- Country: United Kingdom
- Title: Former shadow chancellor of the exchequer
A longtime member of the United Kingdom’s Labour party, Ed Balls was elected to parliament in 2005 and served as shadow chancellor of the exchequer from 2011 to 2015. Before that, he was chief economic adviser to the Treasury and a columnist at The Financial Times. Now a senior fellow at the Harvard Kennedy School, Balls, who supported the Remain campaign, spoke with Foreign Affairs deputy managing editor Stuart Reid in London on July 6.
What were the motivations voters had for leaving the European Union?
There's been some big changes in our economies over 20 years as a result of globalization, and I don’t think that either politicians or economists properly understood what those meant. One was that, 20 years ago when I was involved in making the Bank of England independent, we all thought that the biggest threat to stability was going to come from the government’s mistakes regarding inflation. And then we had a global financial crisis in an era of low inflation, the consequences of which are still playing out economically and politically.
The second thing is, we thought globalization and technological change were going to impact, in particular, the wages and jobs of the unskilled, but it’s really bitten into the wages and the incomes of people in the middle. You’ve seen in America and in Britain a big squeeze on the incomes of middle earners, and that’s made people angry.
The third thing is, we thought globalization would be about capital markets and trade, and nobody foresaw globalization of people moving on this scale. When I was writing for The Financial Times 25 years ago, we thought the issue was going to be Polish workers in Poland undercutting British car workers in Britain. What nobody foresaw was economic migration happening on the scale that it has. The reason why in Britain we didn’t have transitional controls on Eastern European migration in 2004 was that we didn’t really think people were going to move.
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