Britain's Death Spiral

Flag of the Strasserite Black Front

The British economy has been in relative decline for more than a hundred years. Its only hope was as an integral part of a larger EU economy. Now that hope, following the vote for Brexit, and with the Tories now not only advocating Brexit, but descending into an orgy of reaction, as one politician after another attempts to outdo the other as to which is the more xenophobic nationalist, is rapidly disappearing. The Tories are now claiming to be a “Workers' Party”, and their rhetoric is increasingly filled with anti-capitalist rhetoric. But, the idea that this anti-capitalist rhetoric has anything to do with them positioning themselves in the so called centre-left, as sections of the media have proclaimed, is dangerous nonsense.  It is no more a politics of the centre left, than are the similar such anti-capitalist policies of the Front National in France, or were those of the Strasserites in 1930's Germany. It was also promoted in the 1970's in Britain by a section of the National Front, and later in the 1980's, by Andrew Brons, who went on to be a BNP MEP.

Amber Rudd Wants foreign workers to be identified and listed
by their employers.  What next, will they have to wear
identifying yellow stars when out in public?

At the Tory Party Conference in Birmingham this week, we have seen the disgraceful sight of Amber Rudd standing at a podium of the governing party calling for British firms to be shamed for the number of foreign workers they employ, and issuing threats that all firms will have to publish lists of all the foreign workers they employ. What next, will the Tory brown-shirts also call for those same foreign workers to have to be identified by wearing stars sewn on to their clothing, as the Nazis required Jews to do?

Earlier in the week, Tory Prime Minister, Theresa May, was asked if all of the thousands of foreign doctors, nurses and other healthcare workers, employed in the NHS, would be able to stay in the UK, after Britain actually leaves the EU. Her reply was effectively, no, they would not, saying that they could stay until Britain had trained enough British healthcare workers to replace them. We then had Amber Rudd attacking foreign owned banks in the UK, like Santander, implying that they facilitated foreign criminals operating within the UK. The Tories, she said, would make it more difficult for those foreign banks to operate here, and for foreigners to open bank accounts! That was coupled with the idea that any foreigner caught nicking a packet of Polo mints, from the local newsagents, would quickly be deported.

This all comes at a time when Britain is trying to negotiate its post-Brexit relations with the EU, and all of its member states, whose citizens are being threatened with such intimidation by the full power of the British state and its jackbooted enforcers. Given that a large part of Britain's economy is tied up with the operation of the City of London, and its need to be able to obtain the support of the EU for continuation of its passporting facility, such rabid xenophobic nationalism, is unlikely to win Britain's negotiators any easy ride in the future negotiations. Given the nature of the three muppets the Tories have put in charge of those negotiations, its pretty likely that Britain is going to get seriously mugged in its future dealings with the much bigger, much more powerful EU.

In a way, this is a kind of death spasm by British national capitalism.  What is apparent over the last few weeks is just what a fantasy world the Tory Brexiteers live in.  They do not yet seem to have realised that the days of the British Empire, and of its gun boat diplomacy are gone and gone forever.  They seem to think that they only have to demand privileges from the EU, and they will be given.  Some hope, and given the xenophobic outpourings of the last few weeks from the government, even less hope than there was before.

But, long before that the populist posturing of Tory politicians will do serious damage not only to the British economy, but to British society. Take the issue of sending back foreign shoplifters, and the other ranting this last week at the Tory Conference. They seem to have had no thought about the 2 million British people already living and working abroad. If its made harder for EU banks to operate in the UK, what do the Tories think will happen to all of those branches of Barclays and other UK banks dotted along the Spanish Costas, largely meeting the needs of Brits who have retired to the Spanish sun? And, when it comes to repatriating criminals, the Spanish and others have far larger pickings in the Costa Del Crime, for repatriating Britons who have been guilty of far more serious acts than pilfering a pack of Polos.

But, that seems to be part of the xenophobic nationalism that the Tories seem to have settled on as their only hope of future electoral success. It is part of a more general pulling back from the world, and attempt to hunker down behind national borders, cutting the economy and the society off from the wider world. It is a reflection, in government policy, of the kind of jingoist editorials of the Daily Mail and Daily Express over the last few decades, which appealed to that section of the population in which this kind of bigotry is rife, but whose extent, liberal minded politicians and journalists have tried to blind themselves to. It reminds me of my in-laws who some years ago, when Abbey was taken over by Santander, immediately withdraw all of their savings, because they could not stomach the idea of having their money with a foreign owned institution.

