Sinking, but not yet sunk

Rex Dunn discusses Brexit, the future of neoliberalism and the system’s potential for disintegration.

If neoliberalism were The Titanic, it would be as though it had been holed by an iceberg called rightwing populism, and is about to sink into the icy waters of the unknown. As a result, a terrible fate awaits most of its passengers - especially those who could only afford third class, who bought their ticket in good faith.

But is this the correct analogy? I shall argue that the bourgeoisie have been able to patch up the hole in their flagship, so that it can continue on its voyage - at least for the time being - although there are still hidden dangers ahead and the waters are increasingly choppy.

Neoliberalism has to be discussed once again, because everything else flows from it. Briefly it may be defined as globalisation (ie, the free movement of capital, labour and goods inside large trading blocs, under the domination of finance and monopoly capital); deregulation of labour as a means to depress wages; a growing emphasis on short-termism or reliance on parasitic finance capital to achieve higher profits, which takes precedence over long-term investment in the productive sector.

But the financial crash of 2008 was a sign that neoliberalism has broken down. This is a profound problem not just for capital, but humanity as a whole. As Hillel Ticktin explains,

... capitalism is in decline when the poles of contradiction become more and more difficult to mediate … [Then we get] Bureaucracy [or] mediation between use-value and exchange-value … because all other forms of mediation have broken down.

... finance capital became a new and necessary form to mediate that contradiction [and has been] maintaining capitalism for some time. War, and the cold war in particular, are other examples of mediating forms which maintain the structure of capitalism [But] they are extreme forms which have limited lives ...

What happens, however, if there is no mediation possible between the poles of contradiction? Then disintegration ensues …1

Post-2008, the bourgeoisie tried to fix the breakdown of neoliberalism by bailing out the banks; otherwise they would have collapsed, bringing down the whole system. So trillions of fictitious dollars were pumped into the banking system, in order to keep it afloat. This is usually referred to as ‘quantitative easing’. But QE had to be made a material reality, which could only be achieved by cutting wages and welfare; ie, the working class had to shoulder the burden. This is generally called austerity, which is far from over.

Great disruption

The crisis of neoliberalism has to be understood not just in terms of contradictions within the economic base: these are also reflected in the superstructure, which are both political and cultural. The latter are accompanied by the atomisation of society - now this is being reinforced by social media.

So far, the working class has not been able to develop the necessary consciousness anywhere: ie, throw up a Marxist party, which offers the only a way out of the crisis. Instead we have seen the rise of rightwing populism within sections of the lower-middle class and the working class: ie, it is a grossly distorted form of the class struggle. It led to Trump’s victory as the champion of ‘new’ money, as opposed to ‘old’ money in the US, and Brexit in Britain. Capital is split between one section and the other (unlike, say, German fascism, which won the support of the whole capitalist class and its state). That said, we are living through what I call the great disruption.

To make things worse, Brexit has descended into tribalism, cutting across traditional party - and class - lines: ie, Tories versus Labour, with the Liberal Democrats trying to occupy the middle ground. It manifests itself within society (even individual families), constituencies, as well as parliament, even the government itself (as witnessed in splits in Theresa May’s government and now Boris Johnson’s). As a result politics has become paralysed and a large section of the business community is suffering from a crisis of uncertainty.

Brexit tribalism was triggered by David Cameron’s referendum on Britain’s membership of the European Union. A majority of the electorate voted to leave, even though the issues are very complex. At the same time, there was an outpouring of disinformation, including bald-faced lies spread by the ‘leave’ campaign, especially within social media. The Eurosceptics in the Tory Party, led by the European Research Group (ERG), transformed themselves into leavers, who are prepared to contemplate a hard Brexit, backed up by the threat of no deal - ie, a sudden loss of its trade, should Britain crash out of the EU. This would be extremely damaging for the economy, which is the fifth largest in the world. Therefore it could even trigger another financial crash.

