Newsletter: Brexit Backlash Against EU, Revolt Against Elites

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Above: Protesters supporting both sides of the Brexit cote, by Associated Press.

Note: One reader thought we were urging an end to the EU and ending of all trade agreements. That is not what we are saying. Jeremy Corbyn of the Labor Party seemed to have it right, stay in the EU and change it. He saw problems going back to the pre-EU system as well. The EU does not have to put bankers and big business interests first; they do not have to be anti-democratic and secretive; they do not have to kow-tow to US pressure toward greater militarism against Russia. My hope is the Brexit is a wake up call and they change. If they fail to do so they will see more countries leaving and break apart.

Regarding trade, we favor trade and trade agreements but they do not have to be written by and for transnational corporations, in fact they should be written to control the abuses of these corporations. They also do not have to be written in ways that will undermine the Paris Treaty on climate, they should be written to support that and other progressive treaties on the environment, human rights and labor rights. They can be negotiated in a transparent way so people see what they are doing and can have input into the process. Trade can be a positive force for uplifting people and planet but only if they are not dominated by transnational corporations who have interests that often conflict with the interests of people and planet. KZ and MF

Mobilization for Global Justice

The globalized economy is not working for most people of the world. International trade agreements and new government structures like the European Union serve corporate power and put the people and planet aside to ensure profits continue to come first. They undermine democracy and national sovereignty, leaving people feeling more powerless.

By pushing austerity and commodification of public services, people are now more economically insecure with less wealth and lower incomes. The response of many is anger. Some protest austerity, others blame people of a different skin color, heritage or ethnicity. The surprise vote in the UK to leave the European Union is the latest, and perhaps the biggest, example of the blowback economic and political elites are getting for their actions.

The Brexit Backlash

As economist Michael Hudson tells Chris Hedges, the negative impact of neo-liberal economics is augmented by US and NATO military actions. The war on Iraq, destruction of Libya, ongoing military conflict in Syria; along with the US regime change in Ukraine and lining Russian borders with NATO forces while the US demands Europe spend more on militarism; have led to a massive exodus of migrants from the Middle East which has exacerbated economic insecurity and nationalist fears.

Anti-Brexit supporters dressed as bananas protest outside York racecourse.  (Photo by Christopher Furlong/Getty Images)

Anti-Brexit supporters dressed as bananas protest outside York racecourse. (Photo by Christopher Furlong/Getty Images)

The impact of the Brexit is just beginning. Hundreds of billions have been lost and bankers and investors are going to find themselves upside down. US and European banks, as well as UK banks, just lost 9 percent of their value because of the drop in the value of British currency. These financial elites will be demanding another bailout and the US and other governments controlled by the finance sector will comply. This will lead to greater anger at the bottom and the conflict between the elites and the people will grow, leading to new explosions.

The European political establishment has been hit with a shockwave. They did not see this coming. British prime minister David Cameron immediately announced his resignation, but that is just the beginning. Stock markets dropped around the world, the British pound fell to 1985 levels and another recession for Britain is on the horizon, which will create more shockwaves throughout Europe and the world. Populist views in multiple European nations are rising and there could be other countries seeking to leave the EU. The Brexit could be the beginning of the end for the EU.

The Brexit vote showed how out of touch the elites are with the lives of the people in England. They are unaware how austerity, unfair incomes and lack of wealth makes life unbearable for many. The same is true throughout the globalized economy, which is rigged for the 1% around the world. As the elites seek to protect themselves, at the cost of everyone else, it is time for the Left to escalate its actions against austerity, poverty and extreme inequality.

A banner reading 'Capitalism isn't working' at the Occupy London Stock Exchange protest. Photograph: Oli Scarff/Getty Images

A banner reading ‘Capitalism isn’t working’ at the Occupy London Stock Exchange protest. Photograph: Oli Scarff/Getty Images

The popular movement for economic, racial and environmental justice must seize the moment to demonstrate that the real issues are economic and classist; that the economy rigged by and for the transnational corporations and the investor class is robbing people, treating them as wage slaves with no power and ignoring their hopes while highlighting their lack of political power. This is an opportunity for the movement, but the narrative must be reshaped to be about living standards, pensions, wages and wealth of the people.

As Left Unity argues the Brexit makes it more important for people in Britain to link with those in the Nuit Debout movement in France, with those struggling in Greece, Portugal, Spain, Italy and Ireland as well as with the various fronts of struggle in the US. We are all in this together, just as the transnational corporations have united to build their power in governments across the world.

The European Union Anti-Democratic, Favoring Austerity and Public Services Privatized

Brexit may be just the first country to seek to leave the EU. Movements in multiple countries are getting stronger because many are seeing the EU does not represent them. Even those who favored the UK staying in the EU, like Labour leader Jeremy Corbyn, agreed the EU needed major transformation.

