Tuesday, 17 December 2019

Healing? No Hope - Part 2 of 2

Boris Johnson claims that he aims to “heal” the divisions in society brought about by Brexit. It is as empty as Thatcher's similar promises, quoting Francis of Assisi.

Within months Thatcher had launched into her application of the Ridley Plan, and its programme of all-out class war. Riots erupted in inner city areas. She had begun to close down steelworks, and attack the steel workers, shortly followed by attacks on other staple industries. She made a pre-emptive attack on the Miners, in 1981, which failed, only to come back, better prepared, to beat them down in 1984.

There is, however, potentially a difference between Thatcher and Boris Johnson. Thatcher's rhetoric was empty, because she represented all of that base of the Tory Party that comes from the small business class. Her ideology, like that of Rees-Mogg, and much of the ERG, is that of Austrian School Libertarianism. Her advisor was Friedrich Hayek. Boris Johnson is not of that school. He has had to use it to get what he wanted, and he may yet find himself the captive of it. It is a replication also of what has happened with Trump and the Republican Party. 

What we have, as I have suggested in the past, is something akin to what happened in Austria in the 1930's. Austria was the home of Hayek and his co-thinker Mises. These Libertarians professed their dislike of anti-liberal forces such as fascism. However, after WWI, when the Austrian working-class began to flex its muscles, and elected a socialist government, the libertarians took even greater fright. Mises was economic adviser to the Austrian clerical-fascist Dolfuss.  In the end they opened the door to the rise of Austrian clerical fascism, seeing in it a bastion against the upsurge of the proletarian masses. As Hayek himself proclaims in “The Road To Serfdom”, the Libertarians do not fetishise democracy, which they see as itself a potential threat to liberty, by which they mean the liberty of the wealthy, to exploit the workers. The Austrian clerical-fascists then opened the door to Hitler, and his annexation of Austria. You can connect the dots here from the ERG to Johnson to Trump. 

In this scenario, the Libertarians of the Rees-Mogg/ERG variety play the role of Mises and Hayek. For Johnson, they are useful idiots, much as were the DUP, in enabling him to rise to leadership of the Tory Party. Its highly unlikely that Johnson is even a great opponent of the EU. As a Daily Telegraph journalist, he learned to write ridiculous articles about the EU supposedly passing laws to ban bent bananas and so on, which he knew were untrue, but played extremely well with the rather dim-witted, jingoistic readers of the Torygraph. Reading those articles, I suspect that Johnson himself, was laughing behind his hand at the very people that lapped it up, and who enabled him to enjoy a rather lucrative career, simply making up those stories, without having to do any work, as would have been required to have actually obtained real stories based upon the facts. He is after all renowned as a rather lazy person, who does little – even his own side referred to him as a do-nothing mayor, when he was Mayor of London – with little time for studying details. 

Johnson wrote two opposing articles, before coming down on the side of Leave. That decision seems to have little to do with any consideration of what was the right position to adopt, and everything to do with Johnson's own strategy for how to mobilise Tory members behind him against David Cameron. Johnson almost certainly did not expect, or want, to be on the winning side in the referendum. He argued that the referendum should be used to negotiate additional concessions for Britain inside the EU. For Johnson, the ideal outcome was to have led a campaign for Leave against Cameron that won large scale support from within Tory ranks, and thereby launched Johnson into a position to challenge for leadership, whilst leaving Britain inside the EU. Given that everyone expected a vote to remain inside the EU by a comfortable majority, it would have seemed a rational strategy, because no one could fault you for having led a valiant effort that was always bound to fail. No wonder Johnson looked shocked and lost when he discovered the vote had actually gone to Leave

Having found himself in that position, but then defeated by Theresa May, he simply continued that strategy. To defeat May, he occupied a continued position of opposition. He won the backing of the ERG without being a member of it; he won the backing of the DUP, having allied with them against any attempt by May to sell out Northern Ireland. But, what he did once he got the leadership was then instructive. By expelling a large chunk of Tory MP's, he deliberately turned the party into a Minority Government. In doing so, he neutered both the DUP and ERG. They could only hold any leverage if their votes were required to form a majority. Now, neither could do so. He then unceremoniously dumped the DUP. Despite all the hype, what Johnson did was neither to reopen the Withdrawal Agreement nor scrap the Irish backstop. What he did was simply to capitulate to the EU, and reinstate the original deal that May had negotiated with the EU, which puts the border down the Irish Sea. It is the deal May had had to pull back from because of opposition from the DUP and ERG. Now, the DUP fumed, but was impotent. And, with the DUP impotent, the ERG was also rendered impotent. 

