Most readers will be familiar with Aldous Huxley’s vision of a dystopian future, Brave New World. Indeed, my contemporaries and I often find ourselves observing that this or that latest invention could have come straight out of Huxley’s nightmare vision.
Given the reaction against the ill-effects of globalisation by those who have been left behind – but not left out of electoral and referendum polling booths – it was a clever idea of the British economist Stephen D King to produce a book earlier this year entitled Grave New World.
The “D” distinguishes him from the bestselling novelist Stephen King, although I gather that the former is occasionally asked to sign copies of the latter’s thrillers.
Well, this book is a different sort of thriller. Its subtitle warns of The End of Globalisation, The Return of History. Other economists and politicians take the existence of the globalised economy as a fact, and not something that can be reversed: only, it is hoped, modified to work better for those who lost out. But this is certainly a forcefully argued book.
Be that as it may. What particularly intrigued me on a re-reading were the topical and poignant references to the implications of – you know what – Brexit, if it is not stopped, and King’s references to the vision of Huxley’s contemporary George Orwell.
King warns: “As the US loses its appetite for supporting the global institutions that have established ‘the rules of the game’, it is not impossible to imagine that the 21st century will increasingly be characterised by Nineteen Eighty-Four-style superpower rivalry, with Oceania dominated by the US, Eurasia by Russia and East Asia by China.”
What would happen to western Europe if Brexit went ahead? King speculates about the re-emergence of the “old fault lines”. In this context he asks opponents of the European Union to explain “how a divided Europe would more easily cope with a nervous Russian bear next door, particularly if Washington becomes increasingly isolationist”.
These are deep waters. Of more immediate concern is the damage being wreaked already by the mere prospect of Brexit. While the British government fools around, Michel Barnier continues to play by the book. He never, to my knowledge, threatened that Britain would be punished – that story was typical of the fake news favoured by Brexiters. But he did say there would be consequences, and they are now piling up. Cherry-picking and having your cake and eating it are not on the menu, and never have been.
The short-term consequences of Brexit were exaggerated by George Osborne when he was still at the Treasury. The chancellor who was so proud of handing budget forecasts over to the independent Office for Budget Responsibility did not apply this discipline to forecasts of the referendum’s immediate impact. The result was that the Brexiters could claim that, with exception of the forecasts for the pound – a swift and large devaluation – the Treasury’s forecasts were misleading, and that the immediate damage was not as bad as the more excitable Remainers had predicted.
However, these effects occur with time lags, and the damage is beginning to show. The Bank of England has been refreshingly forthright on the prospective losses; so have the International Monetary Fund and the Organisation for Economic Co-operation and Development.
And Chris Giles, the economics editor of the Financial Times, has analysed the results of a series of independent studies. One of the main findings is that the referendum result has already cost the UK close to 1% of GDP, with consumer spending hit by the devaluation of the pound, and business investment by the lack of confidence caused by the prospect of Brexit and the government’s chaotic handling of the affair.
Curiously enough, the estimated hit to the economy already amounts to £350m a week, remarkably similar to the figure of so-called benefits to the NHS that were promised on the sides of the notorious Brexit bus.
The Financial Times estimates that: “This post-referendum loss of economic output also implies a reduction of about £9bn in fiscal revenue. This drop will increase in the years ahead.” This when years of unnecessary austerity have severely damaged many of our public services.
And the Brexiters should have been careful about what they wished for: essential services are already threatened by a collapse in immigration from the rest of the EU.
It is interesting that Lord Heseltine, a former cabinet minister with decades of experience of industry and commerce, said last week that Brexit would be more damaging than a Labour government: “Well, we have survived Labour governments before. Their damage tends to be short-term and capable of rectification. Brexit is not short-term and not easily capable of rectification.”
My youngest daughter gave me a sweater that proclaimed: “All I want for Christmas is EU.” Out of date already? No: I have not given up hope and am keeping it for next Christmas.
Meanwhile, Happy New Year!