Lessons from the referendums in Yugoslavia

Catherine Baker, a historian, argues that Brexit has echoes of the break-up of Yugoslavia: “The break-up of Yugoslavia took the public through a downward spiral of collapsing expectations, each dragging people into a new sphere of uncertainty and fear: from the Yugoslav system being more successful than its capitalist and Warsaw Pact neighbours, to the reverse; from it being unthinkable that the union of republics would break up, to it seeming inevitable that it would; from living an everyday working life to seeing your standard of living and the whole economy collapse beyond repair; from Communism being the ideology you learned at school, to an entire system of political power and property ownership falling apart; from moving normally around your town, to fearing for your safety on the streets, based on what others read as your ethnicity. Even if these were ill-founded – historians still debate whether or not Yugoslavia had too many long-term weaknesses to be viable when it was unified in 1918 – they were part of people’s common sense, until they could not be. When I teach courses about the break-up of Yugoslavia and the social contexts behind the 1990s wars, British students start seeing their own society differently. The issues at stake for Britain and its constituent entities have many resonances with, and important differences from, Yugoslavia – but perhaps the most troubling parallels come from how politicians and the media brought Yugoslavia to the point of collapse and co-operated to intensify fear and hatred once Slovenian and Croatian secession was inevitable.” Similarly, another historian, Fedja Buric, argues that “The Brexit referendum, like any other, was supposed to let the people speak. The trouble is, that they did not speak in unison and now the raison d’être of this multinational state has disappeared. In the early 1990s, Yugoslavs also went to their referendums to determine their willingness to stay in another federation. The result was bloodshed and the fragmentation of Yugoslavia into squabbling, dysfunctional mini nation-states. What can a dead country teach the (barely) alive one? The Yugoslav case defies the notion that democracy is an essential good in itself, that it brings stability and that it liberates people. In Yugoslavia, the 1990s began with a genuine mobilisation of grassroots engagement with the political process. New political parties sprang up overnight. People demonstrated, asking for all sorts of things. Referendums were announced. New futures were promised. The decade ended in a bloodbath, the country tearing itself apart into dysfunctional or nonfunctional nation-states.  The end tally: over 100,000 dead, more than 2 million displaced, new borders erected and a future poisoned by hate, division and nationalist-coloured corruption. If there is one lesson the UK should take from Yugoslavia it is this: referendums are terrible. These brief exercises in direct democracy not only fail to solve existential societal questions, but they bring to the fore societal divisions that had previously been channeled into civil political discourse (like in the UK) or, yes, been politically repressed (like in the case of Yugoslavia). What the Brexit debacle should teach us is that referendums are more often than not populist tools that allow demagogues to use the politics of resentment in a democratic way. Sure, referendums are democratic. But, they can also be deadly.”

Brexit and Fuzzy Logic

The Brexit issue defies binary logic. The UK was not cleary inside the EU ten days ago, and will most probably not be clearly outside the EU 10 years from now. I would recommend not accepting a bet about whether the UK will eventually be in or out of the EU some day in the future. It will be impossible to prove whether you won or you lost the bet. In my view, the relationship of the UK element with the EU set is a clear case of fuzzy logic.

That’s one of the reasons why binary sovereignty plebiscites are a bad idea: the in/out referendum projects an impression of false clarity when the issue is complex and ill defined.

Financial markets after the first week have not been as negative as some had expected. But contrary to what Krugman argues (as you can see, I am high in self-esteem today) perhaps it is not because Brexit is not so bad in the short run, but because Brexit has actually not taken place. The leaders of Brexit are divided, the UK government does not want to invoke article 50 yet, and a new consensus is evolving by which the UK basically wants to keep all the rights and obligations of EU membership perhaps without sitting in the (main) table. Among other reasons to avoid the break-up of the UK itself. I am not the first to argue that sovereignty events are difficult to interpret: does a setback to anti-secessionists increase or decrease the probability that secession will take place? Well, it depends on the evolution of subsequent events. And events after the referendum have not been very good news for the brexiteers. They are not only divided but they have been exposed as liars and reckless. It is not clear at all that they are prevailing.

Where were the superforecasters?