Now with a majority of 80, Johnson needs neither the DUP nor the ERG. Johnson's own programme is closer to that of Mosely, and Mussolini and Hitler than it is the ideas of Rees-Mogg, Mises, Hayek or Thatcher. Those that based their argument around the idea that Johnson was seeking to be able to implement a No Deal Brexit were completely wrong. He probably doesn't want any real Brexit at all. He certainly knows that No Deal would be catastrophic and career ending. Those that argued that Johnson wanted to impose deep cuts and austerity were also wrong. It is an error that comes from failing to distinguish between different sections and interests of the ruling class, and which equates state intervention with leftism. The regimes of Mussolini and Hitler, of course, engaged in widespread state intervention, and massive state spending, for example with the building of the German autobahns. It is described as National Socialism, but in reality whether it is implemented by Stalinists or fascists, it is no kind of Socialism at all. As Trotsky wrote, the regime of Hitler, and of Stalin differed only in the greater brutality of the latter. 

Johnson proclaims himself a “One Nation Tory”. What does this actually mean? The clue is in the slogan used in the press conferences after the election “The People's Government”. It is a proclamation that Britain is headed in a totalitarian direction, with Johnson as a modern day Bonapartist in the fashion of Mussolini, or his British counterpart, Mosely. In 1929, Mosely had left the Tory Party, and joined Labour, becoming a Fabian. As Chancellor of the Duchy of Lancaster, under the Labour Government, Mosely brought forward his Mosely Memorandum, as a cure for rising unemployment. Here is what Wikipedia says, 

“Mosley realising the economic uncertainty that was facing the nation due to the death of her domestic industry, eventually put forward a whole scheme in the "Mosley Memorandum", which called for high tariffs to protect British industries from international finance, for state nationalisation of main industries, and for a programme of public works to solve unemployment. Furthermore, within the memorandum, it laid out the foundations of the corporate state which intended to combine businesses, workers and the Government into one body as a way to "Obliterate class conflict and make the British economy healthy again". Mosley published this memorandum due to his dissatisfaction of the laissez-faire attitude that both Labour and the Conservative party held and how passive it was to the ever increasing globalisation of the world and thus looked to a modern solution to fix a modern problem. However, it was rejected by the Cabinet, and in May 1930 Mosley resigned from his ministerial position... In October he attempted to persuade the Labour Party Conference to accept the Memorandum, but was defeated again. Thirty years later, in 1961, Richard Crossman described the memorandum: "... this brilliant memorandum was a whole generation ahead of Labour thinking." As his book 'The Greater Britain' focused on the issues of free trade, the criticisms against globalisation that he formulated can be found through the critiques of contemporary globalisation. He warns nations that buying cheaper goods from other nations may sound appealing but ultimately ravage your domestic industry and lead to large unemployment as seen in the 30s. Mosley in regards to free trade argues that they are trying to "challenge the 50-year-old system of free trade which exposes industry in the home market to the chaos of world conditions, such as price fluctuation, dumping, and the competition of sweated labour, which result in the lowering of wages and industrial decay.” 

The Mosely Memorandum was supported by Nye Bevan amongst others. Its ideas also flow through the Alternative Economic Strategy of the 1970's/80's, and of the Stalinists behind Corbyn today. But it is not socialism; it is economic nationalism, pure and simple. This is what is implied by Boris Johnson's programme for large scale state spending on infrastructure to re-balance the economy's regions, and to do so behind a protectionist wall, which is precisely what Brexit is supposed to do, i.e. to create borders and barriers. It is a programme designed, as was that of Mosely, Hitler and Mussolini, for economies that are today dependent upon large-scale monopolistic capital, and which also thereby require large scale state intervention, regulation and planning. It is the antithesis of the Libertarian agenda of Thatcher, Rees-Mogg and the ERG. But, Johnson will have a similar problem in trying to win support for such a programme inside the Tory Party, as Mosely did inside the Labour Party. What is more, economic nationalism was reactionary in the 1930's, it is even more reactionary, and impossible, in today's global economy, in which three giant economic blocs – the EU, the US, and China dominate. 

