Soft-Brexit Business Britain

So soon after the previous post that I have barely taken breath I offer a partial answer to my earlier question: what is British Capitalism Playing At? Reporting over the weekend 13th/14th Jan) puts the smart money on soft Brexit. If Nigel Farage wants a second referendum it is because he fears that Parliament will refuse a clean break with Europe, reject the deal offered by May and demand some kind of soft Brexit that maintains Britain’s economic links with Europe while cutting the political ties. This is no kind of independence, he would argue. It leaves Britain on the margins of Europe, conforming to the rules, including those established by the European Court of Justice, without any input of its own. And in this, Farage is absolutely right.

Maybe British business is recovering from Brexit shock and trying to reclaim some control of its own. They won’t care too much if ‘Britain’ is subsequently excluded from political circles in Europe. Many of them are international businesses that exercise sway elsewhere. In any case, money always talks.

The rest of us should be alarmed. Remaining in the single market and customs union, perhaps as a member of the European Free Trade Area, has to be the worst possible outcome. Whatever economic advantages it brings, the UK surrenders political voice completely. For an electorate that voted to ‘take back control’ this would be a gratuitous insult. Put this argument in context. The problem with Europe is that economics was prioritised over politics; the Euro which was to drive economic integration has actually driven countries apart; national resentment is a growing force across Europe, strong in France and getting stronger in Germany. Europe is a failed project unless it creates a popular European culture and politics to fix the dysfunctional economics. At this point the soft-Brexiteers offer economic conformity and a neutered politics. I cannot think of anything more calculated to restore the flagging fortunes of the Brexit brigade than this.

Remainers are repeating the mistakes of the referendum campaign on a grand scale. The SNP have even issued an estimate, as George Osborne did, of the cost per head of leaving the single market. It wasn’t the economics stupid (to paraphrase Clinton), it was the politics. The second mistake on an equally heroic scale is to imagine that the decision is all about Britain, and nothing else. The remain campaign lost because it didn’t have anything to say about Europe. What have Britain’s politicians got to say about Macron’s desire for deeper political integration and a multi-speed Europe; a Euro finance minister, complete banking union, and a European Monetary Fund? And if not Macron’s ideas, what are the alternatives? Do we want to revive Margaret Thatcher’s (and De Gaulle’s) idea of a ‘Europe of Nations’, or take baby steps rather than strides to a United States of Europe? On Europe’s free trade periphery Britain will be excluded from all of these decisions but deeply affected by every one of them.

Finally, some remainers think that staying in the single market on the periphery of Europe will facilitate easier re-entry later. It might but I doubt it. Britain negotiated a short-lived European Free Trade Area agreement outside the EU in 1960 but abandoned it a year later to apply for EU membership. History will not simply repeat itself. Some in the EU must surely think of Britain as an unreliable, unstable and disruptive force. Once outside Europe, re-entry will not be simple.

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What is the British Capitalist Class Playing At?

I am genuinely puzzled. I know that the relationship between politics and class is not simple. I know that ‘economic interests’ do not translate directly into politics, and that the State is a great deal more and less than ‘the executive committee of the bourgeoise’. But I still don’t understand Brexit. Why haven’t manufacturers and financiers kicked up more of a fuss?

Perhaps ‘remainers’ have overstated the economic downside of Brexit. Manufacturing in Britain (much of it foreign owned) is a relatively small sector but much of it is technically advanced and competitive. 54% of exports go to the EU but much of manufacturing, like pharmaceuticals, are global players. Financial services might lose their passport to the EU but overall the fall in income is unlikely to be more than 15% and the drop in employment between 3% and 7% – bad but not catastrophic (Djankov, 2017).

On the other hand, the EU isn’t stopping either manufacturing or finance from taking the world market by storm and the economic damage is clearly significant. Why only feeble protests from employers’ organisations? The bankers have met May and offered to pay for access to the single market but it is hardly ground shaking stuff. Is it possible that ‘capital’ in capitalist Britain feels much like Corbyn: about 70% in favour? Or have they lost their grip on the Tories, on politics? Or have we always overestimated the impact on politics of property?

There is an argument that finance has dominated British economic development to the detriment of industry (Geoffrey Ingham, ‘Capitalism Divided’), and that after the ‘big bang’ the City was taken over by foreign-owned, American and Japanese financial companies with a truly global presence and outlook.  British capitalism gave up ‘making things’ a long time ago to focus on selling services. On one view, the EU is an old-fashioned producers club with troublesome rules that weigh on new kinds of global services.

