Healing wounds: The Brexit vote shows us that the task of “humanising globalisation” cannot wait
The most harmful wounds are the ones we don't see.
In the last weeks of campaigning ahead of the UK referendum on EU membership, the then Prime Minister, Mr Cameron, argued that leaving the EU would be a “self inflicted wound” for Britain's economy. He may yet be proved right about that. The early indications are not particularly encouraging and the formal exit process has not even begun.
Things might have turned out differently had he paid more attention to the wounds that were already there.
A crude and insulting campaign
This is not to say that everyone who voted to leave the EU did so for identical reasons. Certainly concerns about migration levels played a significant part, but so did worries about the manner in which EU laws are made, the reach of those laws, and the way that financial contributions by States are spent.
Nevertheless, instead of engaging fairly and constructively with the electorate's legitimate concerns about democracy, accountability, allocation of resources and waste, Mr Cameron and his “Remain” colleagues simply dusted off their old playbook from the last two elections.
For several months, the British electorate was subjected to increasingly ludicrous and hysterical claims and counterclaims. From the Leave side we received dodgy figures, rubbish statistics, grossly distorted descriptions of EU positions and processes, a simplistic “Take Back Control” mantra and, when cornered on any specific issue, airy dismissals of the advice of any person in possession of any actual knowledge. From the Remain side we received predictions of economic doom and gloom that may yet be realised but which, in the manner of their calculation and presentation, were simplistic to the point of being insulting.
This time, the sterile, one-dimensional campaigning, the crude economic bullying that had proved effective in the Scottish Independence Referendum and the 2015 General Election, was not going to work.
Because, for many, this had become a referendum, not just about the EU, but about globalisation itself. And, for once, everyone would have an equal say.
Cooperation, control and the elusive concept of “sovereignty”
In urging people to “Take Back Control”, Leave campaigners were fairly unspecific about which things needed to be re-controlled and why. Control over migration was a large part of it – and that much is easy enough to understand conceptually – but what else? The question was generally answered in terms of a battle for “sovereignty”. We had given away our sovereignty to Europe and we needed to get it back.
But where does it all end? Every time a country enters into a treaty of any kind – whether it concerns the safety of civil aviation, or defence, or treatment of refugees, or taxation, or climate change, or the protection of biodiversity, or the transportation of hazardous waste, or a myriad of other things – that country makes commitments to do things on which the other State parties are entitled to rely. International agreements simply do not work otherwise. Do we tear all these up because of unspecified worries about “sovereignty”? Of course not.
Most people appreciate that, in a globalising world, there are many things that are more effectively tackled together. When countries enter into cooperative arrangements, whatever the subject, they do not really “give up” their sovereignty. They pool it with a view to getting better results together than they could achieve alone. There is no weakness in seeking out such opportunities. To recognise that countries are better off working together as a group to tackle a cross-border problem or to press home their advantage is not to admit defeat, or to “talk one's country down”, as representatives of the Leave campaign were prone to suggest. It's just being realistic and smart.
In reality, there was never any loss of “sovereignty” to the EU. The fact that the UK will soon be invoking Article 50 and coming out of the EU should be proof enough of that. So what else was going on? Why did worries about “sovereignty” get so much traction in this debate and not others?
The answer is simple. The anxiety was not just about the perceived loss of “sovereignty” in principle, but the question of who sovereignty had been surrendered to, and to what end .
The people versus big business, vested interests and arrogant, selfish, unaccountable elites
For the first quarter of 2016, a referendum result in favour of Remain looked likely, if not certain. However, by the end of May 2016 there were signs that the Leave campaign was gaining ground.
The Remain campaign responded with a stage-managed series of warnings on the economic risks to the UK of leaving the EU. Voters were unmoved. Interventions by the Treasury, the Bank of England, the OECD, the IMF, a slew of leading economists and even US President Obama himself barely registered in the polls. A chorus of business leaders joined in. If anything, the Leave campaign only seemed to gather pace.
This is because the Leave campaigners understood something that the Remain campaign did not – the bruising, recent, personal context in which these messages would be interpreted.
Because the globalisation and liberalisation project – of which the EU is a key part – has not worked for everyone. There are those who have done very well and those who have lost out.
Leave campaigners were very clear about who they thought the “winners” of globalisation were. The “winners” were the bosses who were taking advantage of cheap migrant labour, the super-rich who could easily move their money around to avoid paying tax, chief executives whose pay packets seemed to bear no relation to the performance of the companies they were responsible for running, big businesses concerned only with the bottom line and their legion of corporate financiers and advisers. But the “metropolitan elites” were in on it too; the coffee drinkers and restaurant goers, the theatre-going “luvvies”, the well-heeled City types who rely on Polish nannies and cleaners to hold down their well-paid and interesting jobs and, of course, the chardonnay-swilling, strawberry-scoffing, brie-munching Waitrose shoppers.