For Mosely, the answer had to be to leave the Labour Party and establish his New Party on the way to the British Union of Fascists. For Johnson, the problem is that although he may no longer be dependent on the ERG, and has no use for the DUP, the ERG still represents around 80-100 Tory MP's. Moreover, Johnson only got elected leader because he used Brexit, and in particular No Deal Brexit, to mobilise all of those libertarian minded small business elements behind him. It isn't Brexit in itself that those elements require, but what else it implies. What they seek is not more state intervention but less. The only state intervention they want to see is that applied by Thatcher to ensure that trades union resistance is smashed, and so workers rights can be driven into the ground. For all of these elements, large scale state spending means higher taxes, higher borrowing and so higher interest rates, which is the last thing they want to see. 

Johnson wants a People's Government, but the people are deeply divided by their different interests. Imposing a One Nation, People's Government, that implies homogeneity, when, in reality there is irreconcilable contradiction and antagonism, can only by done by utilising overwhelming authoritarianism, and forcible suppression of dissent. It implies a rapid movement towards Bonapartism and totalitarianism. It requires that dissenters be labelled enemies of the people and suppressed accordingly. 

To pursue his programme, Johnson would have to recreate the Tory Party. He will have to not only cull the ERG in the same way he culled the Cameroons, but he will also have to neuter or dismantle a large part of the Tory party grass roots. Given the undemocratic nature of the Tory Party itself, that may not be such a problem. Expect Johnson to take a leaf out of Kinnock and Blair's book, and begin to complain about infiltration by UKIP and Brexit Party entryists, prior to expulsions and closures of Tory Associations, as he engages in a Night of the Long Knives. 

But Johnson's totalitarian “One Nation” People's Government, as with all such regimes, is necessarily based upon a lie. The lie is that there is one nation to begin with, rather than antagonistic classes and class interests. In order to deal with the implications of the lie, those that disagree with the People's Government, must, by definition, be branded as also thereby enemies of the people, even if these enemies actually constitute a majority of society, as do those that voted for parties opposing Brexit in the General Election. Johnson's totalitarian people's government will attempt to forge one nation, by insisting that these enemies of the people shut up. It is a totalitarian message that many of those elements that voted for him agree with, as they agreed with his decision to shut down parliament itself. Already, we see Johnson proposing to change the constitution so that the courts cannot be resorted to to prevent the government acting illegally in future; despite the thoroughly subservient attitude of the BBC to the government, Johnson is proposing further threats to its existence and funding, as well as making threats against Channel 4, which made some attempt to hold the Tories to account for the vast number of lies they purveyed during the campaign. 

An obvious example of this totalitarianism is Johnson's attitude to Scotland. Scotland has not only voted overwhelmingly against Brexit, but also overwhelmingly against the Tories. The SNP has won 80% of the seats in Scotland. I do not support the idea of Scottish independence, but I entirely defend the right of the Scottish people to determine their future, and so their right to independence should they seek it. Yet, Johnson, faced with a huge challenge to his totalitarian One Nationism, and to his Brexit agenda, responds by saying that he will not even allow Scotland the democratic right to express its wishes! So, we have the ridiculous sight of a government that defends the right of the people of Crimea, of Kosovo and elsewhere to determine their own futures, but denies that basic right of self-determination to the people of Scotland. Scotland will act as a focal centre of resistance, in the year ahead, much as the GLC acted as a focal centre of resistance to the regime of Thatcher in the 1980's. Then Thatcher responded, by simply abolishing the GLC. Expect to see Johnson attempt to abolish or completely neuter the devolved governments, particularly of Scotland, but also in Northern Ireland now that the Tories traditional Unionist allies now constitute a minority. The consequence of that will not be any kind of healing, but a massive increase in sectarian conflict. 