Greece austerity game over.

Greece austerity game over.

Perhaps the greatest example of the EU missteps has been in Greece.  After the 2008 economic collapse Greece did not recover. Greece sought a bailout from the EU and had to deal with the Troika, the European Commission (the executive body of the EU), International Monetary Fund and the European Central Bank. The troika required harsh terms to assist Greece in the sovereign debt crisis beginning in 2010 with a bailout and additional bailouts in 2012 and 2015.

Throughout this time there were protests against the Greek government and the EU austerity requirements. Its climax was in 2015 when Syriza put forward a national referendum on the required austerity measures. Two thirds of Greeks voted in the referendum and a landslide 61% to 39% of the pubic opposed the terms set by the Troika.

The Troika reacted aggressively, ignoring the views of the Greek people and continuing their demands showing deep conflicts in the Eurozone and highlighting the undemocratic nature of the EU. Syriza could have taken more aggressive action – nationalizing banks, creating their own currency, issued their own Euros – instead, amid nationwide protests the Syriza government approved the deal, causing divisions in its own party. Alexis Tsipras, forced to give in to the European bankers, knew the austerity policies forced on Greece were a “dead end.” He said he tried to represent the people against the powerful, but the powerful won.

Greece Democracy not available in EU

Greece Democracy not available in EU

The Troika forced a fire sale of Greek public works and infrastructure to their creditors – Greece was for sale, everything must go. This meant the sale of 14 regional airports, which the Germans took, major ports, gas transmission lines, motorways, the main telecommunication system, postal service, water utilities, casino licenses – you get the idea, everything. And, they were forced to sell in the midst of a depression for very low prices. How could this process help Greece be financially stable in the future? In fact, it assures Greece will not be a stable economy. Not only did the Troika take away Greek assets, it took away its dignity after showing that democracy in the birthplace of democracy had no meaning.

Not only did the people of Greece get the message of the abusive power of the EU but people all over the world witnessed it. There were 22 countries with a debt crisis at the time, with predictions that the number could grow to 71 nations. Germans in 14 cities protested against the abuse of Greece. There were members of the EU Parliament that showed their solidarity with the Greek people, but they did not have the power of the Troika.  The view of the world was “we are all Greece.”

Bankers should go to jailThe world saw that the bankers rule in the EU, the people can get down on their knees and beg, but the bankers will make them grovel and give them nothing. The facts showed irresponsible German bankers were a greater threat to Europe than Greece, that Germany had built the façade of a strong economy on bad loans and that so much of the Greek economic problem was a tragedy and a lie. Nine months after this abusive agreement, a leak from the IMF showed that they may be negotiating the debt in bad faith and trying to precipitate another debt crisis to avoid fulfilling their side of the bargain. With the shock waves of the Brexit, economic collapse may be returning to Europe and a country like Greece, economically ravaged by the Troika, may be at great risk.

Some of the lessons from this Greek tragedy may lead to even more radical responses in the future. A Grexit has been talked about and called for, but at the time the people were not ready. Will they be in the near future? People are now recognizing that a left political party in one nation cannot challenge the ruling class of bankers and investors, a broader revolt in the future will be necessary. And, we may find that the power structure of the ruling class will destroy itself from the inside, not from the outside.

The Hypocrisy of the IMF on Austerity, Wealth Divide and Worker Rights

The International Monetary Fund was a key player in the Greek crisis and has been a key player in the globalized economy that serves transnational corporations and not the people. The IMF has pushed austerity on many nations around the world – shrinking their economies when they needed to be growing, pushing wealth to the top when the wealth divide needs to be made smaller; and weakening the power of workers.

IMF World Bank protest

The IMF knows these policies do not work and are counterproductive but they continue to insist on them. The IMF is a tool of the bankers and investment class. It does their work, even though they know it will be counterproductive for the economies of various nations as well as for the global economy. As the backlash against the EU and other global economic institutions designed by and for big business builds, the IMF’s policies will deserve a good deal of blame.

The IMF’s own reports indicate that neoliberalism has been oversold and that austerity is much worse for the economy than they realized. The IMF is now telling the United States that it needs to spend more money to build-up its economy.

In 2015 the IMF said in a report that income inequality is harming economies around the world, calling it the “defining challenge of our time.” The report came out one month before the Greek landslide vote against the austerity and other measures that would expand inequality being forced on Greece. The report found that inequality may show GDP growth but growth does not trickle down and creates a weaker economy.

A March 2015 IMF report, four months before the Greeks voted to oppose the Troika bailout, found that as worker rights and unions diminish, the CEO’s and investors get wealthier but workers get poorer. The wealth divide expands and the economy gets weaker. Yet, the IMF – one-third of the Troika – insisted Greece put in place policies that weakened workers and pushed money to the top.