The referendum also established the basis for a full-blown British constitutional crisis, because so-called ‘direct democracy’ came into conflict with representative democracy or parliament. At the same time, the executive was emboldened, claiming to be carrying out ‘the will of the people’, whilst parliament is seen to be ‘obstructing democracy’. But, when Johnson tried to shut down parliament, the Supreme Court adjudicated that this was unlawful. On the other hand, parliament showed that it was incapable of uniting to defeat the government; whilst the government was unable to impose its will on parliament. Parliament refused to pass two EU withdrawal bills, but was unable to force a vote of no-confidence that would have led to a general election, which is the only way break the stalemate. But now the logjam has been broken.

Brexit tribalism has led to a crisis within the Tories, as well as Labour. On the one hand, this tendency has benefited a new, more rightwing party (ie, the Brexit Party) and, on the other, to a lesser extent, it has benefited those of the centre (ie, the ‘remain’ parties, such as the Liberal Democrats and the Green Party). Meanwhile the Scottish National Party, Plaid Cymru and Sinn Féin are likely to try to take advantage by seeking independence from the UK. Thus we have two contradictory political tendencies: on the one side, the possible integration of an independent Scotland with the EU, along with the Six Counties, as they move towards economic union with the rest of Ireland; and, on the other, the possible disintegration of the UK.

To concentrate on the Tories and Labour, Brexit tribalism will continue during the coming election, despite Corbyn’s attempt to prioritise the contents of his previous manifesto, For the many, not the few. It remains to be seen if he is successful in this: has the level of working class consciousness remained the same as it was in the 2017 election or has it fallen? This is crucial to the future of the class struggle in this country. Arguably there is a danger of the latter, because Corbyn has tried to sit on the Brexit fence.

In the absence of a more democratic electorate system, the existing two-party order is fragmenting. Previously elections usually produced a Tory or Labour majority in parliament, which would then form a government. But following the 2017 election, the Tories failed to win an outright majority and had to rule with the support of the Democratic Unionist Party. But if the European elections last May are any indication, then we could have a four-way party split in the coming election: ie, between Tories, Brexit Party, Labour and Lib Dems, as opposed to the usual Tory or Labour majority, wherein the Lib Dems get squeezed in the middle. In other words, at one end of the political spectrum, the rightwing Brexit Party will pick up votes at the expense of both the Tories and Labour (some pundits predict that this will hurt the former rather than the latter); but at the centre, the Lib Dems could be the beneficiaries, at the expense of both the Tories and Labour. The Lib Dems have already acquired a number of MPs who have defected from the two main parties, of course.

This is how Brexit tribalism is manifesting itself at the moment. In other words, it will continue to paralyse British politics, up to and even after the December election. As a result, we could end up with another hung parliament. Then rightwing populism, Brexit tribalism and the crisis of the British state would continue to grow and deepen.

Similarly, given the failure of the American left to offer a leftwing alternative, it is possible that Trump will win the 2020 election in the United States. Thus we could find ourselves in an even deeper crisis, which gives us little time for reflection. Clearly we are in a transitional phase towards socialism and communism, but the latter is not guaranteed. As István Mészáros points out, “the truth of the matter is that Marx originated the idea of ‘socialism or barbarism’”.2

Tory Party

The split in the Tory Party, combined with the fact that Labour is similarly divided over Brexit, means that Britain’s two-party system is destabilised. At a deeper level, Brexit is a reflection of changes within the economic base of British society - it is an example of a universal tendency within late capitalism: the fact that productive capital has been usurped by parasitic financial capital, but ultimately it depends on the former (via pension funds, etc - this is what I mean by ‘old’ money). Whilst this process has been going on for a long time, finance capital is now becoming more irrational in its modus operandi, as expressed by the rise of hedge funds, which is what I mean by ‘new’ capital. Once again, this is an expression of the decline of capital itself, not just British capital.