The reason Johnson must do so, of course, is that its not just Scotland that is seeking such independence, as Britain descends into the mire of Brexit. Even the DUP are reported to be considering talks with Dublin about the possibility of some future arrangements between Northern Ireland and the Republic. Johnson's regime is essentially a white, English nationalist regime. Much like Trump's regime in the US. Its members have said that losing Northern Ireland and Scotland would be a price worth paying for Brexit. They may get their wish. It makes sense in the changed environment for Northern Ireland to seek a long-term arrangement that essentially keeps Northern Ireland integrated with the economy of the Republic, and thereby with the EU. And, although it makes sense for Scotland to want to keep an open border with England, it makes even more sense for it to want to keep an open border with the much larger EU, especially, if it were to come together in a new union between Scotland and Ireland. But once these kinds of centrifugal forces are set in motion, they have a life of their own, as was seen in the break up of Yugoslavia, and of the USSR. The rise of nationalism in Wales has been noted, but as different regions find that they do not get the boost to their economies they were promised, we are likely to see demands for greater regional autonomy. The existence of metropolitan mayors will exacerbate that tendency. 

A big contributor to the rise of Scottish nationalism was the riches provided by North Sea Oil. Similarly, Catalunya is one of the richest regions of Spain that feels that it is paying more into the national coffers than it gets out. When he was London Mayor, Johnson himself made similar arguments essentially calling for independence for London, so as to retain its income rather than have it redistributed to the rest of Britain. As London begins to feel the effects of potential isolation due to Brexit, we can expect that powerful interests in the City will seek to have separate conditions for London with the EU than those applying elsewhere. They will want a London mayor to press those interests as against the government. And, with a Johnson government potentially in office for five years, as soon as various regions around the country see that the various boons they were promised do not materialise, we can expect demands for greater autonomy for Yorkshire, the West Midlands and so on to materialise. After all if Brexit is the answer for Britain as against Brussels Yexit, and Wmexit are equally a solution for the problems of those regions as against Westminster. 

We can expect that Johnson will attempt some large infrastructure projects. It is consonant with his Mosleyite ideology. Moreover, all of those new Tory MP's in northern towns will be facing angry Yorkshiremen and women as soon as they see that nothing has changed – to coin a phrase. They will be banging on Johnson's door demanding that money be spent. The trouble is, of course, that these kinds of large scale infrastructure projects make little real difference to people living in the regions in the short term. For one thing, they take years to complete. For another, its usually large national or international firms that undertake them, and the labour used by those firms is often shipped in from elsewhere, rather than employing local labour. In ten years time, you might notice the benefit of a new hospital, school, or road being planned today, but that is not much good for electors who expect to see some improvements in their lives tomorrow. 

Immediate effects would require that more teachers, nurses and so on were employed, but that can't happen. The budgets already exist to employ many of these people, but they simply can't be recruited. Its why the Tories claim of 50,000 new nurses actually requires retaining 20,000 existing nurses they expect to lose! But, with many of those workers returning to the EU, and none coming to replace them, those objectives look impossible to achieve. There are already massive labour shortages in various areas. Fruit and vegetables have rotted in the ground, because of lack of migrant workers to pick them, there is a shortage of 45,000 lorry drivers, expected to rise to 75,000. Additional workers can only be recruited with large pay rises, which will itself bust apart the Tories economic plans. 

And, this is also where the contradictory things that the proponents of Brexit have offered also run up against reality. On February 1st, many of those who voted for Brexit, and now for Johnson, will be dismayed that the TV and newspapers continue to talk about Brexit, as Britain now faces the lengthy task of negotiating its future relations with the EU. They will be even more dismayed when they find that the EU demands access to Britain's waters for fishing as a precondition for any trade deal; that, if Britain wants a free trade agreement, it will have to agree to remain aligned with EU customs, tariffs and single market regulations. They will be further dismayed that, in order to engage in any such relations, Britain will have to remain members of various EU regulatory bodies, and pay a subscription to be so, which will eat into a large part of those so called savings that voters were offered. Indeed, it will have to accept the jurisdiction of the ECJ in disputes over many of these regulations. Britain could, of course, avoid that, by going for the kind of No Deal that the ERG desire, and that Johnson threatened, but Johnson knows that such a course would be disastrous, and, in the end, he will not pursue it, just as he backed out of it in October, instead capitulating to the EU, and having to accept the deal the EU had originally proposed to May. Johnson can't do it, because his Mosleyite ideology leads him to the conclusion that Britain's economy, and so its future, depends upon large-scale capital, and any return to an economy dominated by the interests of small business, and all out competition would be catastrophic. 