And, of course, that kind of xenophobic nationalism being promoted by the Tory government was witnessed in the upsurge of racist attacks on anyone who looked foreign, or sounded foreign in the days after the referendum result. And, of course, it has its blow-back. The foreign owners of Nissan-Renault in Sunderland, have said that they will not be making any additional investment in the plant, and will be seeking compensation from the government for any losses resulting from Brexit; the Indian owners of Jaguar Land Rover, have made similar comments, and reported that they are facing problems already with sales in Europe, where potential consumers are saying they have no interest now in buying British produced goods. That will increase as reports feed back to those populations, in Europe and elsewhere, of the racist attacks on their compatriots living in Britain.

In the expectation of a vote to Remain, the Pound rose towards $1.60, on the night of the referendum, only to sink to $1.30 on the result. As it started to seem that Britain might not leave the EU, or that some kind of fudge, or soft exit might be negotiated, the Pound recovered slightly. But, as uncertainty persisted, only to be followed by this outburst of nationalistic populism, it has sunk again, and looks set to keep falling until parity with the Dollar and the Euro, or lower. The consequence will be a decimation of living standards in the UK, as the cost of all of the imported goods rises sharply. Yet, the Tory media reflecting the set of currently dominant ideas, has ignored the actual damage to the real economy that is being done by a falling Pound, instead to focus on the fact that it has caused the FTSE 100 to rise, thereby making a handful of money-lending capitalists even richer, on paper, than they were before!

There are only two basic trajectories that the UK can now take. Either it will become a more overt representative of the interests of the US in Europe, or it will find itself having to crawl back to the EU cap in hand, as a supplicant for readmission. The UK was effectively only of any use to the US, as a representative of its interests, whilst it was actually inside the EU tent. Outside the EU, the US will have no real use for the UK, and will cut it adrift. The UK would then float off into the mid Atlantic, as a kind of pariah. Its economy is large enough to be a competitor to the EU, for the EU to do everything it can to diminish the UK, isolate it economically, diplomatically and militarily, but it is too small to be an independent economic power. Rather like Russia, the only thing it would have in its corner, as a last resort, is its nuclear weapons, but for most occasions, where any tension or conflict arises, they are useless, just as they were in the Falklands War against Argentina, or the Cod Wars against Iceland. No one seriously thinks that Britain would launch a nuclear strike on Europe, for example, when, in a few years time, a renewed conflict arises over Gibraltar, which is one reason that Gibraltarians voted overwhelmingly for Remain.

Only a decade or so ago, Britain was the world's fourth largest national economy; even several weeks ago it was still the fifth largest economy; but today, as a result of the rapidly shrinking Pound, it has fallen to be just the sixth largest national economy. In less than a decade, it is likely to be only the twelfth or even fifteenth largest national economy. But, in today's global economy, talking about the size of national economies is meaningless, because what counts are the large economic blocs, such as the EU. Compared to the EU, US, China or even Japan, the UK economy is already a minnow. Yet, it is too big to be able to operate like a tiny country such as Switzerland, still less Norway with its tiny population, and large oil and gas reserves.

The UK was on a long steady path of decline, which had been steadied and smoothed for the last 43 years, as a result of its membership of the EU. The decision to leave the EU, has ended that possibility, and the populist rantings of the Tories, in search of short term electoral support, are making it even worse. In the EU, the similar right-wing nationalist outfits, such as the FN in France, will have limited possibilities, because the EU will be able to utilise its much greater resources, as global economies shift away from Monetarism to Keynesian fiscal stimulus, to pump large amounts of investment into infrastructure spending, and thereby stimulate economic growth. They will also turn the tables on the UK, using it as a scapegoat for any short term problems.

The UK will either go into a death-spiral, of which the current ravings of the Tories are the first signs, or else it will be forced back into the EU, as a much more subordinate member, having to give up its previous rebate, exemptions and also having to become a member of the Eurozone. The pressure from capital, even over the next couple of years, is likely to build for this latter option. But, a section of the Tory party appears fixed on surrounding itself with that layer of lumpen proletarians that have previously been misdescribed as Labour's core vote, that 30% of the population, which I long ago set out as being racist, and bigoted and which formed the majority of the Leave vote in June, and which previously provided the electoral base for the BNP and UKIP, but whose components also often never voted, or voted Labour blindly, as an act of tribal loyalty. Such layers could never form a solid basis for even a progressive social-democratic party, let alone a party aspiring to socialism.

Labour should abandon such ideas, and base itself on those sections of the working-class and middle class that are forward looking, that voted Remain, and more specifically voted Remain, whilst recognising the existing limitations of the current EU. We have to tell the truth to the working-class that a future outside the EU is no future, and that our future resides in joining with other European workers to construct new institutions and organisations that meet our needs. The reality is that outside the EU, Britain will quickly descend in a death-spiral of increasing reaction, of which the last few weeks have been merely a foretaste. The British economy would become little more than a colony of the EU.