Brexit lessons: India should stick to its middle road
The nation should find a path between radical socialism and rampant capitalism and hold in balance the nationalism and globalisation tensionanalysis Updated: Jul 09, 2016 21:50 IST
My last column was on Britain’s decision to leave the European Union — Brexit, as it has come to be known — and I make no apologies for returning to the subject because I believe India should understand the significance of the referendum. Brexit may not seem to be of particular importance to India. There are other European countries that will be only too happy to be India’s gateway to the EU. Britain will be even more eager to trade with India. There is no threat to Britons of Indian origin. At a meeting I had with the Indian Journalists’ Association in London, I was told that British Asians would vote for Brexit because they reckoned that if the Europeans were kept out, there would be more room for Indian immigrants, something which seems to me highly unlikely, judging by the anti-immigrant sentiments in the referendum. But Brexit does matter to India because it is the biggest threat to globalisation since that economic doctrine started sweeping the world, including India, two decades ago.
Brexit demonstrates the deep dissatisfaction with globalisation which exists in one of the world’s most prosperous countries. What is the reason for this dissatisfaction? Bank of America researchers have provided one answer, saying “Brexit is the biggest electoral riposte to our age of inequality”. It has been calculated by the renowned British think-tank Chatham House that the biggest winners from globalisation are the world’s wealthiest people, just 1% of the population. The biggest losers are the poor. In between them are the middle classes, which have done pretty well out of globalisation.
The results of globalisation are greater wealth to be set against greater inequality, greater economic growth to be set against environmental degradation, and cheaper products to be set against lower wages. These results are just what are not needed in India, which is still battling with a grave problem of poverty. This is not to say that India doesn’t need greater wealth and greater economic growth but Brexit raises the question of wealth for whom and growth for whom.
The Brexiteers did not address these questions. One of the scandals of the referendum is that the Brexiteers had clearly given no thought to what would happen if they won. In fact there is widespread speculation that the Brexiteer politicians who were rebel Conservative MPs didn’t want to win. The shock on the face of the leading Conservative Brexiteer, former London mayor Boris Johnson, the day the results were known, his subsequent disappearance, and eventual withdrawal from the Conservative leadership contest indicate that at the very least he was thoroughly alarmed at the prospect of being responsible for cleaning up the mess his campaign had created.
Brexit also demonstrates the return of virulent nationalism. The nationalism became racism when the issue of immigration was raised. Immigration was generally reckoned to be the issue that swung the vote and after the results were announced there was a marked rise in incidents of racial hatred. Much has been written about the rise of nationalism in Europe and America. But there is a warning here too for India, where there is an attempt to whip up nationalism, which all too easily deteriorates into religious hatred.
The Brexit vote showed that neither of the two main political parties, Labour and Conservative, was in touch with its supporters. Both campaigned to stay in Europe and on both sides huge chunks of their supporters rejected the party line. In the north of England, a traditional Labour bastion, there was a wholesale revolt against the party line. The failure of the political leadership to influence the referendum seems to confirm the widely-held view that in Europe and America politicians have lost the respect of the people.
What is needed to end the age of inequality and curb the rise of virulent nationalism? Brexit for me shows that India needs to revive its ancient tradition of seeking balance in life, not going too far one way or the other. In the second half of the 20th century the world has swung from a socialism that gave governments too much control over the economy to a capitalism that has given capitalists too much freedom. The last thing India should do is to swing back to the straightjacket of the licence-permit raj and the protectionism that went with it. India should return to its traditional middle road, find a path between radical socialism and rampant capitalism and hold in balance the nationalism and globalisation tension.
The views expressed are personal