Predicting methods are among the losers in the Brexit referendum and in the Spanish election. The night before the referendum I confidently sent an email to some friends reassuring them that betting and prediction markets were safely forecasting a remain victory, almost for sure. My apologies. The Economist immediately wrote an article after the referendum claiming that polls were better than prediction markets, because the latter were victim of all the behavioural biases that affect financial markets. However, four days later, polls also miserably failed to predict the Spanish election. Poll results published the night before the election (as well as those published during the campaign) predicted that the Socialist Party would be clearly overcome in votes by the populist left, and that all the leftist parties together would have more seats in Parliament than the sum of the right and the center-right. Even in the election day, exit polls made a similar predicition, only to be ridiculed by the real results a couple of hours later. With the benefit of hindsight, pundits have concluded that the Brexit result had a significant impact on a decisive part of the electorate: conservative voters rallied around the Popular Party and the populist left lost some cautious voters. If this is true, this would not be an explanation for the polls from Friday to Sunday. The impact of the Brexit result on the Spanish election is not a random issue. The Brexit result was a clear possibility, and once it took place, its impact on voters was not something that could not be explained. The political chaos that followed the referendum in the UK was a warning against those parties that promote plebiscites and that do not have a clear commitment to the European Union. The referendum provided information (a public good) that was relevant in Spain. The consequence was that the populst left would lose a significant number of votes (other were lost during the campaign for other reasons). Both polls and predicition markets got it wrong. Next time we should mobilize Tetlock's superforecasters.

A lesson to Andrew Marr and the BBC

One of the things I've always admired from the UK is the BBC. This admiration has been eroded during the recent referendum campaign by the impartiality of the network between clowns and experts. This morning, the first edition of the Andrew Marr Show in BBC1 after the Brexit referendum, has been a clear and shameful example. In the section of the program devoted to commenting the headlines in the newspapers, Mr. Marr interrupted Polly Toynbee from The Guardian because she was mentioning the obvious lies of the Brexit campaign (the money "saved" from exiting the EU, the control of immigration...). He felt obliged to interrupt a prestigious journalist such as Mrs. Toynbee and tell her that the Remain campaign had also lied. She replied something like "here we have the BBC, on the one hand this, on the one hand that..." She should have been much tougher. The BBC should be first committed with the truth, and any objective, not impartial, observer, will akcnowledge that the amount and significance of lies in the Brexit side have been enormous. As Paul Krugman always denounces about the US media, it is not acceptable that they (especially collectively owned media) behave with impartiality between, for example, creationism and evolution. Andrew Marr should learn a lesson from journalists in the competing network ITV when they interviewed the soft fascist leader Nigel Farage and were appropriately tough on him for his lies. Populist referenda are so poisonous that they can even destroy the reputation of institutions that have done so much for democracy like the BBC.

Rodrik, his trilemma and the morning after

Since Paul Krugman has almost "copied" the title of my first post today, I can't help but write a second one (will he copy this one?). Contrary to what Dani Rodrik himself seems to argue in a post some days ago, the victory of Brexit in the UK's referendum is not a victory of democratic politics, but a victory of the nation-state. I don't know about Nigel Farage (does he?) but Boris Johnson and Michael Gove do not want to abandon an integrated global economy. If they claim to be the great defenders of the sovereign nation-state and want Britain to be successful in a world with free trade, the piece of Rodrik's trilemma that has to be abandoned is democracy. And it is. First, this referendum has been a mockery of democracy, as it is very well explained in the blog "Stumbling and Mumbling". Second, it is not clear what specific project has won this referendum. Now it seems that Boris Johnson is not in a hurry to start negotiations to leave the EU. Oh, you didn't know? Yes, negotiations are needed and leaving the EU is not automatic. What will happen in between these negotiations or at the end? Will Boris Johnson reach a new agreement to half-stay in the EU and call another referendum? I thought that "neverendum" was only an option for losing secessionists, but I'm not so sure now. A vote for soft fascism cannot be a victory of democracy, as argued by the blog "Notes from a Broken Society:"
Yesterday’s vote to leave the EU is a leap into the unknown. It’s becoming increasingly obvious that the winning side hasn’t a clue what happens next.  No exit strategy, no negotiating brief.  Only a vague perception that “we have taken our country back”, and a lot of noise and fury about immigration;  a vote distinguished by its virulent anti-intellectualism and an apparent belief that actually to know about a subject somehow disqualifies one from having a legitimate opinion on it.