What follows is taken from the City-based website, Management Today. It quotes a British government report which states that between 2005 and 2015 EU regulations in the financial sector (against tax evasion and market abuse) increased tenfold. This exposed tensions between productive capital and speculative capital. ‘Old’ money is also represented by established financial institutions, which still see the need to invest in the long term: ie, multinational companies, which have located their plants in Britain (eg, the Japanese car industry), in order to take advantage of Britain’s membership of the single market/customs, with its frictionless trade in capital, labour and the materials of production. ‘New’ money, as represented by hedge funds, lives or dies in the short term; ie, their owners make a bet either way on, say, a fall in the pound. Whatever the outcome, the hedge fund makes money! In the 2016 referendum, established institutions like Citigroup and Goldman Sachs supported ‘remain’, whilst many hedge fund managers supported ‘leave’.

Brexit is a cultural as well as an economic phenomenon. On the one hand, it is about fears for British sovereignty and immigration; on the other, it presented an opportunity for speculative capital to make money. Both aspects found expression in the right wing of the Tory Party or the ERG. The Tory hard right had already bedevilled Cameron; hence he tried to defeat it by means of the 2016 referendum. To his horror, it backfired - he had underestimated the groundswell of support for rightwing populism: ie, English nationalism. As a result, a narrow majority of the British people voted to leave. May then had the unenviable task of negotiating Brexit with the EU.

But she was up against the old boy network: most of the ERG’s supporters were educated in private schools. Today they make up two-thirds of Johnson’s cabinet. His register of interests includes a number of hedge fund managers, who have made donations of up to £100,000 each! “Ideologues like Cummings [Johnson’s chief advisor] think they are transforming society when they are actually doing the bidding of some clever financiers”.3

The ERG is at the centre of an internecine row between remainers and leavers within the Tory Party. It led to the rejection of May’s ‘soft’ Brexit, which was replaced by Johnson’s ‘hard’ Brexit, accompanied by the threat of a no deal. That culminated in the virtual expulsion of 21 members of the party, including former chancellor, Phillip Hammond, along with Tory grandees like Kenneth Clark.

Leftwing populism

In Britain, as elsewhere, the 2008 financial crash also produced a converse swing: ie, the rise of leftwing populism, albeit on a smaller scale. But it was enough to boost the Labour Party to over half a million members, making it the largest political party in Europe. This began with the election of Jeremy Corbyn in 2015, the most leftwing leader in the party’s history. His support is based on young Corbynistas in the metropolitan areas of the country (along with a few ex-Trotskyists). But today it appears to be fizzling out, because he has proved to be a weak and inept leader, when it comes to defeating the Labour right. But he may do well once again during the election campaign.

Leftwing populism is another crucial factor, because it has the potential to offer a way out of the current crisis for the capitalist class, as well as the working class, at least in the short term, via the promise to restimulate the economy in the form of state-sponsored investment - eg, a Green New Deal in America and Britain. This would create new technology and jobs to tackle the climate crisis. But it appears that the leadership of the capitalist class is not yet ready embrace this ‘offer’, because they are afraid this would lead to a repeat of 1968; ie, a working class revolt somewhere down the line. Even if this is not a consciously-led revolt, it could open the way for the re-emergence of Marxist parties, able to transform the working class from a ‘class in itself’ into a ‘class for itself’, upon which the overthrow of capitalism depends.

Let us now consider the current state of affairs. I shall start with the utter failure of the Corbyn leadership to fight for its own manifesto, even though its main thrust is to defend the working class from the worst effects of neoliberalism. (In reality the working class needs a party which is willing to fight for a genuine socialist solution, since that is the only way forward.) Corbyn should have made fighting for his manifesto his top priority. On this basis, rather than shy away from an election, he should have been calling for one at the earliest opportunity. This would have given him the opportunity to nip Brexit tribalism in the bud, which would have increased his chances of winning a majority of seats. Then he would have been in a better position to renegotiate Britain’s membership of the EU in accordance with Labour’s six points that are designed to protect workers’ rights, along with the environment. Instead he capitulated to the myth that Brexit is the expression of the ‘will of the people’ and he decided to sit on the fence.

