How a Great Power Falls Apart
Decline Is Invisible From the Inside
On June 23, 2016, citizens in the United Kingdom voted 52 to 48 percent to leave the European Union, sending shockwaves around the world and raising concerns about a new type of populism on both sides of the Atlantic. The common explanation of Brexit presents it as a revolt by the losers of globalization. As the international movement of goods, capital, ideas, and people has intensified, this argument runs, the latter shaped the referendum results most profoundly. The intra-European flow of migrants from east to west, combined with the potential for an influx of refugees in 2015, convinced many British citizens that they stood on the losing end of a globalized, borderless Europe.
Although this story captures important dynamics, it misses crucial historical developments that influenced British leaders’ decision to hold the referendum, as well as its outcome. Four trends converged to lead the United Kingdom to split with the EU: a divergence between the United Kingdom and the continent about the meaning of the European project and the nature of sovereignty; a gradual estrangement of British political parties from the public; the aftermath of the 2008 financial crisis; and Brussels’ lackluster management of the EU’s problems. These developments help explain why the message of Leave resonated and that of Remain proved counterproductive. They reveal, moreover, just how fragile and elite-driven the European project remains.
SOVEREIGNTY AND THE MEANING OF EUROPE
The first trend—the growing distance between the United Kingdom and other European states over integration and sovereignty—dates to the start of European integration in the 1950s. On the continent, the European project’s founding fathers saw integration as a way to overcome the destructive legacies of World War II by reimagining national sovereignty. The Nazis’ brutal conquest of France, the Low Countries, and Italy, together with the U.S. and Soviet occupations that followed, deconstructed the states of Western Europe. Across the continent, the Third Reich’s racial policies had unleashed a kind of civil war, as the Nazis forced local populations to take sides; later, the Allied liberation of Europe led to violent reprisals by resistors against collaborators.
The continent’s experience of war delegitimized not only the state but also the nation. So in the peace that followed, Western Europeans strove to rehabilitate their discredited nation-states through a federation, a political unit that has since represented the goal if not the actual course of European integration. “There will be no peace in Europe if the States rebuild themselves on the basis of national sovereignty,” the French statesman Jean Monnet argued in 1943. “The States of Europe must therefore form a federation or a European entity.”
The United Kingdom, by contrast, experienced bombing but not occupation and civil war, and thus emerged from the conflict more confident in the legitimacy of its nation-state, particularly after the development of its social welfare programs. A federation that superseded national sovereignty was not for London. In 1946, when Winston Churchill famously called for a United States of Europe, he was referring not to the citizens of the United Kingdom but to those on the continent.
When the United Kingdom joined the European Economic Community in 1973, it did so to rehabilitate its own ailing economy, not to prevent war or forge a federation. In a time of decolonization, stagflation, and distress over the country’s balance of payments, the EEC seemed to offer economic refuge. For Edward Heath, the Conservative prime minister who led the United Kingdom into the EEC, what counted was “the effect upon the standard of living of the individual citizen.” Notably, the Conservatives downplayed the issue of sovereignty: their message to the public was about not what would change but what would stay the same. There would be “no question of any erosion of essential national sovereignty,” Heath said. Yet politically speaking, much would change, and indeed much already had: in 1963, the European Court of Justice had noted that the Treaty of Rome created a new legal order “for whose benefit the States have limited their sovereign rights.” Heath paid that fact no mind, and the campaign to join the EEC (and the 1975 referendum to remain in it) was characterized by vague language about what membership would entail. British euroskeptics could thus claim that their opponents obfuscated the real political implications of joining Europe.
Indeed, in contrast to their counterparts across the channel, both Conservative and Labour leaders saw Europe as a “business arrangement,” as Labour politician James Callaghan put it. This was most evident under Conservative Prime Minister Margaret Thatcher, who turned the EEC budget from a collective endeavor into a horse-trading scheme in which the United Kingdom tried to extract more than it put in. (The budget negotiations at the 1979 European Council in Dublin, where Thatcher famously said, “What we are asking is for a very large amount of our own money back,” epitomized this tendency.) As the political scientist Andrew Glencross has noted, this utilitarian approach persisted into the twenty-first century and helped frame the debate over Brexit as a question of material benefits rather than political ideals.
