Brexit — a Game of Social Engineering and No Winners
The University of Zurich, Switzerland, 19 September 1946: “We must build a kind of United States of Europe. In this way only will hundreds of millions of toilers be able to regain the simple joys and hopes which make life worth living”.
These words kicked-off the discussion about the potential establishment of a geopolitical entity, uniting the most developed countries in Europe. If you wonder who is the author, make no mistake — it is Winston Churchill, the leader of the country that has now gone full-reverse on the idea of a united Europe. What happened in the next few decades is pretty well-known. In 1993, six of Europe’s leading countries formed the European Union and the entity went on to become a global leader, a symbol of freedom and wellbeing, as well as a hub for innovation and progress.
But apparently, for one of its founders, the European family started to feel narrow. It needed a change (or at least it was deceived to think so) and that is how we ended in the comical situation of Brexit.
The path to the Brexit referendum — an easy guide on manipulating people
The 2016 referendum was controversial in many ways. It started with Boris Johnson’s false claim that the UK pays the EU £350 million on a weekly basis. He added also that a scenario like Brexit had the potential to free these funds and even ensure their direct transfer to the NHS, thus improving the wellbeing and the health of the British citizens. However, the truth is that, according to the Office for National Statistics, the UK’s gross contribution to the EU for 2016 was £18.9 billion. Let’s not forget that a major chunk of these funds come back in the form of rebates, public and private credits (for investment programs, research initiatives, technical agencies, etc.). So, after all deductions, the UK’s net contribution for 2016 equals £8.1 billion (or ~£155 million per week) — a large disproportion with the figures Boris Johnson cited.
It is worth noting also that Simon Stevens, head of NHS England, warned that a recession, following Brexit, would be “very dangerous” for the NHS itself. Besides that, a poll among a sample of NHS leaders pointed out that over 75% of respondents consider Brexit’s effect on the NHS as “negative”, while 80% insisted that it will make it harder to hire medical and social care staff.
“When the British economy sneezes, the NHS catches a cold”.
Simon Stevens, head of NHS England
There is a Russian proverb that says “He lies like an eyewitness”. And when it is valid for one of the leading and most popular political figures, it is understandable why voters were deceived so easily. Fast-forward 3 years and Boris Johnson is now about to be sued for his misleading statements. However, the damage is done and people believed in the false story. This further proves that in the era of misinformation, we are getting used to not checking the reliability of what we are served, thus make irrational decisions on crucial matters.
People fell for the simplest strategy of manipulation — the false enemy that threatens to make your life worse. In his brilliant novel “1984”, George Orwell describes the way the ruling party manipulates people by constant propaganda about a fictional evil enemy from abroad that threatens their freedom and well-being. In the book, the strategy works perfectly. In practice, it worked even better. People were deceived and 51.9% of voters opted for “Leave”.
In his book “How to Lie with Statistics”, Darrell Huff describes simple, yet very efficient methods for using statistics to deceive the audience and influence their choices. By highlighting specific sections of a chart; playing around with the sample quality and quantity to fit the plot; misrepresenting or manipulating small, yet relevant factors; tailoring the most appropriate timing to conduct a study; ignoring important points that should be considered for a particular research or poll and so on and so forth — the informed usage of these simple techniques is capable of ensuring a major advantage. Considering the mathematical and statistical background of some of the key figures behind the “Vote Leave” campaign, it is understandable why they used the necessary tools to misrepresent information so successfully. Here are some examples:
- The countries set to join the EU
Relying on the aggressiveness of the old-school flyer-based marketing, “Vote Leave” printed and distributed a very misleading leaflet about the “countries set to join the EU”. The deceptive data visualization was focused around the likes of Albania, Macedonia, Serbia, Montenegro and Turkey as the next EU members. This is highly misleading because these countries have applied and are yet to be (if at all) approved to join the EU family. There is no guarantee that they will ever join the bloc. In fact, Turkey’s submission dates back to 1985, almost 35 years ago, and the country’s application is still far from approval.
On top of that, countries like Syria and Iraq, highly destabilized and conflicted war zones, outside the borders of Europe, were also highlighted, while the rest of the European map was left grey. The idea was to influence voters on a subconscious level and make them perceive the EU more of a threat to the UK’s sovereignty, rather than a positive ally and a source of benefits.
