What Next? - Part 2

For The Nationalists – SNP and UKIP

Last year, I wrote that the last EU elections were likely to be the high point of the fortunes of the extreme nationalist parties like UKIP, the FN and so on. The reason for that is that the material conditions are changing so as to undermine their basis. The global long wave boom that began in 1999 remains in place. That provides the underlying conditions that favour growth and accumulation of capital. Its effect has been countered, as a result of the global financial crisis of 2008, and the economic crisis that resulted from it. An indication of the strength of the underlying boom, however, can be judged by this. In 1847, when Britain experienced a serious financial crisis, like 2008, the economic crisis that followed it, resulted in a 37% fall in activity. The 2008, financial crisis was the worst on record, and yet the fall in economic activity was around 7%.

In 1847, the Bank of England suspended the 1844 Bank Act that had caused a credit crunch, and within a year, the long wave boom of the period had resumed, as the huge reduction in the prices of financial assets, that had been blown up as part of the Railway Mania, meant that productive-capitalists were able to buy up capital on the cheap. After 2008, the collapse of financial asset prices, including property prices, that had begun, was prevented from continuing, due to nationalisation of the banks, and massive money printing, to reflate the prices of fictitious capital. That meant that the weakening of the power of the money-capitalists was muted, and, with austerity measures weakening aggregate demand, whilst money printing encouraged resources into speculation, rather than productive investment, the final and inevitable resolution of that contradiction was delayed, for a few years more.

The underlying conditions for growth have been undermined, not just by the financial crisis, but by the deliberate economic policies adopted by some governments, i.e. the policies of austerity adopted in the UK, and the European periphery, which deliberately took demand out of the economy, at a time when aggregate demand was being reduced, as a consequence of the financial crisis. Economists like Paul Krugman and Joe Stiglitz have explained the failure of the US economy to grow as rapidly as it has during past recoveries, by a failure to adopt adequately stimulative measures. However, the problem is not a failure to stimulate enough. The US economy, when the freak effects of weather are stripped out, has responded adequately to the stimulus it received. What limited the response, was the deliberate political frustration of those measures, undertaken by the Republicans at local and state level, and the repeated political crises they inflicted over the Debt Ceiling, Budget and Sequester.

Had the UK and EU continued to adopt the stimulative measures they undertook at the end of 2008, and which the US continued to follow, rather than adopting austerity, the effect on stimulating global recovery would have been marked. The failure to do so has limited the extent to which the long wave boom has been able to manifest itself, but the fact remains that the long wave boom remains in place. Moreover, the latter part of 2015 marks the start of a new period of upturn in the short run three year cycle.

For the reasons I've set out elsewhere, the conditions are in place, for a shift away from a situation favourable to money-capital and towards one favourable to productive-capital. Money-capital provides the material basis for the forces of conservatism, whereas productive-capital provides the material basis for the forces of social-democracy. As, interest rates rise, the value of financial assets (fictitious capital) declines, and the social power of the owners of fictitious capital declines along with it. As the productive-capital becomes more important, social democracy increases in strength.

The conditions, therefore, are turning objectively against conservatism and nationalism. The delay in the resolution of the above mentioned contradiction cannot continue for long. Financial asset prices have risen so much, and yields on them fallen so low, as a consequence, that even the money-capitalists themselves realise that they cannot simply keep making huge, non-inflationary capital gains, or obtaining even minimal interest, on their money-capital, without profits increasing in the real economy, and, for profits to rise, real productive investment must increase. Moreover, in many parts of the global economy, there has been neglect of large swathes of the economic infrastructure, required for a modern economy to function efficiently. Roads, railways and other transport infrastructure is rotting in many places, and, in many parts of Europe, the broadband internet and telecommunications infrastructure is now way behind that in Asia, and many parts of Africa.

