George Kerevan says the British ruling class is experiencing an extended crisis best epitomised by Brexit
When Boris Johnson’s political obituary is finally written, you can bet it will contain the infamous quote which said: ‘F*ck business’. But how could a senior bourgeois politician, vying for the leadership of the world’s oldest ruling class political party, denounce the very capitalist interests the Conservative Party was traditionally supposed to represent?
The answer is that Brexit is the crucible in which the ancient ruling class bloc that heretofore has represented British capitalism is being re-forged. EU membership, which was meant to provide new markets for British industry following the demise of Empire, has proven a cul-de-sac for every sector except City finance (which originally opposed joining). Britain runs a permanent and growing manufacturing trade deficit with the EU. Some 27% of all British businesses employing over 250 workers are now foreign-owned, with well over half in of those European hands. Exploiting Britain is now a prime source of EU, US and foreign profits.
This underlying economic crisis has provoked a related but separate crisis in how British capitalism maintains hegemony over society. The result is a massive convulsion in British politics, in the internal relationships between different sectors of ruling class itself, and above all in the functioning of the dominant Conservative Party. Brexit is not the primary cause of these developments, but it is the outward form in which ruling class divisions are being played out.
Karl Marx in his London exile was the first to explore the complex inner political relationships of the oldest capitalist society on the planet. British capitalism was uniquely pre-industrial, based on market-driven agriculture and City-funded foreign trade in the period after the English Civil War. Here the Tory Party emerged as representative of the new agricultural landlord class: the former feudal aristocracy whose financial interests were now centred on ground rent. Perpetually ranged against the Tories were the Whigs, representatives of the tight oligarchy of senior aristocratic families, such as the Devonshires and Bedfords. The Whig oligarchy sought to maintain monopoly of control of the government and the military machine, whose patronage protected their wealth (which is the origin of the relative autonomy and elitist culture of Whitehall to this day.)
As the nineteenth century progressed, this ruling class duopoly was challenged by the rise of an industrial middle class and by the world’s first mass proletariat. Politically, this clash took place around 1) the demand of the new industrial bourgeoisie for free trade (hence, the repeal of the protectionist Corn Laws); and 2) working class Chartist demands for universal suffrage. The outcome settled politics for the rest of the century. The Corn Laws were repealed, and the industrial bourgeoisie granted the vote. In return for these concessions, the newly enfranchised industrial middle class feebly accepted a permanent, political condominium with the landed interest – it was a safer option than unleashing the proletariat. But male working-class suffrage was denied till 1918. Women waited even longer.
Britain would remain a curious constitutional fossil in which the industrial bourgeoisie failed conspicuously to take a monopoly of political power – contrary to Marx’s confident mid-century predictions. As a result, British capitalism would fall behind America in creating a modern state geared to its own interests. Hence, a century of relative economic decline. The persistence of this ancient regime has been the subject of much debate on the British left, famously in the pages of New Left Review. While there is a core truth contained in this analysis, British decline provoked repeated conflicts and realignments within the ruling bloc. It is these conflicts which – if belatedly – are now coming to a resolution.
For example, the successor to the Whigs, the Liberal Party, first morphed into the political representative of the big industrial bourgeoisie; then it split again after the rise of the Labour Party, with the main industrial faction fusing with the Tories. The ruling bloc underwent yet another reorganisation after WW2. British industry had remained organised in small family firms – undercapitalised, badly managed and increasingly unable to compete with giant American and German rivals focused on mass production. With the loss of imperial markets after 1945, British manufacturing capital faced Armageddon. The solution was state ownership of coal, railways and steel, which paid off private capital with taxpayers’ money. A second wave of high-tech nationalisations followed under Harold Wilson and Edward Heath, involving aviation, Rolls Royce, computers, cars and shipbuilding.
The ultimate aim was to create economies of scale to allow manufacturing industry to conquer new European markets once Britain entered the EU (then called the EEC – European Economic Community). As a result of this state capitalism, the bourgeois managers of nationalised firms emerged as a key stratum in ruling class power. Figures such as Michael Edwardes, boss of British Leyland, and Lord Robens, head of the National Coal Board, became influential players in this state-industry nexus. But it proved to be the last throw of the dice for the industrial bourgeoisie in Britain. A new political bloc would emerge post-Thatcher. The roots of this new bloc lie in Thatcher’s privatisation programme.
State capitalism succeeded in consolidating and re-capitalising British manufacturing. Thatcher now sold these assets back into private ownership for a song. In the process, a new bourgeois layer emerged bent on making a quick buck from trading shares or buying and selling assets – much as Russian oligarchs would do after the fall of Communism in 1989. The era of ‘Del boy’ capitalism had arrived, aided by Thatcher’s simultaneous deregulation of the City and Gordon Brown’s later tax concessions for ‘non-doms’. Sociologically, this upstart bourgeoisie was drawn mainly from outside the traditional Oxbridge or City elite. Arron Banks is the son of an expat sugar plantation manager while Nigel Farage’s peripatetic father was a failed stockbroker turned antiques dealer. The ‘Del boy’ class made its living in fringe financial wheeling and dealing – Banks by insuring commercial white vans and Farage by selling junk bonds. This stratum learned to hate the traditional bourgeois establishment.
