Unequal Market Insertion and Brexit

Unequal Market Insertion and Brexit

Juan Díez Medrano

Theories of nationalism do not explain why regions that benefit from membership in multi-ethnic, multinational, polities want to secede. This piece builds on and modifies recent empirical work in international political economy and European integration studies to propose unequal market insertion as one of the many factors that contribute to explain Brexit. By unequal market insertion I mean a situation where the benefits of insertion in an expanded market (i.e. the European single market) vary significantly across sectors of the economy, social groups, and locations within a given territory.

The United Kingdom’s insertion in the global market (including the EU) coincided with increasing economic prosperity for a small segment of society and economic stagnation or even decline for other large groups in the population. The combination of overdevelopment relative to other European Union member states and the exclusion of many from the benefits of the larger markets created a propitious environment for the mobilization of the excluded in favour of full sovereignty.

Economic inequalities, and more specifically, overdevelopment, lie at the centre of explanations of peripheral nationalism (e.g., Hechter 1975; Beramendi 2007). In addition to this, the recent literature on international political economy and European integration also demonstrates the existence of an association between intraregional economic inequality and secessionism (e.g., Kuhn et al. 2016). It is unclear whether this association reflects an actual causal relationship or is spurious. I suggest that the observed association partly masks the causal impact of the prevalence of material deprivation, with which economic inequality is closely related. Ceteris paribus, the more concentrated the benefits that result from insertion in a broader market are, and the greater the number of people and firms excluded from them, the greater the opposition to membership to that market will be. Whether the simultaneity between market insertion and social exclusion that propels secessionism is constructed in causal terms or not, however, depends in the end on factors such as dominant narratives in a particular society and on how problems are framed by competing political actors.

While similar to Germany and France in terms of economic and demographic weight within the European Union, the United Kingdom differs from these two countries in that it has been less able to impose its vision of what the European Union should be like. Important as the United Kingdom’s inability to steer the process of European integration is, what really contributes to explain Brexit is the distribution of benefits and losses of insertion in the European Union among the three countries’ respective populations. Compared to Germany and France, material deprivation in the United Kingdom has been comparatively more widespread for the last forty-five years.

The United Kingdom’s economic insertion in the European and global markets has been highly unequal. Whereas the financial sector thrived, old industrial sectors and regions suffered enormous losses. Enormous corporate salaries and profits concentrated in a relatively small segment of the population and in London and contributed to a significant increase in economic and geographic inequality in the United Kingdom. Insertion in a new market thus benefited only the fewest in the UK (Williams 2013). Spatial concentration of social exclusion in the North, in particular, brings close together the worldviews and interests of the middle class to those of the working class (e.g., Geary and Stark 2016).

There is good empirical evidence to think that uneven market insertion and, more particularly, the stagnation, even decline, of the living conditions of a large section of British society enters into the explanation of the Brexit referendum’s outcome. Compared to those who voted for Remain, they were more likely to be older, less educated, and lower class, and to live in geographical areas experiencing deindustrialisation and a deterioration of living conditions.

The relationship between unequal market insertion and secession is not automatic, however. The “losers” must interpret their situation as a consequence of insertion in the market represented by the polity from which they want to secede. In the United Kingdom, this interpretation has ebbed and flowed since the 1960s, when membership started to be discussed, and can be approximated through the evolution of discourse about the European Union in the Labour Party and the Trade Union Congress. Since the late 1980s, and for almost two decades, the Labour Party and the Trade Union Congress made the convincing case that membership in the European Union insured the working class against the worst excesses of British neoliberalism (Díez Medrano 2017).

It is not a coincidence that the immediate years following this about-face coincide with the highest levels of net support for membership in the European Union ever obtained in the United Kingdom (see the Eurobarometer Interactive website). In the first decades of the new millennium, however, New Labour’s “third-way” policies, the European Commission’s neoliberal turn, and the European Union’s financial and economic troubles and, most important, the arrival of thousands of immigrants after the 2004 and 2007 enlargements led many members of the British working and lower-middle class and residents of all regions except the South East to give up on the EU. Working and lower middle-class Eurosceptics were then joined by conservative members of the insecure educated middle class.

In 2008, for the first time in the long series of Eurobarometer surveys, the percentage of respondents who thought that membership in the EU is a bad thing was higher than the percentage of those who thought it is a good thing. It is not that material deprivation became more widespread. Statistical data from Eurostat do not show major changes in this area; what changed was the context, in ways that may have intensified the British population’s sense of insecurity. Eventually, with the help of the tabloid press, UKIP succeeded where the British National Party, the Referendum Party, and other far right and Eurosceptic organizations had previously failed: capitalizing on longstanding misgivings about the European Union, it persuaded the population that the binomial European Union-migrants was responsible for their ills (e.g., the crisis of the NHS) and that, given the United Kingdom’s high level of development, extra-European ties, and military strength, they would fare better outside than inside the European Union (e.g., Ford and Goodwin 2014).