I still don’t see it. How does the EU constrain British enterprise of any kind? We are drawn back from economics to politics. Civil servants are reported to have dubbed Brexit ‘Empire 2’. In other words, for people that never really got over the loss of empire, never reconciled themselves to Britain’s restricted reach, Europe is a grubby retreat and a challenge to British ‘manhood’ (self-respect) deeply felt in Tory heartlands. Working class Brexit patriotism is altogether simpler if equally deluded.

And there it is. I have heard Dominic Raab and the rest bang the drum for global Britain. Michael Gove is not stupid – at least not as conventionally measured – and he makes the same case. But nowhere have I seen the economic argument for Brexit laid out in anything that goes beyond rhetoric. It is true that Patrick Minford, for example, argues that world prices for British consumers and producers are lower than EU-imposed ones but the corollary of world prices as the be-all-and-end-all is savage exposure to market rules, more free-market-ideology than economics. Maybe this is what it comes down to – souped-up Thatcherism.

If anyone knows why capitalism, or a significant fraction of capital, has a positive interest in Brexit, or why capitalists who oppose it have been so feeble and ineffective, please do tell.

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Populism 2017: popular explanations and excuses

‘Brexit and Trump’ are routinely bracketed as examples of the new ‘populism’. Right wing movements are often added to the list, but sometimes also the 5 Star movement in Italy and even the Chavistas in Venezuela. Do they have anything in common? Maybe ‘the people vs. the elite’ as a recurring theme but populist politics really means little more than the challenge to the political ‘centre’ occupied for so long by established left-right parties alternating in government or sitting in coalitions. It says a lot about political panic in the centre and almost nothing about the insurgents.

For the progressive left oscillating around the centre Brexit-Trump was the revolt of the dispossessed, the left-behind. The deindustrialised ‘heartlands’ were giving vent to grievances long ignored. The progressives, at once guilty and aghast, quickly absolved the left-behind of all responsibility. How could you blame ‘them’ for voting against a politics that offered them nothing?

There are two things wrong with this, and they are connected. The first is that neither Brexit nor Trump were decisions determined by the working class left-behind. There aren’t enough of them. The Oxford geographer, Danny Dorling, reckons that 59% of the leave vote came from the middle-class and 41% from the working class though he still thinks the result was driven by the politics of austerity. Brexit revived the deadly combination that sustained Tory governments through the 20thC – socially conservative voters from the working class and the Tory shires, united by a shared identification with the ‘nation’. Trump struck the same chord in the heart of the declining American empire with the appeal ‘to make America great again. Nationalism, albeit in different forms, is a more important populist theme than hostility to elites.

The second thing that is wrong with the progressive left explanation of Brexit-Trump populism as the revolt of the dispossessed is its patronising middle class ‘understanding’ of the misguided masses. We are invited to feel their pain, to understand why they might have voted for Trump or Brexit. After all, no one was listening to them, why not kick over the traces? Well, they voted huge tax cuts for the rich in America, and for Boris Johnson in Britain. Good luck with that!

The working class are not innocent bystanders buffeted by forces beyond their ken and their control. Given the reduced working-class proportion of the electorate, their weight in the leave vote is still significant and in many areas, was decisive. It was a vote driven by the politics of the nation, not crudely immigration and identity despite its prominence, but identification with the nation as the political entity that should be making decisions, the nation that would put its people first, the nation where they might eventually get a grip, the nation as the focus for grievance.

Unbelievably Labour (jobs-first-Brexit) and the TUC are still banging on about the economic consequences of Brexit as if this were really the point when someone needs to talk about the politics of the nation and Europe in an international economy;  or the politics of Europe and EU reform; or the reasons for the crisis of social democracy as part of the decaying centre of politics, actually engaging with the political ideas of people you might want to influence. Anything would be better than the anguished wringing of liberal hands and heartfelt sympathy-as-self-criticism of the cosmopolitan commentariat admonishing everyone for not listening.

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Blind Man’s Brexit Bluff

The EU says Britain must make ‘clear what they really want’. But they have. Britain wants a bespoke trade deal that gives her pretty much what she has now while remaining free to make her own trade deals elsewhere. The UK can’t see the signals coming back that this is out of the question.

