Its five years, now, since I first began putting forward a number of predictions for the year ahead, in the manner of the predictions given by various pundits, as a festive ritual. They are intended as much as seasonal entertainment rather than rigorous analysis. But, this year has shown why Marxists do not make long-term predictions, and why short-term predictions can even more easily be blown off course, as a result of some black swan event – a point I made some time ago, in relation to the 2008 financial crisis.
“There are two points of relevance here. First, the superficiality of taking events or phenomena that appear the same as actually being the same, and second, the problem that economists and social scientists have with randomness. I do not wish to talk about the latter here, but will come back to it in another blog. All I will say about it is to repeat a comment made recently by hedge fund manager Hugh Hendry on CNBC. Asked for a prediction, he said: “I can tell you what will happen in five years, possibly even two, but I can’t tell you what will happen tomorrow, next week or next month.” This might seem odd, but it is not.
In the longer term, the consequences of randomness are removed. It is possible to analyse laws of motion and predict how things should develop, but tomorrow, some random event can cause consequences that no-one could predict.”
In fact, its not even the global COVID19 pandemic that is responsible for that Black Swan event. Globally, it has caused no more deaths than would be expected from flu in a bad year, and far less than the normal number of deaths from all causes. In Britain, for example, total deaths per year vary between 450,000 to 625,000, a range of 175,000. So far, the 65,000 COVID deaths (and the actual number dying from COVID rather than with COVID is undoubtedly much less than that) amounts to less than half of that normal annual variation. The Black Swan event, rather, has been the fact that governments responded to a moral panic created on the back of it, by imposing widespread, catastrophic lockdowns of social activity, which created the worst economic slowdown in 300 years. In developed economies, for example, COVID has caused, in population adjusted terms, no more deaths than did the 1968 Flu Pandemic, which also, by contrast, killed far more younger people, whereas COVID has almost exclusively killed the elderly. Yet, no such lockdowns were introduced in 1968, nor in 1957, when other flu pandemics killed similar numbers. In 1918, when Spanish Flu killed far more, even in nominal terms, no lockdowns were introduced.
But, as I wrote in relation to the 2008 financial crisis, and the impact of short-term events, they tend to have little effect on longer-term predictions, based upon analysis of material conditions. Very few people even remember the 1968 Flu Pandemic, and other events of that year, such as the Prague Spring, the May events in France, and so on are the ones that come to mind. As Lenin pointed out, Marx and Marxists do not make “predictions”, about social development, any more than Darwin could predict what species would develop a thousand years, hence. We do not put forward schemas of how the future “should” be, we only describe the existing material conditions, and analyse the process that led to it, thereby, extrapolating that process into the future, setting out the natural path of development. Even though the “predictions” set forward, are in the vein of those usual for the season, rather than being any kind of seminal piece of theoretical analysis, I have tried to develop them, within that same framework. But, the experience of this last year shows the degree to which all such predictions can be upset, by randomness.
Although, they are offered up in the same way, I have attempted to develop them in the same way that every Marxist makes “predictions”, i.e. as merely reflecting the unfolding of existing realities. That is the method of historical materialism. For example, as Lenin says, when Marx talks about the inevitability of Socialism, this was not a prediction of some future event, but a description of the fact that, economically, the socio-economic forms of Socialism already existed in the shape of socialised capital, of the cooperative and joint stock companies, which Marx described as transitional forms. Marx merely extrapolates the natural path of development based upon this material reality. Where I have not done that, in some previous years, in relation to particular predictions, such as Trump standing down (2019), I have made clear that the prediction inclines more towards the entertainment value of such exercises.
Brexit Doesn't get Done
As I write this (17th), there are just two weeks to go to the end of the year. As predicted, Brexit did not get done. Its hard to see how more of what else was included in that prediction could have also come true.
In the prediction I wrote,
“Boris Johnson has two real options. Either, to get a deal done before the end of next year, he again capitulates to the EU, and accepts a Brexit In Name Only deal, whereby Britain essentially stays inside the Customs Union and Single Market, or agrees to indefinitely abide by their rules and regulations, or else he implements a No Deal Brexit that is simply deferred until the end of next year.”