Some critics of the argument outlined here may, of course, ask why do we need unequal market insertion (i.e., widespread material deprivation) if we have xenophobia? Is it not possible to explain the outcome of the referendum by simply pointing out the massive arrival of immigrants from Eastern Europe just after the 2004 enlargement? I do not attempt to answer this complex question. Immigration and xenophobia probably played a major role in the decision to secede. This, however, does not necessarily invalidate an explanation of Brexit that emphasizes the role of unequal market insertion. Had xenophobia been the only mechanism that channelled the impact of post-enlargement immigration on the British citizens’ voting behaviour, change in net support leading to the referendum outcome would have been homogenous across social groups and regions.

Eurobarometer data for this period show that declines in net support were generally greater among the lower classes (e.g., skilled and unskilled industrial and service workers) than among the middle and upper classes. While net support increased in the United Kingdom’s South East region, it dropped dramatically in the South West, including Wales. Clearly, if immigration played a role in the referendum it did so especially among the most vulnerable in the United Kingdom. Whether xenophobia or perceptions of economic threat drove their behaviour is irrelevant for what this says about the impact of unequal market insertion in the explanation of secession. It suggests that material insecurity made them especially receptive to the xenophobic messages sent by the anti-EU camp and that, ceteris paribus, lower rates of material insecurity could have resulted in less support for Brexit.

Theories are not meant to fully explain cases. The explanation of the United Kingdom’s decision to leave the European Union is no exception (for an overview of arguments, see Outhwaite 2017), and while the analysis above shows consistency between theory and outcome, this does not mean that the factors highlighted by this theory are the most important ones. After all, membership in the EU was always controversial in the United Kingdom and levels of popular support have been among the lowest of the states. Accounts that stress the role of the Empire and of the United Kingdom’s accommodation after it disintegrated are particularly appealing (Díez Medrano, 2003; Holmwood, 2017; Bhambra, 2017).

They do not challenge, however, the general validity of a parsimonious explanation of secessionism in multiethnic, multinational polities, focused on the combined effects of economic development relative to the core, lack of power to steer politics at the core of a union, and unequal market insertion. The challenge for those interested in explaining the United Kingdom’s decision to leave the European Union will be to try to knit together the general theory outlined in this note with historically and culturally sensitive accounts of attitudes to European integration and the European Union.

References
Bhambra, Gurminder K. 2017. “Locating Brexit in the Pragmatics of Race, Citizenship, and Empire.” In Brexit: Sociological Responses, edited by William Outhwaite, 91-101. London: Anthem Books.
Beramendi, Pablo. 2007. “Inequality and the Territorial Fragmentation of Solidarity.” International Organization 61: 783-820.
Díez Medrano, Juan. 2003. Framing Europe. Princeton: Princeton University Press.
Ford, Robert and Matthew Goodwin. 2014. “Understanding UKIP: Identity, Social Change and the Left Behind.” The Political Quarterly 85 (3): 277–84.
Geary, Frank and Tom Stark. 2016. “What Happened to Regional Inequality in Britain in the Twentieth Century? Regional Inequality in Britain.” The Economic History Review 69 (1): 2015-28.
Hechter, Michael. 1975. Internal Colonialism: The Celtic Fringe in British National Development, 1536-1966. London: Routledge and Kegan Paul.
Holmwood, John. 2017. “Exit from the Perspective of Entry.” In Brexit: Sociological Responses, edited by William Outhwaite, 31-41. London: Anthem Books.
Kuhn, Theresa, Erika van Elsas, Armen Hakhverdian, and Wouter van der Brug. 2016. “An ever wder gap in an ever closer union: Rising inequalities and euroscepticism in 12 West European democracies, 1975-2009.” Socio-Economic Review 14 (1): 27-45.
Outhwaite, William. 2017. Brexit: Sociological Responses. London: Anthem Books.
Williams, M. 2013. “Occupations and British Wage Inequality, 1970s-2000s.” European Sociological Review 29 (4): 841-57.

 

Juan Díez Medrano is a Professor of Sociology at the Universidad Carlos III de Madrid and Coordinator of the Research Program “Institutions and Networks in a Globalized World” at IBEI (Institut Barcelona d’Estudis Internacionals). He is the author of Divided Nations (Cornell University Press, 1995), Framing Europe (Princeton University Press, 2003), and numerous articles.

Image Credit: TeroVesalainen Pixabay

No comments yet.

No one have left a comment for this post yet!

Leave a comment