But there is another reason for this abdication of leadership: Corbyn is a left nationalist (like Tony Benn before him), as well as a ‘socialist’ in the tradition of the Second International. In the words of Lenin, like its predecessors, the Corbyn leadership remains the “principal social prop of the bourgeoisie”; “the labour lieutenants of the capitalist class, real channels of reformism and chauvinism”.4 In other words, he is in favour of winning privileges from the international bourgeoisie for the British working class at the expense of workers in other countries. For the record, on the question of immigration, Corbyn says: “Labour is not wedded to freedom of movement for EU citizens as a point of principle.” Therefore he has committed Labour to a policy of “reasonable management”, based on “our economic needs”.5

Therefore Corbyn finds himself on the same side as those rightwing Labour MPs, along with their working class supporters in the north of England, who voted to leave. In the objective sense, he is feeding into the narrative of English nationalism: Britain must leave the EU in order to take back control (of immigration in particular). At the same time, he is alienating his rank and his file, who like the idea of freedom of movement within the EU. Instead of increasing the support which he had built up during the 2017 election, Corbyn is in danger of dissipating this, thus weakening his chances of winning the election.

But what will happen if Johnson wins?


Even if Britain is able to avoid crashing out of the EU, Johnson’s deal would still make a majority of the British people poorer. It would also open the door to a Singapore-style low-tax, deregulated economy, which would be bad for workers, as well as the environment. The national health service (which is already staggering under the weight of its drugs bill, along with an inefficient internal market) would be one of the casualties; as well as British agriculture, which depends on the EU for subsidies and a guaranteed market:

An official paper shared by ministers this week ... stated that the UK was open to significant divergence, even though Brussels is insisting on equivalent regulatory provisions ... In a passage that could alarm Labour MPs who have backed the Brexit bill, the leaked government document also said the drafting of workers’ rights and environmental protection commitments “leaves room for interpretations” ... Jenny Chapman, Labour’s shadow Brexit minister, said: “These documents confirm our worst fears. Boris Johnson’s Brexit is a blueprint for a deregulated economy, which will see vital rights and protections torn up.”6

But now the media is saying that everyone is suffering from ‘Brexit fatigue’. Johnson is exploiting this by arguing, “Let’s get Brexit over the line, once and for all”. Many people agree. But, according to a recent survey, a lot of workers are so disillusioned, they are now saying that they might not bother to vote in the general election.7 If this becomes a trend, it will not help Corbyn’s chances.

The above points to the unresolved problem of the bourgeois division of labour, which has negative effects for the working class. It separates mental from material labour, because this is the most efficient way to accumulate capital. As Marx says, the worker “becomes more and more … dependent on a … very one-sided and machine-like type of labour [which depresses him/her] both intellectually and physically to the level of a machine”.8

Such a division of labour is particularly useful to the ruling class whenever it sees the need for plebiscitary politics, such as the 2016 referendum. But ‘direct democracy’ is the opposite of genuine democracy. Millions of people believe that Britain has ceded control over immigration to the EU, which leads to job losses, a shortage of school places and hospital beds, etc. They fail to realise that such austerity is a direct consequence of neoliberalism everywhere; that this would continue, once Britain leaves the EU. Hence people are becoming more xenophobic, whereby immigrants are made the scapegoats for the real enemy: capitalism itself.

This problem is exacerbated by social media, which is becoming the main source of information for millions of people. It played a key role in the 2016 referendum - and will do so again in future elections. Whereas the broadsheets and BBC news provide at least a modicum of debate, social media relies on targeted messaging, which opens the door to disinformation: eg. ‘Millions of Turks are about to join the EU’. Thus large numbers of people have decided that Britain needs to ‘take back control’ - not because they are stupid, but because they are deprived of the opportunity to make informed decisions.

The reality is that under Johnson a post-Brexit Britain will lead to more zero-hour contracts; the economy will also become more reliant on service industries. Ken Loach - who voted to leave - highlights this in his latest film, Sorry we missed you. It focuses on the father of a typical working class family, who works as a delivery driver; but he has to provide his own van and is monitored by a scanner to ensure that he is making enough deliveries; there is no overtime or Sunday rates of pay. His wife is a care worker, employed by the private sector, who is only paid for the time of each visit, not for travelling to and from clients:

In other words, ‘the flexibility and freedom’ of the gig economy sold to them was a lie. Exhausted, they hardly have any energy to look after their teenage children ... “The reality today [says Loach] is that employment doesn’t guarantee a decent life. you may have a job, even two, and still not have enough to feed yourself and your family.”