The Backlash to Austerity Is Broader Than Brexit

The UK was in an uproar over the unfair economy produced by the austerity policies of David Cameron.  Protests began immediately after Cameron was elected with only a plurality of the vote. Shortly after the “no” vote by the Greeks there were mass protests calling for an end to austerity by the EU. There was an occupation outside of Parliament when the 2015 budget was released. A broad coalition of 60,000 people protested outside of the Conservative Party meeting over promised austerity programs.5708f74a2e00006400950d3f

When it came out in the Panama Papers that Cameron’s family was hiding money offshore to avoid taxes, protests exploded with 150,000 in the streets of London and led to calls for his resignation last October. In September of 2015, Jeremy Corbyn defeated the Blairites and won the leadership of the Labor Party. The Blairites continue to try to remove him, but Corbyn is fighting back.

In Spain, Podemos (We Can) grew out of anti-austerity protest movements. They built their power in the streets, followed by a metamorphosis into a political party that became a major threat to Spain’s political establishment. In May of 2015 they and allied parties won major municipal elections, taking power at the city level. By December 2015, the two party system in Spain came to an end when Podemos, just two years old, came in third place in national elections with 21%, just 7% behind the leader. In December they refused a coalition with the other parties, preventing a majority government. Podemos is going into the upcoming national election in a strong position. It has allied with United Left and is willing to form a government with the Socialists included. It is calling for an increase in social spending of 6% of GDP over four years, paid for by progressive income taxes, an increased corporate tax, fighting tax fraud and financial transactions tax.

 TTIP has angered voters around Europe. Here, people protest against the deal in Amsterdam in May. Marten van Dijl / AFP / Getty Images

TTIP has angered voters around Europe. Here, people protest against the deal in Amsterdam in May. Marten van Dijl / AFP / Getty Images

Another example: as another globalization project is attempted in Europe, the Trans-Atlantic Trade and Investment Partnership (TTIP), there have been mass protests throughout the continent. In April 2015 in an international day of action against TTIP hundreds of thousands of people protested across Europe, saying no to the sovereignty-killing agreement that would undermine the environment, food and jobs in Europe.  Hundreds of thousands protested against TTIP in Germany in October 2015.  In February of 2016, activists from seven countries blocked US-EU talks on TTIP in Brussels. When Obama came to Germany in April, 90,000 people protested his trade agenda calling for “free love, not free trade.”

As with Obama’s other big trade agreement, the Trans-Pacific Partnership (TPP), the TTIP gives big business power over legislation and prevents laws in the public interest. Leaks showed TTIP was empowering transnational corporations while threatening the environment and health. And, it has come out that the EU trade minister promised to reduce barriers for ExxonMobil and other oil companies, such rules would undermine the Copenhagen agreement. All of this has added up to the near death of the TTIP and recognition by Obama that he cannot finish negotiating it before he leaves office. The difficulty of passing the TTIP is leading the EU to try to undermine democracy further by claiming that a Canadian agreement, CETA, does not require ratification by each country, but only by the EU, according to leaks.GREECE-DEBT-FINANCE-LABOUR-STRIKE-EUROPE

All of this is fueling a broader democracy movement in Europe. Five anti-austerity, pro-democracy leaders in Europe called for a summit at the end of last year to plan a response to EU’s attack on the people. Former Greek finance minister, Yanis Varoufakis, announced a new European effort seeking democracy by 2025 in Berlin this past February. Varoufakis hopes to enable progressives throughout Europe to take back power from what he described as a “shadowy world of bureaucrats, bankers, and unelected officialdom.” The group seeks to end the EU’s “opaque decision-making process” and urgently seeks to democratize Europe.

Brexit Part of a New Era of Protest

Climate change protest in Copenhagen.

Climate change protest in Copenhagen.

In this broader context, Brexit should be seen as part of a longer rebellion, going back to the Indignado movement in the spring of 2011 (the European occupy) and building with anti-austerity revolts in multiple countries. The vicious attack on Greece ripped off the fig leaf of the EU and showed how it had become a big business, anti-democratic vehicle. Now we are in the midst of a new phase of a global protest against the United States, IMF, EU and web of international trade laws that are denying nation’s their sovereignty and undermining democracy around the world.

Brexit shows we have our work to do to educate people that this is not about racism and anger at ethnic groups, but is really the battle between the people and the elites. It is a conflict over whether we the people will have the power to decide our futures, whether we can create a fair economy that serves more than the 1% and whether we can act in ways that are consistent with the needs of the environmental crisis we face. There are multiple crises that are linked the crises in democracy, in capitalism and of environmental collapse. We are in an age of dissent and there is much more to come.

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  • Harriet Heywood

    Endless war, globalization, austerity, with a sprinkling of racism-the power elite are adept at blaming the victims for their own crimes.