However, things get even more misleading with the next picture, where Iraq is also thrown in the mix and coloured in almost the same tone as the “countries set to join the EU”, while Syria is in orange. There is also a breakdown of each country’s population and an arrow from the red zones, straight to the UK, indicating a potential influx of migrants.
- “Breaking Point: The EU has failed us all”
UKIP, Nigel Farage’s party, which was the more aggressive Brexit-promoter, also unleashed its creativity and designed a flyer, visualizing a hundreds-of-meters-long queue with migrants. The accompanying text, urging to take the control of UK’s borders back, implied that all these migrants were heading to Britain, and the only salvation from that threat appeared to be ticking the box “Leave the European Union” on 23rd of June.
Although the author of the image came out and revealed that the shot was made at the Slovenian border, it was already too late. The idea of the whole poster campaign was to instil a sense of fear in voters and urge them to take action by “protecting” UK’s borders from the invasion.
However, such a strategy came as no surprise, given the history and the public statements of Farage and co. A few hours after the result of the vote came out, pro-leave leaders started explaining how the promises on the NHS spending would not be met, the EU immigration couldn’t be controlled and leaving the EU could take several years. Add to that Farage’s ridiculous claims about migrants and the sex attack threat they posed to British women, made just two weeks before the vote, and there was the recipe for uniting those, eligible to vote but not so keen on reality checks.
Getting back to Orwell’s “1984” — in the novel, the ruling party and its leader (the Big Brother) engineer a collective hatred against a fictional enemy that is not seen or whose actions haven’t had any real-life implications, but are still proclaimed to be significantly damaging and threatening for the citizens of Oceania. From a psychological point of view, all this is necessary in order to distract, unite and focus the collective anger, while at the same time paint the political elite as saviours. Or in the case of Brexit — to result in support for those, promoting the idea of how damaging an EU membership is and unite voters who do not have a strong position or are easier to manipulate.
“Remain” vs “Leave” — political branding and the power of words
During the 10 weeks of the “Leave” campaign, the odds from Betfair, one of the leading betting houses in the UK, were suggesting a crushing victory for the remainers. The probabilities ranged from 60% to 83% (66% on average) for IN and from 17% to 40% (33% on average) for OUT. If that was the case, how did “Leave” manage to win against the odds? The answer is that the “Leave” campaign was more organized, more influential and more aggressive. In fact, researches point out that the public trusted Boris Johnson’s words more than any other politician at the time.
“Vote Leave” won because of some wise political manoeuvres and a thorough strategy comprising three main pillars:
1) Take advantage of the circumstances
The result from the referendum was helped by the recency bias of voters. The “Leavers” highlighted the recent shaky situation in Europe and unfavourable events, such as the Euro Crisis, the Global Financial Crisis and the immigration crisis. Although some of these events hadn’t been directly caused by the EU or a fault of its members, they affected the perception of the union in a negative way. Although some of these recent instabilities in Europe had nothing to do with the idea of the referendum itself, political leaders capitalized on their negative effect and managed to level the playing field.
They did that by asking the audience a simple question: “Are you happy with the way things are”? It is typical for us, as voters and members of society, to perceive such a question as an opportunity to express our frustrations and desire to change the status quo, rather than to focus on the positives. Taken out of context or without any accompanying information, the question, itself, was an easy way to tickle the audience’s anger and steer it in a particular direction. The most popular answer from the respondents, of course, was “No”. Although there was no alternative provided, the reasoning behind such a question was simple — to turn people against the status quo and to paint the current situation in a negative way. Without guarantees about the “new reality” or any real proof why the post-Brexit life may turn out to be a better one, swing voters were massively influenced in their decision.
What the “Vote Leave” also did brilliantly was to avoid putting too much weight on pollsters’ predictions. They were confident that even if the initial projections were showing a 50–50 parity or even a slight advantage for the remainers, in the end, “Vote Leave” would grab the win. This was all because of the bias, typical for such type of researches. Leavers considered all the relevant factors that were capable of affecting pollsters’ predictions, such as the fact that most pollsters lived in London, which meant they communicate in a pro-EU environment with a majority of “Remain”-individuals. In the end, the leavers turned out right as a seemingly insignificant fact like this was enough to bias pollsters and tweak their predictions.
