Schumpeter and Brexit: Same Old Story, Different Ending

Joseph Schumpeter wouldn’t have been surprised by Brexit, but would blame British elites for putting it to a referendum and then walking away from the consequences. 

 

 

Anti-Brexit protest near the Houses of Parliament, London. Photo by ChiralJon [CC BY 2.0], via Flickr

In Sociology of Imperialism (1919),1)Joseph Schumpeter, “The Sociology of Imperialism,” in Two Essays by Schumpeter: Imperialism and Social Classes (Cleveland, Ohio: The World Publishing Company, 1951). Joseph Schumpeter describes protectionism and nationalism as a quintessentially British game of domestic politics, albeit one that parliamentary elites are usually too responsible to carry through.

 

In Schumpeter’s telling, this rhetorical tactic of tariffs and nationalism—Schumpeter referred to this as a certain brand of “imperialism”—became ingrained in British parliamentary politics with the repeal of the Corn Laws, which regulated grain imports in the mid 1800s. However, while these nineteenth century debates and political rhetoric bear uncanny similarities to the ones that generated the Brexit referendum, the response of contemporary British parliamentarians is something Schumpeter would have never anticipated.

 

‘Imperialism as a Catch Phrase’

 

In 1846, recounts Schumpeter, Conservative Prime Minister Robert Peel went against the protectionist position of his party to champion free trade. While Peel’s success at instantiating free trade policy was an economic boon for Britain, it completely “wrecked” the Conservative party. Without a pro-Corn—i.e. protectionist—position to stand on, the party lacked a platform or any semblance of a positive position. In the ensuing election campaign, the Conservatives were so uncertain of their own cause that “their opponents were able to claim with some justification that [their] candidates were protectionist in rural districts and free trade in urban ones.” Obviously, given the sharp increase in economic prosperity, a return to being the Corn Party was “out of the question,” and therefore, the Conservatives had nothing left to offer their “hard-core followers.”

 

Following their subsequent electoral defeat, and after roughly a decade of Liberal dominance under William Gladstone, Conservative leader Benjamin Disraeli realized that a radical reformulation of the Conservative party’s platform was necessary. While criticisms of Gladstone generated substantial political capital, it was not enough to rally a majority of the electorate behind the Conservatives. During the election campaign of 1874, Disraeli proposed an “Imperial Federation” as the new vision for Britain, and thus inaugurated a long rhetorical tradition in British parliamentary politics, which Schumpeter calls “imperialism as a catch phrase.” 

 

Valuable as a Slogan, but Never as Policy

 

Disraeli outlined how the British empire was to form an exclusionary customs union, in which the products of the mainland and the colonies were to be reserved for English men only. A defense system was to be created, and the whole structure was to be crowned by a central representative organ in London, “creating a closer, living connection” between government and people. The Imperial Federation appealed to national sentiment, and, from the beginning, the “battle cry against ‘liberal’ cosmopolitanism… emerged sharply.”

 

Disraeli’s tactic, as a whole, makes sense for a variety of reasons: Protectionism, Schumpeter writes, has much to offer to a whole series of special interests—”primarily a protective tariff and the prospect of lucrative opportunities for exploitation,” which provided the chance to “smother consumer resistance in a flood of patriotic enthusiasm.” Moreover, protectionism later became even more attractive as “certain English industries were beginning to grow quite sensitive to the dumping tactics employed by German and American exporters.” Most importantly, he continues, nationalism always lurks in the background of any political situation, for it “satisfies the need for surrender to a concrete and familiar super-personal cause, the need for self-glorification and violent self-assertation.”

 

According to Schumpeter, the Imperial Federation’s militarism, protective tariffs, and “ideology of a unified ‘Greater Britain’” all foreshadowed “vague aggressive trends that would have emerged soon enough if the plan had ever passed from the sphere of the slogan into the realm of actual policy. While the “slogan” and ideology of a “Greater Britain” was politically valuable, no one ever seriously considered affecting policy change on this basis—least of all Conservative elites. According to Schumpeter, Disraeli’s political genius consisted of using nationalist rhetoric and protectionist positions to speak against Gladstone’s free-trade positions, without ever acting on any such platform:

 

“That this imperialism is no more than a phrase is seen from the fact that Disraeli spoke, but did not act. But this alone is not convincing. After all, he might have lacked the opportunity to act. The crucial factor is that he did have the opportunity. He had a majority. He was the master of his people as only an English prime minister can be. The time was auspicious. The people had lost patience with Gladstone’s peace-loving nature. Disraeli owed his success in part to the slogan we have been discussing. Yet he did not even try to follow through. He took not a single step in that direction. He scarcely even mentioned it in his speeches, once it had served his purpose.”