The conclusion is correct, but, in today's world, that conclusion also draws you inevitably to the conclusion that such policies can only be implemented within the context of the EU. It was not a coincidence that Hitler sought to create a unified Europe under German domination. 

If Johnson attempts to pursue his course of large scale infrastructure spending, in part to appease those voters in Northern towns, then the reality is that he can only fund that by either raising taxes or increasing borrowing substantially. The UK economy is essentially stalled with no growth. Employment levels are high, wages are rising faster than prices, so that profits are starting to be squeezed, especially as higher wages are not offset by higher productivity, because of Britain's appalling levels of investment in equipment etc. In addition, the Tories have promised their supporters additional tax cuts. The only way that they can finance their spending, therefore, is by additional borrowing. Government borrowing is already rising, as a stagnant economy means lower tax revenues, and additional spending. Increased debt issuance by the Tories will mean that bond prices begin to fall, meaning yields rise. Market rates of interest are also likely to rise. As 2008 showed, because yields are at such absolutely low levels, even small absolute rises translate into large relative rises, with consequently large effects on the prices of financial and property assets. The government will find itself in an inevitable dilemma in which it must increase spending, but doing so causes interest rates to rise and asset prices to fall, opening the potential for a crash in financial and property markets. Such an eventuality befell the Tory government in 1993, a year after they had won their fourth general election. 

The fact is that, if Brexit goes ahead, these tendencies will be accentuated, because of the hit to the economy that it will bring. The Pound has risen, in the short term, as a relief rally based upon the ending of a degree of uncertainty. However, uncertainty actually continues. Its not clear whether Britain will yet have a No Deal Brexit at the end of next year. If Johnson remains captive of the Tory base, he will find it hard to pursue the Brexit in Name Only that is required for a quick, comprehensive deal. Any hint that that means a No Deal will again spook the markets. So beyond, a very short term bounce, I wouldn't expect any large scale unleashing of investment after January 31st.

All of the pressure, during the next year, will be on Johnson to reach a deal with the EU that amounts to Brexit in name only. So, the position of Michael Heseltine that the fight over Brexit is finished is premature. In 1975, despite the vote to remain in the EU being 2:1, it did not at all stop the opponents of membership from continuing to demand exit. Indeed, the Labour Party itself went into the 1983 General Election calling for withdrawal. It maintained that position until 1987. With the margin in favour of Leave being wafer thin in 2016, and with all of the indications that now a majority would reverse it, there is absolutely no reason why the opponents of Brexit will shut up, as Johnson wants. Every day that passes brings additions to the camp of Remain and deductions from the camp of Leave. The members of the former camp will become increasingly angry and militant in their opposition to what they see as a denial of their democratic rights. The campaign in Scotland will play into that angry narrative in a way that will be the very opposite of any kind of healing process. 

So, it is highly likely that, in the course of the next year, Johnson will find himself lined up in opposition to the ERG, and will be pushed more and more into the position of negotiating an extension of the Transition Period. He will have a majority in parliament for that, despite the ERG. It will be the only way a comprehensive deal with the EU can be agreed. But, that means that for all intents and purposes, Britain remains inside the EU. It only means that it will have no say in formulating those EU rules that it will have to abide by. All of those that voted for Johnson on the basis of “getting Brexit Done” will fume in angry letters to the press, but there will be nothing they can do. Farage will again try to mobilise his pensioners army, but having been marched up and down the hill so many times by this latter day Duke of York, they will undoubtedly become weary and hostile to his unwanted attentions. 

Far from creating a climate of healing, as with Brexit in general, what we can look forward to is a much more heightened degree of hostility and internecine struggle, especially as many of those that voted for Brexit, find that they have been screwed as a consequence of doing so.

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