There are a lot of opinions flying around today about what exactly the Brexit vote means. For those unaware of what this even is, a vote took place yesterday in Great Britain about whether or not they should remain as part of the European Union. A vote to leave, or exit, the union has been nicknamed (for better or worse) Brexit. This term is similar to the term used for the potential exit of Greece from the European Union dubbed Grexit. It would seem this is the term of choice.
Many people are negatively referring to this as an outbreak of populism but that word can mean different things depending on who is using it and in what sense. Stripped of the political nuances some on either side of the question ascribe to it, populism is simply the belief in the power of ordinary people and their ability to control their government rather than have it controlled by a small group of so-called elites.
First, with that in mind, I think it is a good thing. It says clearly that the majority of British citizens do not believe they are getting a fair deal as part the larger European Union. Whether or not that is in fact true is open to debate but as I have remarked to people for many years, fairness, like beauty, is in the eye of the beholder. In any event, the democratic process is at work and I think that is a good thing.
Second, people generally and financial markets specifically dislike uncertainty. There will be unrest in the coming days as people around the world process what this vote means in practical terms. Financial markets around the globe will process through this as well and dip for a period of time though the smart folks have already thought through how to squeeze these lemons and make lemonade.
Anyone who supports self-government should applaud this historic vote and the courage it took for the people of Great Britain to chart a new course into the unknown. The British economy will not collapse, the world will not come spinning to an end, and here in the United States people will forget about it just as soon as one of the current major candidates for political office says or does something the news media thinks we should care about more. Something tells me we will see more such votes around Europe in the coming years.