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Lessons learned from Brexit

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19Jul

By: Graham Lane
Posted 7/15/2016

The immediate outcome from the United Kingdom’s vote to leave the European Union holds valuable lessons. Despite months of intense pre-vote debate, the immediate economic and political fallout that followed came as a shock. Why?

In Greek mythology, Pandora’s box was a jar best left unopened. On opening, she expected it held riches. Opened, out poured death and pestilence. Shock!

A slim majority of the 33 million voters preferred the U.K. leave the European Union, expecting the U.K. would gain from discarding the rules that bind member states of the European Union. However, the immediate fallout from the vote includes loss, confusion and fear. The pound fell like a stone; Scotland and Northern Ireland threaten to leave the UK (hoping to remain in the European Union); commercial property, bank stocks and consumer confidence plunged; planned investments in the U.K. deferred; and, political disarray ensued.

Leave voters didn’t expect the depth of the fallout, coming even before the U.K. gives formal notice to the EU. Still, despite the immediate financial and political turmoil, most leavers maintain their hope for a resurgent U.K., free of the ‘shackles’ of the EU. Divisions between leavers and remainders widen, risking the breakup of the U.K. and even further turmoil.

The jury is out as to whether ‘leave’ voters were misled, voting without an adequate understanding of potential negative consequences. A black swan event is a negative event, neither anticipated nor even on the radar screen. It is an event that comes out of the blue. The immediate shock outcome of the leave decision was no black swan. The risks of a ‘leave’ vote could and should have been well-discussed and fully appreciated well before the vote.

So, why did the leave option prevail? And, are there lessons to be gained from the U.K.’s ongoing and harrowing experience?

The factors that drove the ‘leave’ verdict were anger over uncontrolled immigration; lost manufacturing jobs blamed on globalization and free trade; EU’s massive and stifling costly bureaucracy; perhaps false confidence as to the U.K.’s future outside the EU; and, unfortunately, some racism. Neither the proponents of remaining in the EU nor devotees of the leave option addressed all those issues and risks ahead of the vote.

While misrepresentation by the leaders of the leave campaign has been asserted, criticism of the failure of the remain camp to deal with the substantive social issue, uncontrolled immigration, is equally valid. It is shameful that despite months if not years of pre-vote debate voters were never adequately briefed. Decisions of magnitude deserve better. The immediate fallout from a leave win was clearly predictable. What cannot be comfortably predicted is the long-term result.

What can we learn from this fresh saga? Is it don’t open Pandora’s box, leave curiosity at the doorstep? No, better to be very curious. Don’t rush into anything, seek sound understandings as to merits, negatives and risks. Ensure all issues and potential outcomes are quantified, raised and fully discussed before making critical choices.

As for the peoples of the U.K.: in the Greek fable, once Pandora’s jar was closed at the bottom there still remained hope.

Graham Lane chairs Manitoba Forward (manitobaforward.ca), seeking openness and transparency in public affairs.

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