27.10.2022

Welcome to Britaly

Because it is in steep decline, the British capitalist class has lost control over what is now a fractious, incompetent and thoroughly corrupt Conservative Party. Not a few are looking to Labour for salvation, reports Kevin Bean

In the 1850s and 1860s Marx and Engels wrote a series of articles about British politics - the elections, the comings and goings in Downing Street and the endless battles fought out in the Palace of Westminster. Their vivid pen portraits and brilliant epigrams cut through the pompous rhetoric of establishment politicians and exposed the real class interests that lay behind ‘the great political questions of the day’: in short, the interests of the industrial capitalists versus the interests of the great landowners. Their parties, the Whigs/Liberals and Tories/Conservatives, dominated both houses of parliament and they debated, fought, split, fused, dispensed with leaders and formed every ministry.

The recent crises at the top of the Conservative government, the defenestration of two prime minsters in quick succession, the rapid recomposition of the cabinet and the dramatic ‘turbulence on the markets’ would surely have given Marx and Engels much rich material to work with.

As it is, our contemporary politicians and journalists have gone to town, resorting to dramatic superlatives and hyperbole in an attempt to make sense of the causes and the consequences of this period of “unprecedented” and “exceptional instability”. There was much talk in the international media of the collapse of ‘British democracy’, the failure of the institutions of cabinet government, and its impact on Britain’s standing internationally. The reaction of the markets to the Kwarteng mini-budget and the widespread argument that Britain had all the characteristics of a so-called emerging market economy only added to the palpable sense of crisis.

The fact that the political and economic crisis seemed to largely emanate from within the Conservative Party - the oldest and most successful political party in the world - completed the sense of shock and puzzlement amongst commentators at home and abroad. The Tories are said to be in a state of permanent civil war - irrevocably divided amongst themselves and seemingly determined to appear ‘ungovernable’, in the words of one Tory backbencher. Comparisons with Game of thrones or The godfather came easily to reporters trying to explain the apparently never-ending factional struggles and the jockeying for position amongst rival claimants for the Conservative leadership.

If the international media had a field day with the twists and turns - mixing a certain Schadenfreude over the working-out of Brexit with astonishment at the ruthlessness and naked ambition on show in the mother of parliaments - perhaps the most telling commentary on the whole saga came from The Economist. With a cover featuring Liz Truss dressed as Britannia (her shield a partly eaten pizza and her trident a fork enwrapped in spaghetti), the magazine welcomed us to ‘Britaly’ - a “country of political instability, low growth and subordination to the bond markets” (October 19 2022).

The comparison with Italy was obviously not meant to be flattering. Leaving aside our fascination with la dolce vita, Italy has become a by-word for “interminable political crises, economic stagnation and nervous bond markets”. On the other hand, official Britain has prided itself on being a stable and long-established democracy, a leading, advanced economy in the same league as America or Germany, and one whose credit and reputation are rated good throughout the world.

Crisis

Much of The Economist’s case rests on quite familiar and long-repeated arguments about British decline and woeful economic performance in comparison with its nearest rivals. Mainstream bourgeois opinion has argued at least since the 1950s that this malaise stems from underinvestment and poor productivity, resulting in low levels of economic growth. However, The Economist draws attention to two new interlinked features of ‘the British crisis’ that have emerged in spectacular fashion this year and drawn it closer to the ‘Italian model’: namely political instability, and the way that the bond markets are “now visibly in charge in Britain”. If we focus on the causes and the nature of this ‘political instability’ highlighted by The Economist, like Marx in the 19th century, we are drawn back to the high politics of the ruling class ... and the need to get elected.

Since the 1867 extension of the franchise under the Derby-Disraeli government (a concession to the potential strength of the working class), the strategy of the Tories has been to create a mass base of support amongst the middle classes and sections of the working class by promoting empire, xenophobic patriotism and patriarchal family values. This produced its own internal stresses and strains, especially as British imperialism faced stiffer and stiffer competition from rising powers, most notably Germany and the United States. Upping the domestic rate of exploitation and mass unemployment could only be partially offset by financial parasitism and exporting the surplus population to the ‘white’ working colonies of Australia, New Zealand, Canada and South Africa.