 

After Disraeli employed this tactic, Chamberlain followed suit. In fact, the rallying cry of protectionism and nationalism was used by politicians of all stripes—not just Conservatives. Indeed, the use of this “imperialist” catchphrase “never vanished again, becoming a stock weapon in the political arsenal of English conservatism, usurped even by many liberals.  Schumpeter notes that not only was it a leading part of the Conservative press and rallies, but as early as the 1890s, the rhetorical device “meant a great deal to the youth of Oxford and Cambridge.”

 

In the 2016 Brexit campaign, as Cambridge classmates Boris Johnson and David Cameron went toe to toe on precisely the same issues, the conversations leading up to the referendum do seem to be foreshadowed by the history of British parliamentary politics.

 

“Schumpeter argues that British political elites often tapped into aggressive nationalism to win over the electorate, but that in the end, the masses would never want to make the economic sacrifices necessary to implement such policies.”

 

The Masses and the Referendum: An Analogous Case?

 

Schumpeter argues that British political elites often tapped into aggressive nationalism to win over the electorate, but that in the end, the masses would never want to make the economic sacrifices necessary to implement such policies. “As a toy, as a political arabesque,” they accepted it, “just so long as no one tried it in earnest.” Within the representative system available to the masses, voting on such platforms was the only way to send a political message. That is precisely why both liberal and conservative elites often campaigned on such platforms, he writes, but never enacted them.

 

It is here that the historical precedent and the contemporary situation diverge. In the 19th and 20th centuries, as Schumpeter explains, British elites only used nationalism and protectionist rhetoric to win parliamentary battles; they never actually entertained such policies once their electoral aims had been achieved. Doing so—that is, following through on their campaign promises—would have been far too costly for the masses. This, he says, is actually how representative democracy works.

 

But wasn’t it the masses—and not the elites—who voted to leave the European Union? Some analysts have suggested that the Leave/Remain split was classist and broke down along university attendance lines (though even this conclusion has been somewhat contested and complicated). Schumpeter’s insight suggests, however, that the British elites who flirted with such rhetoric only managed to do so thanks to a representative system in which they did not have to follow through with policy promises.

 

In other words, in the British example, employing such dangerous strategies only worked when the system is based on the electorate choosing its representatives, but never insisting on specific policy choices—especially ones that would be so contrary to the economic interests of the people as a whole.

 

Comedian John Oliver recently highlighted the fact that when the Brexit referendum was called, ordinary British people expressed clear hesitation about making such a consequential decision on a complex and—up to that moment—relatively foreign policy to them. Leading up to the referendum, the electorate knew and even admitted that the Brexit decision was too complex for the majority of the people to draw a conclusive position. All they could do is trust that their representatives, in calling for a “Leave” vote, were confident enough that they would be able to execute it (or not), as has always been the case in their representative democracy. They may often be wrong about this, as Schumpeter notes, but “the masses are never hypocritical”.

 

Instead, what did British elites do? They invoked protectionism and nationalist rhetoric, and then pushed an unfamiliar and highly complex policy choice to the masses to wash their hands of any responsibility for the outcome. Once the “voice of the people” had spoken, the politicians who vociferously called for Brexit refused to take leadership and manage the outcome. At this point, it is worth remembering that the parliamentarian who was tasked with negotiating a deal to leave the European Union is one who voted to stay in it. It is also worth noting that Vote Leave’s biggest champions, Boris Johnson and Nigel Farage, not only refused to take the reins at the time, but currently refuse to offer any kind of public suggestions for the current negotiations.

 

Schumpeter certainly did not view political elites with rose-colored glasses. But he would have been shocked to see British parliamentarians tempting the fate of the nation towards pernicious nationalism and protectionism and then refusing leadership. The whole point of rhetoric is to win the electoral battle, not to evade political leadership once it has been won.

 

Instead of blaming the working classes who voted to leave the EU, Schumpeter would recommend political elites be more honest about themselves and the dictates of representative government. In a representative democracy, voters elect people who make policy decisions for them, and those decisions usually (or even often) don’t follow specific policy mandates from the people. Moreover, an electoral system that deploys referenda only occasionally undermines its efficacy. That is to say, after relying almost exclusively on elections for hundreds of years—elections that have historically never implemented policy choice, but rather only selected representatives—haphazardly inserting a referendum will rarely prove effective. Voters are not prepared to make complex choices in such circumstances, nor do they have a clear sense of how these decisions will be implemented. That doesn’t mean that the institutional mechanism is ineffective in and of itself, or that the mass citizenry is incapable of governance. 

 

Given the history of parliamentary politics, the portrayal of Brexit as a policy decision meant to give “the people” more power over their government was probably dishonest from the start. The British elite may want to come to terms with their past use of nationalist/protectionist rhetoric, and govern more responsibly moving forward without blaming the electorate for the current constitutional crisis it caused.

 

Natasha Piano is a political theorist and PhD candidate in the Department of Political Science at the University of Chicago.

 

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References   [ + ]

1. Joseph Schumpeter, “The Sociology of Imperialism,” in Two Essays by Schumpeter: Imperialism and Social Classes (Cleveland, Ohio: The World Publishing Company, 1951).