Land ownership (with its rental income) would also make a comeback post-Thatcher. The literal massacre of the English yeoman officer class on the fields of Flanders virtually annihilated the traditional Tory rural bourgeoisie. But since Thatcher, British governments have sold off a massive 2m hectares of public land – a staggering 10% of the entire land area of Britain. Result: while 30% of all land in England is still held by the traditional Whig aristocracy, a staggering 40% is now owned by anonymous corporations, foreign oligarchs and nouveau riche financiers. This has created new political interests.
Consider pro-Brexit tycoon, James Dyson. He has spent the last few years on a massive land buying spree. His Beeswax Farming company controls 33,000 acres of prime English farmland, making Dyson the biggest farmer in the country. Why has Dyson bought up all this land? Certainly, he rakes in public subsidies. But the core reason is that Dyson’s investment in farmland is a way to avoid inheritance tax. Oligarchs like Dyson are frantic to deregulate land control and cut taxes, as a bolt hole for their new wealth. Any agency that smacks of regulation (i.e. the EU) is, to him, an enemy.
These new ‘Del boy’ capitalists aren’t interested in long term investment. Consequently, privatised industry has again been abandoned to foreign competition and foreign ownership (hence, support for the EU). Instead, domestic British capitalism accumulates using financial speculation. A look at who funded the ‘Leave’ campaign and Boris Johnson’s leadership bid reveals the prominence of a splinter group of finance capitalists who operate so-called ‘hedge funds’. They include Crispin Odey of Odey Asset Management and Johan Christofferson of Christofferson, Robb and Co. Their interest in Brexit has everything to do with escaping new EU regulation, ending central bank quantitative easing (which favours conventional bond holders) and returning to a more libertarian (‘chaotic’) economic system in which they can make money by shorting the market. Here lies the genesis of a new ruling class bloc.
So, Brexit is not a cry for help from the English underclass. It is a carefully stage-managed campaign orchestrated in particular by hedge fund billionaires and fringe speculators like Arron Banks manoeuvring to seize the state for their own profit.
Traditionally, the British ruling class and its attendant national culture are an ideology free zone. This is the result of the failure of any social revolution from below to challenge – never mind destroy – the ‘eternal’ edifice of British capitalism. But the new hedge fund insurgents need to explain why they are intent on a radical break with Europe and with the pro-EU hegemony of the City, CBI and Whitehall-Oxbridge-BBC establishment. This ideological project takes the form of an extreme anti-state libertarianism. Consider puckish Steve Baker MP, the technological brains behind the ‘Leave’ campaign and chair of the ultra-Brexit, European Research Group. Baker is a conscious radical libertarian who hates traditional conservatism. He’s an entrist who sees Brexit as the hammer to destroy the failed, corrupt British establishment and start a revolution to reverse British capitalist decline.
Classical libertarianism eschews nationalism, advocating open borders and freedom of lifestyle. Yet Trumpism and the pro-Brexit bloc are extreme nationalists, anti-Muslim and anti-immigration. How is this contradiction squared? Pro-Trump and pro-Brexit ‘libertarians’ theorise that you can only risk abolishing state regulation if there is a commonality of culture among the citizenry. And defending a common culture requires curbing immigration. Of course, this ‘libertarian nationalism’ is thinly disguised racism – but a racism that allows the new ‘Del boy’ capitalists to mobilise a mass base among the de-classed, worried pensioners and threatened petty bourgeoisie.
Can this new ruling class bloc solidify? On one side, the pro-Brexit ‘Del boys’ represent a precariously narrow social base. Their success arises from the weakness of the left, the complacency of their bourgeois opponents and the decline of British industrial capital. Their petty English nationalism seems oblivious to the centrifugal forces a ‘hard’ Brexit will unleash in the Celtic fringes. And, their financial interests are at odds with the needs of what remains of industrial capital. Alternatively, ‘Del Boy’ speculators have nothing against Chancellor Javid (an ex-derivatives salesman) abandoning austerity in favour of a massive borrowing and spending spree. It could buy Boris victory in a general election.
Yet the thing about speculators is they are apt to gamble too far. There’s a global recession in the offing and the working class won’t remain quiescent. This time, the ruling class is deeply divided. Let’s keep it that way. If Labour gets to power, it should ban ‘shorting’ in shares and regulate hedge funds out of existence. And, it should impose a hefty wealth tax on big land ownership. A new ruling bloc has yet to crystalise. Let’s prevent it ever happening.
George Kerevan is the National Convenor of the SNP Socialists group and a former SNP MP