WeeklyWorker

10.04.2025
City of London: an adjunct of US power

Vanishing capitalists?

Mike Macnair reviews A Hanton Vassal state: how America runs Britain Swift Press 2024, pp298, £12.99

Back in the 1970s, one of the British Maoist groups promoted the chant: “Five fingers, five fingers, five fingers make one fist; death to the British monopoly capitalist!” The underlying idea was people’s frontist - unity with non-monopoly capitalists against monopoly capitalists.

But even if you did not agree with the theme, the idea that there were in reality British monopoly capitalists made an obvious sort of sense (meaning, as Leninists usually mean by this expression, big capitalist oligopolies). Today this is much less obvious. It is not that there are no big capitalist oligopolies: it is, rather, that it is less easy to identify British monopoly capitalists.

The political problems that this issue poses have involved identifying what the specific interests are of British capital as such in relation to a series of issues. For example, the internal dispute in the state in 2002‑03 over participation in the invasion of Iraq. Or, the peculiar quietness of “British business” in relation to the Brexit debate in 2015‑16. Or, currently, the question of what British interest (if any) is involved in the UK government campaigning for the continuation of US and European support for the Ukrainian regime in the Russo-Ukrainian war since the policy turn of the Trump administration (whatever this turn actually is, which is not clear).

Transnational

A line of reasoning about the issue of national capitalist interests, which was popular around 2000, saw, on the basis of the development of ‘transnational corporations’ and international institutions, the emergence of a ‘transnational capitalist class’ (TCC).1 The course of events since then has seen very large ‘transnational’ capitals dependent on nation-states for bailouts after the crash of 2008, the very heavy state intervention of the Covid pandemic, and a developing trend towards US unilateralism, starting with the 2003 invasion of Iraq (at the expense of French and German business interests). This was followed by the 2014 Euromaidan colour-revolution coup in Ukraine, with a view to forcing the European states into war with Russia (effectively achieved in 2022 after a delay in 2016-20), the 2021 Aukus scheme to attack French arms production and, most recently, Trump’s tariffs. The plausibility of the TCC idea has thus been greatly reduced.2 The symptoms which were interpreted around 2000 as showing the emergence of a TCC revealed, in reality, the very high level of United States dominance of world capitalism.

Angus Hanton’s book has been positively reviewed. It is a journalistic canter round the evidence for US ownership of businesses which are commonly assumed to be ‘British’, and US control of British government policy. It is broadly Europeanist and British nationalist in its perspectives - in chapter 13 looking across the channel for remedies in terms of controlling the sale of businesses, tax reforms, increased government interventionism and efforts to promote a British Mittelstand of family businesses - Hanton himself runs a family business, a sort of internet estate agency for parcels of woodland.3

The introduction to the book stresses the difficulty of establishing the facts about US control, which the British government actively conceals (but quite a lot of which can be found from US sources). Then chapter 1 starts with basic consumer products and US ownership of British brands, moving to US takeovers of financial services firms and other US operations in the City; US dominance of farm machinery and fertilisers, and increasing US corporate acquisitions of farms, and the role of US corporate commodities merchants as oligopsonist purchasers of farm output; US jet engine manufacturers and US oil suppliers. US corporations, he points out, account for $700 billion of goods and services sold in the UK, amounting to a quarter of UK ‘gross domestic product’ (p27). (It is an oddity of GDP that sales by foreign firms are part of it - reflecting the fact that GDP is actually a measure of taxable transactions, not of productive output). Chapter 2 shows that this tendency towards US takeover has been British government policy since the Thatcher government. US corporations have been most generous in employing former British chancellors and prime ministers …

Chapters 3-5 are concerned with the business models of the ‘tech giants’ - starting with their commitments to ‘scaling up’ to achieve monopoly. Part of this process is buying out in field innovators before they can become rivals. The upshot is partly what Hanton calls “toll bridges”, especially in relation to payments (chapter 4): by driving cash out, the big payments processors can carve an increasing share out of the sales of other firms (incidentally, though he does not discuss this, probably driving consumer prices up). In advertising, the displacement of ‘legacy media’ (newspapers, radio and TV) by ‘new media’ also creates monopsony strangleholds. The level of centralisation of capital allows extended rentier models, often involving scams, to suck people into subscriptions - often paid from credit cards attracting 20%+ interest rates, and leading incautious users into debt problems (chapter 5).

Chapters 6-7 discuss mechanisms of exploitation. Chapter 6 concerns ‘private equity’ - in reality, the ‘leveraged acquisition’ mechanisms: borrowing in order to pay for control of the company and then, after you have obtained control, charging the loans to the company itself. This used in the 1970s to be called ‘circular cheque transaction frauds’ or ‘asset-stripping’. Chapter 7, ‘Why you cannot milk an eagle’, is about how US corporations - and in particular ‘private equity’ - use tax havens to dodge taxation, while the USA itself claims extraterritorial jurisdiction.

Chapters 8-9 are concerned with the dominance of US corporations in public supply contracts: chapter 8, ‘The NHS cash cow’, is fairly self-explanatory; chapter 9, ‘Suppliers of choice to HM government’, with other forms of contracting, especially software from the big tech firms, arms supplies, ready-meals supplied to schools, privatised prison operations, and so on.

Chapters 10-12 are a miscellaneous rag-bag of consequences of US dominance: businesses and skilled people are sucked into the USA (we should note that skilled people are on a very large scale sucked into the UK too); US culture is ultra-focussed on success in business considered as ‘dominate or submit’; the US state is routinely deployed in the interests of US business (while, by implication from the previous chapters, the British state also acts in the interests of US business …4).

