Brexit, 'deglobalization' and the stakes of systems in chaos
I was busy being bitten by ants in an Ivory Coast cocoa plantation, then winging back across the Sahara, as Britain voted on David Cameron’s disastrously conceived in-out European Union referendum, known by most as Brexit.
June 23, the day of the vote that destroyed Cameron’s political career and legacy, was also my birthday. Having filed a postal vote for "Remain" some weeks before flying to Abidjan, I landed at Charles de Gaulle airport to discover the worst birthday news I have yet received.
Most readers know the farcical, tragic sequence of events that followed, but what are the implications for sustainable development, globalization and democracy?
These may seem overblown questions in the wake of recent events in a small country off the coast of a region that has been fading in relative geopolitical significance. But I’m not the only one seeing Britain’s self-inflicted injuries in recent weeks as profoundly worrying signals that current forms of globalization are time-expired — and under existential threat.
History shows that when markets fail, democracy also is at hazard.
Having worked through the various stages of grief since the inchoate and duplicitous Brexit movement stepped blinking into the media spotlight, clueless as to its next steps, we have been thinking through the implications for the globalization project (which took off after the fall of the Berlin Wall) and for the sustainability project (which has been building over pretty much the same timescale).
Globalization has a much longer history than most people know, going back thousands of years. And, as the Economist pointed out in 2013, the history of those great cycles of globalization shows clear evidence of periodic market disintegration — and of deglobalization. Is that where we are headed?
On the last day of June, I made my way across to Nesta, one of the U.K.’s most influential innovation think-tanks. I wanted to hear Nandan and Rohini Nilekani talk about their new learning platform, EkStep.
I have known and admired them for years: He was a co-founder of Infosys, which has benefited mightily from globalization, and later led the process by which hundreds of millions of Indians were given new digital identities; she is one of India’s leading social entrepreneurs.
Something Nandan said that morning helped crystallize the challenge for me. He admitted he had been worried — and had warned — about the growing risks of deglobalization even before the Brexit vote. And having just finished writing the latest draft of a report on the future of business models for the Business & Sustainable Development Commission, I find myself in the same rocking boat.
None of this should come as a surprise. Thoughtful economists have sounded alarm bells.
Dani Rodrik of Harvard was one of these, warning that the trade-offs implicit in globalization generate a "trilemma": societies cannot, simultaneously, be globally integrated, completely sovereign and democratic. They can opt, he concluded, for only two out of three. Writing in the late 1990s, he suggested that national sovereignty would give, but the EU saga suggests that economic integration may be more vulnerable.
When speaking to my 90-plus-year-old parents, both of whom voted for Brexit, I am instructed to "cheer up," to "see the bright side." As an optimist, I believe that lemonade can be made out of even the bitterest of lemons.
But history leaves me wondering whether Time magazine might not be prescient with its "The Fall of Europe: Why Brexit Is Just The Beginning" front cover.
The pessimist in me thinks that the Sustainable Development Goals suddenly have become even more distant than their 2030 time horizon made them appear when launched last year. But the optimist in me knows that times of profound turmoil are exactly the moments when big systemic changes become possible, indeed inevitable.
Looking for leadership
The ultimate outcome always comes down to leadership — and the people who push us towards breakdown or breakthrough.
Milton Friedman helped launch forms of capitalism that have relied on market intelligence to resolve all human ills. There is no question, as Joe Klein put it in that same issue of Time, that "free trade and free movement of people are staples of the liberal capitalism that, over the past few centuries, has brought the greatest alleviation of poverty in human history."
But, he warned, for successful outcomes we must regulate and moderate both free trade and the free movement of people.
This is a systemic crisis requiring systemic solutions. It is not at all clear that today’s democratic processes can cope, but we must do the best with what we have.
Britain’s political classes bear the lion’s share of the responsibility for what is happening, clearly, but the dynamics that drove Brexit are found across the EU.
Novelist Kazuo Ishiguro, who has lived in the U.K. since he was 5, asks whether Britain has really voted for xenophobia? His answer: No.
He sees a nation that is mainly decent and fair-minded. So do I. And it is a nation that I believe still has an immense amount to offer in the areas of democracy and sustainable development, which it has helped pioneer and champion.
That said, unless European politicians and institutions move quickly to create an appealing vision, one that properly addresses the deadly political solvents of unbridled free trade and free movement of peoples, we’re headed into a vortex.
I leave the final word to my colleague James Perry, a fellow board member at the London-based Social Stock Exchange. He argues for a European reset. And he concludes that the future of Europe — and therefore, to a considerable degree, of globalization, democracy and sustainability — lies in the hands of the remaining EU leaders.
We must all hope that the EU27 can rise to the once-in-a-lifetime challenge.