2) Be more efficient and proactive
Dominic Cummings, a Campaign Director of “Vote Leave”, described the whole process as “hacking the political system to win a referendum against almost every force with power and money in politics”. The leavers did a great job in spreading their core message across the wide audience through the campaign’s slogan — “Vote Leave, take back control”.
The whole idea was to emphasize that previously, the UK had held the control in its hands, but it was then taken away by the EU. This is important because it tickles people’s sense of nostalgia on their past, as well as the pride for the power of their country and the soul that had been lost somewhere along the road. Although the whole idea may lack transparency, the truth is that it worked.
It is when we deep dive in Cummings’ words about the roadmap of “Vote Leave” when we can put into perspective what really happened and how efficient the leavers’ actions were.
“In September we had an office, in October ‘Vote Leave’ went public, in April we were designated the official campaign, 10 weeks later we won.”
Dominic Cummings, Campaign Director of “Vote Leave”
What this proves is how a few people with a clearly-defined strategy managed to win against all odds (starting from a worse position; defending the unpopular stance among the Parliament; no control over referendum timing, Parliamentary timetable, legal rules and renegotiation; fewer resources). If not else, this is a truly admirable achievement of strategic thinking and social engineering.
3) Find the perfect timing
Leavers’ marketing campaign consisted of 125 million leaflets and almost 1 billion targeted digital adverts. It was executed through a team of 12 000 volunteers. This massive expansion, alongside with the experienced data science team, has contributed to the successful execution of the main idea behind the strategy — that adverts and messages are more effective when they are communicated closer to the decision-making moment. Cummings shares that “Vote Leave” decided to hire physicists to make the necessary projections and engineer the strategy to optimize its effectiveness, as well as dedicate 98% of the funds to digital advertising.
It is worth noting that, although “Vote Leave” achieved their goal, the win was very fragile. As Cummings points out, if only one of the factors and key points in their campaign (immigration; Turkey or the £350 million to NHS) was missing, they would have lost more than 650 000 votes and the remainers would have won the vote.
However, the analysis of the referendum’s result should not be one-sided and considered only as a win for the leavers. In fact, it is equally reasonable to describe it as a loss for the “Remain” campaign. It is clear that those in favour of staying in the EU failed to tackle leavers’ arguments on immigration, sovereignty and economic prosperity. Anyway, this wasn’t the main flaw in their campaign. What really decreased the chances of winning the referendum was remainers’ sole focus on the risk, posed by Brexit, rather than the economic, political and social benefits of the EU membership. Why is this important? In the perception of voters, having a solid stance and a clearly-defined position holds more value than contradicting the opposition. Or in other words — highlighting the benefits of something, rather than the negatives of the rivals’ position affects an individual’s decision-making way more significantly. It is quite the same with a situation where you are selling a product — if you focus solely on communicating the risks from using your competitor’s product, rather than describing the benefits and key selling points of yours, you will have a hard time growing your sales and winning over the neutral segment of the market. In the case of Brexit, this is exactly how the “IN” campaign lost over the swing voters, which proved to play a decisive part for the final result.
But let’s get back to the fact that, in the end, leavers’ strategy worked wonders and defied all odds. A big part of the success, however, was due to the flawless execution of leavers’ tactics. Another key factor that proved decisive for the result of the referendum was the voters’ demographics. The analysis of the age and the education factors prove that “Vote Leave” succeeded in reaching the right profile of voters:
According to Opinium, a market research consultancy, 64% of citizens in the age of 18–24 and 90% of those aged 65 and above voted. Among those aged up to 25, 70% — 75% voted “Remain”. Additionally, 54% of citizens in the age group 25–49 voted “Remain”, whilst 60% of 50–64-year-olds and 64% of those over 65 voted in favour of leaving the EU.
Additionally, a study published in the European Journal of Political Economy found out that the common profile of “Leave” voters was associated with white ethnicity, older age, lower education, rarer use of smartphones and internet, low life satisfaction, social benefits and adverse health.
All this proves that the older generation had the feeling of “nostalgia” for the life outside the EU and the belief that once outside the union, the UK would be capable of regaining its past glory and prosperity. Aside from that, voters aged 65 and above are thosе affected the most from Johnson’s fictional weekly influx of £350 million to the NHS.
