A chaotic Brexit could do great damage to ordinary people, as was the case with Britain’s self-ejection from the Exchange Rate Mechanism of the European Monetary System in 1992. But those ordinary people will be overwhelmingly British. The days when Britain could move the world are long gone..
The contours of the nineteenth and early twentieth century were defined in part by a series of consequential British foreign policy and economic decisions. As recently as 2007-2009, British policy affected global outcomes: whereas deregulation of the City of London contributed to the severity of the global financial crisis, British leadership at the London G20 summit in April 2009 ultimately proved a stabilizing influence. Today, however, despite all the political theater and dramatic rhetoric, Britain’s impending exit from the European Union – Brexit – really does not matter for the world.
The global economy may have hit a patch of uncertainty, but this is more due to the mercurial actions of U.S. President Donald Trump, self-proclaimed “Tariff Man,” who seems intent on undermining the credibility of the Federal Reserve, disrupting supply chains, and negotiating through random pronouncements. The EuroZone is struggling to break out of its prolonged agonies, but the fundamental problem remains bad banking practices and potentially unsustainable public finances in some member countries.
While Brexit may well prove an unfortunate idea for many inhabitants of the United Kingdom, the likely impact is lower British growth, not a significant disruption of regional, let alone global, trade.
It is hard to overstate British influence over global affairs after it became the cradle of the Industrial Revolution. From about 1750, British inventions created a wave of technological innovation that transformed how power was generated and how metal was worked. Railways and steam ships revolutionized transportation. Even when the center of innovation shifted across the Atlantic, British capital and emigration supported industrialization around the world.
Not all British contributions were positive, of course. Britain’s rise as a global power was accompanied by the horrors of the Atlantic slave trade and the many abuses of colonial rule.
Perhaps there is a mad version of Brexit that could have ramifications beyond British shores, but that seems far-fetched. Unlike Trump, no responsible politician in the U.K. really wants to restore protectionist tariffs to the level of the 1930s. Also unlike the USA, no prominent official in Britain is keen to gamble again with the country’s future by weakening financial regulation.
Most of the British political elite seems just as out of touch with global reality as their predecessors were in 1938, 1944, and 1956. The world has moved on, again. A chaotic Brexit could do great damage to ordinary people – as was the case with Britain’s self-ejection from the Exchange Rate Mechanism of the European Monetary System in 1992. But those ordinary people will be overwhelmingly British. The days when Britain could move the world are long gone.
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