The EU thinks that if the UK wants pretty much what she has now she must mean an off-the-shelf-deal like the ‘Norway’ option as part of the European Free Trade Area. If she wants to negotiate something different, that must mean setting out on the 10-year path to a Canadian-style deal. But the UK wants neither.

And on it goes, and on, and … Personally, I blame the BBC. Anyone who switched on the radio or television a year ago would have heard almost exactly the same reporting, exactly the same conversations as now. Politicians endlessly repeating the same old formulas, dancing in circles around diametrically opposed positions. They are stumbling around in the dark, unless of course they know something they are not telling the rest of us. That’s possible but I suspect they really don’t know what they are doing. For certain, the public is being kept in the dark. The BBC is endlessly recycling disinformation.

And Labour isn’t much better than the Tories. Their call for a 2-year (or more) transition deal that maintains the status quo while negotiations proceed is sensible enough but Labour too is peddling the idea that negotiations could produce a solution, a ‘jobs-first’ Brexit for heavens sake, that refuses to confront the hard choices.

Now it seems the UK is on the verge of offering enough money to move on and talk about trade as long as the stumbling around over Ireland can be fudged. Would we, mercifully, be nearer to understanding the key choices and decisions about what comes next?

I doubt it. Attention will now focus on a “transition period”. The struggle in the Conservative Party will be about whether the ‘transition’ will last too long and frustrate an imagined global-Britain. If that doesn’t precipitate a hard-Brexit an even more prolonged period of uncertainty will ensue which will tempt Labour towards what appears to be the remain fall back position: membership of the single market/customs union, a Norway deal by some other name. This should be resisted. Giving up a political voice in Europe for single market membership will be empathetically and rightly rejected by any self-respecting citizen.

In the melee of small talk about trade deals and jobs-first Brexit there is no one of sufficient stature it seems to address the question of Britain’s history and its place in the world.

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History’s revenge

The Brexit sage rolls on. Only a minimal shift in public opinion against Brexit. Most seem to hope that the political theatre of the negotiations will result in an agreement of some sort. It is hard to see what that would look like. If it isn’t the ‘clean break’ of the believers in a global Britain it has to be a variation of the ‘Norway’ option. In other words, even a ‘bespoke’ agreement on trade (and services!) must leave Britain  paying for access to the single market without any political influence over it. So much for taking back control! It is unlikely that such an agreement could be made to stick, or that it would last very long. How have we come to this point?

Leave aside the internecine disputes in the Tory party and the miscalculations of Cameron and the EU. The roots of the Brexit debacle lie deeper, in a ‘British’ national identity bound up with empire. That empire once ruled the waves, played off one European power against another to maintain a balance of power that wouldn’t threaten Britain, and relied after the second world war on maintaining a relationship with the world’s new superpower in America to cover up its enfeeblement. But ideologies and identities outlive their origins. The pretensions of global Britain are the last gasp of the post-war illusion that nuclear weapons would shore up British status, of the long bloody retreat from colonial possessions, of the haughty refusal to engage directly with Europe. In the 1950s Britain was still trying to position itself as the linchpin between the EEC and a wider free trade area. It had to give that up as a lost cause (soft Brexiteers please note) and finally joined the EU in 1973.

Ever a reluctant member, looking for opt-outs and exceptions, remaining aloof from the Euro, clinging still to the idea that Europe could be a ‘free-trade area’ without any political superstructures, Britain is now on the exit threshold with only past illusions as a guide to the future.

It is important to understand that the political impetus for exit did not only come from the ‘left-behind’, a desperate, inarticulate, cry of protest from people in the deindustrialised north. Its heartland was in the Tory shires where deep-seated unthinking conservatism almost defines itself in ‘national’ terms. It was that toxic combination that swung it. If it has a rationale it is the conviction that Britain is not a ‘merely European kingdom’ as the Times put it in 1891.

The illusion of power, still at the core of a disintegrating ‘British’ identity, that we are ‘different’, that others must come to terms, is at the heart  of Brexit and it is extremely difficult to see how it can be changed without long and painful experience.

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Repression and separatism in Spain

The action of Spanish police in repressing the Catalonian referendum will do more to stoke the fires of separatism than almost anything the Catalans have done. What is at stake here? First, a principle, the right of ‘nations’ to self determination. Spain cannot remain united by putting Catalonia in chains. In the end, if the Catalans want it so much they must be allowed to separate.

