Sunday 2 October 2016

Theresa May: Brexit Means Wrexit

If politics is war by less violent, constitutional means, it follows that truth fares no better in the peaceful competition between interests. This is especially the case when politics is staking out new territory. If one can define what a problem or challenge is, your solutions, such as they are, have a certain credibility from the off while everyone else plays catch up. Consider the deficit determinism Dave's administration served up for for six years, and scored him a general election result too. The truth didn't matter. By linking the crisis in the public finances with alleged Labour profligacy and not with bail outs and recession, the Tories controlled the story.

Theresa May is doing exactly the same with Brexit. And that means dishonesty at the very basic level is fundamental to how she defines it. In her short speech at Tory party conference earlier, she had this to say:
I believe there is a lot of muddled thinking and several arguments about the future that need to be laid to rest. For example, there is no such thing as a choice between “soft Brexit” and “hard Brexit”. This line of argument – in which “soft Brexit” amounts to some form of continued EU membership and “hard Brexit” is a conscious decision to reject trade with Europe – is simply a false dichotomy. And it is one that is too often propagated by people who, I am afraid to say, have still not accepted the result of the referendum.
She and every leading Tory knows full well this is untrue. When matters turned to Brexit over the summer, proponents of soft Brexit - presumably favoured by reconciled remainers and a large number of leave voters because, after all, a soft exit is what the likes of Johnson and Grayling talked up during the referendum campaign - defined it as fundamentally non-disruptive. Britain after Brexit was to be business as usual with as many benefits retained as is practicable. The hard Brexit position, which has only recently started speaking its name this last month or so, isn't the rejection of trade with the EU as May pretends. It's the reckless abandonment of arrangements that have strengthened the British economy and allowed for the interpenetration of capitals, of workers, of flows of trade and the circulation of goods. The EU sells more to us than what we buy, say the idiots, but as an entity where risk is distributed among a market of 440 million people, the sundering of free ranging economic ties with Britain are going to hurt us far more than our withdrawal will hurt it. And we know from the 2008 crash who'll end up paying for this failure.

In the Bermuda Triangle of the Foreign Office, Dept of International Trade, and the Brexit office sense disappeared right after truth vanished from the radar. May has swallowed the Leave line that Britain can negotiate its own exit that retains all the benefits of the EU with none of the responsibilities simply because, well, we're Britain and we're a Very Important Place. As an assumption to hang a negotiating position, it's utterly reckless. For one, as the default party of British business the Tories show scant awareness of capitalist economics. To demonstrate, there is some evidence British car exports to the continent have taken a hit post-referendum. Who benefits? Well, that would be other manufacturers. Imagine that on steroids. Two years of Article 50 negotiations means a drop in inward investment for companies wanting unimpeded access to the single market. Meanwhile multinationals with a significant presence in the UK, such as Toyota and Nissan, will no doubt hold negotiations of their own with a view to relocation. And European competitors are going to go hell for leather on EU market share held by UK companies because they cannot respond quickly to competitive pressures thanks to Brexit uncertainty. May's foolhardy Brexit is going to put British capital at a disadvantage. Again, remember, this is supposed to be the party of business.

There's a strategic deficit when it comes to the 27 member states too. She seems to have forgotten they have politics too. As above, some would gain from a Brexit as UK-based business relocates and their companies muscle in on markets: they have an interest in a bumpy landing for Britain. At the same time, EU member states - Germany especially - working toward greater integration have to strike a fine balance between maintaining stability that won't negatively impact on their economy, and ensuring no one else has exiting thoughts. While the Tories believe in appealing to the rationality of unimpeded Mercedes sales in Britain, German and EU politics are divided over detente or punishment because EU business benefits differently and unevenly from Brexit. The second big political issue is the Tories' fantasy of free trade without free movement. If by some fluke Britain negotiated such a deal, the populist and the far right in the EU could be emboldened to demand the same. With immigration and the refugee crisis a perennial issue, it's difficult to see how Brussels, with the backing of Paris and Berlin would sign up to an arrangement that could accelerate EU disintegration.

Recall how we got into this mess? That's right, the short, medium, and long-range interests of the country were put into jeopardy for the sake of a small number of Tory voters tempted by a declining and doomed fringe party. May likes to pose as a different kind of leader, but I can't shake the feeling this negotiating position is also conditioned heavily by parliamentary party management. The Brexiters were always going to be her bastards, so the pre-announcement of Article 50 and a clear, if stupid and dangerous position on hard Brexit would keep them happy. But couple it with the Great Act of Repeal (an invite for a limited but publicity-hungry backbencher to call for a national holiday in perpetuity to fall on that date, to be sure), due to be legislated for as the EU negotiations take place and the PM can now look forward to a trouble-free conference. Let this be clear. The government are adopting the weakest negotiating position vis a vis the EU because it preserves party unity.

Asked about his son's role in negotiating Britain's future, Stanley Johnson reportedly said his Boris needs to avoid Brexit becoming a wrexit (wrecks it). Even if he was competent, which he is not, his boss is determined to steer the ship of state right into the harbour wall.


