The British and their exceptionalism

Insight
03 May 2017

Few countries have allowed their sense of exceptionalism to damage their interests in the way Britain is doing. British overconfidence is unjustified and will come at a heavy price.

Most countries see themselves as exceptional, but few have ever allowed the belief in their exceptionalism to damage their economic and political interests in quite the way Britain is currently doing. What makes so many British politicians, business leaders and newspaper editors so confident that Britain will flourish unencumbered by the EU? Why do so much of the British elite see the EU as a constraint on British influence in the world? Both France and Germany sometimes bridle at the EU but neither seriously thinks that the EU diminishes their ability to pursue their interests.  Even now, when it is clear that Brexit will do profound damage to British political and economic interests, few powerful figures in British business, politics or the media feel it necessary to speak out. There is no justification for British overconfidence or sangfroid. The UK needs the EU as much as the Germans or French.

The British are less euro-centric than many other Europeans. They are generally less anti-American and more likely to move to non-European countries to work. And Britain has global interests and reach in ways that small and medium-sized EU countries do not. The country has a permanent seat on the UN Security Council. Like France, it is a serious military power and has nuclear weapons. The question is why so many Britons believe that it will be easier to defend those global interests outside of the EU than within it. 

The French elite do not believe that France’s ability to defend its interests – which are similar to Britain’s – is held back by its membership of the EU. For the French the EU has always partly been about locking Germany into multilateral European institutions and preventing Germany from becoming too powerful. But the French have always understood that France could only remain a significant global power by harnessing the power of the EU as a whole. The benefits of EU membership for Germany are obvious: the country regained legitimacy and respectability through its founding membership of the EU; by subsuming itself in this multilateral project, it succeeded in drawing a lot of the sting from its history. Far from undermining German power, EU membership enabled it to reassert itself internationally. For the Germans EU membership is a key strategic national interest.

Why does the British elite, and not the French and German ones, believe they do not need the EU? The first reason is their rose-tinted view of Britain’s history. There is always a disjuncture between the way a country sees itself and how others perceive it, but this disjuncture is especially large in Britain’s case. Britain did not face the need to regain legitimacy in the same way as Germany did after the war, but there are more similarities than most Britons are prepared to admit. Too many see Britain as a beacon of democracy and liberty. Too few are aware that the country’s colonial history means that much of the rest of the world is more ambivalent – and that Britain is less trusted and admired – than they imagine. 

The emphasis that many Brexiters place on the Commonwealth illustrates this. It is notable that so many former British colonies are happy to be members of such a club, but that is perhaps because they see the club differently from many Britons. India is a member, but sees no justification for privileged economic relations with Britain, as illustrated by the Indian government’s rather bemused response to Britain’s clumsy emphasis on the two countries’ shared history as a reason for some kind of special economic relationship. Nor do the Indians, or any other Commonwealth country, see Britain as leading the organisation in the way many British appear to.

The second reason for the hostility, or at least ambivalence, of the British elite to the EU is that they always resented Britain playing second fiddle to the Franco-German axis. Not joining the EU until 1973 meant that the EU always looked like a Franco-German project that privileged French and German interests to the detriment of those of the other member-states, especially Britain. In short, the British have never been able to wholeheartedly support a European project that they were not the leaders of. And it is this, as much as an aversion to sharing sovereignty, that explains the depth of antipathy to the EU. 

Of course, no-one who knows anything about the EU would argue Britain lacked influence within it. The country skilfully used its ties to the US and its EU membership to maximise its value to both sides; the EU helped Britain to punch above its weight. Britain was also instrumental in the EU’s embrace of a liberalising economic policy and its enlargement to the East. The latter has helped cement English as the lingua franca across Europe. Britain even managed to negotiate a special status within the EU – part of the single market, but not a member of the eurozone or Schengen. But this kind of influence was never enough for much of the country’s elite. For them, the EU’s institutions never looked sufficiently British. 