That doesn’t make it the right thing to do, and it certainly doesn’t make it progressive. Why do the Catalans want ‘independence’? For some it is the mystical aura of nationhood; for others the illusion that democracy will be more real if we can draw a boundary around ethnicity or language or other markers of identity and exclude the rest. But there is calculation too. The complaint that Spain takes much more from the region, one of the richest parts of Spain, than the Catalans get back. Well of course it does. Catalonia has 16% of the population but 20% of GDP, 23% of industry and 25% of exports. Who should pay more, the poorest regions?

The Catalan complaint is heard in one form or another across Europe. Britain got her ‘rebate’ from the EU; Germany and the richer north complain continually that they have to stump up for the poorer south; The Italian Northern League would dearly love to cut themselves off from the Sicilian south. If the Euro fails it will be because national interests prevented Europe from building a European economy. Actually, because Europeans failed to build a European culture and politics that would make such an economy possible. We will not get one step closer to a European politics through independence for Catalonia, or Scotland, or other regions yet to emerge from the contradictions of globalization, only more deeply entrench ‘national’ interests.

For some on the left the sight of demonstrations and a  vote denied seems to go to the head. Paul Mason in the Guardian completely lost his. The fact that there is a revolt, that the slogan is democracy – ‘our’ democracy of course, not ‘theirs’ – is enough. Self-interested Catalan nationalism is progressive as long as it remains ‘cosmopolitan’. Oh dear! And after everything he has written elsewhere how can he seriously suppose that Catalonia can achieve  ‘independence within both the EU and the Eurozone’. Independence? Really?

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Brexit Left?

Is there a case for Brexit on the left? Larry Elliott made the argument recently in the Guardian. He thinks the EU was only another crutch that British capitalism sought to lean on. Moreover, he thinks the EU would outlaw a radical socialist programme, and that the impetus for change that Corbyn represents would dissipate with a return to the status quo. The British economy remains fundamentally dysfunctional but it can be re-built and re-balanced more equitably outside the EU.

There are 4 obvious flaws in this argument. First, it lacks historical or international perspective. Elliott actually endorses Gaitskell’s fear that European political union would end a 1,000 years of British history, an unfortunate phrase if ever there was one, and one rooted in Brit-centred myopia. Second, the EU might well outlaw a radical socialist programme but Corbyn’s Labour doesn’t have such a programme. And if it were to develop one we can rest assured that international capital would outlaw it in an ‘independent Britain’ as surely as the EU. Third, there is no consideration of the international division of labour or world political alignments and their implications for rebuilding a British economy. And fourth, if Brexit, like war, does present a ‘disruptive’ opportunity for positive change it is not Brexit itself (or war) that counts but what you do with it. Hoping to salvage something from a war or Brexit is a desperate strategy.

The nub of the issue is the politics of Brexit. Socialists have a long history of internationalist convictions cramped and confined by national identity and sentiment. It is time to spell out the realities of Britain’s place in the world and create the political and cultural links across national boundaries that would make the management of an international division of labour possible. Where can this best be done? The socialist-cum-social-democratic case for managed, democratic economies and societies is certainly not enhanced by leaving a neoliberal EU for a rampantly neoliberal globalising world. With the political will it might be done within the EU by constructing a dialogue for reform with other socialists. If Corbyn’s Labour did strike out in a socialist direction the chances of winning support within the EU against its present neoliberal leadership would be greater than it would from outside.

In truth there been no debate about a left Brexit for the simple reason that it is a non-starter. It has no popular support; indeed no one with any political clout has proposed it. Manuel Cortes, the General Secretary of the Transport and Salaried Staffs Association (TSSA) dismissed the argument. The left that argues for Brexit ‘gives our ruling class a get-out-of-jail free card’; they blame the EU for neoliberal policies that are firmly entrenched in Britain. Cortes also made the argument against ‘soft Brexit’, the illusion that there is an economically safe haven on the periphery of Europe. ‘Why’, he asks, ‘should we confine ourselves to the second rate option of EEA or EFTA membership when what we already have is something far better? I can’t see how we win the hearts and minds of those who voted for Brexit by telling them that we should now enter into a new arrangement which, in exchange for a large fee, will allow the EU to make all the rules for us because we gave up our EU seat and ability to shape things’.

Labour should look for the opportunity and the courage, as events develop, to make the argument for continued membership of the EU. Timing in this is everything. There are huge risks but if Labour gets this right it will build a new social coalition to displace the Tories.

 

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