Unrealistic

This brings us back to the recommendations in chapter 13, which I discussed at the outset. These are, to be blunt, unrealistic proposals. To think about why they are unrealistic is to reflect on the character of the book as a journalistic canter (as I said there) around the evidence for US dominance.

In the first place, a useful review from a perspective roughly sympathetic to Hanton’s is offered on Substack by Rian C Whitton. He makes the point that Britain is not alone in suffering increased US dominance: the same is, in fact, true of continental Europe, albeit to a lesser degree. “So, if Britain is one of the countries more in thrall to American power, I think this means we are just at a more advanced stage than other US-aligned countries. US relative decline vis-à-vis China for the last few decades has been countered by relative growth over Europe and, to an extent, the developed east-Asian world.”5

The other side of this coin is that, though Hanton’s book is heavily concerned with numbers, it is rather less concerned with proportions. And here, if we go to Wikipedia for a quick glance at the top UK-headquartered companies, we find Shell and BP among the oil majors, and HSBC among the high-ranking banks.6 None of the rest get into the world top 100 either from Fortune 500 or Forbes, but Rio Tinto in mining and AstraZeneca and GSK in pharma are not far below: global-scale operators. This is not a systematic point, but symptomatic: what Hanton offers is impressions and, on the other side of the coin, UK-based global operators are missing. Someone who is better with figures than I am needs to do the actual analysis of proportions, which Hanton has not.

We can turn Whitton’s argument upside-down. Around 1970, the USA entered into relative decline as an industrial producer, while other countries began to catch up, though remaining absolutely world-dominant - as happened to Britain in the 1850s. The response of the USA was to exploit the reserve-currency status of the dollar - first by breaking with the Bretton Woods agreement in 1971-73,7 then by again forcing down the value of the dollar in the 1985 Plaza Accord (throwing Japan into a prolonged stagnation, from which it has not yet fully recovered).8 At each stage of the relative decline, the response is to demand more tribute from US ‘allies’ - really all vassal states. The Trump tariffs, and the demand for European rearmament which Starmer has chosen to spearhead (while still planning to ‘buy American’) is more of the same.

Secondly and on the other hand, the US buying up British businesses is an aspect of the decline of Britain. Hanton blames Thatcher for the phenomenon of US dominance, and at a certain level this is true enough. But the UK is not the first country to pass through industrial power to imperial dominance, from imperial dominance to financial dominance, and from the inflow of money due to financial dominance to increased land values - leading to increased wage costs, leading to industry being hollowed out. Before us, both Venice and Genoa in the 16th-17th centuries passed through the decline of industry in favour of finance, and the Netherlands in the 18th century. The USA is in the first phase of this transition; the phenomena of the politics of ‘declinism’ and ‘Make America Great Again’ reflect the trend at work, as does the USA’s increased demand for tribute from its vassals.

It is this objective decline of Britain as an industrial producer which Thatcher responded to by going for open de-industrialisation and financialisation. It is entirely natural that this choice would lead to greater openness to British capitals (compared to European and Japanese capitals) being bought out by American capitals - the symptom Hanton discusses. But that also implies that Britain on its own is in no position to stand up to the US demands.

Is Europe? In 1939-45 the British empire survived (temporarily), thanks to US assistance. The US cashed this dependency in the defeat of Keynes at Bretton Woods in 1944, in insisting on Indian independence as a condition for bailing Britain out in 1945-47, and in using financial leverage to crush Britain’s attempt to act independently in the Suez crisis in 1956. Western continental Europe was forcibly conquered by the US and its British auxiliary, and eastern Europe was conquered by the USSR. In 1947‑48, the USA decided to ‘contain’ communism by direct subsidies (Marshall Aid) and by allowing ‘managed trade’ protection against the US (the General Agreement on Tariffs and Trade). These concessions allowed the continental European protection of the Mittelstand and small farmers, as well as concessions to the working class (welfarism).

Now that the USSR is gone, the USA has been gradually taking back the concessions. Defence of, or return to, the 1950s-70s social order is not on the table. The choice that faces Europe is between rearming as vassals of the USA, paying increased tribute to US arms manufacturers, or rearming against the USA.

  1. See, for example, L Sklair The transnational capitalist class Hoboken NJ 2000; WI Robinson A theory of global capitalism: production, class and state in a transnational world Baltimore MD 2004; WK Carroll The making of a transnational capitalist class London 2013.↩︎

  2. For struggles to reinterpret or limit the concept without completely ditching it, see, for instance, WK Carroll, ‘Rethinking the transnational capitalist class’ Alternate Routes: A Journal of Critical Social Research Vol 29 (2018), pp188-206; D Chen, ‘Rethinking globalization and the transnational capitalist class: China, the United States and 21st century imperialist rivalry’ Science & Society Vol 85 (2021), pp82-110.↩︎

  3. www.woodlands.co.uk; plus the interview in Living Woods magazine May-June 2009, p31: www.woodlands.co.uk/about-us/articles/living-woods-interview.pdf.↩︎

  4. On this issue, compare also T Stevenson Someone else’s empire: British illusions and American hegemony London 2023; Hanton is only concerned with the domestic consequences of British subordination to the USA.↩︎

  5. riancwhitton.substack.com/p/vassal-state.↩︎

  6. en.wikipedia.org/wiki/List_of_largest_companies_in_the_United_Kingdom.↩︎

  7. history.state.gov/milestones/1969-1976/nixon-shock.↩︎

  8. en.wikipedia.org/wiki/Plaza_Accord.↩︎