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'Citizens of the World'? Nice Thought, But ...

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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I didn’t think it would actually happen.

Sitting in an airport with middle-class Britons last week, I heard far more support for leaving the European Union than for staying in. But heading into Thursday's voting, I couldn’t quite believe it.

I didn’t think it would happen simply because things like this usually don’t. The status quo is a powerful totem. People don’t like jumping off into the unknown. As polls moved toward Remain in the waning days of the campaign, I assumed that we were seeing the usual pattern: People flirt with the new, dangerous outsider, then come home and marry the familiar boy next door.

It turned out my anecdata from the airport did better than the polls. And way, way better than the betting markets, which as late as 6 p.m. in the Eastern U.S. gave “Remain” an 88 percent chance of winning. Betting markets failed worse than polls, worse than a casual survey in an airport. They failed, because as the blogger Epicurean Dealmaker pointed out on Twitter, “Markets distill the biases, opinions, & convictions of elites,” which makes them “Structurally less able to predict populist movements.”

The inability of those elites to grapple with the rich world’s populist moment was in full display on social media last night. Journalists and academics seemed to feel that they had not made it sufficiently clear that people who oppose open borders are a bunch of racist rubes who couldn’t count to 20 with their shoes on, and hence will believe any daft thing they’re told. Given how badly this strategy had just failed, this seemed a strange time to be doubling down. But perhaps, like the fellow I once saw lose a packet by betting on 17 for 20 straight turns of the roulette wheel, they reasoned that the recent loss actually makes a subsequent victory more likely, since the number has to come up sometime.

Or perhaps they were just unable to grasp what I noted in a column last week: that nationalism and place still matter, and that elites forget this at their peril. A lot people do not view their country the way some elites do: as though the nation were something like a rental apartment -- a nice place to live, but if there are problems, or you just fancy a change, you’ll happily swap it for a new one.

In many ways, members of the global professional class have started to identify more with each other than they have with the fellow residents of their own countries. Witness the emotional meltdown many American journalists have been having over Brexit.

Well, here's one journalist who is not having a meltdown. I think Brexit will be somewhat costly -- if you want to understand just how complicated the separation will be, take a gander at the primer that the law firm Dechert put up for its clients -- but it’s not going to destroy the country or start a war, so if Britain wants out, then … bon voyage. I can certainly understand why my British friends who supported Remain are upset, and why people in other countries who are actually going to experience long-term effects from this decision are unhappy—if I were a Pole, I’d be worried as heck. But I don’t take it personally.

A lot of my professional colleagues seemed to, and the dominant tone framed this as a blow against the enlightened “us” and the beautiful world we are building, struck by a plague of morlocks who had crawled out of their hellish subterranean world to attack our impending utopia. You could also, I’d argue, see this sentiment in the reaction of global markets, which was grossly out of proportion to the actual economic damage that is likely to be done by Brexit. I mean, yes, the British pound took a pounding, and no surprise. But why did this so roil markets for the Mexican peso? Did traders fear that the impact on the global marmite supply was going to unsettle economies everywhere?

Well, no. This was a reflection of sudden uncertainty, not a prediction about the global economic future. But the sheer extent of the carnage made me wonder if one of the uncertainties traders were newly contemplating was when the morlocks are going to be coming for us outward-looking professional types with pitchforks.

The answer to these uncertainties, I submit, is not to simply keep doing what we’re doing. There’s a lot of appeal to the internationalist idea that building superstates will tamp down on war. But there’s a reason that the 19th century architects of superstates (now known simply as “states”) spent so much time and effort nurturing national identity in the breasts of their populace. Surrendering traditional powers and liberties to a distant state is a lot easier if you think of that state as run by “people like me,” not “strangers from another place,” and particularly if that surrender is done in the name of empowering “people who are like me” in our collective dealings with other, farther “strangers who aren’t.”

The EU never did this work. When asked "Where are you from?" almost no one would answer "Europe," because after 50 years of assiduous labor by the eurocrats, Europe remains a continent, not an identity. As Matthew Yglesias points out, an EU-wide soccer team would be invincible -- but who would root for it? These sorts of tribal affiliations cause problems, obviously, which is why elites were so eager to tamp them down. Unfortunately, they are also what glues polities together, and makes people willing to sacrifice for them. Trying to build the state without the nation has led to the mess that is the current EU. And to Thursday's election results.

Elites missed this because they're the exception -- the one group that has a transnational identity. And in fact the arguments for the EU look a lot like the old arguments for national states: a project that will empower people like us against the scary people who aren’t.

Unhappily for the elites, there is no “Transnationalprofessionalistan” to which they can move. (And who would trim the hedges, make the widgets, and staff the nursing homes if there were?) They have to live in physical places, filled with other people whose loyalties are to a particular place and way of life, not an abstract ideal, or the joys of rootless cosmopolitanism.

Even simple self-interest suggests that it may be time for the elites in Britain and beyond to sue for peace, rather than letting their newborn transnational identity drive them into a war they can’t win -- as happened with so many new states in the 19th and 20th centuries. Try to reforge common identities with the neighbors they have to live with, and look for treaty rules that will let them live in peace. Unfortunately, it’s not clear that transnationalism is any more capable of tempering its own excesses than the nationalism that preceded it.

(Corrects odds given by betting markets in fourth paragraph of article published June 24.)

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor responsible for this story:
Philip Gray at philipgray@bloomberg.net