... The core of the problem is the privatisation of local services and subcontracting from local councils to companies chosen because they are the cheapest - “nobody accepts responsibility for the inevitable dire consequences of such a system”. As for the part played by new technology in all this, “It has been used to lower labour costs rather than to benefit everyone.”9

In an article for the London Review of Books, James Meek also sorts out Brexit myths from reality. He cites a British hi-tech company called Imagination Technologies. It developed the Graphics Processing Unit (GPU) system, which since 2012 has been “used in two-thirds of the world’s smartphones”. For a time, even Apple was happy to use Imagination chips; then it “began to poach [its] engineers” and opened its own design centre nearby. Worse was to come:

... within a few months the company - a bright star of the kind of British technology cluster politicians say they like - was snapped up by a Chinese-backed private equity firm. Even if Britain’s politicians were raving about taking back control, Britain was losing control to China and the US over the arch-tool of modern control.10

A recent Channel 4 Dispatches programme pointed out that, if Johnson is able to negotiate a free-trade deal with the US, it will not be a level playing field. At the moment the NHS is able to negotiate cheaper drugs on the world market. Dispatches gave the example of the drug Humira, which is used to treat bowel disease. Today the NHS is able to purchase this drug seven times cheaper than it costs in the US. But Trump wants to stop this and set up a competitive market for pharmaceutical drugs, which will drive the price back up - why should American patients pay more than British people? To this end, he has the full backing of the pharmaceutical lobby on Capitol Hill, which seeks to ensure that American companies can defend their monopoly of the market. So much for ‘free trade’! This policy is about to be enshrined in a ‘free-loader’ bill.

It is obvious that the UK will be the weaker trading partner in any future negotiations. Whilst the NHS is struggling to drive down the price of drugs, the US is determined to squeeze this practice out. Contrary to what Johnson has said, the NHS will definitely be on the table in any new trade deal with the US. At present the NHS spends £18 billion a year on drugs, but this could go up to £45 billion. The UK trade secretary, Liz Trust, refused to be interviewed by the programme’s reporter.11


Corbyn has an uphill climb if is he is to win the election. As for Johnson, he will try and sell the idea that a post-Brexit Britain would allow ‘regulatory divergence’, and that would be good for the economy. Meanwhile he hopes to gain support with the promise of a public spending spree. In reality, he is trying to soften up the British people, before the shock of a bad trade deal with the US sinks in.

Not only has Corbyn left the working class rudderless: he has failed to deal with the Labour right. After years of delay, he has not yet implemented deselection in a decisive way, in order to get rid of both the Blairites and the Brexiteers within the party. On the other hand, if he does win, will he continue with his disastrous strategy of appeasement, so that Labour can remain a ‘broad church’? His failure to deal with the Zionist-inspired ‘anti-Semitism’ campaign does not augur well. Sooner or later, the right would get the knives out for him again: eg, if/when the International Monetary Fund (etc) opposes his public borrowing requirements.

Would a Corbyn victory make the left’s task of building a new Marxist party any easier? Whether we agree with the strategy to transform the Labour Party into a united front of the left or not, we still have to break the vanguard from its illusions with electoralism as an end in itself - along with the idea that Labour can use the capitalist state to build ‘socialism’ (aka Keynesianism).

To return to Brexit, whilst the EU has granted the UK yet another extension, until January 31, as things stand, no deal still remains a possibility further down the line. If that happens - to continue with my seafaring analogy - it would have the effect of an Exocet missile hitting HMS Britannia below the waterline. Crashing out of the EU would severely dislocate Britain’s existing trade relations, which means that the economy might crash. This could easily spook the City of London, even Wall Street, and spark another financial crisis. But it would be even be worse than 2008, because the ruling class cannot place additional burdens on the working class in order to bail out the banks. After all, they have already tried that solution, which led to the rise of rightwing populism. This would give the latter a huge shot in the arm. Thus capitalism would be in an even bigger mess than it is now.