Britain’s sense of economic invulnerability is even more puzzling. Why does a country that is significantly poorer than Germany, with far fewer internationally competitive industries and greater dependence on foreign capital and managerial expertise, believe it can afford to quit the single market? After all, the Germans would see such a move as gratuitous economic self-harm. Britain’s economic performance is no better than France’s and on some important measures – not least productivity – far worse. Yet nobody from France’s political mainstream seriously entertains the idea that French business or the French economy would benefit from leaving the EU.  

Much of the British elite know little about how Britain’s economic strengths and vulnerabilities compare with other European countries. They are quick to state that Britain is the sixth biggest economy in the world (just behind France), which it is on some measures. But few realise that three-quarters of the country is poorer than the EU-15 average, or that its growth performance (at least per head) has been mediocre at best. And few know that there are relatively few British-owned and managed businesses with a strong record of growth. There are, of course, bright spots in the British economy, but a disproportionately high share of those bright spots reflect the involvement of foreign capital and expertise. Indeed, foreign-owned businesses generate over half of the country’s exports. Many of these exports are intermediate goods – links in international, predominately European – supply chains; that is, they are vulnerable to Britain leaving the single market. The country’s biggest comparative advantage is in financial services and that is to a large extent because London has successfully become Europe’s dominant financial centre; the City of London was a relative backwater prior to Britain joining the EU. 

Leaving the EU will make Britain less attractive to foreign investors, not more, as many of them have already made clear. After all, firms’ decisions where to invest turn on small margins. If the British economy was more locally-owned and managed, it would be easier to understand the British complacency over the economic impact of Brexit; capital would be more susceptible to political pressure and thus less mobile. But for a developed country so dependent on foreign capital to do something so damaging to its ability to attract that capital has few precedents. 

Underlying this complacency appears to be a belief that Britain is such an attractive place to do business that investors will continue to come even if the country quits the EU. In particular, the status of London as a preeminent global city appears to make many British politicians and the country’s wider elite think that Britain is more important and powerful than it really is, and its economy more dynamic than the rather prosaic reality.  London itself has had a terrific 30 years. But much of that is the result of its success in carving out a profitable link in Europe’s division of labour: financial and other business services. 

Another key reason for British complacency over the impact of Brexit is that much of the country’s elite buys into the idea of the EU as a sclerotic, inward-looking economic failure. The EU faces serious challenges and relations between its members have been tested by the eurozone and refugee crises. But the EU is far from the British caricature of it as protectionist, insular and economically illiberal. In reality, the EU’s single market is more open than the US market. And the EU has a good record of defending things the British claim to be upholders of – international law, rules-based trade and human rights. 

On the face of it, Brexit looks like a protest vote by the left behind. But the underlying reason is the hubris and ignorance of much of the British elite, not just the eurosceptics among it. They are less worldly than they imagine themselves to be.  Their exaggeration of British political and economic power has fed the idea that Britain can afford to leave the EU, indeed flourish outside of it. And they have tacitly encouraged the poor and insecure to blame their problems on EU membership, in order to shift attention from domestic policy failures. This message has been reinforced by a stridently eurosceptic, and sometimes xenophobic, print media. The country’s responsible papers have been loath to call out the xenophobic ones, either out of exaggerated respect for Britain or growing indifference to the country. 

Britain has its strengths, but it is hard to understand why much of the country’s elite believe that the French and Germans have more to learn from them than they do from the French and Germans, or why they think Britain would flourish outside the EU. They should consider why it is that when the leaders of China, Russia or the US (most of the time) want to talk to a European leader, they head for Berlin or sometimes Paris, and rarely to London. This is not the result of Britain’s membership of the EU, but because the British government has had little to say about the most pressing issues of the day for some years now. And because it marginalised itself within the EU (and then voted to leave), it can no longer act as a useful bridge to the EU for the US, China or India. The British need to accept that quite a bit of the world sees Britain’s past differently from the British themselves – and that EU membership often helped to mitigate these historical tensions, while enabling Britain to punch above rather than below its weight. The widespread belief in Britain that the country is held back economically by its EU membership does not stand even cursory analysis. And the failure to acknowledge the strength of other member-states or of the EU as a whole means it fails to learn necessary lessons from others. 

