Friday 13 September 2019

Finance Capital and the Conservative Party

What is the Conservative Party? Why, for the majority of the left it is the traditional party of Britain's ruling class. And while it has proven to be its preferred vehicle, having dominated the 20th century and holding the title of the most successful party in electoral politics anywhere, it is not and has never been the party of all the ruling class. When Marx wrote about the state as the general committee for the common affairs of the bourgeoisie, it did not necessarily follow that the Tories as a collective political entity were similarly stamped by these "common affairs". As the Conservative Party suffered its first week from hell under Boris Johnson's dubious leadership, we are reminded of the sectional character of the Tories by last week's series of not-hostile articles in the Financial Times on Corbynomics. This involved the not insignificant news of Citibank and Deutsche Bank coming out in favour of a Jeremy Corbyn-led Labour government over a no deal Brexit under Johnson's stewardship. Welcome, comrades!

Something strange has happened in British politics to bring about this - previously unthinkable - eventuality. Weird, yes. Unsettling? Certainly, particularly to those looking on in horror on the right. But not entirely unexpected if you grasp the long-term development of the Tories, the recomposition of Labour in response to the rising class politics of the 21st century, and the simple realisation that capital, as a collective, is foremost concerned with preserving the class relations and power dynamics underpinning private ownership - relations that are more nakedly obvious now than at any time since the 1930s.

Following John Ross's excellent small book, Thatcher and Friends, the emergence of the modern Conservative Party following the 1832 Reform Act and the splits and controversies of the Corn Laws in the 1840s has seen it be the fractional vehicle of certain sections of British capital. These are finance itself - chiefly the City, banks, owners of large property portfolios, overseas speculators and the like; landed capital, including the old aristocracy, large farmers and food producers, and mercantile capital, the myriad of middlemen firms who fixed up trade routes and brokered deals while creaming off a share of the commerce they affected. You'll note the absence of extractive industry and manufacturing capital. True, there have always been Tory manufacturers and capitalists in the Fat Controller mode who identified with and give money and support to the Tories, people like JCB's Bamford family, but as a whole their support for the Tories was more conditional and episodic. In the post-war period, for example, while the Tories quickly adapted to the Keynesian settlement and were promulgators of a capitalism that appeared more gentlemanly and patrician, at least from our vantage point, manufacturing capital was more oriented toward Labour. In the early 1980s the SDP-Liberal Alliance was also able to win over industrialists.

This, again, shouldn't shock when you examine the dynamics within the ruling class. As Alexander Gallas points out in his The Thatcherite Offensive, as the ruling nexus of Keynesian capitalism entered into crisis during the 1970s, under Thatcher the Tories pivoted away from it. What enabled this was the movement into the parliamentary party of so-called self-made business men (they were all men), party hacks, and professionals (above all, lawyers). The old guard of one nationists who looked back aghast at the 1930s, not least because the laissez faire response to the depression ably assisted the emergence of mass fascist and communist movements across Europe, were retiring and getting replaced. The newcomers were the cadres of politicians who had little or no memory of the war, and did not appreciate how the institutional consensus built by successive Labour and Tory governments allowed labour to have a seat at the table and buy a measure of class peace. Until the 1970s, anyway. Not only did this layer hold the post-war compromise in contempt, unlike their predecessors they were not tied to it in the same way. For instance, if your capital was tied up in producing for the supply chains supporting the nationalised industries, it was more immediately obvious how government spending and the commitment to full employment impacted your business than if you worked in or ran a law firm, or worked in brokerage in the City. Because these ties were weaker, because the Tories were traditionally the party of the finance-land/food-mercantile power bloc of bourgeois interests, and the Thatcherites doubly so, they were relatively structurally insulated from taking on the rising power of organised labour. And when they did and unleashed their thugs against the miners the blowback had few political ramifications. Indeed, they went on to win the following two general elections. Pace Tony Crosland, his view a party causing or presiding over mass unemployment would pay a prohibitive political price turned out not to be the case.

Therefore come 1992 and with John Major in Downing Street, the Tories had broken the labour movement and taken a wrecking ball to the country's manufacturing base. They continued to do so. The components of their power bloc remained in place, but it was stark how much the party's organisation had collapsed during the Thatcher years. This didn't matter so much as long as the power of the press were on their side, but nevertheless it represented an acceleration of a trend that had begun in the early 1950s. The culprits were, on the one hand, a purposeful and conscious promotion of privatised individuality. Why spend an evening listening to the old bores down the Association bar, when you can stay in and play with your new hi-fi instead? You could nip to church on Sunday, but there's more interesting things you and yours could be doing. But of greater significance was the unwitting attack on its own base. Thatcher and co. were insulated for the moment from the consequences of their open class war against labour, but as she shuttered the nationalised industries and closed down the mines, huge quantities of capital were liquidated. Some of this was able to move into property and speculation, becoming finance capital, but for whole swathes of small and medium sized business it meant ruin. The petit bourgeois and conservative-voting sections of the working class were hit, and turned them toward despondency or political opposition to the Tories. Matters were not helped by the introduction of the Poll Tax, which hit this constituency as hard as anyone else. Attempts to cultivate a new base of support through "popular" privatisations of the utilities and issuing of shares to encourage mass take up, and the selling off of council housing primarily to owner-occupiers did not stymie the sharp contraction of the base.

