Opinion | Niall Ferguson

The world after Brexit

A demonstrator wrapped in a European flag left an anti-Brexit protest in Trafalgar Square in central London on June 28.
A demonstrator wrapped in a European flag left an anti-Brexit protest in Trafalgar Square in central London on June 28. JUSTIN TALLIS/AFP/Getty Images/AFP

“Now is the end! Perish the world!” In a hilarious 1961 sketch, the “Beyond the Fringe’’ team played a millenarian sect, led to a mountain top by Peter Cook to await the end of the world. After protracted discussions about the precise form the apocalypse will take —“Will this wind be so mighty as to lay low the mountains of the earth?” “No, it will not be quite as mighty as that”—there is a long and expectant silence.

Nothing happens.

“Well, it’s not quite the conflagration I’d been banking on,” says Cook. “Never mind, lads, same time tomorrow ... we must get a winner one day.”


You might be forgiven for feeling that way about Brexit. This time seven days ago, the papers were full of prophecies of the impending end of days. I myself said Britain was heading down “the stairway to hell.” And then, having fallen off a Lehman Brothers-style cliff on July 24, global financial markets spent last week rallying. This created the perfect opportunity for the referendum’s victors to consign the losers’ warnings to the shredder of history.

The flaw with this argument is twofold. First, and most importantly, Brexit hasn’t happened. Nor is it imminent. In fact, it probably won’t happen for more than two years. Second, there is no evidence yet to dismiss the predictions that the UK would suffer a recession if the electorate voted to leave the European Union. I still expect it to, as investment appears to have ground to a halt, and that sucking sound you hear is the sound of financial services jobs leaving London.

The most that can be said is that the Brexit vote was not a “Lehman moment” for the world economy. But it was never likely to be, as the impact is primarily on the UK and it will partly be mitigated by the instantaneous 10 percent drop in the pound’s exchange rate. For every other central bank, Brexit provided ideal cover for more monetary easing — hence the global rally in equities and record-low bond yields.


Nor did the referendum result portend a generalized “revolt against the elites” (a view fashionable with the kind of hacks who belong to the elites but like to write as if they don’t). The only concrete consequence of the referendum so far is a Tory leadership contest that seems like a re-enactment of the Oxford student politics of my youth.

The “revolt against the elites” thesis has another flaw. The biggest division exposed by the referendum was between the generations. Not only were the elderly much more likely to back Brexit than the young, but they were also much more likely to show up and vote. As Tina Brown has pointed out, there was rampant pro-Brexit sentiment among older members of the British social elite in the run up to the referendum.

And remember that the over-64s aren’t really that old. You need to be in your eighties to remember what a mess Europe was in 1945. The last survivor of the Somme died in 2005. He was 108. Small wonder David Cameron’s somber warning about the continent’s historic instability did not resonate.

So Brexit is really this generation’s Munich or Suez: a foreign policy crisis that splits the political elite and thereby creates an opportunity for an ambitious politician to replace one who gambled and lost.


As for the global ramifications of Brexit, I am beginning to disbelieve in the idea of a populist chain reaction. At this point, it’s hard to see anyone else in Europe wanting to go down the UK route. Polls suggest that if a vote on “Nexit” were held in the Netherlands, it would be as tight as the UK vote ten days ago. Precisely for that reason, the Dutch elite is united against such a referendum. And it would be forced to hold one only if Brexit necessitated a change to the EU treaties.

And Donald Trump? True, he lost no time in giving his blessing to Brexit, even if he made the mistake of doing so in Scotland. But I still hear few members of the American elite talking him up the way their counterparts in London were talking up Brexit in recent months. Only one thing makes me hesitant to write off Trump, and that is the news that election expert Nate Silver gives him just a 20 percent chance of winning the presidency in November. Nate, I hate to ask, but back in January didn’t you give Trump a 12 percent chance of winning the Republican nomination?

No, Trump can still win, despite a run of lousy polls, just as Brexit came from behind and won. The simple but strange reality is that, for reasons no political scientist can quite explain, most elections in our time are very close. (When was the last landslide anywhere?) Which brings us back to the “Beyond the Fringe’’ question: “Will this windbag be so mighty as to lay low the mountains of the earth?”


The answer, as with Brexit, will be: “No, it will not be quite as mighty as that.”

Niall Ferguson is a senior fellow of the Hoover Institution at Stanford.