The upcoming Brexit vote (in which the U.K. will decide if it is to remain in the European Union) has been the major—in some cases, the only—factor in market performance during the past week. We have written extensively on this issue, occasionally using British music in order to frame the discussion. Music is a great way to gain insight into a culture, including how people think and why they act the way they do.
Today we’ll take that approach again, looking at the band the Kinks. Extremely popular in Britain, they only had modest commercial success in the U.S., not nearly as great as other British bands like the Beatles or the Rolling Stones. Why? One reason is that the Beatles and Stones aspired to be American, deriving their names from American sources and showing strong American influences in their songs. The Kinks remained quintessentially and proudly British, and looked inward for musical inspiration.
The Brexit movement has tapped into this sense of Britishness. This may manifest itself in issues, such as regulatory overreach coming from Brussels, or even about the challenges of incorporating large numbers of immigrants. But beyond the social and economic policies, there is an emotional attachment to keeping Britain British.
Many people in Britain are, at best, indifferent to Europe, if not outright suspicious of it. Europe may be a source of luxury goods, but it’s also a source of red tape and bureaucracy. They may go to the beaches of Spain and Portugal on holiday, but it’s also a place where two generations of young men went to die. Against this emotional backdrop, technical issues of trade rules and whether London can remain a financial hub may just be too esoteric for some, particularly those who do not believe they have benefited from England’s increased globalization.
Like the Kinks, some people may vote to leave the EU and stay British because…well, that’s just the way they like it.
For more on the upcoming Brexit vote, please see last week’s Weekly Market Commentary, “Brexit: Should They Stay or Should They Go?” and today’s Weekly Economic Commentary, which is due out later today.