What will happen now? Britain is heading for humiliation. It can back down, accept continued freedom of movement and jurisdiction of the ECJ in return for access to the single market but little influence within the EU or internationally. Or it can stick to its red lines, and end up with little more than a minimum free trade agreement in goods at some point in the future. Under this scenario, the British economy will take a hammering, with the poor suffering most; populism usually hits hardest those it claims to help. Under this scenario, Britain will be alienated from its closest allies – the rest of the EU – and have little international influence. Reality will eventually kick in and that reality will be that Britain needs to rejoin the EU. In all likelihood, it eventually will, though on inevitably worse terms. And it will then have to spend the next 20 years painstakingly rebuilding the influence that it so casually threw away. 

Simon Tilford is deputy director at the Centre for European Reform.

Comments

Totally agree with many but not all of you posts.

The British elites want EU. The British people do not. You are most bright about the German Franco domination of Europe. Italy, Greece and others are now under their control and once again to their detriment. Vichy made his choice based on the horrendous things he saw in the first world war. As a great leader in the first world war he wanted to find the way of least resistance and least damage to his country. I understand it but history tells us he was wrong.

The British people agreed to economic union and rejected a United States of Europe based on the previous mistakes of history. In the second world war we had blackshirts in the UK today we have remoaners.



It must be obvious to everyone that the term United Kingdom only referrers to that part of Britain governed by Westminster. "Brexit", don't make me laugh.

Less obvious, perhaps, is that the term, "United Kingdom", means that the United Kingdom is exactly what that title describes it as - a kingdom that is factually not a single unified country.

It is a bipartite united kingdom formed by the only two kingdoms still extant in Britain in 1707. It is not a country and the two signatory kingdoms are equally sovereign kingdoms. There actually cannot now be a United Kingdom as one of the equally sovereign kingdoms has, in Westminster's eyes been, "Extinguished".

How then is the Westminster Parliament functioning today as an, unequally devolved , quadratic union of countries? With that quadratic union of countries being ruled over by an, unelected as such, de facto parliament of the country of England that uses EVEL to prevent the other three countries from being involved in what Westminster classes as, England only matters, but retains for itself the title, "The United Kingdom"?

Worse still Westminster now claims, without a shred of evidence, that, "The Treaty of Union extinguished the Kingdom of Scotland and renamed the Kingdom of England as the United Kingdom".

Factually, Westminster is now the de facto Parliament of the Kingdom of England even although there is not an actual parliament of England and no members are elected as members of the Parliament of England.

EVEL means that The de facto parliament of the country of England is now devolving the powers of an, unelected as such, parliament of England, calling itself the United Kingdom and thus is devolving the country of England's assumed sovereignty to three English dominions and has thus relegated their only legal partner kingdom, Scotland, to being just another English Dominion as were Wales, from 1284, and Ireland, (from 1542), and thus both before the three country Kingdom of England became a, "Constitutional Monarchy", in 1688 before the Treaty of Union.

Democracy? Don't make me laugh.
Simon Tilford has hit the nail on the head. There are too many people in Britain who still think in terms of "Empire" and world domination - even if that Empire had gone before they were born. Having travelled extensively in Europe I think that Britain has a larger sector of poorly educated people than other European countries who did not try to understand harshly realistic economic arguments, but were happy to listen to meaningless phrases about "Taking back Control". As one who tried, in my small way, to help the Remain cause, I look back and realise just how many sceptics I came across, but I complacently thought it would all come right on the day. Now I fear for the future of my dear Grandchildren and I hope that at sometime in the future they can help get the country back on track and within the EU fold, where it belongs.
Whether or not leaving the UK is a matter of self harm rather depends on whether one values parliamentary democracy, or whether one is content to live under authoritarian rule. A majority of the UK public have voted for the former. If this comes at a price then so be it. The last time this decision was put before the British people, it cost them an empire.
Oh how I wish every Brexiteer would read this article. It explains so well why we really should be fighting for a U turn on Brexit. Unfortunately those who voted 'out' will never bother with such a sensible view on our current position in the world.
I couldn't agree more, but where are the politicians to express these valid points.
Congratulations Sir, on a very enlightened and sensible point of view on the dilemma Britain finds itself in. Leave it to the elite of any country, for that matter, to be blinded by hubris, to the detriment of its citizens and of it's place in the world!
We are embarking upon the single greatest act of national self-harming in the history of this nation.