YouGov found out that 68% of those having a university degree voted “Remain”, while 70% of those, having only Secondary education or lower voted “Leave”. Additionally, Sir John Kevin Curtice, a political scientist, a Professor of Politics at the University of Strathclyde and a Senior Research Fellow at NatCen Social Research, concluded that 75% of university graduates voted “Remain”, whereas 80% of voters without any educational qualification opted for “Leave”.
This is not something unusual as in developed countries, educated citizens usually have a broader perspective and a progressive mindset, that help them acknowledge the real value and economic benefits of globalization, European membership, Single Market, etc. On the other hand — voters with lower education are more likely to have a more conservative profile and a limited understanding of politics, social and economic development.
Another important thing to focus on here also is the role of media. Although passively, it contributed to the progress of the “Leave” campaign due to tabloids’ and popular newspapers’ anti-EU stances. From shock-seeking papers like the Daily Mail, the Daily Telegraph, The Sun and the Daily Express, to highly-credible media like BBC, all were criticized by remainers for the way they handled the whole process and the provision of false-balance and special coverage of pro-Brexit arguments.
When it comes to social media, in order to track users’ opinions on the Brexit topic, it is worth taking a look at Twitter as the most utilized channel at the time. An interesting study focused on the use of hashtags concludes that there were significantly more “leave” hashtags. However, if we take a closer look, we will see that the majority of all tweets (“leave” and “stay” included) come from outside the UK.
This highlights another interesting point of discussion about the way social media and outsiders can influence those who lack a clear position. It also raises the question of potential manipulation with the help of automation. In the “Computational Propaganda During the UK-EU Referendum” study, by analyzing tweeting patterns for both human- and computer-generated tweets, the authors conclude that political bots have a small but strategic role in the referendum conversations. The findings suggest that the word cloud of pro-Brexit hashtags dominates and point out that <1% of sampled accounts were responsible for over 30% of all messages.
Another study by researchers at the City, University of London identified more than 13 000 Twitter account that posted 65 000 messages, the majority of which favoured the “Leave” vote in the month prior to the referendum. All messages and the issuing accounts were deleted shortly after the vote, either by themselves or by Twitter, while an additional 26 538 profiles changed their names.
Facts and figures — Brexit’s implications to date
The following list may resemble the side-effects of a highly-aggressive drug, but the truth is that these are all official statistics and predictions from leading think-tanks, official organizations, research agencies and the Government itself on Brexit’s effect on the British economy:
- A 2.4% loss of real GDP for the British economy since the 2016 referendum (source: Goldman Sachs)
- Over 275 companies have moved their operations from the UK as of March 2019 (source: New Financial)
- £1500 lower disposable income per British household than estimations in the pre-referendum forecast (source: Organisation for Economic Cooperation and Development)
- £97 million is the total amount the government has spent on Brexit consultants in 2018 (source: National Audit Office)
- £66.6 billion is the estimated economic growth lost due to Brexit (source: S&P)
- £800 billion withdrawn by banks operating in the UK (source: NY Times)
- £100 billion withdrawn by insurers and asset managers operating in the UK (source: NY Times)
- Between £600 million and £800 million per week is the cost of the Brexit uncertainty since 2016 (source: Goldman Sachs and BoE)
- £50 billion per year is the expected cost of a no-deal Brexit for the British economy (source: FT)
- 7.5% peak unemployment rate in case of a no-deal Brexit (source: Statista)
- 7x harder hit on the British economy, compared to the rest of the EU and a slip into recession, in case of a no-deal Brexit (source: IMF)
- £1 billion per year is the cost of immigration decline for the UK economy (source: Global Futures)
- 87% drop in the number of European nurses registering in the UK, compared to 2016/2017 (source: Christie & Co.)