This “them and us” narrative became the beating heart of the Leave campaign. The “establishment” (never properly defined) was conspiring to preserve a corrupt system that was hurting “ordinary people” (again, never properly defined). Never mind that the UK's period of membership with the EU has coincided with a remarkable turnaround in economic fortunes for the UK in both GDP and average income terms. Never mind that each year EU migrants contribute billions more to the UK economy in taxes than they receive in benefits. It is hard to make macro-economic arguments stick if people believe that the system is rigged and that the benefits will inevitably go elsewhere.
If you live somewhere where wages are stagnating, where jobs are disappearing overseas, where zero hours contracts are all that is on offer, where infrastructure is crumbling around you, where high streets have become dilapidated and deserted and where public spaces are unhygienic and unkempt you are hardly going to be moved by the warnings of politicians who never visit, or government departments who for years and years have failed to invest. If you live somewhere where local services have been hammered by cuts to budgets since 2010, where affordable housing is nowhere to be found, where A&E and maternity departments are under threat of closure, where schools are under-performing, where police are barely in evidence, where it is hard to find a doctor when you need one, or to get decent social care for an elderly family member, you are hardly likely to heed the advice of the bankers you see as partially responsible for the mess, or the economists, regulators, institutions and other “experts” who failed to see it coming.
Successive and serious failures by EU institutions, on the Eurozone and the Syrian refugee crisis in particular, have helped to draw the EU into this narrative of winners, losers, political incompetence and establishment stitch ups. The Commission's approach to the negotiation of mega-trade deals, such as TTIP and CETA, has done little to dispel its reputation for highhandedness and secrecy. The conspicuous and ongoing failure of EU leaders to address the issue of waste within the system has helped to make the EU a lightning rod for anger about greedy, selfish, complacent and even “corrupt” elites.
In the end, a vote to Remain was a vote for the status quo. Whereas a vote to Leave could be any number of things. As Professor John Curtice put it before the vote took place:
“You might think this is a referendum about the UK's membership of a relatively obscure international intergovernmental organisation. It is not. This is a debate about the kind of society the UK is, the kind of society we think it should be, and in particular the way that society has been shaped by the processes of globalisation.”
Making a success of Brexit
So what kind of society will that be?
UK Prime Minister Theresa May has expressed her determination to “make a success of Brexit”. But what does that mean? And who will be the judge of success?
If there is one lesson to be learned from the EU referendum it is that “big business” and the population at large have rather different ideas about what success looks like. Solutions that benefit “big business” but which contribute to further poverty, division and inequality will only make matters worse.
Mrs May's first remarks on the steps of No. 10 Downing Street as the new UK Prime Minister show that she has at least some inkling of this.
But it is only when Article 50 is finally invoked and we begin the Brexit process that we will start to see whether the government is interested in sustainable change or quick fixes.
For instance, will Brexit build on, or roll back on, the pioneering work done by successive UK governments, both on their own and through EU institutions, in the field of corporate social responsibility? Will post-Brexit arrangements foster, or undermine, human rights-respecting cultures by companies? What steps can be taken to ensure that human rights related concerns are identified and addressed, in the course of the Brexit process and beyond?
In short, will the UK government work towards “humanising globalisation”?
Things to watch out for as Brexit unfolds
With the UK government's negotiating position and strategy still in the early stages of development, it is far too early to be able to say with any certainty what impact, if any, Brexit will have on corporate social responsibility in general, and the regulation of business-related human rights impacts in particular. However, there are a number of areas that will need monitoring as the Brexit process progresses.
Trade and investment deals will need careful scrutiny to ensure that they are aligned with responsible business principles. They should encourage good behaviour – support, rather than undermine, human rights respecting businesses – and should not impinge on the ability of State parties to regulate businesses effectively.
As 40 years worth of EU laws are transposed into UK law, care will have to be taken to ensure that unfairness is not exacerbated and inequalities are not worsened. Hard won labour, consumer and environmental rights must not be eroded in a misguided attempt to “cut red tape”. Worse still would be to engage in a “race to the bottom” in an attempt to attract future investment away from the EU and towards the UK.
On access to remedy, withdrawal from cooperative arrangements on the use of jurisdiction and enforcement of judgments must not reduce the ability of people to seek remedies for business-related human rights abuses in civil courts and, if successful, to have these enforced. Moreover, it will be important to preserve the cooperative arrangements that have allowed domestic prosecutors and law enforcement agencies from different EU member states to work closely and effectively together to tackle cross-border problems such as organised crime and people trafficking.
