EUROPE AND THE REVOLT OF THE DISAFFECTED
When UKIP (the UK Independence Party) secured 27.5% of the vote in the European elections, it was the first time in more than a century that any party, other than Labour and the Conservatives, had won a nationwide election in Britain.
Quite intentionally, I’ve taken a week to respond to the European election results, because what we need is a deeper analysis instead of the kind of knee-jerk response that has characterised much of the mainstream media’s reaction.
Some of the parties that triumphed in these elections might indeed be “right wing”, “left wing” or less than mature and professional in their conduct of politics, but this is to miss the point, which is that the European electorate has delivered a damning verdict on the established parties and, by extension, an equally damning verdict on our economic and social systems.
Very simply, this is the revolt of the disaffected. Whilst the EU and immigration have been flagship issues, the substance of the electoral “earthquake” has been a backlash against a globalised, corporate-dominated economic system that seems to favour an affluent, politically-connected elite at the expense of everyone else.
Many in the mainstream political and media world have sought to belittle the surge in support for UKIP. Some say that the party is irrelevant, because our first-past-the-post (FPTP) electoral system makes it all but impossible for UKIP to secure a significant presence in the House of Commons. Others have argued that UKIP is a single-issue protest group rather than a political party as such, and still others have derided UKIP as (in the words of Tony Blair) “nasty and unpleasant”.
To dismiss the surge in support for UKIP in this way, and to assume that its voters’ only (or even primary) concern is the European Union (EU), is to make a grave mistake. UKIP represents a political position which, even if it is less than fully coherent, commands widespread support. Moreover, even a British exit (“Brexit”) from the EU would not assuage the anger that motivates UKIP voters.
To understand why, we need to see UKIP in a pan-European context.
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The result in France, where the Front National (FN) topped the poll with 25% of the vote, is arguably the single most important outcome in the 2014 European Elections. The surge in support for the FN imperils the European Union (EU), because Germany cannot carry the European project alone. If Britain were to leave, the EU would probably survive, but a French pull-out would kill the EU stone dead.
Critics who deride the FN as “extremist” and “racist” are missing the point. Though opposition to immigration is part of the FN’s platform, its appeal is far broader. Essentially, the FN has become the preferred vehicle for the disaffected, people who probably account for two-thirds of the French electorate. The analysis here is that globalisation has benefited two groups – immigrants, and a wealthy cosmopolitan elite – at the expense of everyone else.
Those who have read Life After Growth will know that I’m highly critical of globalisation. In pursuit of micro-economic (corporate) gain, the West has undermined its macroeconomic position by outsourcing production to cheaper markets whilst expecting to go on consuming at ever increasing levels. Activities such as manufacturing, farming and mining – which, collectively, I categorise as “globally marketable output” – have been replaced by services which we provide to each other, either directly or via the state. Inevitably, globalisation has been accompanied by an escalation in state and private debt as we endeavour to maintain our consumption even though our marketable production has declined.
We seem to have forgotten that you cannot indefinitely consume if you do not produce, and services that we can only sell to each other hardly cut it in a global economy. Western economies have been deskilled, and globalisation has eroded real wages for a substantial majority of the workforce.
This disaffection with a globalised, pro-corporate and pro-rich economic system is exacerbated by a lack of faith in institutions. Many French people view the mainstream political establishment with contempt, which is hardly surprising given the extremely low quality of the French national leadership in recent years.
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The bedrock disaffection which has driven the FN vote upwards has its parallels in the rise of support for UKIP in Britain. Though different in character, the division between “us” and “them” is every bit as serious here as it is in France.
Those who take a long-term view of national evolution have every cause for concern where British institutional life is concerned. Politicians’ standing has been undercut by the expenses scandal, phone-hacking revelations have discredited not just the media but the police as well, and the banking system has fallen into public discredit since the financial crisis, an impression exacerbated by a series of scandals.
Of course, most politicians do not fiddle expenses, most journalists do not tap phones, most policemen do not take bribes, and most bankers do not enrich themselves at the expense of customers and society, but it tends to be on the headline impression, rather than on the broader and more mundane substance, that the public reaches its verdict.
There is a widespread belief, too, that the political, administrative and business elite do not inhabit the same world of accountability as the rest of us. Expense-fiddling politicians seem to get off lightly compared to benefits cheats, few if any heads rolled over the Stafford NHS disaster, wealthy foreigners are allowed to live in Britain virtually tax-free, we still do not have the full story on Iraq, and the widespread assumption of symbiosis between government and finance has been worsened by the (disastrous) decision to rescue the bankers at the same time as rescuing the banks.
Of course, this anger might have been less acute if the economy was doing better, and the steady decline in real incomes – especially in relation to the escalation in the cost of essentials – has made matters much worse. Widespread hardship, and continuing ultra-high levels of household debt, undoubtedly make the affluence of the elite harder to stomach.
Most Europeans, of course, have further grounds for complaint, in that the single currency has been a disaster for almost every Eurozone country other than Germany. Even a first-year student of economics could have told the EU that you cannot combine a single currency with a multiplicity of budget processes, because monetary and fiscal policy need to be complementary. Denied the normal devaluation route, countries such as Spain, Portugal, Ireland and Greece have had to deal with competitive weaknesses through an extremely painful process of internal devaluation, with predictably nasty (and largely avoidable) consequences for living standards.
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The political establishment, whether in Britain or in Europe more broadly, will not understand the electoral upheaval until it stops bandying pejorative terms (such as “right wing”, “single issue” and “protest vote”) and starts to understand that what we are witnessing is the start of a revolt by the disaffected.
What these disaffected voters, in their tens of millions, are telling us is that an economic system based on globalisation, deregulation, corporate self-interest and elitism has failed.
My point, from an economic perspective, is that globalisation has become a debt-creating machine, the European single currency has been a disaster, and the widening gap between the rich and everyone else is economically as well as socially damaging.