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Brexit: A Warning for Globalization

by John Brian Shannon

Seventeen million Britons voted to leave the EU, and the world wants to know why.

Could it be the Economy?

All EU citizens are feeling the pressure of falling purchasing power and lower employment levels, but only Britons have had the opportunity to leave the European Union for a shot at a better existence.

I suggest that the bottom two economic quintiles in every EU nation would choose to leave the EU today! if they could, and for the same reasons voters in the United Kingdom voted Brexit on June 23, 2016.

That’s 203 million people out of a grand total of 508 million EU citizens who now find themselves in the bottom two economic quintiles in the European Union.

That is some statistic!

If the European economy was rocking along at a furious rate, it mightn’t be too much of a problem.

GDP growth is flat and EU unemployment is cast at 9 percent of the total workforce — but in reality it’s much higher, as huge numbers of people have given up looking for work and aren’t counted on official unemployment statistics, nor are those who’ve returned to college because they can’t find a suitable job, nor are those who find themselves on some kind of government (welfare) support. Which makes the real EU unemployment rate in excess of 20 percent.

Official youth unemployment in the EU ranges from 50 percent in Greece, to 45 percent in Spain, to 37 percent in Italy, to an EU-low of 7 percent for Germany.

And like elsewhere in the developed world many EU jobs are entry-level jobs. And sure, the people who have those jobs know they’re lucky to have them — but they also know they’ll never ‘get ahead in life’ for as long as they stay at that job.

It isn’t an EU-only problem. In recent decades, a larger proportion of employment opportunities are low-paying jobs as multinational corporations automate many of the operations formerly performed by skilled workers.

Why pay a human, when you can pay a machine less?

Could it be a lack of Democracy?

All over the EU, everything from the price of bread to how many migrants are allowed into your EU-member country are decided by unelected mandarins in the EU’s version of the Soviet Politburo.

With an official unemployment rate of 9 percent which equates to +21 million people (but a real unemployment rate of +20 percent, which equates to 44 million unemployed people) and 203 million people living in the bottom two economic quintiles; When you combine their numbers with the people who’ve had enough of being told how to live by the unelected bureaucrats in Brussels, you arrive at enough votes to exit the European Union. Exactly as happened in the UK last week.

Here’s the rough math on that for the entire EU:

  • Total population of the EU = 508 million
  • Of those EU citizens, 203 million are living in the bottom two economic quintiles + 44 million real unemployed + a minimum of 20 million voters living unhappily with the unelected mandarin situation in Brussels = 267 million unhappy EU citizens
  • 508 million – 267 million unhappy voters (‘leavers’) = 241 million who would probably vote for continued EU membership (‘remainers’)

Do you see how the UK accumulated enough votes to leave the European Union?

If a vote were held in every EU country today, the exact same result would occur as in the UK last week.

And everyone would blame their economic woes, their lack of employment and quality of their employment, and the lack of democratic process in Brussels, for their decision to vote against EU membership.

Could it be Globalization?

Globalization has done some wonderful things for consumers over the past 25 years, some of which have been quite unnoticed by citizens.

It’s fair to say that globalization ushered in an era of low-priced and higher quality goods than would otherwise have been available. It’s also fair to say that consumers have a much wider selection of goods to choose from.

And importantly, competition dramatically sharpened between corporations — which increased productivity, efficiency, national GDP statistics, and has helped developing nations to become net assets to the global economy instead of draining the strength of the world economy.

It’s all good – except the parts that aren’t

The downsides of globalization are understood; Higher unemployment, lower wages, lower quality jobs, offshoring millions of jobs, the increased power of corporations vs. citizens, and the fear of our societies transitioning from true democracies into corrupt plutocracies.

Now that we’ve reaped the benefits of globalization (but lost the UK in the process!) now might be a good time to address some of the inadequacies of globalization before we lose significantly more.

“We cannot solve our problems with the same thinking we used when we created them.” — Albert Einstein

Legislation can solve every one of these problems if the political will exists.

If a higher minimum wage is legislated throughout the 28 EU nations (say, 15 euros per hour) and if people who earn less than 25,000 euros per year are exempted from paying income tax, and if job-sharing schemes are made mandatory with a view to employ every worker for a minimum of 6 months per year; Not only could the bottom two economic quintiles have an opportunity to improve their lives for the first time in decades, they will resume their normal voting patterns (which is more often than not) reelecting incumbent politicians and voting to remain in existing political unions.

See how easy it is?

“If you treat an individual as if he were what he can and should be, he will become what he can and should be.” — Johann Wolfgang von Goethe

By addressing the negatives of globalization, the EU could still become what it can and should be.

And by addressing the democratic gap in Brussels where unelected officials can never, ever, be removed by voters no matter how odious the policies, the European Union could become what it can and should be.

And that’s an EU worth joining.

Related Article:

Brexit and Enhanced Commonwealth

by John Brian Shannon | June 25, 2016

When a thing isn’t working, it’s time to quit. Whether it’s a marriage or a political union there comes a time to say a respectful ‘goodbye’.