- A current shortfall of 100 000 medical professionals in the UK (source: Nuffield Trust, King’s Fund and Health Foundation)
- £100 billion is the potential cost of Theresa May’s deal for the UK economy (source: National Institute of Economic and Social Research)
Although these statistics account for just a small portion of the expected Brexit side effects, they seem to be more than enough to raise the question of the decision’s rationality. Even “Leave” voters are now becoming increasingly doubtful about the whole Brexit saga and its long-term effect as they are turning gloomy on the economic projections for a future outside the EU. This is understandable as even the Government’s own analysis pointed out that the UK will be worse off under every Brexit scenario (a deal close to Theresa May’s one will result into a 3.9% growth hit, while a free trade agreement and no-deal Brexit scenarios will lead to economic output decrease of 8.9% and 10.7% respectively).
If we take a look at a corporate level, things get even worse. No matter whether it is about large international corporations or small businesses, the Brexit impasse does no favours. Statistics point out that over 62% of small businesses admit that government is not on their side and does not focus its efforts on backing micro companies to succeed. Things don’t get better with big corporations either. Airbus, Honda, Jaguar Land Rover, Philips, Nissan, Toyota, Unilever, Sony, Mitsubishi, Ford, Rolls-Royce, Panasonic, Aston Martin, BMW (the Mini production particularly) — these and much more have expressed their frustrations over the Brexit limbo, shut their production or relocated operations outside the UK. While most of these companies find it hard to operate due to the inability to plan their supply chains in the uncertain environment of today, businesses and organizations that rely on human labour are also affected. Several business groups (CBI and REC included) demanded from Theresa May to allow the entry of low-skilled migrants to minimize the potential destabilization of the construction and the social care sectors. Things are quite the same with the fast-food and hospitality industry which have been struggling with staff shortage and spending millions for stockpiling in an effort to avoid no-deal Brexit disruptions.
When it comes to the financial sector, the situation is no different — BoA, HSBC, UBS, Goldman Sachs, JP Morgan Chase, Lloyds, Barclays, Credit Suisse, Morgan Stanley, Citigroup, Nomura, Standard Chartered and much more have all moved assets, cut jobs or relocated major parts of their staff to cities like Paris, Frankfurt and Dublin.
Theresa May’s resignation, the EU and what comes next?
First of all, let’s make it clear — the UK didn’t vote to crash out from the EU. It voted “Leave” with the fantasy of leaving the bloc on a red carpet. Now, after May is gone, leavers face the harsh reality of being kicked out.
In order to come up with realistic expectations about the future, we have to wait and see if there will be Brexit at all. If there is a second referendum and Brexit is reversed, then everything goes back to normal (except all the damage done to companies and small businesses in the meantime). If political leaders stick to the plan to deliver Brexit, they will have to come to a consensus about the type of Brexit they will fight for and the characteristics of the deal. If they fail to do that before 31 October, then there will be a hard Brexit, as EU leaders insisted there will be no more extensions. Although all this sounds pretty simple and straightforward, somehow, almost 3 years after the referendum, there is still no progress. In the meantime, Brexit’s implications on a macro- and micro-level keep getting worse.
When it comes to Theresa May, though, it is worth noting that ever since 1945, only three British prime ministers have been in office for a shorter period. However, none of them faced such a complex challenge — to take the UK out of the EU in the most harmless way, while at the same time keep their party together and unite the nation. Although she failed, it is safe to say that at the time of her appointment, she seemed to have been the perfect candidate to lead the UK through the awaiting turbulences. And it is clear that the lack of viable options continues to date. The opposition is no different from opposing parties in other countries. While their main duty is to remain in denial of everything proposed by those in charge, most of them also took part in taking May down with their stubbornness and lack of proactiveness to come up with some real-life solutions and not dream scenarios on how to break the deadlock.
As one of the main reasons for May’s failure, experts point out her cautious approach. Her political profile is more of a mediator, rather than a go-getter. Throughout the whole Brexit saga, she was reaching for the balance. Although this can be interpreted as both — a positive and a negative of her leadership, one thing is clear — she tried to deliver in a situation where many others would have given up. She stood up for a stance that she had realized wasn’t the best for the UK, yet put voters’ wishes on a pedestal and fought for them. And all that under the tunes of Abba.
On a serious note — she might not have been the perfect leader, but at least she tried to honour the referendum’s vote and remain true to her duty of delivering the best possible outcome in a situation with limited options. Some may accuse her of a lack of flexibility, which in all fairness, will be correct, based on the fact that her only proposed solution to break the Brexit deadlock was denied 3 times and was on the course of a fourth rejection. Apart from that, the National Institute of Economic and Social Research estimates that May’s Brexit deal could cost the UK economy £100bn. Put differently — an equivalent to 3% in GDP per capita or losing the economic output of the City of London.
