“
Why did Brexit/Trump happen?” has been asked innumerable times since 2016, but the answers are often lazy and rarely satisfying. I recently read Paul Collier’s
The Future of Capitalism and think the model he lays out in chapter 3 (or available
here as a more formal economic paper) is the best I’ve seen. The basic idea is that the desire for esteem and respect drives behaviour. In Collier’s model, there are two sources of esteem - your nationality and your job. Your nationality generates esteem in proportion to your country’s prestige; your job in proportion to your income.
Crucially, though, there are two “meta” sources of prestige: you decide which of these two identities (nation and job) is more important to you and get a “boost” from that source. This gives you an additional identity (and source of esteem): you’re either in the “
nation tribe” or the “
job tribe”. In the aftermath of WW2, the US and UK had high levels of national prestige and
low levels of inequality. For most people, it was rational to identify as “
nation tribe”. But as income inequality grew, this changed. Better off people, concentrated in big cities, began to identify as “
job tribe”.
But identities require
signalling. How to signal that you’re a member of “job tribe”? The simplest way is to denigrate the nation. This increases the relative prestige of your job - but reduces the esteem of those who identify as “nation tribe”. Brexit is “The Nation Strikes Back” - and the economic cost is irrelevant, as reducing the prestige of income is a benefit! I’m simplifying a lot (do read Collier’s version!) but it’s a powerful model that I’ll return to - and has some important hints for liberals if they want to start winning again…