The morning after in the UK

There is a wonderful book ("The Morning After") by journalist Chantal Hebert about what would have happened in Canada in case the secessionists had won the referendum of 1995 in Quebec. To write the book, she interviewed all the main leaders involved in that referendum campaign, and the conclusion was that nobody had a clue about how to manage a "leave" vote. Those in favour of independence were uncertain and divided about how to proceed and how to implement the hypothetical "will of the people." In the event, the "remain" vote prevailed by the narrowest of margins, the stock markets and the Canadian Dollar went up and the liberal federalists little by little recovered their political hegemony. Well, now Chantal Hebert can compare her hypothetical exercise with the real thing. The United Kingdom is today experiencing its day after. By a narrow margin, they have decided to leave the European Union. The leaders of the "leave" campaign, which include from fascists to apparently civilized conservative politicians, claim that they want to keep trading freely with the European Union countries. But unfortunately during the campaign they have not explained how will they manage to negotiate a free trade agreement with a club they just have decided to leave, or how long will it take them to reach such agreement. Meanwhile, the "remain" vote has won in Scotland and Northern Ireland, and leaders there are asking for their right to separate from a non-EU United Kingdom. The pound has descended in a few hours to the lowest level since 1985 and credit rating agencies are suggesting that they may downgrade their evaluation of British debt. Other national-populist leaders in European countries, including Marine Le Pen in France, have not yet asked for a similar referendum in their countries probably because they have not waken up yet. Turmoil in the very short run, huge uncertainty in the long run. Congratulations, Mr. Cameron. (I wrote this while listening to Nigel Farage on TV: it's scaring).

Homage from Catalonia to the tolerant Britain (a love letter)

My first flight was to London when I was 12. I fell in love with the parks and with ethnic diversity in the streets. In 1999, I remember the day when I was selected for a fellowship at the London Business School (LBS) as one of the happiest in my life. Before that, I had spent six weeks at Oxford, where I met giants of academic economics like Colin Mayer or John Vickers, while I was doing my PhD in Florence under the supervision of another English professor, James Dow. I did not become friends with any of them, but I admire them not only for the professional excellence, but for their honesty, tolerance and willingness to help in an effective way (that is, making you better). Of course, all this was possible because of the European Union budget and research programs. Then in London, I had the pleasure to work and have fun with excellent co-authors and friends like Paul Levine, Jon Stern and Neil Rickman. I also wrote the speech in Spanish of another great British economist, David Currie, when the construction of his house in Sitges (near Barcelona) was completed. All these friends are not exceptions. There is a long history of open-minded, tolerant, pro-European Britain. Not only Churchill wanted to see the United States of Europe, but the British federalists of Lionel Robbins were hugely influential in the Italian federalists of Spinelli that did so much to promote the idea of a united Europe. London, Oxford, Cambridge are much more open and tolerant than any city or region I lived in my life (perhaps with the exception of Berkeley). While I was in London and later, the deans of my institution (the LBS) where Canadian or American, and the managers of the national football (soccer) team were either Swedish or Italian. Nobody asked about your nationality or your origin. Apparently, next to this Britain that I know and I love, there is another Britain, the Britain of the demagogues and the opportunists, and the Britain of the fearful and vulnerable to cinicism (every society, as any individual, has a dark side). It is a mistake to think that a European Union without Britain could be better because it would make faster progress towards unity. A post-Brexit EU would be weaker and poorer not mainly economically, but politically, culturally and socially. And it would have to confront the precedent of a huge victory for the nationalists and populists supported by Trump and Putin. Catalonia and Spain have nothing to teach the UK about tolerance. I chose this title because one of the heroes of tolerance, the British writer George Orwell, wrote a book decades ago with the title "Homage to Catalonia," where he explained his experiences with the many British that came to Spain to fight for freedom against the fascists in the Spanish Civil War. Dear friends: thanks for everything, I hope you prevail tomorrow.