David Cameron's Great Blunder
David Cameron's Great Blunder · The Fiscal Times

First Britain, now Italy, what’s next? The Brexit has triggered the EU’s worst political crisis.

And to make matters worse Britain’s Prime Minister David Camron steps down on Wednesday, having bet his entire political future on the likelihood that a vote for Brexit would lose at the polls. Pollsters and policy experts alike did not take the likelihood of a vote for Brexit seriously. After all, if David Cameron and his advisors believed for a minute that they’d lose at the polls, they would never have initiated a referendum.

Their arrogance rests in a conviction that when countries join the global economy and become more prosperous, they gradually experience a sociopolitical “convergence.” In part, it’s the same narrative that has dictated Western global development and defense policy, and global diplomacy, since the Cold War.

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In one of David Cameron’s favorite books, “Why Nations Fail,” political economists Daron Acemoğu and James Robinson explain that there is an iron law of political and economic development, and that countries that attempt to deviate from its grip will fail.

But the iron law did not sway England’s masses. Every conceivable economic argument was made by policy pundits from the entire spectrum of British politics, including both the Tories and Labor, to communicate the risks of exiting. Informed that leaving was the riskier option, why then did the British population exhibit such incredible boldness? Who — the experts or the population — made the bigger miscalculation?

Maybe the voters sensed that building a “European identity” upon shared fiscal and commercial interests is, after all, nothing but “a grand illusion?” That’s the very phrase the late historian Tony Judt used in a prescient essay of the same name written 20 years ago. He described what he called the “reductionist fallacy, the curiously nineteenth century belief shared by classical economists and Marxists alike, that social and political institutions and affinities naturally follow economic ones.”

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Led by this fallacy of socioeconomic convergence, Britain’s political elite concluded that a Brexit win was unthinkable. They are unable to grasp why a plurality of British voters consider that the nation state and not the EU offers them the best assurance that the social fabric will not be torn apart by globalization. Far more suited toward civic responsibility and effective participation, a well-governed nation state can promise to ease the disruptive effects of transnational trade, protect the disadvantaged and distribute resources according to some shared standard of equity. Thus Judt cautions that it is wrong to read nationalism and the nation-state as anachronisms; they can be the most modern of institutions.