A Short History of Brexit

What explains the European Union’s unique structure—neither a federation nor a typical alliance? The book argues that modern Europe is best understood as a grand experiment in reconciling open markets, stable welfare states, and peace after the devastation of two world wars. After 1945, European leaders concluded that ordinary treaties would not suffice to make peace and prosperity durable; they needed new supranational institutions to bind nations together politically and economically.

From War’s Trauma to Institutional Innovation

The scars of the wars defined the European project’s urgency. France had lost over 3% of its population in the First World War, Germany some 3%, and in the Second World War the toll rose even higher. The Franco‑German relationship—once the continent’s flashpoint—became the foundation for peace. Jean Monnet and Robert Schuman’s 1950 plan to pool coal and steel production was designed to make future wars not only unthinkable but materially impossible. By tying together the resources of war, the European Coal and Steel Community (ECSC, 1951) institutionalized mutual dependence.

Economic Logic: Integration to Protect Welfare

Postwar governments built expansive welfare states, but uncoordinated trade liberalization could undercut those domestic bargains through a 'race to the bottom' in wages and social policy. The solution was to create institutions—the European Economic Community (EEC, 1957)—that pooled sovereignty and imposed shared rules. Common agricultural and social provisions protected fairness, while supranational enforcement (through the European Court of Justice) ensured states could credibly commit to those rules. This design allowed peace, social protection, and markets to coexist.

Britain’s Divergent Path

Britain’s historical trajectory diverged due to its nineteenth‑century legacy. Industrialization, maritime empire, and deep exposure to world markets produced a culture that valorized free trade and resisted supranational authority. Imperial preference and 'Balfour’s verbal formulas' revealed a political habit of compromise short of integration. Viewing European federalism as alien to its flexible Commonwealth model, Britain stayed aloof while others built the EEC, joining only in 1973 after economic necessity made isolation untenable. That delayed entry sowed the ambivalence that would persist for decades and culminate in Brexit.

From the Common Market to the Single Market

The EU’s later transformation into a borderless market was a feat of technical coordination rather than mere politics. In the 1980s, Lord Cockfield’s White Paper catalogued hundreds of barriers—physical, technical, and fiscal—that had to be dismantled. The Cassis de Dijon ruling introduced 'mutual recognition,' enabling goods approved in one state to circulate across the EU. The adoption of a harmonized Value Added Tax (VAT) allowed customs posts to vanish without fiscal chaos, building the administrative base for the 1993 Single Market. Immigration, tax enforcement, and consumer rules became cross-border issues managed through shared governance.

Ireland’s Story: Peace and Prosperity Through Europe

For Ireland, European integration was transformative. Membership from 1973 diversified its trade away from the UK, while EU funds and market access encouraged modernization and foreign investment. Later, Single Market participation enabled Ireland’s 1990s growth miracle. Equally important was its political impact: by erasing visible border controls, the EU created the conditions for the Good Friday Agreement (1998), which turned a conflict frontier into an open interface. When Brexit later threatened that border, it reopened historic tensions, showing how deeply the European framework underpinned peace.

The Broader Arc

The story you follow across the book is thus one of crises yielding institutions, and institutions creating stability. The EU’s evolution—from postwar cooperation to modern integration—emerges as a contingent but cumulative answer to three dilemmas: how to lock in peace, sustain social welfare in open economies, and manage interdependence without centralization. Britain’s uneasy relationship with this system, combined with globalization shocks and austerity, later fractured the consensus. In this account, Europe’s promise and Britain’s estrangement share a root issue: the challenge of reconciling economic openness with social and democratic legitimacy.

To understand Britain’s long dance with Europe, you have to trace a distinctive political economy built in the nineteenth century. Early industrialization, global trade dependence, and maritime dominance forged a worldview in which sovereignty was indivisible. British leaders interpreted supranational structures as threats to autonomy rather than safeguards of peace and welfare.

