens feel represented, and politicians do not resort to populist rhetoric.

The best way for the EU to increase output legitimacy is to lead the way to recovery and sustainable economic growth. Philippe Legrain spells out a plan of action in his book European Spring, which involves making economies more adaptable to change, more dynamic and innovative and fairer. Clearly, a grand plan, and one in which the EU – in its current form and shape – can play a major role, facilitating investment, innovation and job creation, helping restructure the banking system and writing off unpayable debts, among others.

Henning Meyer suggests investment to be excluded from stringent EU fiscal rules and start relying more on fiscal policy – and not only monetary policy –to pave the way for recovery. He is not alone in suggesting a stronger role of the European Investment Bank (EIB), and points at the creation of a European Sovereign Wealth Fund which would create fiscal capacity that could help absorb asymmetric economic shocks. Relatedly, he proposes the creation of a European Migration Fund, which would provide help to deal with consequences of migration both at the origin and destination countries.

These economic reforms should be coupled with political reforms. Across Europe, democracy needs to be more open, more transparent and more deliberative. The idea put forward by democratic theorist Mark Warren might be of use to understand how democracy should be reformed. He argues that democracy consists of two ideals. The first one entails the ‘procedures, beliefs and practices that most western nations have institutionalized (…) for the purpose of protecting against an arbitrary state and to develop structures of accountability’. The result is the ‘liberal electoral democracy’. The second one, which is often neglected, is the one that citizens are reclaiming now. It is the understanding of democracy as ‘an arrangement for collective learning and problem solving’, one that leads individuals to come together, to form civic associations when they feel that their core values are at stake and when they see that liberal electoral democracy, with its parties and limited opportunities for voting does not address the issues that concern them. This second ideal is now being embraced by more and more citizens, so governments and parties should adopt it too and not shy away from it if they are to succeed.

Populist rhetoric is on the rise, and at times, it seems unstoppable, but not everything is lost. Brexit has been a wake-up call for many problems that had just been swept under the carpet for a long time. Let’s make Brexit a window of opportunity for Europe, and not the beginning of its demise. It is only then that we shall win the battle for more equality and prosperity. We, as Europeans should do our utmost to make it happen.

Mireia Borrell Porta

Mireia Borrell Porta completed her PhD at the London School of Economics and Political Science (LSE, 2016), where she works as a Teaching Fellow in Political Economy of Europe. Prior to this, she earned a BSc degree in Economics by Pompeu Fabra University (UPF, 2007) and was awarded the Patronat Catalunya Món Scholarship to complete the MSc in European Political Economy at the LSE (2010).

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Photo 1: taken by Yorkpress.

Photo 2: Pro-EU demonstration in London, 03/09/2016.

Photo 3: Theresa May (L), British PM, and Jean-Claude Juncker (R), President of the European Comission, 21/10/2016 (EUobserver).