There is many a slip 'twixt cup and lip, but as things stand at the moment, it looks like a deal will be done at the last minute that amounts to the Brexit in Name Only described above. At every stage, Johnson has had to capitulate to the EU. In order to get a tariff free trade deal, Johnson had to agree to Northern Ireland remaining effectively inside the EU in perpetuity. His Internal Markets Bill provisions quickly had to be removed, in relation to NI. But, he has also had to essentially agree to Britain itself remaining inside the EU Single Market in perpetuity, though not its Customs Union. To get an FTA, Johnson has had to agree to abide by EU Single Market regulations on standards. Its not clear, at this moment, what the conditions on future standards are going to be, but its clear that the EU is going to also impose on Britain the requirement to adhere to its future standards, or else to face, equalising tariffs on its exports to the EU. For all intents and purposes, this amounts to Britain agreeing to abide by EU Single Market regulations now, and forever. It is Brexit in name only.
Its the worst of both worlds. Whilst this arrangement allows Britain to continue to trade with the EU tariff free, it does not remove all of the frictions that have been imposed on Britain as a result of Brexit, nor the costs that go with it. It will not prevent the backlog of lorries in Kent, for example, because British firms shipping goods to the EU will still now have to produce millions of new documents showing that their goods do indeed comply with EU standards and regulations. This BRINO may or may not overcome some of the issues in terms of other regulatory compliance that a crash out would have brought with it. We will have to await the details in that regard. Its still likely that only a fraction of the current number of UK drivers will be able to continue driving in the EU, and the costs and delays involved is already leading to lorry drivers deciding not to come the other way. It does not change the requirement, even for goods shipped from UK to Northern Ireland, to have to provide all of this additional paperwork, and to be subject to verification checks. It will only obviate the implementation of tariffs, which amounts to only a fraction of the total frictions and costs of trade.
What the deal does do, from all accounts, is to leave Britain outside the Customs Union. That leaves Britain free to impose whatever tariffs it likes on imports from non-EU countries, although, unless it has specific trade deals with these other countries, it has to apply standard WTO tariffs to all of them equally. It leaves Britain free to strike these separate trade deals. But, what is the reality of that? So, far, Britain has only done roll-over trade deals with countries it already had trade deals with, as a member of the EU. It has gained absolutely nothing extra in any of those trade deals. Nor is it likely to, because the UK is only a sixth the size of the EU, and so it can offer any other trade partner only a sixth of the potential market that the EU can offer. It is in a much weaker bargaining position than it was inside the EU. Indeed, this is why across the globe, countries are joining together in such economic blocs to gain the advantages they bring including in terms of the additional bargaining power. Britain is peculiar in trying to move against the tide of history and economic rationality.
But, even in terms of these separate trade deals, Britain is constrained. The very rules of the Single Market that Britain is now signed up to abide by, means that it will not be able to willy-nilly import goods from these other countries. The rules of origin of the Single Market will prevent that. Take the well-known issue of US chlorine washed chicken. It is currently banned from the UK, because it does not comply with EU regulations. That does not change. If the UK did a trade deal with the US, in which it agreed to take in US chlorine washed chicken, that would break the EU regulations, and put Britain in breach of its agreement with the EU. It would mean that foods were being allowed inside the UK that did not comply with EU regulations. The same would apply to US GM crops, hormone treated beef and so on.
The EU would have several grounds for opposing any such deal. Firstly, it means that goods are circulating in the UK economy that do not comply with EU regulations, and so could be deemed to give the UK an unfair advantage. If UK workers were being fed substandard food, then this might be seen as acting to lower UK wages, to give the UK an unfair advantage. Secondly, those imported foodstuffs and so on, would be used in food manufacturing processes, again lowering production costs unfairly, and so in breach of the trade deal. Finally, precisely because these foodstuffs would go into food processing in Britain, those manufactured products could then find their way into Northern Ireland supermarkets, from where they might cross the border into the Republic, or they could find their way, directly, into EU markets, not only giving UK manufacturers an unfair advantage, but also undermining EU regulatory standards, and so the Single Market.