Speedy said...

There's a good piece by Vernon Bogdonor in today's Guardian.

"May has swallowed the Leave line that Britain can negotiate its own exit that retains all the benefits of the EU with none of the responsibilities..."

I doubt it - rather, I think May is presenting the inevitable as a choice. She has realised how grim, and frankly impossible, it will be to negotiate a special trade deal against a hostile EU parliament, and the ability of veto by any one of 36 national parliaments, and is cutting her losses.

The UK is hurtling head on to WTO rules in two years precisely because she knows it has not got a hope in hell of getting anything else. This will be the reality discussed in board rooms, and quietly between officials and businessmen in off-record meetings. They will be preparing now, while the public believe what they read in the newspapers.

As Bogdanor points out, there is a misperception of Article 50, which is to regulate withdrawl, not new trading arrangements. This means the status of EU citizens, not tariffs on goods and services.

Paradoxically, immigration will float down by itself as the nation enters economic tumult. So May will be able to dress it up as a win, in the end, even if the win is for the top one per cent and the south of England.

David Cameron, et al, will surely be seen as the Guilty Men, in all this, but certainly Corbyn and the Lexit brigade will merit a sizeable footnote - it was for want of two per cent, a two pre cent that a dynamic Labour campaign might have swung - that the UK will lurch into US-style hyper-capitalism, eviscerating what remains of post-industrial communities and workers rights. It may seem strange, but future generations of Leftists may look back on these as halcyon days.

Boffy said...

"For one, as the default party of British business the Tories show scant awareness of capitalist economics. To demonstrate, there is some evidence British car exports to the continent have taken a hit post-referendum."

Except they are not, and never have been the default party of British business. In the 19th century, the Tory party represented the interests of the old landed aristocracy and the associated financial oligarchy AGAINST the interests of Business. Some in search of working-class votes, like Disraeli, are described by Marx in "The Communist Manifesto" as "reactionary socialists". It was the Liberals that were the representatives of business, and as Marx and Engels describe, they pulled the working-class behind them, in opposition to those old vested interests.

In the twentieth century, as voting workers became more significant, the Labour Party more or less just took over where the Liberals left off, but with a superficial "socialist" gloss, which all social democracy presents. But, it is social democracy that represents the interests of business, of the dominant forms of big, socialised capital.

The Tories continue to be the representatives of the interests not of business - which is why the Tories could carry out policies destructive of business form the 1980's onwards - but of the owners of money-capital, of shareholders, bondholders and other financial assets, whose prices have rocketed as a result of Tory policies, even as business itself has continued to be undermined. To the extent that the Tories represent any business interest, it is only of those remnants of the past, of the interests of the private owners of the small to medium businesses, whose interests were often hostile to those of big business, and of structures like the EU.

The consequence of the Tories approach of representing the interests of the owners of loanable money-capital, fictitious capital, shares, bonds etc. is not just the blowing up of extremely dangerous financial bubbles in all of those assets, but the consequent draining of money-capital from productive investment into such speculation. As that led to a continual reduction in yields on those assets from the late 1980's, so the representatives of that fictitious capital on company boards, diverted increasing proportions of profits into the payment of dividends, rather than into capital accumulation.

As Andy Haldane at the Bank of England has said, in the 1970's, only 10% of profits went to pay dividends in the 1970's, whereas today that figure is more like 70%. The global economy for the last thirty years has become transfixed with the drive to continually inflate asset prices, whether they be share, bonds, or property, as the owners of those assets have become transfixed in gambling on their future nominal rise.

It has been to accommodate such a mesmerised obsession that conservatives have geared their policies over the last thirty years, including those conservatives like Blair and Brown, who dominated social-democratic parties during that period.

It led to a series of crashes, each becoming more severe, the latest being in 2008. But as I have set out in my book Marx and Engels' Theories of Crisis instead of remedying the basis of those crisis, more of the same medicine has been applied, which means that any time soon, an even bigger financial crisis will strike, and given the financial conditions, it is unlikely that the old Monetarist intervention policies will be possible this time.

It will mean the period during which those conservative anti-business policies could be applied in the interest of the money-lenders will have come to an end.

Paul Ewart said...

'If politics is war by less violent, constitutional means': good to see you channelling your inner Foucault......

Paul Ewart said...

Nonsense. The guilt resides with Cameron and his team, as Professor Curtice so ably demonstrated. As for the rules: I disagree with your line of argument. It would be all to play for had we a competent, rational government. Sadly, we do not. We have a government that would prefer to pander to xenophobia and the mad fantasies of Boris, the fantastic Dr Fox et al. When what we should be considering is the EEA.

Metatone said...

Interesting piece that I largely agree with.
Lots of people want to dispute the semantic details of if we've entered a new era of "post-truth" politics, but it seems evident to me that with both austerity & Brexit a particular strategy (that you outline) has been used and what marks it out is how much it is a consensual construction of the media and the government...