But the laws that govern them have maximized the prosperity of people in Britain, just not them. So yes, it is racist and xenophobic to blame anyone but their own country for them not partaking in their country's prosperity.
The EU optimizes the prosperity of the EU collectively, rather than the prosperity of Britain specifically. That is by design: when heads of national governments sit in the European Commission (correction: Council), they are obligated to consider the interests of the whole EU, not the interests of the nation they represent.
You're right, but my point stands: commission members are obligated to represent the general interest of the EU as a whole, not that of their home state. They're precluded, by oath from favoring the policies that maximize the prosperity of their home state.
But that's not the point. The European Commission and European Parliament can, together, make laws directly binding on British citizens. But in making those laws, those bodies are required to consider not just the welfare of British citizens, but the EU as a whole.
Which brings me back to my question: is it racist and xenophobic for the British not to want to be governed by people who owe allegiances to people besides the British?
No, the members of the European Parliament are not required to ignore the impact of treaties on their own country. Moreover, every country has the option to veto new treaties, like the UK did when the EU tried to introduce banking regulations to strengthen the Euro: https://www.theguardian.com/world/2011/dec/09/david-cameron-...
A nitpick: the EU does not write laws, they write directives. It is up to every country's national parliament to write their own laws that meet/implement the directives.