Any idea, even in this sphere, that Britain could exercise unconstrained “sovereignty” is a feint hope.
I wrote,
“The easiest option for Johnson is BRINO. He has already passed off his capitulation to the EU as being some kind of victory, in which he got them to reopen the Withdrawal Agreement, and removed the Irish Backstop. Neither was true, he simply went back to Theresa May's original deal, offered by the EU, in which the border was placed down the Irish Sea. May couldn't get that accepted because she was beholden to the DUP, and people like Johnson, supported by the ERG, opposed her, for their own tactical purposes of removing her from office. Johnson has neutered the DUP, and even more so, now, with his parliamentary majority. The Tory Party, with its instinct for staying in government, will not want Johnson to appear to have failed. So, there will be huge pressure to pass off BRINO as being a marvellous deal, and the fulfilment of Tory election promises.”
Any deal will be precisely of this nature. The issue of fishing rights is one that the media has kept on the front burner, even though everyone knows that, economically, it is irrelevant to both the EU and UK, accounting for less than 1% of GDP in both cases. Keeping the issue to the forefront, is precisely the kind of sleight of hand that will allow Johnson to claim that he has preserved “sovereignty”, and obtained a “good deal”, whilst having capitulated on everything that actually matters, i.e. Single Market regulations. Even here, Johnson will have to give ground, because Macron and others will need to show that they have also protected the interests of EU fishing fleets. Some deal that gives the EU continued access, but on a smaller scale, with some kind of transitional arrangements is likely.
For the reasons set out above the DUP and ERG are likely to be cowed in their opposition to this capitulation, but even if they are not, Johnson need not care. In the last year, he has been able to rely on the faithful support of Keir Starmer and Labour, with Starmer having become a bigger Brexiteer than was Corbyn. Indeed, Starmer has been Johnson's reliable lieutenant not just on Brexit, but also on lockdowns and other restrictions on civil liberties, as well as on Johnson' promotion of jingoism in all forms, for example, in his legislation to protect UK war criminals from prosecution.
I said,
“Johnson also knows that, with Labour in disarray, the Liberals having again destroyed themselves, and the SNP acting as a useful threat around which to rally English nationalism, he can probably rely on the sheer opportunism of the Labour Right, to come to his assistance. The right-wing Labour nationalists, and no doubt some of the Blair-rights, and soft lefts like Kinnock, will make the case for supporting any Brexit deal that Johnson brings forward. A BRINO gives them every excuse for doing so. So long as Johnson can rally the large majority of support for a BRINO, which his 80 seat majority makes it easier for him to do, then even if the ERG could muster 100 rebels to vote against it, Johnson needs only 20 or so Labour rebels to back him to get his deal agreed. Johnson must see that as eminently achievable, whereas a crash out would not only destroy his government, it would also provide a pole around which all opposition could again rally.”
Indeed, now he must see that the Brexiteering Starmer Labour Party, in parliament, can be counted on to get him over the winning line no matter how many Tory and DUP rebels there might be.
But, the reality of this BRINO is ludicrous. As I wrote,
“Johnson can use BRINO to say that he has got Brexit done, whilst, in reality, all that would have happened would be that Britain would have remained inside the economic institutions of the EU, having given up its political input into those bodies. It is a totally ludicrous position to be in, and, eventually, even those that voted for Brexit would wake up to that fact.”
Britain again would have the worst of both worlds. It would essentially still be in the EU, having to comply with Single Market regulations in perpetuity, but now with no right to determine what those regulations are to be, as it enjoyed as an EU member. Looking at what the Brexiters promised, including Boris's so called “oven ready deal”, it was that they could obtain all the benefits of being inside the EU, but with none of the costs or obligations. If that is what they meant by Brexit, then its clear that even if they obtain a deal, it certainly will not amount to having got Brexit done. With two weeks to go, there is, as I write, still no actual deal. Yet, we were told that such a deal “an over ready deal” was going to be the easiest thing in the world to have negotiated, in which case it should already have been signed, sealed and delivered months ago!
