A demonstrator holds a placard reading ‘Brexit: is it worth it?’ during an anti-Brexit protest outside the Houses of Parliament in London, U.K. (Photographer: Simon Dawson/Bloomberg)

Brexit Stress Isn’t All In Your Head

BloombergOpinion

(Bloomberg Opinion) -- The uncertainty of the ongoing Brexit drama is taking an emotional toll on the British public. Since the original vote in 2016, there has been a 13.7 percent increase in prescriptions for antidepressants relative to other drugs. Political chaos has consequences for public health.

Indeed, the results of a new study suggest that people subjected to long periods of intense uncertainty show levels of immune-system activity similar to that when triggered by viral or bacterial infections. The British public is certainly tired of the Brexit psychodrama, but they — and their political leaders — may in a real sense be sick as well, with a significantly reduced capacity for making wise decisions.

Humans aren't dispassionate information-processing machines, akin to computers. Surprising news affects us not only mentally, but also physically, increasing breathing and heart rates, triggering a surge in hormones such as adrenaline and cortisol. This stress response also involves the immune system, which biologists now understand does a lot more than protect us from infectious pathogens. It also acts to reorganize our metabolism and use of energy, with both positive and negative consequences. 

During an acute episode of stress, the body draws on stored energy resources to boost its innate immunity. But prolonged stress triggers the systemic release of pro-inflammatory cytokines — the key signaling proteins of the immune system — which can lead to chronic inflammation and so-called sickness behavior. People suffer from fever, generalized anxiety and depression, as well as experience social withdrawal and difficulty in feeling pleasure. They also exhibit a reduced capacity to explore new situations and take risks, even when doing so could be beneficial.

The new study documents these effects under real-world conditions: on hedge fund traders in London during the European sovereign-debt crisis, a period of intense negotiations over the Greek bailout. Neuroscientist John Coates previously ran a trading desk for Deutsche Bank. Several times a day, over two weeks, he and colleagues drew saliva samples from the traders and measured levels of cortisol, as well as immune-system activity through the pro-inflammatory cytokines. The measurements showed that traders' immune systems fluctuated every bit as wildly as the markets. Both hormone and cytokine levels closely tracked several indices of market volatility.

Coates previously argued that hormonal changes linked to stress may induce investors to act in ways that make markets less stable. They encourage investors to take too much risk when times are good, stirring bubbles, and to be excessively risk-averse in bad times, helping a bear market turn into a crash. The immune system may exert a similar influence through different biochemical pathways. As the authors note, it's broadly known that financial markets tend to underperform in late autumn and early winter, as sunshine levels dwindle, an effect one might expect to be eliminated by arbitrage. That may not be so easy if the underperformance is due to systemic risk aversion linked to chronic inflammation in the bodies of a significant number of investors; circulating levels of cytokines also tend to increase naturally during this time of year.

So what does this mean for Brexit and the British? No one has been monitoring the physiology of the entire population, but it is natural to expect that many people have experienced a similar stress response. Just after the Brexit referendum in June 2016, a broad measure of economic uncertainty — the Economic Policy Uncertainty Index — reached an unprecedented level. Since then, Brits have experienced more than two years of heated, confused and contradictory debate over the political future of their nation. They've worried over the status of their jobs, friends, families and communities. The potential "costs" of Brexit can't be reckoned only by considering immigration or its economic impacts. The physiological health and psychological well-being of the nation matter, too.

Will Britain accept Theresa May's negotiated “deal,” or will it crash out with “no deal”? Or even entertain the mayhem and madness of a second referendum? All will entail enduring further agonizing uncertainty. As it becomes clear that any Brexit outcome will leave the U.K. poorer than if it stayed in the European Union, there could be an increasingly attractive alternative. Parliament might recall that the original referendum always had only an “advisory” status, and it in no sense compels Parliament to do anything. After all that has been suffered and learned in the past two-plus tumultuous years, the body could just decide that it's time to forget the whole thing.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Buchanan, a physicist and science writer, is the author of the book "Forecast: What Physics, Meteorology and the Natural Sciences Can Teach Us About Economics."

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