Politico reported the other day that the French European affairs minister, Nathalie Loiseau, had named her cat “Brexit.” Loiseau told the Journal du Dimanche that she chose the name because “he wakes me up every morning meowing to death because he wants to go out, and then when I open the door he stays in the middle, undecided, and then gives me evil looks when I put him out.”
If you can’t take a joke you shouldn’t have come to London right now, because there is political farce everywhere. In truth, though, it’s not very funny. It’s actually tragic. What we’re seeing is a country that’s determined to commit economic suicide but can’t even agree on how to kill itself. It is an epic failure of political leadership.
A nation turns its lonely eyes to you
I say bring back the monarchy. Where have you gone, Queen Elizabeth II, a nation turns its lonely eyes to you.
Seriously, the United Kingdom, the world’s fifth-largest economy — a country whose elites created modern parliamentary democracy, modern banking and finance, the Industrial Revolution and the whole concept of globalisation — seems dead-set on quitting the European Union, the world’s largest market for the free movement of goods, capital, services and labor, without a well-conceived plan, or maybe without any plan at all.
Both Conservative and Labour members of Parliament keep voting down one plan after another, looking for the perfect fix, the pain-free exit from the E.U. But there is none, because you can’t fix stupid.
The entire Brexit choice was presented to the public in 2016 with utterly misleading simplicity. It was sold with a pack of lies about both the size of the benefits and the ease of implementation, and it continues to be pushed by Conservative hard-liners who used to care about business but are now obsessed with restoring Britain’s “sovereignty” over any economic considerations.
They don’t seem to be listening at all to people like Tom Enders, C.E.O. of the aerospace giant Airbus, which employs more than 14,000 people in the U.K., with around 110,000 more local jobs connected to its supply chains. Enders has warned the political leadership here that if the U.K. just crashes out of the E.U. in the coming weeks, Airbus may be forced to make some “potentially very harmful decisions” about its operations in Britain.
“Please don’t listen to the Brexiteers’ madness which asserts that ‘because we have huge plants here we will not move. …’ They are wrong,” he said. “And, make no mistake, there are plenty of countries out there who would love to build the wings for Airbus aircraft.”
I understand the grievances of many of those who voted to leave the E.U. For starters, they felt swamped by E.U. immigrants. There are reportedly some 300,000 French citizens living in London, which would make it one of the biggest French cities in the world. I had a drink with a member of Parliament in the bar in the House of Commons on Tuesday, and as we sat down he whispered to me that “not a single person working in this whole building is British.”
I also get the resentment of Brits at having regulations set by faceless E.U. bureaucrats in Brussels. And I get their resentment at the globalised urban elites, who those in the rural areas here believed looked down at them. And I get the squeeze on middle-class wages here that gets blamed, unfairly, on the E.U. and immigrants the way President Trump blames Mexicans. I get all of that.
But I also get what it means to be a leader in the 21st century. And it sure doesn’t mean asserting your sovereignty over all other considerations or breaking out of the giant E.U. market, where the U.K. sends over 40 percent of its exports, without a serious national discussion of the costs and benefits.
What do the most effective leaders today have in common? They wake up every morning and ask themselves the same questions: “What world am I living in? What are the biggest trends in this world? And how do I educate my citizens about this world and align my policies so more of my people can get the best out of these trends and cushion the worst?”
So what world are we living in? For starters, we’re living in a world that is becoming so interconnected — thanks to digitisation, the internet, broadband, mobile devices, the cloud and soon-to-be 5G wireless transmissions — that we are becoming interdependent to an unprecedented degree. In this world, growth increasingly depends on the ability of yourself, your community, your town, your factory, your school and your country to be connected to more and more of the flows of knowledge and investment — and not just rely on stocks of stuff.
Over centuries, notes John Hagel, who currently co-heads Deloitte’s Centre for the Edge, business has “been organised around stocks of knowledge as the basis for value creation. The key to creating economic value has been to acquire some proprietary knowledge stocks, aggressively protect those knowledge stocks and then efficiently extract the economic value from those knowledge stocks and deliver them to the market. The challenge in a more rapidly changing world is that knowledge stocks depreciate at an accelerating rate. In this kind of world, the key source of economic value shifts from stocks to flows.
“The companies that will create the most economic value in the future,” Hagel says, “will be the ones that find ways to participate more effectively in a broader range of more diverse knowledge flows that can refresh knowledge stocks at an accelerating rate.”
And yet Britain is ruled today by a party that wants to disconnect from a connected world. The notion that the U.K. will suddenly get a great free-trade deal from Trump as soon as it quits the E.U. is ludicrous. Trump believes in competitive nationalism, and the very reason he is promoting the breakup of the E.U. is that he believes America can dominate the E.U.’s individual economies much better than when they negotiate together as the single biggest market in the world.
The second thing the best leaders understand is that in a world of simultaneous accelerations in technology and globalisation, keeping your country as open as possible to as many flows as possible is advantageous for two reasons: You get all the change signals first and have to respond to them and you attract the most high-I.Q. risk-takers, who tend to be the people who start or advance new companies.
Britain is about to put up a big sign: GO AWAY
In the U.S., who is the C.E.O. of Microsoft? Satya Nadella. Who is the C.E.O. of Google? Sundar Pichai. Who is the C.E.O. of Adobe? Shantanu Narayen. Who is the C.E.O. of Workday? Aneel Bhusri. Hello London? The best talent wants to go to the most open systems — open both to immigrants and trade — because that is where the most opportunities are. Britain is about to put up a big sign: GO AWAY.
The wisest leaders also understand that all the big problems today are global problems, and they have only global solutions. I am talking about climate change, trade rules, technology standards and preventing excesses and contagion in financial markets. If your country wants to have a say in how those problems are solved — and your country’s name is not America, Russia, China or India — you need to be part of a wider coalition like the European Union. The U.K. membership in the E.U. has given it an outsize voice in world affairs.
And there’s just one more thing the best leaders know: a little history. Trump is fine with a world of competitive European nationalisms, not a strong European Union. So is Vladimir Putin. So, it seems, are the Brexiteers. How quickly they’ve all forgotten that the E.U. and NATO were built to prevent the very competitive nationalism that ran riot in Europe in the 20th century and brought us two world wars.
It’s being led by a ship of fools
Sorry to be so despondent, but I went to graduate school here on a Marshall scholarship from the British government, was married here and started as a journalist on Fleet Street in London. I like the place. But this is not the reasonably competent British government I grew up with.
It’s being led by a ship of fools — a Conservative Party bloc that is now radical in its obsession with leaving Europe and a Labour Party that has gone Marxist. If the people here can’t force their politicians to compromise with one another and with reality (there’s still a glimmer of hope that this might happen), there is going to be a crackup of the British political system and some serious economic pain. This is scary.