How Brexit was achieved, how Trump was elevated.

At the beginning of July 2016, Britain voted to leave the European Union, despite the fact that almost every authority across the world warned that the financial and economic consequences would diminish the wealth and wellbeing of a majority of the UK population. The “Vote Leave” campaign fought on a mix of economic half-truths or downright untruths; invoking hatred of immigrants and foreigners as their trump card. Since the vote it has become clear that the powerhouse behind Leave has been in the parts of Britain’s heartland that have suffered most from economic decline and citizens often of lesser education than those who supported Remain.

Many people felt that immigrants had undercut them and stolen their jobs, had received preferential treatment for housing and were overwhelming already stretched and underfunded public services.

But the most striking feature is the fact that a majority of the populace had come to distrust people and institutions that represented Authority, so the referendum represented an opportunity to exercise some influence.

Erosion of trust and Social Capital

Reducing trust and social capital

Gross inequality has been proven to cause separation and schisms in a society. The poor tend to be driven into ghettos and economic wastelands, where repeating cycles of poverty, poor education and social inclusion tend to feed ill-health, crime and economic deprivation. On the other hand, more wealthy citizens tend to become physically separated from the poor, and to develop theories about the causes of poverty (“their own fault”), spurred by the popular media. Meanwhile the very rich are able to exclude themselves from civil society, exercise power to secure their positions and avoid paying their dues to the societies that actually support them. The congregation of the super-rich in certain parts of London, with very negative effects on the city around them is a very good example of this.

Good evidence by many researchers shows that extreme inequality has an effect, not only on the poor, but increases stress and intolerance in society as a whole. Politics becomes more conflictual - and the capacity of a society to escape from a descending spiral of inequality and social decay becomes less and less. Thus the very fabric of society begins to degrade.

In a nutshell, Inequality decreases Social Capital…

The World Bank believes that: 'Social capital refers to the institutions, relationships, and norms that shape the quality and quantity of a society's social interactions... Social capital is not just the sum of the institutions which underpin a society - it is the glue that holds them together' (The World Bank 1999)

The central thesis of social capital theory is that 'relationships matter'. The salient idea is that 'social networks are a valuable asset'. Interaction enables people to build communities, to commit themselves to each other, and to knit the social fabric. A sense of belonging and the concrete experience of social networks (and the relationships of trust and tolerance that can be involved) can, it is argued, bring great benefits to people.

Trust between individuals thus becomes trust between strangers and trust of a broad fabric of social institutions; ultimately, it becomes a shared set of values, virtues, and expectations within society as a whole. Without this interaction, on the other hand, trust decays; at a certain point, this decay begins to manifest itself in serious social problems... The concept of social capital contends that building or rebuilding community and trust requires face-to-face encounters. (Beem 1999: 20)

There is very strong evidence that communities with a good 'stock' of such social capital are more likely to benefit from lower crime figures, better health, higher educational achievement, and good economic performance.

The alienation of the 'middle'

This example is drawn from British experience, but seems to be consistent also with that of the US.*

“People with middle income and wealth levels located somewhere between the 30th and 70th percentiles are trapped between the two extremes of rich and poor. Despite having fared better than the relatively poor, they are beginning to react to emerging facts about the growing divide between them and the rich and their mood is becoming increasingly sour. They are assailed by stories of the wealth of those in the financial markets and top management and for those living in London and the South East. They are beginning to understand that the soaring price of housing is caused by the burgeoning wealth and consumption patterns of people in the financial markets.

It is this group that suffers most from the plethora of scandals and scams caused by the behaviour of the banking, mortgage, insurance and financial services industries. Several million people have been adversely affected by pensions mis-selling, dodgy endowments, sub-prime mortgages and a host of other well-publicised swindles and mistakes. So as a group, the income and wealth they have now appears to be far more stretched – housing, energy costs, provisions for old age, costs of university education and longer financial dependence of their children all eat away at what should be a comfortable life style.

At the same time, experience in the workplace is often of increasing stress and pressure, declining security of employment and apparently, work satisfaction. And in the world around them, they are likely to be most aware of and affected by those aspects of society that appear to be in decline.

To cap it all, they are constantly bombarded by the media with stories of crime, failings in the healthcare system, runaway immigration and a continual negative narrative about the state of society. When there is good news, it tends to be drowned out by a chorus of gloomy stories.

Is it any wonder that they are so easily influenced by the doomsayers and the culture of blame which is the one part of the traditional middle class newspapers that they tend to believe?

This same mood towards those above them - ('Fat cats') - and below - (‘yobs, immigrants, scroungers and criminals’) generates little sympathy for taking action to rectify the problems caused by inequality. "I've got enough problems taking care of myself and family in an increasingly insecure, unfair and dangerous world", might be the motto of the middle.

So the glue that holds society together becomes degraded, and society more and more resistant to being governed. This in turn fosters the growth of political extremism and political movements based on nostalgia and protest”.

*Sustainable Paths to Community Development, Charlotte and Don Young; School for Social Entrepreneurs, 2011.

Sources, YouGov and other surveys

The Pay-offs

Trump and Brexit

The wild and unprincipled behavior of large corporations in industrial, commercial and finance sectors, which is a direct result of weak regulation and in particular, the values induced by free market philosophies, is resulting in a backlash from the majority of citizens. In conjunction with corporate power, it is widely believed that the political elite is deeply in hock to the institutions of power and wealth, thus excluding the average citizen. In America, once believed to be the land of opportunity for all who were willing to take risks and work hard, it has become obvious that the wealthy have captured power, but worse still, have reserved unfair advantages and opportunities to themselves. The result is rage and frustration, which has taken the form of political extremism. Two candidates for president of the United States, Bernie Sanders and Donald Trump, have captured popular support. Trump has sought to place the blame on external forces, such as immigrants, aliens and the evil machinations of foreign countries such as Mexico and China. This is a well-trodden path, many governments in the past have sought to distract from problems at home by conjuring up hatred of “The Other”.

Bernie Sanders has focused his ire on an internal, but distant “Them” in the form of central government, machine politicians and Big Business.

In both cases they have aimed at distant targets, beyond the perceived power of the average citizen to influence, but Sander’s aim is more rational. The American malaise is largely home-grown. Massive power centres have grown in Wall Street and Washington DC, which are currently beyond the influence of governments and democratic influence.

“Brexit”, founded on distrust, anger and growing hatred of “The Others”

In Britain, the recent vote to leave the European Union has similar roots. The majority of the populace has felt powerless to influence government to act in their interests as inequality has burgeoned. The resulting anger has been a rich recruiting ground for populist and often mendacious politicians who are only too willing to blame “others”, immigrants and a distant European Union for the sufferings they feel.

The result is an angry and hugely disunited country, political chaos and outbreaks of racist violence, which risks still further decline that will affect the poorest still further, and a descending spiral of reducing personal and societal wellbeing.