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  • AlanMacDonald

    Kevin and Margaret, few in the media adequately cover this significant inflection point of BREXIT, and fewer still have even the vaguest idea of its real import.

    Thanks both for your highly revealing and informing Newsletter here, and for your publishing of Professor Targ’s excellent review of Robinson’s pivotal work on the global capitalist empire.

    Yes, regarding the BREXIT issue, I find some ironic optimism that an underlying truth will leak through — as I commented in Targ’s Review:

    Ironically, BREXIT may well lead to the EMPIRE’s ‘exposure’ and
    un-doing — along with the expansion of Bernie’s hopeful but vague sounding ‘call-out’ for a “Political Revolution”:

    BREXIT is merely a mangled and misunderstood, but highly prescient sign, of EMPEXIT (to Exit Empire) — the fast swelling “Political Revolution against EMPIRE” which is NOW organically evolving from Bernie Sanders’ incomplete, vague, and undefined “Political Revolution” (against what?), which very quickly will explode with the firing of a loud, public, world-wide,
    universally humane, but non-violent, “Shout heard round the world” by all ‘citizens of OUR world’, for the real and post-historical revolutionary “Political Revolution against EMPIRE”.

    All of humanity is gathering ourselves together in solidarity to overcome the “Crisis of Humanity” presented by this Disguised Global Capitalist Empire as is so clearly diagnosed by Professor Robinson, Kevin Zeese, Noam Chomsky, Michael Hudson, Christopher Hedges, Morris Berman, Zygmunt Bauman, Michael
    Hardt, Antonio Negri, Karl Polanyi, Chalmers Johnson, Howard Zinn, Hannah Arendt, et al.

    As Professor Robinson so clearly diagnoses and fingers Washington as the metropole of an America that has
    metastasized into the heart of this global Empire:

    “The U.S. state is a key point of condensation for pressures
    from dominant groups around the world to resolve problems of global capitalism and to secure the legitimacy of the system overall. In this regard, “U.S.” imperialism refers to the use by transnational elites of the U.S. state apparatus to continue to attempt to expand, defend, and stabilize the global capitalist system. We are witness less to a “U.S.” imperialism per se than to a global capitalist imperialism. We face an EMPIRE OF GLOBAL CAPITAL, headquartered, for evident historical reasons, in Washington.”
    [Caps substituted for italics in the original]

    Robinson, William 2014 “Global Capitalism and the Crisis of Humanity” Cambridge University Press

  • AlanMacDonald

    Thanks, Newton (your home town?), for Joe’s wonderful essay on class and Empire.

    Joe’s great story telling reminded me that my best grade school friend’s father was a maintenance man at a local factory, and lived across the street from the president of the bank. As I think back 60 years now, their houses differed maybe 50% in value, and my friend’s family house needed new paint and some repair, lacked a garage, and the bank president and his wife both had Oldsmobiles which changed every few years —compared to the 5 year old Chevy that his dad took to work. But at that time in 1954 or so, I had never thought about any differences in anyone living on our little street in a little town near what is Rt 95 (or 128 if you remember) and I can’t ever remember anything being said about who makes more money, and I never knew or saw that a couple of very wealthy families lived down big driveways on the edge of town.

    My friend and I collected money for Ted Williams’ Jimmy Fund — that’s the only thing I can remember thinking about money. But even by the early 60’s in Jr High School most everyone looked and acted pretty much equal and the same.

    Nice memories, before I knew much about girls or Empire.

    As Joe wrote. and I now know about the hidden structure of this God damned Disguised Global Capitalist Empire that has stolen that country of ours:

    “So what is to be done to establish at least some semblance of an equitable society in which all or most members operate on a reasonably common plane, rather than compete by claw ant tooth? One in which mutual
    human respect dominates because long denied classism is exposed, then, over time, dissolved? To put it more practically, what is to be done about kids such as Cousin Ronnie’s?

    Liberals, bless their hearts, do know the answer to that one. But it will cost more than ten Iraq wars, so they never will demand it. Most of what needs to be done needs to be done before first grade and over generations. Things like universal health care and purposeful husbandry of security and love in the homes where children are raised, because these things are actually allowed to flourish in the home. Flourish because mom and dad are not clawing their lives away in the Darwinian Survival Working Class Reality Show. Hillary Clinton pays lip service to it. So does the Black Caucus. But nobody has the ass to demand an
    American makeover that will cost, at the very minimum, maybe ten trillion dollars over at least two or three generations. And besides, the money is no longer there and never will be again. When empires die they die broke.”

    It was famously, or infamously, said, “that it took half the world to support the British Empire” by the late 19th century — but it would take dozens of worlds to support this Disguised Global Capitalist Empire that is just now finishing up destroying ours.