Even Germany is in a poor position, in that regard, reflecting a need for significant capital investment. In the UK, the government's proposals for upgrading the internet infrastructure are feeble. It is proposing, even where it actually does install superfast broadband, to only achieve speeds of around 100 mbps, whereas in Singapore, more or less the whole of the country is already covered by superfast broadband, with 1 gbps speeds. The need to invest large amounts of capital, both to repair and replace vital infrastructure, and to expand productive-capital, so as to increase profits, will cause the demand for loanable money-capital to rise sharply, as the supply of loanable money-capital declines, causing interest rates to rise sharply, and financial asset prices to crash.

The material conditions, resulting from this, favour social democracy. The the role of the “functioning-capitalists”, i.e. the professional production line managers, becomes enhanced; it is real engineering that becomes important at the expense of financial engineering; the need to develop production as a means of increasing profits increases over the requirements to boost share prices; that brings about a changed relation between the “functioning capitalists”, who are themselves professional workers, and the producers; as productive activity expands, workers become more confident, wages rise, trade union organisation develops, and social democratic organisation and ideas are thereby encouraged and strengthened; competition between workers is reduced at an individual, enterprise and national level.

The ultra nationalists never go away completely, but in conditions such as those that are developing, their power continually diminishes, and, in part, that is a reflection of the material fact that capital itself continually needs to be organised in ever larger units, whether at the level of the individual capital, or at the level of the geographic economic unit. The creation of a United States of Europe, is an economic and historical necessity, it is only a question of the means by which it is brought about that is ultimately at issue.

UKIP's electoral support has been flattered in the past.  Those who come to support a party like UKIP are fanatics, people with a bee in their bonnet over something that causes them to stir from apathy or to ditch their allegiance to their former party.  They may not be the sharpest tools in the box, or have serious intellectual arguments backing their beliefs, but it is precisely that fact, as with religious zealots, which makes them cling to their bigotry all the more intently.   For that reason, they are more likely to vote in elections than is the more normal voter, who can only be bothered to vote, when they see the potential for voting on something important, and over which their vote may make some significant difference to their immediate condition.  As a consequence, in local elections, or in European elections, the turnout is always much lower than in General Elections, and the proportion of this low poll made up of UKIP voters is thereby much greater.

That UKIP has once again failed to advance, once it becomes a question of them contesting elections that involve the majority of the electorate, is then not a surprise. Like the BNP before them, when the real chips are down, their actual support, compared to that of the two main parties, remains low. In fact, the vote for UKIP has been flattered, because, as with the SNP, those who voted for them have been deluded as to what these nationalist parties might realistically achieve.

The reality is that, in terms of the reasons that people vote for UKIP – to oppose immigration, to pull out of the EU – UKIP can do nothing about those things via its local councillors, or MEP's, and its single MP can do nothing in relation to those issues either. In terms of the immediate issues that affect those who have voted for UKIP, such as lack of decent housing, lack of decent jobs and so on, which is the real material basis of the fears and concerns that leads them to search for easy answers, UKIP can do even less, partly because its ideology in respect of these issues is more or less identical to that of the Tories. Once that dawns on those that have supported them, that support will rapidly fall away.

But, the same is true for the SNP. The SNP's vote has been flattered, because they have been able to delude Scottish workers about the prospects of what the SNP could achieve. They deluded Scottish workers with the idea that they could vote for the SNP, and get a Labour government in Westminster. Instead, the declaration of political war by the SNP, on behalf of a large chunk of the Scottish population itself, simply and inevitably provoked an equally nationalist backlash from England. Instead of a Labour government, the SNP, as they have done in the past, simply opened the door for a right-wing Tory government to enter in England.

The SNP deluded Scottish workers with the idea that they would be able to blackmail a Labour government, even though they had no leverage to be able to do any such thing. But, the Tories were able to use that threat of blackmail to rally a large enough block of nationalistic sentiment, in England, behind them to win a majority. And, in fact, on purely democratic grounds, that is understandable. The nationalists of the SNP obtained just 1.4 million votes, whereas the nationalists of UKIP obtained 3.9 million votes. On what credible democratic basis could it be argued that the SNP should have a voice in government, but UKIP should not? Rather, the question is why the SNP should be able to claim 56 seats, whilst UKIP with nearly three times as many votes should only claim 1?