PARTY POLITICS AND THE REFERENDUM DECISION
British Prime Minister David Cameron’s 2013 decision to hold a referendum on EU membership, however, was an outcome not of this utilitarianism but of divisions within the Conservative Party. At the time, the party had fragmented into three camps: euroskeptics, euro-advocates, and a middle group that oscillated between these positions depending on the conditions in Europe. By asking British voters to permanently settle the question of EU membership, Cameron hoped to overcome these tensions.
Yet the divisions within the Conservatives were themselves a product of the second trend—the growing estrangement of the British political elite from their parties’ bases. As the political scientists Peter Mair and Henry Farrell have shown, over the last several decades, European political parties have become less connected to the voters, less entrenched in society, more elitist, and more embedded in the state. In the United Kingdom, party membership declined by roughly two-thirds between 1980 and 2010. As parties shrank, their leaders no longer had to listen to their members. Instead, they could appeal to the general population.
As party elites freed themselves from their bases, they also became more similar in outlook. Prime Minister Tony Blair turned Labour into a centrist, neoliberal party; Cameron, after becoming leader of the Conservatives in 2005, said he would take his party in a Blairite direction. This convergence of elite opinion was compounded by the division of most of the country from London, which, as the historian Peter Mandler has noted, houses “an increasingly hereditary caste of politicians,” along with lawyers, journalists, and intellectuals.
The closed political system had major implications for the United Kingdom’s place in Europe. Since the 1990s, the EU had changed dramatically as Brussels increased its authority in a range of new areas, from monetary policy to product regulation. Many states put these changes to national referenda, but British leaders refused to do so, instead treating their nation’s relationship with Europe as a matter for foreign-policy experts. Before the financial crisis of 2007–8, most of those experts tended to be pro-Europe.
When the financial crisis and the eurocrisis stimulated disenchantment with the EU, British voters thus lacked a political outlet through which to channel their discontent. The result was the surge of the populist United Kingdom Independence Party. In 2010, UKIP took just three percent of the vote, but in local elections in 2013, it won 22 percent, threatening to siphon euroskeptic voters from the Conservatives. It was this populist surge that Cameron hoped to fend off when he began planning for a referendum.
THE CRISES OF EUROPE
Two other trends added fuel to the populist resentment with traditional politics and the United Kingdom’s relationship with Europe. First, the financial crisis of 2007–8 widened inequality and further discredited the British political establishment. As the home of the world’s leading financial center, the United Kingdom had experienced lopsided economic development before 2007: growth, wealth accumulation, and booming housing prices concentrated in London, as median wages stagnated in the rest of the country. The country responded to the meltdown with bank bailouts and automatic stabilizers that prevented the implosion of London finance. But these policies generated a large public debt, first under Labour and then in 2010 under the Conservatives. Once the height of the crisis had passed, the Conservatives pushed through strict austerity measures to ensure that London would remain a global financial center. They also used the crisis to implement neoliberal structural reforms. The ensuing cuts to public spending, housing assistance, and social programs fell disproportionately on old industrial areas and the working classes.
As a consequence, while incomes rose in London after 2010, wages in the rest of the country stagnated. In fact, real earnings fell ten percent between 2007 and 2015. This was one of the largest declines for any leading economy in this period—comparable in degree to some countries in Southern Europe. The Great Recession, in other words, left many outside of London dissatisfied and turned inequality into an issue that haunted both parties. Labour was blamed for taking Great Britain into the crisis, and the Conservatives were condemned for the pain of austerity.
Finally, developments within the EU itself fueled euroskepticism. After the Czech Republic, Hungary, Poland, Slovenia, Slovakia, and the Baltic States joined the EU in 2004 and the Schengen border agreement in 2007, their citizens were able to migrate within the bloc, taking advantage of the differences in wages between Eastern and Western Europe. Many came to the United Kingdom, where in 2004 median wages were four times as high as those in Poland. After 2004, net migration to the country jumped to roughly 200,000 a year, a fourfold increase from the late 1990s, and by 2015 the United Kingdom was home to almost 800,000 Poles—more than lived in Krakow. Although several studies suggest that immigration has had little effect on the income of British citizens—in fact, the largest impact seems to be on the wages of previous immigrants—the perception among many British was otherwise.
