Thoughts Brought on by Brexit

I had a shocking realization today. My whole view of the world could be wrong, and Brexit helped me realize it.

How we’re broken

The way the world works is broken. The most effective financial system that we have is capitalism.  It results in goods being produced and shipped to where they are in demand.  In North America, it means that it’s rare to see a product out of stock in a particular store, and even more rare—outside of the latest iPhone—to be unable to purchase a particular product at all.

Capitalism is responsible for that, for bringing together the components needed to make even the simplest product from all over the world, and then bringing the product itself to where it’s needed. It’s magic.

There is a huge problem with capitalism, though. It tends to create gross inequality. The winners in capitalism aren’t just ten times as rich as the losers.  On a net worth basis, they’ll often be a million times richer than the losers. You see that today, where the richest 1% own about 50% of the world’s wealth.

Of course, this doesn’t work very well for the lower 50%. Oddly enough, people don’t care much about absolute levels of wealth, but care a lot about relative measures of wealth. Thus, if you live in a western country with a reliable food source, workable house, functional car, and big screen TV, you don’t necessarily say, “Life is good.”  Instead, you look across the street at the guy who has a mansion, an expensive car, and the home theatre system, and say “I’ve been screwed.”

Thus, gross inequality creates unhappiness and instability.

What’s supposed to happen

In cases like this, the government is supposed to step in to redistribute the wealth, to ensure that the winners still get to be winners, but the losers don’t do as badly. They are supposed to make sure the wealthy dude has only 100 times your wealth, not a million times.  They should allow the rich to be rich enough to provide aspirations to everyone else, while keeping the inequality at reasonable levels.

The problems is that the whole system—politicians, media, corporations, and even academia—runs on money. Thus, politicians can be bought off, persuaded to not enact policies to redistribute the wealth. Academia can be convinced to swing to the right, and their right wing messages distributed through the media for the benefit of the wealthy. (Trickle-down economics, anyone?)

As a consequence, the healthy balancing of economic outcomes doesn’t happen anymore. The politicians do nothing, convinced by money that, by doing nothing, they’re doing the right thing. Or at least lining their own pockets

What I thought would happen

In this scenario, I thought that people would realize that they’re being screwed, and would move to the left. They’d elect politicians who focus on left-wing solutions—single payer healthcare, unemployment insurance, funding for education etc. All the things that will improve income mobility and reduce income inequality.

I think people have certainly realized that they’re being screwed. They see the system isn’t working as it should. I think this is what’s behind the rise of Bernie Sanders. Though Sanders failed this time, my thought was that in four or eight more years, a socialist might actually have a hope of being the Democratic nominee. And it seemed obvious that, even if a socialist doesn’t actually become president, over the long term, society would shift to the left.

Where I went wrong

Brexit has changed my thinking, though. Instead of saying, “our problem is that we don’t have a reasonable distribution of wealth”, opportunistic politicians have said, “our problem is those damn immigrants. If we just got rid of everyone who’s different, all our problems would go away.”

And people have bought it.

This sentiment was a huge factor in the Brexit vote, and a huge factor behind the rise of Trump. Essentially, inequality is leading to fascism.

Even in Vancouver, that sentiment is growing. The only economic issue that matters in Vancouver is housing. The average single family home in Metro Vancouver is $1.83 million.  The average family income is about $74,000. So, the average family has no hope of buying the average home, and would be stupid to do so.  However, this makes the average family angry, and the target of that rage is the Chinese.  Essentially, the Chinese are blamed for pushing up housing prices and there are now cries for the politicians to do something against the outsiders.

So, my shocking realization was that a shift toward socialism might not be the most likely outcome of the gross inequality in our current society. Instead, I suspect fascism is, because it’s such an easy sell.  And I think that’s quite a bad thing.

Where will we end up?

Even worse, 21st century fascism is likely to be far worse than 20th century fascism. Because now we have the ultimate surveillance state. Today, the state can read emails and track people anywhere using both cellphones and ubiquitous cameras with facial recognition. So, whereas in the 20th century dissenters or any persecuted group had some hope of hiding or fighting back, people in the fully-automated 21st century have no hope of escape.

What is it Orwell said? “If you want a vision of the future, imagine a boot stamping on a human face—forever.”