The Free Trade Tradition and Empire

When Sir Robert Peel repealed the Corn Laws in 1846, free trade became patriotic orthodoxy. Britain fed its cities with cheap imports and structured its politics around openness. Even when imperial preference resurfaced under Joseph Chamberlain in the 1930s, the instinct was still imperial, not continental. This fixation meant that when postwar integration began, London preferred loose intergovernmentalism (the OEEC, EFTA) rather than binding institutions like the EEC.

Brentry and Repeated Hesitation

In the 1950s Britain sought compromise solutions—Plan G and EFTA—to maintain access without ceding control. French resistance and the EEC’s success forced a rethink. Macmillan’s 1961 application, twice vetoed by de Gaulle, reflected historical irony: the pioneer of free trade pleading to enter a customs union. Britain finally joined under Edward Heath in 1973, but by then the psychological distance was entrenched. The resulting period—called 'Brentry'—revealed a pragmatic rather than heartfelt engagement with Europe, maintaining a transactional mindset that would later fuel Euroscepticism.

Political Identity and the Anglosphere

Cultural nostalgia reinforced economic divergence. Many Conservatives and commentators imagined Britain’s destiny aligned with the Commonwealth or the United States. This sense of exceptionalism clashed with continental ideas of pooled sovereignty. While European partners viewed supranational authority as the price of peace, British elites saw it as constraint. That tension animated decades of debate—from Thatcher’s budget battles to the later referendum—anchoring the UK’s enduring ambivalence about its European identity.

As globalization reshaped industrial economies, the gains and pains of economic openness were distributed unevenly. The book draws heavily on economic research—by David Autor, David Dorn, and others—to show that concentrated trade shocks destabilized communities and politics in both Britain and the United States. It is here that the roots of modern populism, including Brexit, come into focus.

The China Shock and Political Realignment

When cheap imports surged after China joined the WTO, particular regions—those reliant on manufacturing—suffered job losses, falling wages, and long-term social scarring. Studies showed that in such areas, voters shifted toward parties offering protection or protest. In America, that meant both Trumpist Republicans and polarized Democrats; in Britain, it meant higher support for UKIP and the Leave vote. Economic exposure, not ignorance, drove much of this political realignment.

Inequality and the Absence of Safeguards

Unlike many continental economies, Britain and the U.S. responded to globalization with limited worker protections and welfare cuts. Without strong social insurance, trade shocks provoked resentment and distrust of elites. Surveys around EU referendums in Ireland also showed class divides—working‑class and low‑education voters often opposing treaties viewed as benefiting cosmopolitan winners. The pattern reveals that material insecurity consistently predicts populist dissent.

Policy Lessons

You can draw a clear policy inference: open trade needs matching adjustment mechanisms. Where governments invested in retraining, income support, or regional revitalization, populist backlash was muted. Where they did not—as in post‑industrial Britain—the politics of grievance hardened into challenges to globalization itself. For contemporary policymakers, this part of the book is both diagnosis and warning: neglecting the losers of economic change eventually undermines the entire liberal order built after 1945.

After 2010, austerity policies deepened the divides globalization had opened. The book highlights rigorous evidence—particularly Thiemo Fetzer’s research—showing that welfare cuts and local spending reductions directly increased support for UKIP and the Leave vote. In effect, austerity turned economic stagnation into political revolt.

The Geography of Cuts

The UK Coalition government’s aim to shrink the state hit social housing, local councils, and welfare programs hardest—exactly the spheres that cushioned vulnerable communities. Many postindustrial areas, already shaped by trade shocks and deindustrialization, saw visible deterioration in services and prospects. The political narrative of 'taking back control' resonated because people had lost control over tangible aspects of daily life—job security, healthcare, and local governance.

Markets, States, and Political Legitimacy

The paradox, as the book notes drawing on Dani Rodrik’s 'trilemma,' is that markets require states to remain legitimate. Cut welfare too severely and voters no longer trust the rules of an open economy. Britain’s drastic austerity, celebrated as fiscal prudence, in practice undermined the ethical contract that sustains liberal capitalism. A small reduction in cuts, the author argues, might have changed the referendum result more than any renegotiation on immigration.

