In the chaos since the vote last week in the United Kingdom to leave the European Union, maybe the biggest unanswered question is how much more damage angry voters in big democracies are willing to do to themselves.
The specifics of what’s to happen in the U.K. economy can’t yet be known, of course, but I’ve yet to see a thoughtful analysis suggest that the economic lives of people in the U.K. are about to get better.
They are going to get worse, maybe much worse. That was crystal clear up through the day of the vote, and more than half of those who voted in the U.K. chose to leave anyway.
So much for the idea that people just vote in their own self-interest.
That kind of voter behavior is one troubling part of the news on the so-called Brexit, or British exit from the E.U. If voters in a rock of stability like the U.K. can make this kind of move, voters elsewhere can, too.
There is a presidential vote to be held here this year, of course. Presidential candidate Donald Trump, by promising this week to tear up our country’s international trade agreements, sounds quite a lot like the champions behind the Brexit.
It still seems remarkable that the British prime minister, David Cameron, ever thought this vote was a good idea. He suggested it to mollify longtime skeptics of greater economic integration with Europe in his own Conservative Party, only to have the referendum blow up in his face and likely end his political career.
In the spirited campaigning before the vote, the pro-Brexit forces had to contend with one leading economic institution after another lining up to warn that the U.K. economy would take a body blow by leaving the E.U.
Direct investment by foreign companies would certainly shrivel, U.K. manufactured goods would be at least a little more costly and less competitive, and the center of gravity of industries important to the U.K., like financial services, would likely shift over to the continent. And, of course, uncertainty over the whole uncoupling would lead British businesses and consumers to sharply cut spending.
That’s just for starters.
A study from the Organization for Economic Cooperation and Development before the vote said getting out of the E.U. would cost the U.K. about 3 percent of its gross domestic product by 2020, a “Brexit tax” equal to roughly $3,300 on every household. The International Monetary Fund was even more pessimistic.
Underneath these countrywide forecasts was this startling conclusion: The people who would be hurt the most by their country getting out of E.U. lived in regions where support for the idea seemed to be greatest.
That’s why the think tank Centre for European Reform called the vote “Brexiting Yourself in the Foot,” the provocative title of an analysis published just before the vote.
In some ways it was surprising to read in this short paper that it wasn’t the thriving regional economy of Greater London that was most at risk if the country unhooked itself from the E.U., even though support for staying in the E.U. was strong in London.
London’s regional economy is simply more diversified and resilient, the think tank said, with trade that’s far more global than in other parts of the country and with services making up a bigger slice of the economy.
It was the regions outside London, which depend more on jobs in manufacturing, agriculture and utilities, that had the most to lose from cutting loose from the E.U.
The champions of getting out, in the end, really didn’t try to refute a sensible economic analysis like this.
In early June, a TV interviewer pressed Conservative politician and prominent Brexiter Michael Gove for the name of just one independent economic authority that thought Brexit was a good idea.
“I’m glad those organizations aren’t on my side,” he said. “I think people in this country have had enough of experts.”
This answer got him mocked by the British press, yet Gove also seemed to capture one big reason a majority of U.K. voters were willing to take a chance going forward without the E.U.
Voting yourself out of the E.U. wasn’t just a response to a trading framework that seemed to make economic problems worse, it was a cultural one. It’s hard to even understand the hostility toward immigrants that came out during the campaign. It’s far easier to grasp how voters could have grown frustrated with the bureaucratic experts from London and the E.U. headquarters in Brussels.
Traders in the currency markets first knew they had a seismic event unfolding when the voting results came in from Sunderland, a midsize city on the North Sea well north of London that traditionally reports vote totals quickly. The Leave campaign had been expected to carry Sunderland by perhaps 6 percentage points. Instead, it won by 22.
Sunderland was once a center of the shipbuilding industry, and it seems to have just the kind of local economy now most at risk.
In addition to development projects in the region paid for in part by E.U. grants, it is home to a sprawling assembly plant built in the mid-1980s by Nissan Motor Co. Nissan was the first of the global Japanese automakers to open a major manufacturing site in Europe. According to Nissan, this plant builds one out of every three cars made in the U.K., more than 80 percent of them for export.
The New York Times, reporting from Sunderland after the vote, quoted a retiree who said he couldn’t care less about the impact on global financial markets because he didn’t have any money at risk in the stock market.
“Give Brexit a chance,” said another Sunderland voter, a 58-year-old florist. “It can’t get worse than what’s been going on already.”
That may be the most disheartening thing about the Brexit vote: It can almost always get worse.
By rejecting economic integration in favor of going it alone, the British are about to find out how much worse.