News Release

Brexit Freak Out and the Reaction to Interventions and Austerity

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ROBIN HAHNEL,
robinhahnel[at]comcast.net
Hahnel is professor emeritus at the American University. He is best known as a radical economist and co-creator of a post-capitalist economic model known as “participatory economics.” His ten books include The Political Economy of Participatory Economics (Princeton University Press). He just wrote the piece “Brexit: Establishment Freak Out,” which states: “It is comical to watch the establishment on both sides of the Atlantic panic over short-run economic damage due to market ‘over reaction,’ because any danger of this is due to their own negligence.

“Only because the establishment has hitched our economic destinies to the whims of financial markets is there any need to worry that Brexit might trigger yet another global meltdown. Only because the establishment failed to implement prudent, financial regulation in the seven years since the last financial crisis crashed the global economy is there any danger today. Only because the Cameron government and the European Commission responded to the Great Recession with counterproductive fiscal austerity is a return to deeper recession in Europe quite probable. But we can be sure of one thing: All negative economic trends will now be blamed on Brexit and the populist ‘mob’ who brought it on, rather than on the establishment’s neoliberal policies which are actually responsible.”

MICHAEL HUDSON, michael.hudson[at]earthlink.net
Hudson is a distinguished research professor of economics at the University of Missouri, Kansas City. His most recent book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.

He said today: “Much of the discussion around Brexit takes place as if people who voted for Brexit don’t have any logical or rational reason for doing so.”

In an interview with The Real News, “How Western Military Interventions Shaped the Brexit Vote” just after the vote, Hudson argued that the U.S. and NATO interventions, especially the overthrow of Muammar Gaddafi in Libya — pushed by Hillary Clinton — helped the rise of ISIS, leaving populations with “no choice but to either emigrate or get killed. … Last week when I was in Germany you had the Social Democratic Party leaders saying that Russia should be invited back into the G8, that NATO was taking a warlike position and was hurting the European economy by breaking its ties with Russia and by forcing other sanctions against Russia.

“So you have a convergence between the left and the right, and the question is, who is going to determine the terms on which Europe is broken up and put back together? Will it simply be the right wing that’s anti-immigrant? Or will it simply be the left saying we want to restructure the economy in a way that essentially avoids the austerity that is coming from Brussels, on the one hand, and from the British Conservative Party on the other. …

“You have Geert Wilders, the leader of the Dutch nationalists, saying, we want Holland to have its own central bank. We want to be in charge of our own money. And under Brussels [the EU headquarters], we cannot be in charge of our own money. That means we cannot run a budget deficit and spend money into the economy, and recover with a Keynesian-type policy.” See also Hudson’s interview “How We Got to Junk Economics.”

COSTAS PANAYOTAKIS, [in Greece], cpanayotakis[at]gmail.com
Panayotakis is associate professor of sociology at the New York City College of Technology of the City University of New York and author of Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy. He has been published in numerous journals including Monthly Review and Capitalism Nature Socialism. He commented on the  accuracy.org blog: “The Brexit vote may have partly been an expression of right-wing xenophobia but it is also an expression of disgust across the continent with the neoliberal monstrosity that the EU has become. It remains to be seen, of course, whether the result will be honored. In the past, European political and economic elites have often ignored referendum results they didn’t like by cranking up Pro-European propaganda and repeating the referendum so that the sovereign people could ‘correct’ their mistake.”

Also see at accuracy.org/blog commentary by James Paul.