Thursday 15 September 2016

The Indolence of British Capitalism

The state is a committee for managing the common affairs of the bourgeoisie. That Marx was one sharp fella. For an insight 170 years old, it has proved remarkably durable. Except in one respect: states often fall short of enforcing these "common affairs" and instead are beholden to a clutch of favoured businesses and industries. Reminding us of this failure comes Philip Stephens in the FT. Alighting the EU finding against Apple and ordering them to cough up £13bn in avoided taxes to the Irish government (which, perversely, is appealing against what would be a very significant windfall), he notes how from time-to-time the force of the law should intervene to maintain market competition, check monopolies, and enforce tax monies owed. Or, to repeat Marx, make sure those "common affairs" are managed so all business benefits. The most interesting question, however, goes unasked: why do states, regardless of the political colouration of governments, don't work like they "should", and sometimes go out of their way not to do so?

I'm going to stick with Britain, because it's the one I know best. And, perhaps, because it's in relation to that state that question is most often asked. In 1995, Will Hutton made a huge splash with The State We're In. In it, Will not only criticised the market fundamentalism of the Thatcher years but the feebleness of the British state and the capitalist class since, well, capitalism. In contrast to continental capitalisms where governments had more vigorously directed investment and experienced far greater growth during the post-war boom, Britain's politicians, civil servants, and capitalists proved resistant and hostile to the state taking a more activist role in economic development. Only the exigencies of war time emergency saw it firmly take hold of the steering wheel and drive it into greater planning, even if it was for armaments. For Will, this was a cultural failing on the part of our bourgeoisie. Born into the largest empire the world has ever seen, our rulers cultivated a certain idle indolence because, well, there's always the colonies we can sell to, right? Readers might see an echo of this idiocy today in Brexiters arguing we don't need the EU because we have the Commonwealth and note this born-to-rule complacency has not gone away. Even worse, Will noted that new, dynamic forms of capital that occasionally interrupt and redraw British markets have a tendency to get dragged down by this culture. He laments the British story of bootstraps capitalists making big and quickly selling up - perhaps so they can have a round of golf with disgraced Secretary of State for International Trade Liam Fox. Hence why it seems every successful British business ends up in foreign ownership, often with the government's blessing.

While Will was and is right, his analysis doesn't go deep enough: bourgeois idleness is an attitude rooted in Britain's emergence as the world's first capitalist country. According to the late and very missed Marxist thinker, Ellen Meiksins Wood, the aspects of the British state we take as backward and feudal are symptomatic of a past modernity, while republican government and state-led economic development, features Will and many would associated with the modern speak of a past backwardness. Don't you just love dialectics?

In the old argument, Marx suggested that the forces and relations of production come into conflict. The "forces" are not some dry, technical mechanism or a synonym for technological development - it is the totality of labour, its level of culture, skill, ingenuity, and aspirations. As we've recently seen, the governance structures of neoliberal capitalism are increasingly at odds with the kinds of labour, or productive forces, the relations of production need to turn a buck. Taking it back to Ellen's argument, the new productive force that emerged in the English countryside after the collapse of bonded, landed labour was waged labour. And bound up with it were a caste of formerly feudal lordships who transformed themselves into the world's first (agrarian) capitalist class. It proved more efficient in terms of accumulating an economic surplus, and had the consequence of undermining the sorts of peasant solidarities that powered periodic uprisings. Therefore existing capitalists had an interest in deepening wage relationships, and existing feudal barons likewise had incentive to dissolve serfdom, drive the peasants off the land, and re-employ them as hired hands. Meanwhile, during this period traversing the 16th and 17th centuries, the passage from the old feudal state into an absolute monarchy (later checked by the English civil war) was one in which state structures and decisions by the court were unconsciously and unexpectedly conducive to its capitalist development. The monarchy on more than one occasion sided with the rising class, particularly in the dispossession of peasant lands, to buttress its power. In contrast, during the same period French absolutism used the peasantry to keep the landed aristocracy in its place.

This is where Ellen's dialectical argument comes into play. Because the nascent absolutist and later constitutional monarchical state didn't represent a fetter on the developing forces of production (for the most part) and became enmeshed with relations interested in growing emerging capitalism, inessential feudal fripperies like the unwritten constitution, deference, the pomp and absurd circumstance of the royals, these stayed. And as the world's strongest economy and most advanced power, capitalism was exported by musket and cannon fire and encouraged its organic emergence wherever English commodities washed up. Meanwhile, in France where capitalism only started emerging long after society was crushed under absolutism's obesity, the foundation of the first republic and the Empire can be read as responses to backwardness, of tearing out (and guillotining) aristocratic and monarchical relationships materially wedded to French backwardness. Later in the 19th century, with a great deal less blood, the semi-feudal aristocratic states of Imperial Germany and Japan pioneered extensive state-directed capitalist development. Meanwhile the 19th century Victorian bourgeoisie were doing their gentlemanly thing, preaching the virtues of hard work, Christianity, and growing fat on grinding poverty and colonial booty. Government had no business interfering in business. Small state whiggery and laissez faire were philosophies made in England precisely because capitalism emerged here first, chaotically, blindly, unplanned. England had an early lead, but the born indolence of our bourgeoisie has handicapped British capitalism right up to the present - witness the noted stupidity of Dave's governments.