Broader Consequences

For you as a policymaker, the message is practical: budgets are political instruments. Shrinking the state is not merely a technical exercise—it reshapes how citizens perceive fairness and trust. Without credible protection against market risk, economic populism becomes almost inevitable. Austerity’s unintended legacy was to make Brexit the vehicle for a deeper frustration with decades of unmet promises.

Brexit was not historically predetermined. It resulted from the intersection of long-term skepticism, short-term crises, and a handful of decisive political choices. The book maps how structural rifts met contingent events to produce one of the most consequential referendums in modern democracies.

From Euroscepticism to the Referendum

Thatcher’s Bruges speech (1988) and the backlash to the Maastricht Treaty re‑energized Conservative Eurosceptics. Later, Cameron’s 2013 pledge of a referendum was intended to pacify backbench rebels, not trigger exit. Combined with the EU’s crises—the Eurozone turmoil, migration pressures, and enlargement—the context made disillusionment mainstream. Eastern European migration after 2004 changed perceptions of control and identity in communities already experiencing austerity.

The Campaign’s Turning Points

Dominic Cummings, strategist for Vote Leave, called politics 'a branching history.' Boris Johnson’s late conversion to Leave lent credibility that Nigel Farage could not. The slogan 'Take Back Control' condensed sovereignty, economy, and emotion. Tactical choices—such as emphasizing NHS funding and fears of Turkish accession—proved decisive in the campaign’s final stretch, demonstrating how narratives can outweigh numbers.

Counterfactuals and Lessons

Cummings later argued that without Johnson’s involvement the result might have swung by 600,000 votes—the margin that separated Leave and Remain. The book accepts that structural discontent mattered but insists leadership and timing sealed the outcome. The broader lesson: democratic outcomes cannot be explained entirely through economics or identity; they hinge on human decisions that redirect history’s flow. Recognizing that contingency is vital for understanding—and for preventing—future political shocks.

The withdrawal process revealed not just diplomatic complexity but the structural asymmetry of power between the UK and the EU. Article 50’s legal sequencing meant Britain negotiated from a position of diminishing leverage while internal contradictions—what critics called 'cakeism'—impaired coherence.

Article 50 and the EU’s Leverage

Article 50’s two-year deadline and phase-based structure (divorce first, future later) allowed the EU27 to dictate tempo. Merkel’s stipulation that Single Market access required acceptance of all four freedoms—goods, services, capital, and people—blocked British attempts at cherry-picking. Because unanimity governed decisions to advance talks, Ireland’s interests gained extraordinary weight, binding EU solidarity to the border question.

The Irish Trilemma and the Backstop

The December 2017 Joint Report’s paragraphs 49 and 50 encapsulated incompatible promises: no hard border (49), no internal UK barrier (50), and leaving the Single Market and customs union (May’s red lines). Simon Coveney’s 'trilemma' captured the logic: London could have any two, not all three. The EU’s backstop solution—a legally binding insurance keeping Northern Ireland aligned with EU rules—became the instrument to protect the Good Friday Agreement, but it split British politics and undermined Theresa May’s premiership.

The Chequers Plan and Collapse

May’s Chequers proposal in 2018—customs partnership and partial regulatory alignment—was an attempt to square sovereignty with economic reality. Brexiteers branded it betrayal; the EU deemed it unworkable. Subsequent tunnel negotiations produced the Withdrawal Agreement and Political Declaration (November 2018), separating legally binding divorce terms from non-binding aspirations. Resignations and political paralysis followed, highlighting that technical solutions mean little without domestic consensus.

Institutional Lessons

The episode demonstrates how institutions structure outcomes. Article 50 prioritized EU cohesion; the Single Market’s indivisibility proved non‑negotiable. By contrast, Britain’s fragmented politics and administrative inexperience made coherent strategy impossible. In the end, the Irish border—once peripheral—became the fulcrum of the entire process, symbolizing how peace settlements, economic systems, and national identities are inseparably knitted within Europe’s institutional fabric.