Atlantis wrote:The de-industrialization of the UK economy is closely linked to Brexit. It has produced the discontent in the de-industrialized regions that made people vote for Brexit. Another interesting aspect, highlighted in the below article. is that the British state has become disengaged from industry since most of it has either been off-shored or is foreign owned.
Brexit is a necessary crisis – it reveals Britain’s true place in the world
Quoted by Atlantis,
A determined ignorance of the dynamics of global capitalism is bringing about a long-overdue audit of British realities
Who backs Brexit? Agriculture is against it; industry is against it; services are against it. None of them, needless to say, support a no-deal Brexit. Yet the Conservative party, which favoured European union for economic reasons over many decades, has become not only Eurosceptic – it is set on a course regarded by every reputable capitalist state and the great majority of capitalist enterprises as deeply foolish.
If any prime minister in the past had shown such a determined ignorance of the dynamics of global capitalism, the massed ranks of British capital would have stepped in to force a change of direction. Yet today, while the CBI and the Financial Times call for the softest possible Brexit, the Tory party is no longer listening.
Why not? One answer is that the Tories now represent the interests of a small section of capitalists who actually fund the party. An extreme version of this argument was floated by the prime minister’s sister, Rachel, and the former chancellor Philip Hammond – both of whom suggested that hard Brexit is being driven by a corrupt relationship between the prime minister and his hedge-fund donors, who have shorted the pound and the whole economy. This is very unlikely to be correct, but it may point to a more disconcerting truth.
The fact is that the capitalists who do support Brexit tend to be very loosely tied to the British economy. This is true of hedge funds, of course – but also true for manufacturers such as Sir James Dyson, who no longer produces in the UK. The owners of several Brexiter newspapers are foreign, or tax resident abroad – as is the pro-Brexit billionaire Sir James Ratcliffe of Ineos.
But the real story is something much bigger. What is interesting is not so much the connections between capital and the Tory party but their increasing disconnection. Today much of the capital in Britain is not British and not linked to the Conservative party – where for most of the 20th century things looked very different. Once, great capitalists with national, imperial and global interests sat in the Commons and the Lords as Liberals or Conservatives. Between the wars, the Conservatives emerged as the one party of capital, led by great British manufacturers such as Stanley Baldwin and Neville Chamberlain. The Commons and the Lords were soon fuller than ever of Tory businessmen, from the owner of Meccano toys to that of Lyons Corner Houses.
After the second world war, such captains of industry avoided the Commons, but the Conservative party was without question the party of capital and property, one which stood against the party of organised labour. Furthermore, the Tories represented an increasingly national capitalism, protected by import controls, and closely tied to an interventionist and technocratic state that wanted to increase exports of British designed and made goods. A company like Imperial Chemical Industries (ICI) saw itself, and indeed was, a national champion. British industry, public and private, was a national enterprise.
Since the 1970s things have changed radically. Today there is no such thing as British national capitalism. London is a place where world capitalism does business – no longer one where British capitalism does the world’s business. Everywhere in the UK there are foreign-owned enterprises, many of them nationalised industries, building nuclear reactors and running train services from overseas. When the car industry speaks, it is not as British industry but as foreign enterprise in the UK. The same is true of many of the major manufacturing sectors – from civil aircraft to electrical engineering – and of infrastructure. Whatever the interests of foreign capital, they are not expressed through a national political party. Most of these foreign-owned businesses, not surprisingly, are hostile to Brexit.
Brexit is the political project of the hard right within the Conservative party, and not its capitalist backers. In fact, these forces were able to take over the party in part because it was no longer stabilised by a powerful organic connection to capital, either nationally or locally.
Brexit also speaks to the weakness of the state, which was itself once tied to the governing party – and particularly the Conservatives. The British state once had the capacity to change the United Kingdom and its relations to the rest of the world radically and quickly, as happened in the second world war, and indeed on accession to the common market.
Today the process from referendum to implementation will take, if it happens, nearly as long as the whole second world war. The modern British state has distanced itself from the productive economy and is barely able to take an expert view of the complexities of modern capitalism. This was painfully clear in the Brexit impact sectoral reports the government was forced to publish – they were internet cut-and-paste jobs.
