That sinking feeling (SciFi author Charles Stross on Brexit)

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In the intervening time, the UK has undergone a disastrously divisive general election—disastrous because, in the middle of an unprecedented (and wholly avoidable and artificial) national crisis, it returned to power a government so weakened that it depends on an extreme right-wing sectarian religious party to maintain its majority. The DUP (Democratic Unionist Party) stands for Union with the United Kingdom, and hostility towards Ireland (in the form fo the Irish Republic); they will veto any Brexit settlement that imposes a customs border between Northern Ireland and Great Britain. However, this implies that a customs border must exist between Northern Ireland and Ireland, and the two economies are so entangled that this is impractical. (The border between north and south cuts across roads, railways … and also through farms, living rooms, and business premises.) Creating a hard border in Ireland is anathema to the government of Ireland, which will therefore veto any Brexit agreement with the UK that posits one. (It would also violate the Good Friday Agreement, but hey, nobody in Westminster today cares about that.)

The Electoral Commission has uncovered evidence of electoral spending irregularities in the Leave.UK and Vote Leave campaigns serious enough to justify criminal investigation and possible prosecution; involvement by Cambridge Analytica is pretty much proven, and meddling by Steve Bannon and Robert Mercer has also been alleged in testimny before the US Senate judiciary committee. There’s also an alleged Russian Connection with Aronn Banks (the main financial backer of Brexit) having been offered too-good-to-be-true investment opportunities in a Russian gold mine (according to The Observer newspaper).

But not to worry, the will of the people has spoken! (Although it’s actually the will of these peope—a mixed bunch of right-wing Atlanticists, hedge fund managers, warmed-over neo-Nazis, and disaster capitalists. Never mind, I’m certain they have only our best interests at heart.)

For added fun and optimism, back in the summer of 2016 it looked reasonably likely that over the next few years we would see business continue as usual, on a global scale. This was before the election of Donald J. Trump as president of the USA. Trump doesn’t understand macroeconomics—he’s convinced that trade is a zero-sum game, that for every winner there must be a loser, and that trade tariffs and punitive sanctions are good. He’s launched attacks on the World Trade Organization (as well as NATO) and seems intent on rolling back the past 75 years of post-WW2, post-New Deal global free trade. The prospects for a favourable post-Brexit trade deal with the United States went out the window on January 20th, 2017; Trump perceives isolation as weakness, and weakness in a negotiating partner as an opportunity to screw them. (So much for the Conservative Atlanticists and the Special Relationship.)

The EU is the UK’s largest trading partner, with roughly 44% of all our foreign trade going through our EU siblings. This includes food—the cramped, densely populated UK hasn’t been self-sufficient in food since the 19th century, and we import more than 50% of what we eat.

A customs union with the EU has been ruled out unless the UK agrees to cooperate with certain EU “red line” requirements—essentially the basis for continuing free trade: for reasons too preposterous and stupid to go into this is unacceptable to the Conservative party even when national food security is in jeopardy. In event of a no-deal Brexit, Operation Stack will become permanent, causing gridlock on motorway routes approaching Channel ports. Perishable goods and foodstuffs will be caught up in unpredictable protracted delays, resulting in dairy produce (including infant formula) becoming ‘very scarce’. Large manufacturing concerns with cross-border supply chains such as BMW, Airbus, and Toyota are threatening to shut down production in the UK in event of a hard Brexit; Amazon’s UK manager warns of civil unrest in event of a no-deal Brexit, and in event of a no-deal that doesn’t include services (as well as goods) it’s hard to see how the Amazon supply chain can continue to function in the UK.

(Note: Online sales account for 18% of all UK retail and Amazon is the proverbial 500lb gorilla in this sector. UK customers who purchase from Amazon.co.uk are, however, doing business with Amazon SarL in Luxemburg, who then subcontract fulfillment/delivery to a different Amazon company in the UK—Amazon SarL takes advantage of one of the lowest corporate tax regimes in the EU. This is obviously not a sustainable model in event of a hard brexit, and with shipping delays likely as well as contractual headaches, I think there’s a very good chance of Brexit shutting down Amazon.co.uk and, thereby, close to 20% of the British retail distribution system.)

Current warnings are that a no-deal Brexit would see trade at the port of Dover collapse on day one, cutting the UK off from the continent; supermarkets in Scotland will run out of food within a couple of days, and hospitals will run out of medicines within a couple of weeks. After two weeks we’d be running out of fuel as well.

Note that this warning comes from the civil service, not anti-Brexit campaigners, and is a medium-bad scenario—the existence of an “Armageddon scenario” has been mooted but its contents not disclosed.

In the past month, the Health Secretary has admitted that the government is making plans to stockpile vital blood products and medicines in case of a no-deal Brexit, and the Brexit secretary is allegedly making plans to ensure there are “adequate food supplies” to cover a no-deal exit.

But before you say “well, then it’s going to be all right, we’ll just go back to 1939-54 era food ration books and make do and mend”, we need to factor in not only Donald Trump’s latest bloviations, but Global Climate Change! Europe is facing one of the most intense regional droughts in living memory this summer, with an ongoing crisis-level heat wave. Parts of the UK have had the least rainfall in July since 1969, with a severe heat wave in progress; Greece is on fire: Sweden is having a wildfire problem inside the Arctic circle this summer).

A Hard Brexit, on its own, would be a very dubious but probably long-term survivable scenario, with the UK economy taking a hit not much worse than the 10% downsizing Margaret Thatcher inflicted on it in 1979-80. But a hard Brexit, coinciding with the worst harvest failures in decades, ongoing climate destabilization, a fisheries collapse, and a global trade war being started by the Tangerine Shitgibbon in the White House is … well, I’m not optimistic.