The truth is that May’s decision to step down won’t be enough to break the deadlock. What it will surely do, however, is to increase the risk of a no-deal Brexit. Although all the changes in Parliament and the uncertainty that lays ahead, one thing remains clear — the UK will leave the EU on 31 October, with or without a deal. In fact, the latter scenario is starting to seem more and more likely. Some of the most popular leadership candidates like Boris Johnson and Dominic Raab have already made it clear that they will do everything possible for the UK to leave by the end of October, even if that meant a no-deal Brexit. This false confidence is based on beliefs that once the UK leaves the EU, both parties will be able to start from an equal position in negotiations and agree on a new relationship. However, such ideas are far from serious as in the case of a no-deal Brexit, the EU will require from the UK to pay all its dues. Simply put, even in the case of a no-deal Brexit, the UK will have to respect the withdrawal agreement and its duties. However, for now, the odds are that a no-deal Brexit will be the most probable scenario, the implications of which may turn out to be far worse for the UK than initially expected.
It is pretty clear that May’s plan was not the ideal one. It is also clear that May’s rooting for a deal denied three times and hoping for a different outcome on the fourth was irrational. However, we should not forget that the UK does not have the power in its hands. Michael Barnier and co. were pretty clear — it is what it is and there won’t be further discussions or renegotiations of May’s deal. In the current situation, the EU has all the leverage and, in all fairness, acted very gently, without using its power position in a negative way or put extreme pressure to the UK. Brussels agreed to extend the Brexit deadline multiple times hoping that those in the House of Commons will finally come up with something meaningful. However, up until now, those hopes are pointless.
The UK, on the other hand, became very good at exploiting EU’s painfully-popular tolerance and taking advantage of its mildness. Although the British politicians are surprisingly confident about the thin ice they are walking on and rely on it to continue to carry their insecurities, it is worth noting that the EU could have pulled the trigger at any given point in time. The reason why this hasn’t happened yet? Just both sides do not want Brexit.
When we take a closer look at the EU — UK trade relationship, one thing becomes clear — the UK is very reliable on the EU as a target market and main importer. For 2016, for example, 48% of the UK’s goods exports (or 7.4% of GDP) and 37% of service exports were directed to the EU.
It is needless to say that the EU will also suffer the negatives of Brexit, should it materialize at some point. The UK is Europe’s main financial centre and leading innovation hub, home to some of the continent’s most promising start-ups and progressive companies. However, the European Union cannot influence the UK’s decision and have a say in its internal affairs. What it can and is trying to do though, is mitigate the negative outcome of the whole situation.
It is quite clear, however, that the EU cannot wait forever for the UK to decide what it wants exactly. European leaders have already said that they won’t agree on further deadline extensions. This means that once 31 October come, the UK will be out of the EU — with or without a deal. Up until then, the EU will continue to wait for British politicians to get their act together and come up with a working plan.
What do we say to the EU? “Not today”.
I’ve been following Brexit closely ever since it became clear that a referendum will be held. However, the truth is that not much has changed for that period. Even if you are joining the Brexit party just now, except May’s resignation, it is safe to say that you haven’t missed much. The impasse in the last two years was so hard that it turned Brexit into a game of delays, declines and uncertainty. The only variable in the whole situation is the percentage of decrease in the business confidence, the car manufacturing industry’s output and the growth forecast for the UK.
Usually, this lack of meaningful progress means two things — 1) the situation is very complex and 2) the UK does not know what it really wants. Although the first is true, I firmly believe that there was plenty of time for Britain’s political elite to come up with a working plan. This, of course, is possible only in case there is a uniform vision. Otherwise, it is just chaos.
Although there are just 5 months left until the point of relief when the UK leaves the EU on 31 October, the limbo is now stronger than ever. No significant progress was made during the last 3 years, so it is hard to expect much positives in the time remaining. If politicians don’t make the most out of the few months ahead, the UK is in for a bumpy ride. And with Boris Johnson as the most likely one in the driving seat, it is no secret why the point of relief is Halloween.