In last week's U.K. elections, the losing party wasn't a party at all but the people of the United Kingdom. By now, every pundit has already dissected the election every which way. Predicting the reaction of the people to the election and the government in response to the people will determine where investors should be invested in the near-term.
I was in the U.K. last week to observe the parliamentary elections that took place on Thursday. The elections were very much like those of many U.S. elections I've participated in and not at all like the elections I've participated in Turkey. The key story of the election was of course gerrymandering. Gerrymandering is the drawing of voting districts to artificially amplify the votes of those that draw them and the central "problem" if your party lost or if you care about a "democratic" result.
The most glaring example of gerrymandering is how the UKIP was almost completely shut-out of parliament. Having garnered 12.6 percent of the vote with 3.9 million votes, the UKIP won only one seat in parliament whereas the Scottish Nationalist Party won 4.7 percent of the vote with 1.5 million votes and 56 seats in parliament. Several other parties won far fewer votes but have seated many more MPs than the UKIP party. The anti-EU and anti-immigration party has been called "neo-fascist" and "xenophobic," but elections are merely mirrors of the voting public, in democracies the public should get what the public wants, despite how negatively we may feel about their choices. This obviously did not happen.
Held on a Thursday, the elections are not as major an event in the U.K. as they are in other parts of the world. Held on Sundays in Turkey, elections are times where the country comes to a halt. Perhaps by design, the weekday voting of elections discourages the working-poor from voting. Having worked a full day, who has the energy to go vote at 7 or 8 o'clock? Not the majority of voters in Manchester central, for example. Some 54 percent of voters did NOT vote in the election. In total, 66 percent of eligible voters choose the current parliament in the U.K. The bi-annual Tuesday elections in the United States resulted in a 36.4 percent voter turn-out to choose the current U.S. Congress. In contrast, Turkey's current parliament was chosen by 88 percent of eligible voters.
The demonstrations following the elections illustrate the public's resentment of the electoral process. I had the opportunity to discuss the elections with many voters in London, most notably a gentleman I'll call Brian who didn't want his identity revealed.
Born in Ireland in the 1940s, Brian's mom and dad immigrated to the U.K. to work as a seamstress and in railroad construction. Brian worked as a truck driver until he lost his left eye to a degenerative neurological disease. His driver's license was automatically revoked; he was out of a job, and within months, he was homeless. He was waiting for a bus to the airport as we spoke. He showed me his end-of-the-day "Tesco special" sandwich he had just purchased for 29 pence. Late at night, the bus drivers let him ride for free to Heathrow or Gatwick. "Free Internet" and a dry, warm, place to sleep without interruption on a cold, wet, London night made the airport his frequent destination.
His father passed away in 2010 and his mother was suffering from dementia, living in a nursing home - that's what kept him in London. Brian would visit her a few times a week, even if she didn't know who he was anymore. His only other relative was his brother who worked at a bank in Amsterdam. His wife didn't like Brian much so they rarely spoke. He wasn't pleased with the Conservatives winning the election but wasn't pleased with any of the other parties either. He hadn't voted.
Brian and the millions like him, those that have slipped through the cracks, will be Europe's biggest problem in the coming years. Although the U.K.'s welfare system is not as comprehensive as its continental neighbors, the services it provides are both costly and yet simultaneously lacking. Addressing the needs of the electorate, promoting social mobility and delivering "democratic" electoral results are ideals which Turkey's European neighbors are finding themselves unable to deliver to their people. Europe is a tinderbox of political unrest, with millions of disenfranchised Brians awaiting their own Arab Spring, a European Spring. Let's hope that Turkey's elections result in a more "democratic" outcome, making it more attractive for long-term investing, growth and prosperity.