Right now, the British cabinet seems to be locked in a suicide pact with itself. Theresa May is too weak to beat back the cabal of unscrupulous opportunists within her own party who want the worst to happen—the disaster capitalists, crooked market short-sellers, and swivel-eyed imperialist revenants of the European Research Group. Any replacement Conservative PM would face exactly the same impedance mismatch between reality and his or her back bench MPs. On the other side of the house, Jeremy Corbyn’s dislike for the EU as a capitalist entity has combined with his fear of alienating the minority of “legitimate concerns” racist voters in Labour’s base so that he’s unwilling or unable to adopt an anti-Brexit stance. Brexit cuts across traditional party lines; it’s a political Outside Context Problem that has effectively paralysed the British government in a time of crisis.

So I’m not optimistic that a no-deal Brexit will be avoided.

What happens next?

On a micro scale: I’m stockpiling enough essential medicines to keep me alive for six months, and will in due course try and stockpile enough food for a couple of weeks. I’m also going to try and move as much of my savings into other currencies as possible, preferably in financial institutions accessible from but outside the UK. (I expect a Sterling crisis to follow promptly in event of NDB. We saw Sterling drop 10% the day after the referendum—and certain people made a fuck-ton of money by shorting the stock market; I expect it to go into free fall if our trade with the EU is suddenly guillotined.)

On a macro scale:

Airports and the main container freight ports for goods entering the UK will shut down on day 1. There will be panic buying. I expect widespread rioting throughout the UK and sectarian violence in Northern Ireland (contra public received wisdom, NI is never quiet and this summer has been bad.)

A currency crisis means that goods (notably food) entering the UK will spike in price, even without punitive trade tariffs.

There will be mass lay-offs at manufacturing plants that have cross border supply chains, which means most of them.

You might think that as an author I’d be immune, but you’d be wrong: although paper editions of my UK books are printed in the UK, you can bet that some elements of the wood pulp and the ink that goes on it and the glue that binds them are imported. About 90% of my UK ebook sales are made as (contractually speaking) services via Amazon.co.uk (see above), the fuel that powers the trucks that ship the product to the bookstores is imported, my publishers (Orbit and Tor) are subsidiaries of EU parent companies (Hachette and Holtzbrink), and anyway, people are going to be spending money on vital necessities during the aftermath, not luxuries.

(Luckily for me, many of my sales come from other EU territories—in translation—and from the USA. Unfortunately, getting paid in foreign currency may become … problematic, for a while, as Brexit jeopardizes both currency exchange and the UK retail banking sector’s ability to exchange funds overseas.)

After week 1 I expect the UK to revert its state during the worst of the 1970s. I just about remember the Three Day Week, rolling power blackouts, and more clearly, the mass redundancies of 1979, when unemployment tripled in roughly 6 months. Yes, it’s going to get that bad. But then the situation will continue to deteriorate. With roughly 20% of the retail sector shut down (Amazon) and probably another 50% of the retail sector suffering severe supply chain difficulties (shop buyers having difficulty sourcing imported products that are held up in the queues) food availability will rapidly become patchy. Local crops, with no prospect of reaching EU markets, will be left to rot in the fields as the agricultural sector collapses (see concluding remarks, section 5.6).

Note that during her time as Home Secretary, Theresa May presided over 30% cuts in police numbers. During the recent state visit by Donald Trump, virtually every police force in the UK had to cancel all leave just to maintain cover for those officers temporarily assigned to POTUS’ security detail (the policing operation was on a scale comparable to the 2011 summer riots … when there were many, many more officers available). Also, police and emergency service workers will be trying to source food, medicines, and the necessities of life for themselves and their own families: there may be significant absenteeism from critical posts just as everything comes to a head.

I expect the government will collapse within 1-4 weeks. There will be a state of emergency, managed under the Civil Contingencies Act (2004) (which replaced earlier civil defense emergency legislation). Emergency airlifts of medicines, food, and fuel may take place—but it’s hard to see the current US administration lending a hand.

Most likely the crisis will end with the UK crashing back into the EU, or at least into Customs Union and statutory convergence—but on EU maximalist terms with none of the opt-outs negotiated by previous British governments from Thatcher onwards. The negotiating position will most likely resemble that of Greece in 2011-2015, i.e. a vastly weaker supplicant in a state of crisis and near-collapse, and the British economy will take a generation to recover—if it ever manages to.

(This is, by the way, not the worst scenario I can envisage. The worst case is that the catastrophic collapse of the world’s sixth largest trading economy, combined with a POTUS whose understanding of economics is approximately as deep as that of Louis XVI, will lead to a global financial crisis on the scale of 2007-08—but without leadership as credible as, say, George W. Bush and/or Gordon Brown to pull our collective nuts out of the fire. In which case we’re looking at a global banking collapse, widespread famine due to those crop shortages, and a wave of revolutions the like of which the planet hasn’t seen since 1917-18. But hopefully that won’t happen, right? Because only a maniac would want to burn everything down in order to provide elbow room for a new white supremacist ethnostate world order. Oops, that would be Steve Bannon.)

Anyway: the most likely historical legacy of a no-deal Brexit will be the final refutation of the common British misconception that the UK is still a global superpower, possibly accompanied by Scottish secession and re-entry to the EU, Irish reunification in some sort of federal system, re-acquisition of Gibraltar by Spain, and the disintegration of the Conservative (and possibly Labour) parties at the next general election.

I just hope I’m still alive at the end of it.

Thoughts?

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