Of course, from the 1900s onwards, instead of the extinction of the Tories, as Marx and Engels expected, it was the Conservative and Unionist Party, especially with the end of World War I, which came to be the chief representative of capital: landed, industrial and financial. Irish nationalism and the rise of the Labour Party effectively killed off the Liberal Party.

Many of the current divisions within both the ruling class and the Conservative Party can be explained by the political and economic impact of Brexit, reflecting both the wider decline of the British ruling class and their loss of control over the Tories. So, while most British capitalists opposed Brexit, the decline of a British-based manufacturing economy and its financialisaton has shifted the character of British capitalism and its direct relationship with its main political party, the Tories. This was shown by the way that an opportunist like Boris Johnson was able to mobilise a sufficiently wide enough electoral base and wrest control of the party from its ‘natural rulers’ after 2016. Similarly, the victory of Liz Truss and her attempts to implement her disastrous mini-budget provoked a dramatic response by the markets. It was in this form that the two destabilising dynamics - political and economic - were brought together to produce a rather British version of an Italian-style crisis.

The Economist’s arresting concept of Britain does point up some of the more dramatic features of the current crisis and the Tories’ attempts to resolve them. As Rishi Sunak presides over his reshuffled cabinet and desperately works with Jeremy Hunt (elevated now to ‘safe pair of hands’ status) to produce the November 17 economic programme, which must be acceptable to both the markets and the Tory back benches, the constraints on the new government are clear for all to see. While Sunak may get a boost in opinion polls and something of an initial fillip from a favourable response from speculators and investors, this is not likely to last long.

Given the underlying economic weaknesses of British capitalism, and the state of the public finances and reliance on what Mark Carney, former governor of the Bank of England, has described as the kindness of strangers, Sunak’s pledge to deliver the 2019 Tory manifesto is surely an impossibility. How can boosting arms spending, safeguarding the NHS, maintaining the pension triple lock and levelling up be squared with financial responsibility?

Moreover, as the Italian state knows to its cost, once the markets have tasted blood, they will be back for more. Thus, as former Tory donor and hedge-fund investor Guy Hands argued, given this recent experience, Britain could soon become the new sick man of Europe, with “dire consequences across society” and the threat of International Monetary Fund bailouts to simply keep British capitalism afloat (The Times October 24 2022). For the impersonal capital of the markets, it is not personal - simply business.

If the economic character of our ‘Italian’ crisis seems clearly defined, politically and in policy terms the outcome is, as yet, far from certain. The delay in presenting an updated economic statement means that most of the major political directions remain unclear. Likewise, uncertainty hangs over the factional balance of power within the government and the party. Despite the initial show of unity, the Tories are riven with divisions. These factions are unstable and not always easily mapped on to defined ideological lines. Increasing taxation and cuts in state spending, the need for levelling up and investment in the ‘red wall’, along with debates on levels of immigration, are all potential areas of disagreement and opposition.

Many Tory MPs are driven by personal ambition or mutual animosities, which will not be easy to contain in the crises ahead. Consequently, the carefully balanced construction of the new cabinet shows not the unity, but rather the deep divisions, within the party. The greatest unifying force within the Conservative Party at the moment is the desire amongst MPs to avoid an election and secure their political survival at all costs. Thus, the coronation of Rishi Sunak reveals not widespread loyalty to his leadership and an essential unity, but simply reflects a desperate need to rally around any passably competent leader who could hold things together.

Of course, the parallel with Italy only goes so far. The UK has an alternative party of government, a second eleven. In terms of economic plans there is, says John Allan, Tesco chair, “only one team on the field” (speaking on BBC’s ‘Sunday with Laura Kuenssberg’ October 16). He is far from alone. The numerous business stands at Labour’s Liverpool conference testifies to that. Meanwhile, we probably face two years of Tory chaos before Sir Keir makes his first speech from the Downing Street lectern ... and announces his attacks on the working class.