The overwhelming majority of intelligent, forward-thinking, humanitarian, travelled, integrated British/European nationals voted to Remain as members of the EU. Those small-minded, fearful, ignorant, jingoistic fools who were convinced Brexit would be a good thing and voted for it, had no idea what it potentially could mean for the country.

It is singularly infuriating that no single parliamentary representative seems to have the courage and conviction to refute the legitimacy of a referendum which should never have been put to the vote without proper presentation of factual data and was instead used to convey lies and misinformation to a gullible population which thought it was getting something and will instead lose everything.

The UK has become the laughing stock of the world. I have travelled extensively through 4 continents since the vote last June and have had to try and explain the idiocy of the decision to leave EU to utterly nonplussed citizens around the world. It is only when I have explained the blatant lies which were presented (on the side of buses etc) throughout the campaign, that anyone can understand why such a fiasco is happening. Still, they all ask the same follow-up question, which is "In light of the palpable dishonesty, why doesn't anyone stop the process and do their job as politicians and save the nation from the idiocy?" I have to state that I believe the answer to that question is that our representatives are cowards and would prefer to speak in soundbites and not answer the question, because to do so would reveal the truth -- that we are simply following through with this act of economic suicide because that is better than admitting our democratic process is open to manipulation by liars and self-serving charlatans.
A fabulous read
I find the writer has glossed over the influence of the xenophobic, right-wing press in the UK, which denigrated the EU from the word go. It is no small wonder that the British public, so long the target of this powerful press, have been brainwashed into wanting 'out'.
I also feel the writer has totally ignored the influence of a more sinister and subversive force - Russia. A united strong Europe is not in Russia's interest - their policy is to pick off small, individual nations - combating the power of a huge economic/political entity like the EU, and that of the military bloc of NATO, would be far more difficult for the Russians.
And a third force is at work, I think - the power of so-called 'Dark Money'. Enormous wealth doesn't like too many rules and regulations - the EU represents, for them, too much of that, whereas they want freedom to exploit markets and people.
Against all this, and the ensuing propaganda constantly spread - including lies unchecked and unpunished in their campaign, the British people had no chance - too many voted with their hearts rather than their minds.
The comment by Paul James is correct about British elite generally being in favour of the EU although I disagree with his statement that the people reject the concept of the United States of Europe. We all know that was part of the nonsense. People voted Brexit because (a) because they wished to give the then Prime Minister a bloody nose and (b) they believed the nonsense and lies peddled by the far more dangerous type of elite, being the global press barons. Simon Tilford's jibe about the elite knowing little about how Britain’s economic strengths and vulnerabilities should be aimed at the press and the British education system, and also I'm - sorry to say - at the EU which itself has a poor record of self promotion, perhaps based on a similar arrogance to the British 'exceptionalism'. Looking ahead, the sad fact is that no matter how exceptional British people feel now, that feeling will be replaced not by a more realistic reflection of Britain's (declining) posititon, but by anger. In truth the anger ought be directed at the Theresa May government which is setting about negotiations in the worst possible way, but thanks to the press who have been regurgitating the ridiculous lies spouted by the Brexiteers in 2016 it's more likely that us Remoaners, as Mr James calls us, will be blamed e.g. 'talking the country down', 'running the country solely for elites', 'not understanding the plight of working people' while the reality is that British people will suffer inflation, falling real wages, falling employment levels, further loss of consumer & employee rights / environmental protection and a fractured health service. It's no way to run a country. It's a way to ruin a country.
An excellent article, to which it's hard to add much, other than say that the selective beliefs of British strength and past glories extend far and wide. A wistful cry of many a (typically older) Leave voter is "we stood alone before, and we can stand alone again." Of course, very few such people will have been around during WW2, or if they were, conscious of what was going on. Instead, they seem to believe that Britain survived on its own during WW2 due to some innate British resilience, rather than, I don't know, a large body of water preventing the Wermacht from simply following the retreating British Expeditionary Force into the UK, or Hitler making a grave error in ordering the Luftwaffe to switch from bombing RAF airfields to bomb British cities instead.