Having deluded Scottish workers into a belief that they could blackmail a Labour government, and instead led them into another Tory government, the SNP now have to try to delude them into a belief that this Tory government “must” listen to them. But, of course, the Tory government has no reason to listen to the SNP at all. In fact, what the one-party SNP regime in Scotland has now created, ironically, is a situation where a Scottish voice in government is pretty much excluded. In conditions where there are a large number of Scottish MP's from Labour or the Tories, there is always a good chance that some of those Scottish MP's will themselves be Ministers. In fact, in the last Labour Government, it was Scottish MP's who occupied the position of Prime Minister, Chancellor and other top jobs. Because, today there are virtually no Scottish Labour or Tory MP's, the chances of any of them being in government, is thereby automatically excluded! In more ways than one, the delusions of the SNP have led the Scottish people into a dead end that has also excluded them from any voice in government. SNP MP's in Parliament will just be onlookers.  If they really had the courage of their convictions, they would follow the example of Sinn Fein, and refuse to take their seats.

In just the same way that UKIP take the real fears of British workers, and their concerns over lack of houses, jobs and so on, and blame it on immigrants and the EU, so the SNP do exactly the same thing, and blame it on Westminster. UKIP propose an independent Britain as the solution, whereas the SNP propose an independent Scotland. As nationalist parties, both act to divert workers attention from the fact that the actual problem is capitalism, and seek to unite workers with their domestic capitalists, in opposition to foreigners, and thereby foreign workers.

A look at the actual practice of the SNP, in government, in Scotland, demonstrates the problem for such nationalist parties. Even within the terms of the powers available to the Scottish government, the SNP has performed poorly. It has implemented a policy of austerity just as much as have the Tories in the rest of Britain. And that is inevitably the case, because just as UKIP's nationalistic policies are not only reactionary but impractical, when it comes to resolving economic problems that require a larger rather than a smaller canvas, so the SNP's policies, of confining themselves in an even smaller canvas of Scotland, are even more reactionary and impractical.

The fact, that the SNP currently purport to be pro-European, whilst wanting separation from the rest of Britain, simply exposes the illogicality and contradiction of their arguments and position even more. If, as the SNP claim, their problems arise not from capitalism, but from the fact that decisions are made in Westminster rather than Holyrood, how much greater would their problems be if decisions were made in Brussels rather than Holyrood, and under conditions where Scottish representation in the corridors of power would be even smaller than they are now, in Westminster?

The Tories understood these economic and political realities, which is why Cameron is already rushing to offer the SNP fiscal autonomy.  Jeremy Hunt let that cat out of the bag on Newsnight, whilst Cameron and other Tories have tried to make out that they do not propose to give Scotland fiscal autonomy.  They intend to make the SNP demand it, so as to give it to them as an apparent concession, so the SNP will have to take the blame.  If the SNP have to raise the finance required to cover Scottish spending, particularly in conditions where North Sea oil revenues are declining, and the ability to use them to bolster state finances are likely to disappear completely, the SNP will have little more scope to actually change anything in Scotland than a sizeable metropolitan council in England. It will have less ability to do so than does London. In fact, if any part of Britain has a feasible argument for declaring independence it is London itself.

The days of the SNP are as numbered as those of UKIP, as these realities become reflected in the ideas that determine Scottish voters responses, dividing them once more into the two great class camps of labour and capital. The immediate manifestation of that will be in the same division into the forces of conservatism and social democracy, which the same material conditions will encourage across Europe. Labour as the representative of that social democracy should learn the lesson, and reject all of the nationalistic, diplomatic solutions framed in terms of an independent Scottish Labour Party, devolution and so on. It is not possible to defeat the ideology of nationalism by accommodating to it.  Labour needs to give workers a positive vision of a better future, and that future can only be framed on a European not a national canvas.