Never has the need for a working class alternative been so desperately needed. But that appears to be just as far away as ever, since this will require the emergence of a new Marxist party in order to lead it. Unfortunately here in Britain, as everywhere else, class-consciousness has reached a nadir. Given the climate crisis alone, how much time have we got? Unless it moves towards Marxism and the working class, the Extinction Rebellion movement is likely to go the same way as earlier ones, such as Occupy, etc.


The financial crash in 2008 was instigated by unregulated ‘new’ money (ie, speculative capital, which has become ever more reckless), whilst ‘old money’ (ie, finance capital, which is still aligned with productive capital) is being squeezed. But neoliberalism’s strategy to solve the crisis - austerity for the working class, which means even more inequality - has led to a backlash in the form of rightwing populism, driven by anti-immigration sentiment and nationalism. This found expression in 2016 referendum, and in Trump’s victory in the US. On the one hand, he pursued a policy of economic nationalism, but, because America is also world hegemon, this spells danger for the capitalism as a whole. On the other hand, Britain descended into Brexit tribalism, which spells danger for bourgeois democracy. Thus we are faced with the great disruption.

From the standpoint of capitalism, the stakes could not be higher. Neoliberalism is the final form of mediation for a system which is increasingly unable to resolve its constitutive contradictions. If it does not do something, there will be more chaos and disintegration. In the short term, the Democrats will try to impeach Trump or, at the very least, ruin his chances of re-election in 2020. As for Brexit, the aim is to alleviate the dislocating effects for globalisation, as far as that is possible.

Trump is not opposed to globalisation; rather he wants to rearrange this in the interests of US capital. For example, he wants a trade deal with post-Brexit Britain. But within this Britain would occupy a much more subordinate role, compared to its membership of the EU. At the same time, the EU would be weakened.

But neither Trump nor Johnson pose a threat to privatisation and deregulation. Therefore the economic think tanks of neoliberalism will probably make concessions to rightwing nationalism: eg, by easing fiscal constraints on governments. Hence Johnson’s promise of a public spending bonanza in the run-up to the election.

On the other hand, what if Corbyn wins? The IMF and the World Bank might allow him to tackle privatisation within the NHS (as long as this does not push public borrowing through the roof, which is what it will take). They might allow limited nationalisation of inefficient industries. But they will oppose a Green New Deal. As for the EU, it might allow its member-states more control over immigration (it has learnt something from Brexit!) Thus Fortress Europe will continue, as will the worst refugee crisis since 1945.

The biggest dilemma for neoliberalism is that it should be regulating ‘new’ money, which is causing havoc; but it will not because ‘old’ money takes too long to make a profit. But, whilst the ship is sinking, it has not sunk yet! All this is bad news for the majority of humanity, global warming and the environment, along with the mass extinction of species.

Thus the big question remains: will the transition to socialism/communism arrive in the nick of time or will it be too late for everyone?


1 .H Ticktin, ‘Decline as concept and its consequences’ Critique August 2006, pp154-55.

2. I Mészáros The power of ideology London 1989, p34.

3. ‘How the City gave birth to Brexit’ Management Today October 2 2019.

4. VI Lenin Imperialism, the highest stage of capitalism Peking 1969, p10.

5. See D Adler, ‘Meet Europe’s left nationalists’ The Nation January 10 2019.

6. ‘Fears over post-Brexit worker rights’ Financial Times October 26-27 2019.

7. BBC Newsnight October 25 2019.

8. K Marx, first manuscript Economic and philosophical manuscripts.

9. ‘Tough lives, hard facts’ Financial Times October 26-27 2019.

10. J Meek, ‘The dreamings of Dominic Cummings’ London Review of Books October 24 2019, p25.

11. Channel 4 Dispatches October 28 2019.