Perhaps one point to make is that few of the Leave demographic are in a position to show the British entrepreneurial pluck that they seem so confident exists. Either they're retired or they're unskilled. So they've effectively made bold predictions about British economic might, while looking to others to deliver on this. And that demographic. the young. educated and skilled, voted Remain. But now they're going to have to deliver growth in more challenging circumstances. Of course, a post-Brexit UK could simply allow immigrants to fill the skills gaps, but Theresa May seems determined to bring immigration down drastically, even if the 'immigrants' are international students paying £25,000 a year in tuition fees and living costs for the privilege of studying in the UK on a time-limited basis.

Some other people commenting here have suggested that 'democracy' is worth leaving the EU for. As ever, it'd be interesting to know exactly how they think UK democracy is being constrained by EU membership in a way that the free trade deals it will have to strike post-Brexit will not.

Overall, it's hard to see how indeed Britain can escape humiliation. The EU holds all the cards, economic and procedural. Each day that passes is a day closer to the UK leaving the EU without a deal, so the EU can sit back if it likes and wait for the UK to come to it The longer the EU waits, the more desperate the UK will (or should at least) become. The UK's costs of transitioning out of the EU will be huge. Already some estimates have been provided by the OBR in the tens of billions p/a, but heaven knows how much will have to be paid in total: to the EU to settle existing commitments (tens of billions of Euros seem likely); to the EU to maintain access to the Single Market for a few years during the transitional period; to extra civil servants to set up and run offices administering all the functions currently handled by the EU; in higher prices by firms and consumers as the pound falls and tariffs start to hit British trade. Economic decline seems inevitable, as the foreign capital so key to the UK continues to leave, consumer spending falls due to higher prices caused by tariffs and the weaker pound and the Tory's adherence to austerity leaves little scope for increased spending to make up the shortfall. Eventually the pressures will become too much, and the UK will have no other option but to ask to rejoin the EU or join the EEA. The only question is how much suffering the deluded Eurosceptic right-ring is prepared to let ordinary Brits endure before the inevitable overtures to Brussels begin.
Great article. Very rare to see this kind of deeper analysis.

Seems to me that the UK elite are taking a huge risk.

Germany has always looked east and south east - Russia, Poland and the Balkans are the hinterland it's interested in politically and economically. On the other hand, the EU and the euro provide Germany with a stable sphere of influence in the west and south.

Brexit may destabilise this arrangement for no clear gain. The effect on Germany policy over the longer term is unknown.

Something tells me history isn't over yet!
As a member of the London elite who voted for Brexit, I am surprised by your analysis - I am the only one I know who supports it. For me, this was based on dealings with the EU as a civil servant - all about accruing more power and money to Brussels with no accountability and no benefit. Indeed, most of the EU seemed to be actively out to screw the UK, eg trying to make us pay for the costs of Schengen or the Euro even though we had warned that they were massive errors.

As an economist, I'm afraid I find your arguments about the economic costs weak. The Commission themselves say that the SM is only worth 2% of GDP, so leaving is hardly likely to be disastrous. WTO tariffs are low, and our floating currency can help manage any shocks. Moreover, we have a flexible labour market and the ability to reduce corporate taxes - impossible in statist EU countries. The short term could carry some costs, but beyond that the EU is bankrupt and is at risk of serious security problems from mass Muslim immigration - much of which is unskilled and unemployable.

And as a pro free trade nation, it's relatively easy for us to sign deals around the world - with economies that are actually growing.