The idea that Britain could obtain Brexit in which it had all the benefits of EU membership with none of the costs or obligations – a lie perpetuated both by the Tories and by the Lexiters – was always nonsensical, and impossible to achieve, and it is that reality that has continually imposed itself over the last four years. Britain will end up essentially still in the EU, in terms of having to abide by its rules and regulations, but will, at the same time, have no right to determine those rules and regulations. It will have obtained a free trade deal, but will still, now, face all of the costs and delays caused by the trade frictions it has created by technically leaving the EU. For UK citizens, they will have lost all the advantages they had of EU citizenship, including the right to free movement, the benefits of healthcare coverage when abroad, and so on.
The result is the direct opposite of what the Brexiters promised. It means that Britain and Britons not only lose the benefits of EU membership, but have imposed on themselves additional costs and obligations. As I wrote in the prediction, it can't be long until even those who voted for Brexit wake up to that reality. It is then, unfathomable why Labour has decided to tie itself to the inevitably sinking ship of Brexit. They seem to have calculated that the 90% of Labour members, and 80% of Labour voters who back Remain, would stick with them, as they collapse into this reactionary nationalism. But, there is no reason in logic or recent experience to support that hypothesis. In Spring 2019, 60% even of Labour members voted for Remain supporting parties, rather than Labour, and it was clearly Labour's more pro-Brexit stance that lost it the election in December 2019. Recent polls show two-thirds of voters are either militant Remainers or Leavers, and that division continues to harden, whilst polls also show a growing majority of voters believe the decision to leave was wrong. Labour again seems to be backing the losing horse, as it collapses into nationalism as a response to its populism.
The other predictions in respect of Brexit have also been fully born out. Johnson isolated the DUP and ERG, having used them to get elected Tory Leader.
“Johnson used the Tory Libertarians to destroy May, now he will destroy the Libertarians, and their support in the Tory associations.”
Already, Johnson has challenged the Libertarians with his increasing restrictions on civil liberties imposed under cover of the lock downs in response to COVID, and again, with overt support from Starmer's Labour Party. The Libertarians have grumbled, but they have been impotent, and when he pushes through his BRINO with that same Labour support, they will be impotent again. With the elderly Tory voters that pushed through Brexit dying out by the day, with the support for Brexit continually declining with them, and as a result of the reality manifesting itself as every day passes, and with Labour again wrong-footed, having jumped headlong into nationalism, then Johnson will be again set clear for the other longer-term change of position described in the prediction.
The history of what happened, previously, as described by Sraid Marx, is illuminating. Detailing Britain's attempts to derail the EEC's creation, the UK, in 1957, proposed the establishment of a wider free trade area.
“In 1957 the British Prime Minister Harold Macmillan sought to pre-empt creation of the European Economic Community by proposing a wider free trade area that would encompass the six would-be members of the EEC. The six however had already committed while the British appeared to want to have their cake and eat it: gain a free trade area for its industrial goods in the rest of Europe while continuing its current arrangements with its old Empire, especially in relation to food. For the prospective members of the EEC the British proposal appeared to threaten political ambitions for the new European organisation while France in particular saw it as a British attempt to take leadership.
When this British attempt failed it went ahead with creation of a separate European Free Trade Association (EFTA) that included Austria, Denmark, Norway, Portugal, Sweden and Switzerland, setting its launch date for May 1960. When the EEC members accelerated plans for cutting tariffs in the same month EFTA, in an effort to keep up, followed suit with its own programme of cuts the following February. An earlier example of the exercise of sovereignty and the ‘ratchet effect’ so objectionable to the British now.