The state can no longer undertake the radical planning and intervention that might make Brexit work. That would require not only an expert state, but one closely aligned with business. The preparations would by now be very visible at both technical and political levels. But we have none of that. Instead we have the suggestion that nothing much will happen on no deal, that mini-deals will appear. The real hope of the Brexiters is surely that the EU will cave and carry on trading with the UK as if nothing had changed. Brexit is a promise without a plan. But in the real world Brexit does mean Brexit, and no deal means no deal.
Brexit is a necessary crisis, and has provided a long overdue audit of British realities. It exposes the nature of the economy, the new relations of capitalism to politics and the weakness of the state. It brings to light, in stunning clarity, Brexiters’ deluded political understanding of the UK’s place in the world. From a new understanding, a new politics of national improvement might come; without it we will remain stuck in the delusional, revivalist politics of a banana monarchy.
This is an interesting article. It seems to say that the current Conservative Party is not led by British citizens, but rather by people who own the capital plant in the UK {but don't live there}. So, these leaders don't give a sh*t about what is good for any group of UK citizens who do live in the UK.
I have seen other articles that claim the the Labour Party has stopped representing the working class in the UK. This also happened to the Democratic Party in the US in the early to mid 90s.
So, neither major Party seems to care about what is good for a huge percentage of the actual UK citizens. This situation can't be stable. Only UK citizens can vote and someday {after they wake up and realize that neither major party gives a sh*t about how well off they are economically} the mass of voters will vote for a party that does care about the mass of UK citizens.
This where MMT will come into its own.The ONLY policy it advocates is a Job Guarantee Program that is funded by the national Gov. but mostly run by local govs. The core MMTers say that beyond that one policy all MMT does is to explain how the Gov. actually works and pays for what it does. This lens for looking shows that the national debt is not a debt, that instead it is "the accumulated assets of the people" because it is just the amount of Pounds that the Gov. has spent {in the past} and that it has not taxed back. And therefore, the so called national debt is NOT a drag on what the Gov. can do going forward. The core MMTers always emphasize that lack of money can never be a limit on Gov. spending by a nation like UK, US, NZ, Aust., Canada, Japan, etc.; that instead the limit is the real resources that the nation produces or can buy from abroad. And the Gov. can always mobilize all the idle labor of the nation.
. . . I have always known this. I saw several decades ago that the Great Depression in the US, etc., was not caused by a lack of food being grown, metal ore to mine, oil to pump, or factories to make stuff from the real resources; instead it was caused by a lack of money in the hands or pockets of the people to buy the stuff being made or food grown. That is, a lack of "effective economic demand". Economically, demand requires money to spend and a desire to buy. Starving people who have no money do not create demand. MMT shows us how to add to the demand by the Gov. using deficit spending to do it. And then, NOT taxing it all back later, but just letting the people have the resulting excess of Pounds or dollars forever.
. . . As I have said here a few times the UK/England has had a national debt since 1694 {=1694} or for over 325 years now. If no event in those 325 years {that have seen the growth of its Empire and its loss} HAS CAUSED the debt to need to be paid off, then nothing ever will.
After Brexit, the UK can {if the voters choose wisely} decide to take back control over its economy and do all the things that are necessary for the people of the UK to be prosperous again. Austerity is damaging, pointless and unnecessary. The theory that supports it is just assumed to be true. The main assumption that supports austerity {according to my reading of MMT sources} is that people will spend more money as soon as they grok that the national Gov. has decided to use "sound finance" going forward and so not deficit spend. That they will see that 10 or 20 years in the future they will not have their taxes raised to pay down the "huge" debt, and therefore they can spend more in the now. The BIG problem with this is that the mass of the people now don't have many more dollars, euros, or Pounds in their pockets now to spend. Another problem with this is that nobody thinks like this; "oh look, I'll have more money 15 years from now, so I should spend more now." Ask yourself if you have ever had such a thought?