The world system established under U.S. leadership after World War II is being shaken to its foundations today. During the Bretton Woods Conference on a new monetary system, which was held in the U.S. in 1944, Britain accepted Harry Dexter White's plan, which the U.S. proposed against John Maynard Keynes' plan, and thus began to leave the political and economic regulation of the system to the U.S. Back then, Britain's consent, rather than submission, was a strategy based on the knowledge that the forced consensus (Cold War) between the U.S. and the Soviets would depend on high military spending and that this military rise would lead to the necessity of having troops and carrying out military operations in areas of domination outside the Soviet Union. Obviously, Britain was transferring the task of being the police of the world to the U.S., who had to keep up high military spending. Starting in Vietnam, the U.S. fulfilled this task through bloodshed at high costs.
London was not troubled with this at all. However, when it came to the 1980s, they came to realize that some things did not go as well as they wanted. When Margaret Thatcher came into power as the iron lady, she preferred to withdraw the state from the economy sphere and shift traditional industries to Asia as a way of rebuilding the cumbersome British economy, which lagged far behind the U.S. and of recolonizing the most distant regions by exporting capital like in the past. Then, Britain came abreast of the U.S. with its ultraliberal line on the domestic front and a more aggressive one internationally.
This shift of policy was appropriate for Britain's subjective problems and deadlocks, as well as being a global obligation. However, the following process misled Thatcher and her followers. First, the industrial facilities that Britain moved away from the rural areas of London to Asia for the sake of cheap labor either grew too much to return their profits stemming from productivity to Britain alone and became global players in the strictest sense, or disappeared from the market as they failed to compete with Asia's fast-growing companies. In both cases, Britain lost.
After Europe switched to the euro, not only Germany, but also Italy, Spain and France rapidly boosted their exports through the relatively high euro and started to compete with their Asian rivals, where Britain lagged behind.
Britain thought it would have absolute economic sovereignty by exporting capital to underdeveloped regions as it happened in the gold currency system. However, in the representative currency system, it was important to capitalize and export money through financialization. And it was indispensable to complete this with commodity exports.
Throughout this process, British-based companies could not compete with their European and Asian rivals. The problem was not only high labor costs, it also had lost its technological superiority first to the U.S. and then to Asia and the British pound was too high to be exported. First, Britain began to lose its automotive brands to its European and Asian rivals. Then, London's position as a finance center also started to fall into danger with the financialization that shifted to the center of rapidly developing and emerging economies. The decline of strategic energy and defense industry companies in this process was an inevitable consequence. Meanwhile, Turkey and Russia were coming to the fore in Eurasia and China and South Korea in the Pacific was coming to the fore in markets and technology. It was impossible for British companies to compete with these countries with relatively lower currencies and rapidly rising companies which were in quest of new markets. Moreover, Ireland, Scotland and even Wales, which came to feel the crisis and become uneasy, and countries with natural riches such as Scotland began to talk about independence.
The whole process caused the U.K. to question the EU, which was rapidly heading toward a deep crisis and which had problematic economy and politics. The need for making rapid policy changes and producing more flexible policies toward other countries brought up the Brexit process in Britain.
Today, Britain has to develop new trade unions, partnerships in technology and joint production areas with countries like Turkey. For instance, automotive and industrial companies that currently make production in Britain will soon be unable to export. They have no opportunity to compete with Asian producers with such a high currency and costs. In a conjuncture where the U.S. has implemented of all kinds of protectionism, suspended global climate change agreements and canceled the Trans-Atlantic and Trans-Pacific agreements for the sake of competition, Britain cannot even tolerate waiting for the finalization of the Brexit process.
Britain has to improve all kinds of cooperation with Turkey in consideration of Turkey's political and economic domination in the Middle East and Eastern Europe, its position of being an element of stability in Eurasia through northern and southern energy routes, and its location in the heart of Eastern Mediterranean and Central Anatolian trade corridors (marine and high-speed railway axes). While doing this, it should pay regard to Turkey's interests as well.