Bill Emmott > Masayuki Tadokoro
You are quite right that the improved global economic data seems somewhat in contradiction to the sense of political crisis, or at least extreme volatility, amid the rise of nationalistic forms of populism. However I do not think we should take very much comfort from this development, at least not unless it lasts for several more years and has a significant impact on the living standards of a large proportion of our fellow citizens.
Why do I say this? Well, for two main reasons. The first is that we must remember that Donald Trump was elected in what was in fact already the sixth year of America's economic recovery, one in which unemployment was falling fast. Indeed, the pace of creation of new jobs, net of those disappearing in the normal cycle of economic evolution, has been slower in President Trump's first year in office than in President Obama's final years. Although it is understandable that Trump should want to claim the US is in some sort of boom thanks to his presence in the White House, this is entirely wrong. But in any case, the fundamental point is that economic growth, measured simply by overall expansion in GDP, is not sufficient to change the politics, whether in America or in Europe.
In continental Europe GDP growth really is accelerating after a longer and bumpier recession than in America, but we still have strong support for nationalist-populist parties all over the continent. And, as you say, Chancellor Merkel, Europe’s longest-serving and in many ways most respected leader, has struggled to form a government in Germany, even though that country has low unemployment and a prosperous economy. The point is that populism has arisen thanks to the growing sense of inequality both in incomes and in terms of security of all kinds that has arisen especially since 2008, but was already developing before then. Better economic growth may improve the mood, but it does so mainly for the already rich and secure. At present, it is having too little impact on the life chances and sense of vulnerability of the sort of working class citizens who switched from the Democrats to vote for Trump, or the people of working and middle classes who in Italy feel they or their children have little chance to get a good job or a mortgage or even get married.
The second reason is that economic motives are not the only ones that have fueled nationalist populism. There is also concern about immigration, which is of course partly economic, thanks to perceived competition for jobs or welfare benefits, but is also about culture, about identity and about fears of terrorism. It is this issue which has most weakened Chancellor Merkel, as well as strengthening the more nationalist parties in countries such as Sweden, Austria and Italy. And it is immigration which was the single most powerful reason why Britain voted for Brexit in 2016.
We British are in probably the worst political mess of all. We have voted, quite narrowly (52% vs 48%), to leave the European Union after 43 years of membership. But our political leaders, even those who advocated that we should leave, are finding it extremely hard to resolve the contradictions between different forms of Brexit, i.e. different forms of future relationship with our European neighbours, especially Ireland. Britain is committed by a treaty signed with Ireland in 1998 to maintain close economic co-operation between Northern Ireland, which of course remains part of the UK, and the Republic of Ireland. No one, either in Dublin, London or Belfast, wants border controls to have to be reinstated between the North and the South, because they could become targets for renewed terrorism and spark a revival of the civil war that killed more than 3000 people in the 1970s and 1980s. But if Britain wants to use its freedom from EU membership to have a sharply different trade policy from the EU, and to use deregulation to try to stimulate business, then border checks are going to be needed.
If we don’t differentiate ourselves on trade and regulation, then why bother to leave the EU? You might think our politicians could have thought about this more deeply before the referendum, and you would be right. But they didn’t, and the resulting uncertainty surrounding Britain’s future is harming our economy. While the rest of Europe is enjoying accelerating growth, ours has slowed. It hasn’t collapsed, but we are definitely proving unable to exploit the upswing in global growth that you rightly mentioned, because businesses are proving unwilling to invest in the UK amid all this uncertainty. Yet although public opinion is quite critical of the pro-Brexit politicians over this chaos and indecision, it has not yet swung sharply in favour of staying in the EU. Why not? The main answer is immigration. People know that if we stay in the EU, we will not be allowed to limit immigration from other EU countries. Now, I would argue that immigration by Europeans has benefited Britain, because the vast majority of such immigrants are well educated. It is a “brain gain” for the UK, and a “brain drain” for the countries such as Italy, Spain and Poland from where most of the immigrants come. But it is politically sensitive. This is why the opposition Labour Party has not sought yet to exploit the Conservative government’s disarray over Brexit by opposing it: they fear that many of their working class supporters want to limit immigration from the EU, so that they could lose support if they started to advocate a new referendum to stay in. Labour is keen to remember Britain’s “forgotten men and women” who voted for Brexit.