Just over a year later Britain demonstrated its commitment to its new EFTA allies and announced it was applying to join the EEC. It did this for many reasons, including that EFTA was too small, that the countries of the dying Empire were going to go their own way, and that the US supported West European unity, meaning that EFTA could never rival the EEC.”
As Sraid Marx goes on to say, Britain today is on its own, and in a much weaker position than it was in in 1957. The idea that it is going to stay outside the EU is even more preposterous, which is why it has been led into BRINO. But, BRINO is itself an unstable situation. All of the factors that led to the development of the EU continue to exert themselves. The advantage for Johnson of BRINO, as I said at the start of the year, is that it creates conditions for him to change tack and become the champion of Bre-entry, whilst Labour is left floundering.
“Effectively remaining inside the Common Market – which is what people like Farage originally said they wanted – means that, in a few years time, simply rejoining the EU itself becomes not only the obvious rational course of action, but relatively simple to do. It means that Britain would lose all of the advantages it currently enjoys in the EU, such as exemption from the Eurozone, Schengen and so on, but such is the history of all former great powers, as they try to cling on to former glory, and thereby even more rapidly go into decline, as they have to face reality.
BRINO even allows Johnson to keep that option open for himself in a new incarnation. His plan, as outlined some years ago, was always to try to negotiate a better deal for Britain inside the EU. That won't happen, but, were Johnson to win another election, in five years time, having negotiated BRINO, it would be more than possible for him to orientate to a different electorate. In five years' time, with more of the Tory elderly voters having died off, and more young voters having replaced them, it becomes hard for the Tories to win without responding to those demographic changes. Johnson could shift position on Europe, thereby swallowing up all of the remaining Liberal voters. In effect, he would reverse the transition effected by Thatcher in the 1980's, during which the Tories went from being the main champion of Europe to becoming the champion of Euroscepticism. To do that, Johnson will have to show that his electoral strategy has not only worked in the short-term, but also works in the longer-term. He will have to move swiftly to neuter the opposition to his Right.”
That is consistent with the nature of Johnson's actual politics. Johnson is really the representative of conservative social-democracy, of the interests of the owners of fictitious-capital, whose long-term interests depend upon the growth of real, large-scale capital. In turn, that depends on Britain being inside the EU. As against Thatcher, and the Misean/Hayeckian wing of the Tory Party, which from the 1980's onwards, advanced the interests of the small capitalists, Johnson is more in the vain of MacMillan, or even Churchill. It was Churchill who, as President of the Board of Trade introduced the first Minimum Wage, writing,
“It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate that evil. The first clear division which we make on the question to-day is between healthy and unhealthy conditions of bargaining. That is the first broad division which we make in the general statement that the laws of supply and demand will ultimately produce a fair price. Where in the great staple trades in the country you have a powerful organisation on both sides, where you have responsible leaders able to bind their constituents to their decision, where that organisation is conjoint with an automatic scale of wages or arrangements for avoiding a deadlock by means of arbitration, there you have a healthy bargaining which increases the competitive power of the industry, enforces a progressive standard of life and the productive scale, and continually weaves capital and labour more closely together. But where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes the trade up as a second string, his feebleness and ignorance generally renders the worker an easy prey to the tyranny; of the masters and middle-men, only a step higher up the ladder than the worker, and held in the same relentless grip of forces—where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration.”
Johnson's policies are consistent with this kind of corporatist and statist approach, quite at odds to that of Thatcher and the Tory Libertarians. The other parallel is with that Oswald Mosely in the 1930's, and his Mosely Memorandum. It is by no means socialist, of course, or even progressive social-democracy, but it is a form of conservative social-democracy that recognises the reality of modern capitalism, and the dominant role of large-scale capital within it. It is reflected in Johnson's big proposals for infrastructure spending and so on. Again this is a matter of material reality imposing itself on the political superstructure. It means that the contradictions between the logic and requirements of that material reality are coming into every sharper opposition to the social relations built upon them, and in the reflection of those social relations in the dominant ideas that determine the political superstructure.
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