So still happy with my vote for hard Brexit. The Commonwealth, US, China, etc may not be 100% our friends, but a) money talks and b) unlike the EU they aren't actively out to screw us.
''three-quarters of the country is poorer than the EU-15 average'', ''the UK's growth performance (at least per head) has been mediocre at best.'' if we had stayed in the EU we would have had a powerful voice in the push for much-needed reform. [The EU isn't particularly democratic]- but outside the EU we can do nothing!
A small percentage of the country voted to leave. 52% of those that voted, not 52% of those that could have voted nor those that are resident and denied a vote, despite paying taxes into the system or being too young and now having a future with seriously diminished prospects. The Tories (Leave) lied big time about the supposed advantages of exiting, the Tories (Remain) made the most pathetic defence and one could even question that. The person apparently running the country looks like a rabbit in the headlights when questioned and there is no coherent game plan. The politic opposition...in search of another noun...were not to be seen. So, much of this is the personal entitlement of our democratically elected politicians (whose salaries come from our taxes) seems to distance itself from the will and needs of the populace. In real terms, the Tories have run the country down to the detriment of the majority of the country, or alternatively, to the benefit of the monied few. This is not a tired political accusation but a fact. I earn a big salary, I word extremely hard and am in the autumn of my career, life. I would like to see my country look after its own. Holes in the road get fixed promptly, so that fewer cars get damaged and are out of the system. Ill people are brought back up to spreed robustly and promptly so they can contribute to the well being of one and all. Our children get a decent state education, as per the era that I grew up in. They should be taught my well educated and facilitated staff. Pensions, respectable pensions, to ensure a retirement proportional to the contribution people made to get us where we are now. It all costs money. The money has to come from a viable economy.
To ensure our chances of a sustainable and predictable existence requires talented planning. Just how we achieve that is, sadly, beyond me. I am good at what I do but am not in a position of administrating my beloved country. We vote in people to do that, based on the competence and intentions they sell us prior to voting (and then frequently summarily reneging on the self same). We have a country that has not a lot of faith in the incumbent administration, that has cynically decided (again, after saying the opposite) to seek an election to gain 5 years to exercise and impose their flavour of government, more than probably to their small group of wealthy friends, more than the public in general. You do not need to be a genius to understand that is a non starter. The rich make money from....? Yes, the less rich. And if the latter have less disposable income, the former will diminish. It breaks my heart to announce this small piece of saddening non rocket science but there you have it. And to conclude, with a topic that does not warms the cockles of my heart, we are committing financial and cultural suicide by aiming to leave the EU. The weight of the voters are starting to understand how they were beguiled and deluded and how their futures and the futures of their children are being eroded by a few just for a few. The EU has its problems and they should be dealt with. Junckers being a prime example. Change from within to benefit us, a small nation who has a magnificent history in social advances, industrial progress and gifting a rich language to be the preferred vehicle of communication around the world, as well as our associate partners across the English Channel, would be a sensible strategy.
So man up. Let's get the representatives to look out for us. We have a vote in June 8th and we really do need a change as sadly and ironically "Conservative is not working". The caveat is Jeremy Corbyn. Can he eschew his personal beliefs and dogma, escape their gravity and do what is best for this country, or impose his anachronistic ideals and take us to parallel world to the current system but the polar opposite.
Watch this space!
There is no harm in thinking you are the bee's knees. There is a point though went it becomes dangerous. Brexit is simply a rather stupid displacement activity while the house burns.
A fine analysis; one that chimes with me
Exceptionally well put
The key part for me was about how the French elite sees Europe as a way to retain its influence in the World. Many Eurosceptics think Britain can do the same through "the Special Relationship" with America, this is nonsense, America has shafted us at key moments in the past, notably at Yalta, ending Lend-Lease and reneging on a Agreement to share nuclear weapons technology. Yet despite this the British keep coming back lack a lovestruck teenager.

The key moment for me was Suez, in its aftermath the French elite decided to build Europe up as a counter to the US, the British decided to get closer to Washington. For me these differing reactions are hugely significant and haven't been adequately explained
Please do NOT drag Scotland into this description of British people! Scots voted 62% to stay in EU and we certainly do not in the majority see ourselves as British but Scottish. Even Scots who did not want Independence in 2014 would still say they are Scottish first and foremost and the reason is, Scots are not like these Brits you describe. We feel more European than British because our history with Europe has been longer than being a "supposed" equal partner in UK which we all know is very unequal, we aren't owned by anyone on this island but one of 4 Nations yet Westminster/England treat us like a Colony they still control.

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