It therefore begs the question. If British capitalists are too rubbish for British capitalism, and the state too is infected and inflected with a hands-off outlook, the irony is the only force that can modernise the whole thing and give it a more rounded development is the labour movement, the political expression of the class Marx argued was destined to be capitalism's grave diggers. Who says history doesn't have a sense of humour?


Speedy said...

Very interesting. However - iI can;t see how the labour movement can make a difference. Any change will come from within the bourgeoise.

The UK is going the way of the US and Singapore - it has a long way to fall - and until the bourgeois class starts to be affected itself (although I think with Brexit that may happen relatively soon - but still, did it flinch over student loans? Will it flinch over privatised health? Grammar schools are a sop to its values).

It is interesting, isn't it, following your thesis, China is a the ultimate state run capitalist system. India, too driven by class and caste on the other hand, appears to be following the model of its former imperial masters.

What this suggests to me, is that the EU is well rid of the UK and could, in time, because increasingly affluent and equal, while, sorry - the UK looks an increasingly hopeless case.

Paul Ewart said...

Spot on. Perry Anderson's good on this too. The question is, how were Germany and the US able to overtake Britain towards the end of the 19th Century despite Britain having 50-100 years head start and an Empire? The answer, as you suggest, is that a) Empire made us lazy: By 1938 we were sending 47% of our exports to the Empire under the guise of Imperial Preference, 78% of South African imports came from Britain. This guaranteed market, when opened to international competition, had declined to 10% by the 1970s - Orwell and Samuel are good on this, b) We didn't produce our own Henry Fords i.e. we didn't build a consumer society, preferring to retain feudal practices in an industrial society and c) We don't invest in the long-term.

Here's Samuel:

Territorially, the British Empire reached its maximum extent in the 1920s. (86)
Well before the Ottowa Agreement of 1932, and the advent of a system of imperial preference, Britain’s overseas trade was becoming increasingly autarkic…In 1913 Britain was sending 22 per cent of her exports to the Empire; by the 1938 the percentage had more than doubled, to 47 per cent. The comparable figures for imports were also striking, rising from 27 per cent in the years 1920-24 to a peak of 37.9 per cent in 1938. The reorientation of overseas investment was even more dramatic…by 1938 the colonies and dominions accounted for some 99 per cent of this country’s overseas investment

David Timoney said...

I don't think you've adequately answered your own question, which is about the state apparatus rather than the capitalist class. In other words, what social and political developments have led to a situation in which "the state too is infected and inflected with a hands-off outlook" and consequently doesn't work to create and manage markets?

Given that the history of the 20th century is one of increasing state intervention in the market and social control (and Thatcherism was a continuation of this tendency, not a break from it, as is Mayism as far as we can tell early-doors), is it even accurate to characterise the UK state as "hands-off"?

Many Conservative historians would insist that the last century was characterised by an excess of state intervention that "crowded out" industrial investment. Some, like Corelli Barnett, would even attribute this to the pernicious influence of christian charity undermining the hardheadedness of the early Victorians (i.e. the bourgeoisie got soft).

This is part of a strand of history that characterises relative decline as the product of social decadence. A slightly less intemperate example would be Martin Weiner's 'English Culture and the Decline of the Industrial Spirit, 1850-1980', which identified the problem as the continued social pre-eminence of aristocratic values (anti-industrial and anti-mercantile), which then infected the emerging middle class through gentrification.

I'm using these two examples to point out that the "decadence" criticised by Liam Fox is not some barking saloon-bar guff but part of a long tradition of Tory thought that goes back to the Corn Laws. It might be wrong (there are plenty of counter-narratives that show Britain remained a leader in technology and that postwar welfare spending was in line with competitor nations), but it represents a genuine anxiety.

While this may be expressed in fears that UK businesses will fail to step up to the plate, at root it stems from a belief that the state remains a Whiggish preserve. This is why hard Brexiteers are insouciant about the lack of trade negotiators and other technocrats. What looks to most of us like a problem looks to them like a golden opportunity to cut back the Whiggish state under the guise of quitting the EU.

Igor Belanov said...

"This is why hard Brexiteers are insouciant about the lack of trade negotiators and other technocrats. What looks to most of us like a problem looks to them like a golden opportunity to cut back the Whiggish state under the guise of quitting the EU."

Yes, it's a form of social-Darwinism, which is why it tends to remain on the political fringe.

As David points out, even Thatcherism effectively increased the scope of the state. Its political 'skill' was in using the rhetoric of 'laissez-faire' and competition in order to focus on its enemies, such as organised labour and public sector interests. I think it's a bit daft to see British capitalism as 'lazy' or 'rubbish' when on their own terms they have been very successful. We shouldn't fall into the thinking of the likes of Will Hutton whereby there is some form of capitalism that is ideal for all or we just need to copy some model that seems to 'work' elsewhere.

Phil said...

Yes David, you're right. The lesson there is never write something for a blog post set to a self-imposed deadline so tight that there is no room left for revision.

jim mclean said...

Reading Shinwell's autobiography, totally supported Imperialism and the Empire on the basis of the gains made by the UK working classes, the benefits of Imperial Citizenship I suppose, think the phrase Free, White and Twenty One was still used up to the 60's or 70's.