A difficult balancing act
Within an hour of taking office as Prime Minister of the United Kingdom, Mrs May had named her two main priorities for her government. She would deliver Brexit while at the same time making business more accountable and responsible to stakeholders and wider society. She said:
“If you are one of those families, if you're just managing, I want to address you directly. I know you are working around the clock, I know you're doing your best and I know that sometimes life can be a struggle. The Government I lead will be driven, not by the interests of the privileged few but by yours. We will do everything we can to give you more control over your lives. When we take the big calls we will think not of the powerful, but of you. When we pass new laws we will listen not to the mighty, but to you. When it comes to taxes we will prioritise not the wealthy, but you. When it comes to opportunity we won't entrench the advantages of the fortunate few, we will do everything we can to help anybody, whatever your background, to go as far as your talents will take you.”
Her speech – with more than a passing nod to the Leave campaign slogan to “take back control” – is a signal she at least registers something of the pain, anger and frustration that have led us to this point. Her game plan is to deliver Brexit while at the same time addressing some of the underlying problems that contributed to the Referendum result.
However, developing a coherent strategy on Brexit, keeping the economy on track during this period of uncertainty, demonstrating to the world that Britain is still “open for business” whilst simultaneously forging a new social contract between business, employees and wider society will be devilishly difficult to achieve in practice. And if the predicted economic downturn does indeed materialise, the challenge will be all the greater, with a shrinking pot of tax revenues to work from and welfare budgets under increasing pressure.
Those wondering how much prioritisation will be given to human rights in this particular melange may recall that only weeks before the Referendum, as Home Secretary, Mrs May was advocating that the UK should abandon the European Convention on Human Rights altogether.
So much at stake
The UN Guiding Principles on Business and Human Rights – virtually all of the work leading up to them and virtually all of the work ever since – have been, fundamentally, about making globalisation work for everyone.
In his 2008 report to the United Nations Human Rights Council, Professor John Ruggie pulled no punches about the importance and scale of the challenge:
“Business is the major source of investment and job creation, and markets can be highly efficient means for allocating scarce resources. They constitute powerful forces capable of generating economic growth, reducing poverty, and increasing demand for the rule of law, thereby contributing to the realization of a broad spectrum of human rights. But markets work optimally only if they are embedded within rules, customs, and institutions. Markets themselves require these to survive and thrive, while society needs them to manage the adverse effects of market dynamics and produce the public goods that markets undersupply. Indeed, history teaches us that markets pose the greatest risks—to society and business itself— when their scope and power far exceed the reach of the institutional underpinnings that allow them to function smoothly and ensure their political sustainability. This is such a time, and escalating charges of corporate-related human rights abuses are the canary in the coal mine, signalling that all is not well.
The root cause of the business and human rights predicament today lies in the governance gaps created by globalization—between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. These governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation. How to narrow and ultimately bridge the gaps in relation to human rights is our fundamental challenge.”
The Brexit vote in the UK highlights some of the dangers of complacency about the way we do business, invest and trade. It shows us the devastating consequences of the “can't make an omelette without breaking a few eggs” way of thinking; of government policies that judge their success by reference to macro effects and ignore the miserable reality for many people and their communities.
The stakes are very high. There may be opportunities – as we emerge from Brexit – to foster a kinder, more sustainable, more inclusive version of capitalism in the way we regulate companies and in the way we trade and invest.
But this is going to be a long, hard road. Humanising globalisation will take commitment, courage and leadership. It will require energy, creativity, empathy, compassion and a willingness to look beyond the short term. It cries out for approaches that put social justice and human rights imperatives front and centre. It calls for policies that make people's health, safety and well-being a benchmark of success, not just a hoped-for reward.
The prize is sustained economic prosperity, equality, social mobility, harmony, cohesion and hope.
But the consequences of failure are poverty, rage, violence, hate, social unrest and despair.
When things get this bad, the unthinkable becomes possible.
Take a look across the Atlantic if you are in any doubt about that.
© Jennifer Zerk
Note: I have tinkered with the text a little since this was first published in July 2016 and I have added some further reading as well (see below). But the substance remains the same.
Martin Wolf, ‘Democratic capitalism is in peril', Financial Times , 31 August 2016, p. 11.
John Ruggie, ‘Making Globalization Work for All: Achieving the Sustainable Development Goals Through Business Respect for Human Rights' keynote speech delivered to the Un Forum on Business and Human Rights on 14th November 2016
‘Brexiters and Remainers both fail to grasp the challenges facing Britain', Tom Kibasi, The Guardian, Comment is Free , 11 March 2017.
Jennifer Zerk Consulting: +44 (0)1223 207305 - email@example.com