And it appears howevermuch joining the EU has propelled the UK economy, the social cost of millions of eastern European economic migrants and Levant refugees streaming into the UK is higher than British citizens are comfortable with.

The raison d’être for the creation of the EU is quite wonderful — inspired even. But there can be a difference between the theory of a thing and what has actually occurred.

Sir Winston Churchill information courtesy of Gov. UK

Scary statistics were trotted out in order to push UK citizens into voting to stay in the European Union, but when analyzed turned out to be speculative, at best.

It looks like the EU project is in trouble. I wish them well, and I hope they solve their problems.

In the meantime, the UK must do what is best for the UK

And in my opinion, that means inviting like-minded nations to join The Commonwealth with the goal of increasing economic and social integration with those sovereign northern European nations. (Norway never joined the EU, Switzerland recently left the EU, and the Scandinavian nations are gone as soon as the first opportunity appears that meets optics standards)

If the UK, the Scandinavian countries and Ireland form a loose economic and social cooperative union (or even better, become members of a re-energized Commonwealth) it will immediately boost economic and social metrics across those nations without the downsides of EU membership.

Without wishing any harm to the EU; The European Union can better concentrate on southern European issues with Germany and France leading the way, and without northern European concerns to complicate things.

The question is; Do we choose safe, or do we choose Carpe Diem?

The European Union is deep in it’s own problems for the foreseeable future and in that context I made the case for the UK to leave the EU. As there’s no precedent, it could now become anything the UK government wants it to become.

How about this?

  1. The UK adopts a similar relationship to the EU as Norway and Switzerland.
  2. The UK invites Scandinavian nations and Ireland to become part of The Commonwealth.
  3. The UK institutes a 1% Tobin Tax, keeping one-quarter of one percent for administrative purposes, and remits the remaining three-quarters of one percent to the IMF — to be held in a special account that only the UK government can spend on the UK and on other Commonwealth nations.
  4. Every Commonwealth nation should phase-in a 1% Tobin Tax over a 5-year period. And just as in the UK, one-quarter of one percent would be retained by each Commonwealth nation to cover collection and administration costs of the Tobin Tax.
  5. It’s obvious that a trillion pounds of Tobin Tax revenue would accrue rather quickly — and be available to each Commonwealth nation to spend in any other Commonwealth nation. (Need a new SASOL headquarters in London? Perhaps you need to double the export capacity in the port of Accra? Or with the proper funding you can finally build that 1 GigaWatt wind farm and export billions of dollars/pounds/rands worth of electricity to neighbouring countries. Now you have instant funding!)
  6. If you’re the UK there’s one thing you want, countries lining up to join The Commonwealth. And soon contributing their own Tobin Tax revenue to the special IMF account used (only) to strengthen trade links with other Commonwealth economies.
  7. The ultimate goal, would be for the entire Commonwealth to copy the Norwegian economic model (as much as is reasonably possible) in order to attain Norway’s enviable statistics — such as the world’s highest per capita income, among the world’s highest productivity, free university for all citizens and residents and (related to that) among the lowest crime rate in the world, and so much more. Keep in mind Norway’s very high-ranking on the Social Progress Index and on the UN Happiness Index (free PDF downloads for both) And remember, all positive economic indicators flow from those statistics — not the other way around.

The question would then become;
“Which country wouldn’t want to join The Commonwealth?”

Commonwealth countries, plus Scandinavian countries 2016

In this, the 21st-century, it should never be a case of looking at a glass, half-full. It should always be about creating a massively better system. One that is a whole order of magnitude better than the presently sputtering economic model.

Previous generations of politicians rose to meet the challenges of their time, and likewise the UK government must also rise to the so-called challenges of our time.

But meeting the challenges of our time must be considered passé as the UK is sufficiently advanced that it should blow past the challenges of our time in the same way a Bentley Mulsanne Speed blows past an economy car on the M6 motorway.

Who Should Lead an Empowered Commonwealth?

Whomever is the most recently dismissed Prime Minister of any Commonwealth country should (within 180 days of losing office) be appointed to the top job — Secretary General of The Commonwealth.

In that way, a flow of different approaches from highly empowered and knowledgeable people will lead The Commonwealth of Nations and each former PM will undoubtedly leave their stamp on the broad policies of that organization.

A former Indian Prime Minister sitting as Secretary General might advance the cause of microgrid power generation across all developing Commonwealth nations, while the next SecGen (from the UK for example) might take up the cause of getting resources from all Commonwealth nations to China and other major markets. And during the time of an African Secretary General of The Commonwealth, the preferred cause might be improvement of all Commonwealth port facilities in order to dramatically expedite trade — getting Commonwealth goods to every market, faster, fresher, and better.

What matters to me, is that each Secretary General leaves a positive impact on The Commonwealth using his or her unique worldview, experience, contacts and ability.

It will be this synergy that will make The Commonwealth all that it can and should be.

The Commonwealth of Nations is a group of interdependent countries.

“The Commonwealth is a name for countries which were part of the British Empire before they became independent. This group of states works together on many important matters, like business, health and the fight against poverty.” — Wikipedia

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