Sorry Mad Max fans, the Race to the Bottom has already begun
Its been a fun week for reviving interest in Mad Max as David Davis made an oddly-positioned attempt to reassure the British public that the post-Brexit landscape isn’t going to be a dystopian hellfire. Some news outlets leaned into the opportunity by dusting off footage of Tom Hardy strapped to the front of a truck, while others pondered the mixed messages we’re getting from the government on whether Brexit is something to be feared or excited about.
But when it comes to whether Brexit is going to lead to a ‘race to the bottom’ on deregulation, it seems everyone is asking the wrong question. Fact is, the race already began back in the 1980s with the Thatcher-Reagan “Big Bang” of financial market de-regulation that set capital free to migrate to wherever in the world it could make the highest returns. Ever since, governments have been competing destructively with each other to attract capital by keeping regulations to a minimum. For everyone, the UK’s departure from the EU will only make it worse. Unshackled from the EU, we can only imagine corporate CEOs in the UK, EU and elsewhere licking their lips anticipating a bonfire of ‘red tape’ as governments the world over vie even more vigorously with each other to keep their national economies ever more attractive to inward investors and multinational corporations.
The fact is, we’re already living in a world where keeping regulation to a minimum in order to attract big business is de rigueur for any government who wants to stay economically competitive in the global market. Sure, it may not look like Mad Max out there yet, but you shouldn’t need Charlize Theron driving an oil tanker to see the slick marks of government officials skidding around to keep standards on workers rights and environmental protections as low as tolerable to keep big business happy. That’s why problems like global warming aren’t being addressed and why wealth inequality only gets worse. We’re already living in the dystopia, you just need to adjust your driving goggles to see it.
In today’s Mad Max world-in-the-making, economic competitiveness is all. Far from being lords and masters, national governments have become the bit-part pawns of global capital, willing to do anything to attract the capital, investment and jobs needed to keep their country’s economic growth going. They have to, or risk seeing that investment go elsewhere. All our membership of the EU has historically done is stall and limit the extent to which our and other EU governments could attract that capital through deregulation, but it doesn’t mean our governments haven’t been doing it in other ways. Why do you think the corporation tax rate has fallen 37% in 37 years around the world? Why do you think we continue to turn a blind eye to tax evasion and tax havens?
What’s for sure is that Brexit can only make this death-race faster. And we know it’s a race no one can win, but everyone will lose if it carries on much longer. We’ll need to take the goggles off to look beyond the hyper-local UK-EU relationship to comprehend the vicious circle all nations are caught in.
Only then will we have any chance of doing something about it.