Even more important, the various problems that the EU has faced since 2010 revealed heavy-handed, ineffective governance in Brussels. The eurocrisis revealed irreconcilable disagreements in the way EU states approach economic issues, exposed Europe’s democratic deficit, and may have heralded the end of the long-standing pattern under which crises would prompt deeper EU integration. In the United Kingdom, many saw German Chancellor Angela Merkel’s Fiscal Compact of 2012—which seeks to cap states’ deficits and debts—as a heavy-handed decision rammed through Brussels with little support. London, in fact, did not sign onto the compact, and its implementation only added fire to euroskepticism. After 2015, the influx of over a million migrants and refugees into the EU revealed even more the massive hurdles preventing Brussels from governing effectively, as vitriolic debates erupted among EU states about providing asylum, policing borders, sharing information, and negotiating with the EU’s neighbors.
FRAMING THE VOTE
These four trends shaped last year’s Brexit debate, and both the Conservatives and UKIP Leave campaigns exploited them. To be sure, the latter played up the economic threat of immigration and blamed Brussels for what they believed were the economic consequences of open borders. But Leave also tapped into the thorny issue of the consequences of EU membership for British sovereignty, a question that had festered ever since Heath failed to offer clarity on it in 1973. Euroskeptics claimed that British citizens had unwittingly ceded control to technocratic elites in Brussels who were even more disengaged from local concerns than those in London. Notably, only 33 percent of Leave voters said immigration was their main concern; 49 percent said the main reason to leave Europe was that “decisions about the U.K. should be taken in the U.K.”
For British euroskeptics, not only sovereignty but also money should stay in the United Kingdom. Here the Leave campaign drew on the long-standing British convention of framing Europe as an economic project. In one of their most publicized arguments, Leave argued that the United Kingdom’s contribution to Europe could be spent at home after Brexit, touting an alleged 350 million pounds that would be rerouted from Brussels to the National Health System every week. The Remain campaign rightly condemned the inaccuracy of this claim. But is it surprising that such arguments resonated, given the cuts the United Kingdom has made to public funding since 2010 and the fact that, for the past 40 years, British leaders have portrayed EU membership as an exercise in haggling over budgets and subsidies?
Lastly, UKIP in particular framed the referendum as a way for outsiders to express dissatisfaction with the political insiders of both parties. When Remain tried to rally support through interventions from the business mogul Richard Branson or U.S. President Barack Obama, it backfired. Instead of lending an air of expertise to the Remain campaign, these efforts fueled the belief that the EU and British politics are affairs run by elites for elites.
The referendum, in other words, let voters express resentment about a range of issues and was, in many ways, less about Europe than about the state of British politics. Holding a successful referendum to preserve the status quo is hard to do, and it is even harder when the status quo seems to be a cause of trouble for so many people. As the political scientist Sara Hobolt has illustrated, European referenda rarely have the outcome their architects intended, and Cameron’s decision to hold a referendum in the context of a weak economic recovery, rising inequality, a euro crisis, and a refugee crisis was a blunder for the history books.
Yet Cameron himself made the chance of a Remain vote even more unlikely by the way he framed the debate. He intended to use the threat of a referendum to extract concessions from Brussels, just as Prime Minister Harold Wilson had done in 1975. In the process, Cameron, like UKIP leader Nigel Farage, reinforced the message crafted by Heath and honed by Thatcher: that voters should see the EU not as a political vision to be shared with the continent but as an organization from which to extract rents. From this perspective, why should a country remain in a polity that lacks a unifying ideal, that is portrayed even by its defenders as a utilitarian project, and that at the same time seems to be fraying from the standpoint of economics and governance?
The larger lesson is that elite attitudes toward the EU matter. Ruud Lubbers—a former prime minster of the Netherlands, one of the EU’s most europhile members—once said, “If I and others went on television for a few nights, to make a case against the integration of Europe, I think the Dutch people could easily turn round.” This is a disturbing thought, yet one to take seriously. For better or worse, integration has historically been driven by elites and not by a European demos. Although such a European public is a prerequisite for the EU’s long-term survival, it has not yet materialized: public support for integration still depends on a nation’s political leadership. In this sense, Europe remains a delicate project.
In the absence of a European demos, integration can fail when its elite advocates give up or misfire. This is what happened last year in the United Kingdom—and what European leaders must avoid if the EU is to survive long enough to reform itself.