Arlington VA June 24, 2016
Well, the people of the United Kingdom have apparently spoken--and loudly, about their views on the European Union. They voted to start the process of getting out. That voted confounded many, but should it have?
I would argue NOT. The voting trend in the UK was very similar to what is presently happening in the US. Big city liberals here opted in numbers in the cities to stay in the Union. Those in the Middle of the country--the industrial centers with large blue-collar populations noted just as strongly to get out, and quickly. There are exceptions, of course, especially in Scotland and Northern Ireland, but for wholly differing reasons than their economic self-sufficiency.
This trend in their vote is roughly similar to what we are seeing in the US, with the larger, more liberal-tending city populations moving toward Clinton, and others, primarily the middle-class blue-collar workers moving toward Trump. As in Britain, there is a significant slice of the population in the middle of the two (roughly 20%) which will decide the eventual presidential outcome. As in Britain, President Obama is an avowed globalist, like David Cameron, as apparently is Hillary Clinton, while Donald Trump has made some amount of protectionism a major pillar of his campaign.
What about the broader issue of globalization? Is there a significant. lasting impact as a result of BREXIT? Sticking my own neck out, I will say probably not, but there will be turbulence and turmoil for some time to come. The notion and even philosophy of globalization is here to stay. There is, in my view, virtually no major calamity which could wipe that process off the map. it may be reduced somewhat, but it will remain, especially when foreign direct investment dollars are pouring into the US and other developed countries, and so many of these same countries have virtually given up their middle-class jobs and farmed them out to what used to be the 'third world.'
Corporations exist to make money. With one of the largest resource drains being salaries, wages, and benefits, it is highly unlikely that these same major corporations will simply return to higher costs in the US or Europe. Moreover, with countries such as India, China, and South Africa, as well as Brazil and other South American countries now vying for 'second world power' status economically, they will resist strongly any effort to decrease their impact on the world economic stage.
What will probably happen is a compromise. Britain will initially be 'punished' for leaving by making it extremely difficult for them to renegotiate their agreements and treaties. They will most probably still be subject to some organizations, such as the International Courts, such as the International Tribunal at the Hague, and the European Human Right Tribunal, and despite the current US President's comments that UK will "go to the end of the cue", the US will continue to support them. They have no choice, really, since the UK is the only real ally the US has in Europe.
Bottom line: Tough times for a few weeks, extended negotiations for Britain with the rest of Europe, and the markets will come back to normal in the near future as yet another 'economic crisis' is simply forgotten. All will be right as well with the broader reach of globalization efforts once the rhetoric dies.