Why, more than hypernationalism, Brexit betrays a crisis of globalisation

The promised prosperity though has not materialised, save for a few. Across much of the world, the income inequality between the rich and the poor has become sharper than ever. In Europe, barring a few erratic period of growth, most nations have faced largescale unemployment. For example, at the start of 2000, over 20 million people - 9.2 % of the total labour force - in the EU were unemployed. In the second quarter of 2001, the number dropped to 19.6 million and unemployment rate to 8.7 %. But by the end of 2004, however, the number of job seekers available had risen back up to 21.1 million, with unemployment rate touching 9.2 %.

According to Eurostat data, the best period for EU's workforce was from 2005 to 2008, when the number of unemployed hit a low of 16.1 million, about 6.8 % of the working population.

Then, the global financial crisis hit in 2008 and devastated the job market. In the years since, the unemployment rate has risen steadily, touching 10.2 % in April 2016.

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The devastating impact of the 2008 crisis forced even developed nations in the EU - for long the votaries of the free market - to rethink their economic policies. According to the WTO report, the G20 economies have introduced 1,583 new trade restricting measures and removed just 387 since 2008. In just seven months from October 2015 to May 2016, these nations have introduced 145 new protectionist measures.

So, is the world, and more specifically Europe, giving up on economic globalisation? Prof Biswajeet Dhar of the Jawahar Lal Nehru University explains, "The world is increasingly realising the terms of the globalised world have benefited only a few nations, and even among them a few people."

These few beneficiaries include multinational corporations, the financial industry and inherited capital. According to the think tank Economic Policy Institute, "In the US, between 2000 and 2007, the median worker saw wage growth of just 2.6 percent despite productivity growth of 16.0 percent, while the 20th percentile worker saw wage growth of just 1.0 percent and the 80th percentile worker saw wage growth of just 4.6 percent."

In other words, the lower the worker is on the income ladder, the greater his disadvantage in the globalised economy. Why a worker ends up lower on the income ladder is determined by several factors - education, age, automation, migration, even social discrimination. Since these variables themselves are now tied with income - for example, a good education is now prohibitively expensive for vast populations in the US and Britain - the less well-off are caught in a vicious cycle.

This explains - partly at least - why while the people in London and other metropolitan areas voted to stay in the EU, those in the decaying industrial heartlands wanted out.

In the end, the optimism of those who have benefited or hoped to benefit from globalisation was trumped by the resentment of those who feel hard done by it. How the narrative of that resentment was framed - in rhetoric against immigration and the democratic deficit of the EU - is a different matter.

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