Very quickly, Major's government ran into crisis with Black Wednesday and the UK's forcible exit from the Exchange Rate Mechanism. As the leaves turned brown and fell from the trees, the Tory party was strewn on the ground with them doomed to spend the next five years turning into mulch. Many mainstream commentators date this period as the time when the Tories lost the 1997 general election because they relinquished their mantle of economic competence. There is truth in this, and it's very difficult to see how Labour could have lost regardless of who was leader. But this crisis also marked a sharpening of rumbling divisions in the Tories and their power bloc over Europe. As the ERM was designed to regulate exchange rates between member state currencies with a view to eventual monetary union, Britain's ejection at much expense to the Treasury turbo charged Europe as a factional issue within the party but, more importantly, it levered a split within finance capital itself. While there has always been a difference in capital-in-general between those who are mostly interested in the domestic market, and those oriented to overseas investment the process of post-war economic integration with the near-abroad ensured that within finance capital itself, one was predisposed to greater ties with the European Economic Community and then the EC and EU, while others were focused at home or elsewhere.

The death agonies of the Major government, the rising prominence of europhobia within its parliamentary ranks, the stink of sleaze and scandal, and the obvious conclusion they were facing electoral oblivion widened this difference in finance into a split. Tony Blair's famed and, for some, celebrated cocktail party offensive among city slickers and assorted industry captains had the effect of convincing them his New Labour project represented a safe pair of hands. As Blair was going to win anyway, they threw their lot in with him and were awarded handsomely for doing so. Light touch regulation, the treatment of the Tory tax regime as sacrosanct, no state intervention in housing, and no industrial strategy to speak of. It was spring time in Britain for speculators. When Rover hit the buffers for instance, there was hand wringing but no hand outs. Labour left the Tories' restriction on trade union activity alone, with only a minor concession on workplace ballots for recognition and the extension of individual employee rights over and above collective rights. From the standpoint of our class when you consider the size of Labour's majority, it was the criminal waste of a historic opportunity. While the Labour right are of our movement they can ever be relied upon to work against it. Nevertheless, Blair and Brown's policies kept finance onside. More privatisation, a greater liberalisation of markets, the extension of PFI schemes, the stoking of property prices, sub-contracting out parts of the public sector to any willing provider, New Labour bent over backwards to be their party above everything else. And until the global financial system imploded in 2007-8, finance were happy to tickle their bellies.

Finance is but a capricious paramour. Gordon Brown saved their system and prevented the crashing stock markets from billowing out into a depression, and the thanks Labour got was finance high tailing it back to the Tories. Just as it was in 1997, it wasn't solely because Labour were on a hiding to nothing for the 2010 general election but what their opponents were offering. The years the Tories suffered in opposition were pretty grim and for those who took part in it, a grinding embarrassment. The politics of the time, in which leading Tory after leading Tory were convinced their way back to the big time was to bang on about Europe and their various moral hobby horses received a humiliating rebuff in 2001, and then it got even worse when the ghoulish Iain Duncan Smith took the reins of the befuddled beast. He wasn't there for very long. As Boris Johnson is reminding us, serially dishonest figures with an unenviable record of disloyalty and backstabbing seldom make for good leaders and steady regimes. And so Michael Howard replaced IDS with a programme that wasn't much different - a bit of racism here, a bit of EU-bashing there. And his efforts awarded the Tories an extra 400,000 votes - an underwhelming performance masked by the dismal fall in Labour's vote. But was this time in the wilderness entirely wasted? While Blair appeared to enjoy outflanking the Tories on the right, particularly on issues once regarded their sacrosanct fetishes like crime and policing and, for a while, immigration, their retreat into Europe and dog-whistle racism could be read as necessary moves to bring together their forces following two utterly shattering defeats. With the emergence of Dave and his heir-to-Blairism, that the fading grass roots went for his "modernising" pitch over the comfort zone fodder from David Davis suggested the mood of the party had recovered from its period of introspection and trauma.

Dave's election in 2010 was by no means inevitable. If only Brown hadn't bottled the Autumn 2007 election ... but Dave proved adept at seizing opportunities and making gambles when they presented themselves. And the first major gamble of his tenure was not the hug-a-husky photo opps but the abandonment of Labour's spending plans, and the break with Brown's handling of the financial crisis. Both he and Osborne knew this wasn't a crisis of "profligacy" and public spending, but it suited them to portray it as such so they could come to power and let loose a wave of warmed over Thatcherism. Like Thatcher, they relied on the same sort of arguments about "spending beyond our means" and having to pull together in the national interest. It was crap then and it was crap now. Nevertheless, it gave them ideological coherence and a sense of purpose, even if it was entirely socially regressive. More importantly though it offered that section of finance capital previously aligned with New Labour something in exchange for its return. Brown's recapitalisation and, in some cases, nationalisation of the banks made private debts public debts and at a stroke made government finances look like a basket case, a situation appearing even more dire with the collapse in tax revenues, lending itself to the conceit the consequent public spending deficit represented an unprecedented national emergency. The Tory programme was to keep these debts public and shut down spending by privatising whatever was left of the state, and carrying on with the Blairist programme of marketising everything that moved. In other words, though Alastair Darling was, for Labour, helpfully promising cuts "worse than Thatcher" the Tories were a surer and safer pair of hands. As it turned out, Dave didn't win his majority but the Liberal Democrats proved entirely reliable partners in government, demurring over little save the constituency boundary review and agreeing a further round of social security cuts in exchange for their 5p charge on plastic bags. Thankfully, on this occasion more cuts to the most vulnerable were shelved while the bag tax went ahead.

Still, Dave's time in office wasn't a happy one. Despite securing the services of the LibDems, he faced near constant pressure from his backbenches on Europe, and so from day one of the coalition government party management was his overriding concern and day-to-day politics were increasingly subordinate to it. The rapid recrudescence of the EU obsession was an unwelcome reminder of the key division within the core constituent of his class coalition. The EU-facing section of finance might be satisfied with displacing the cost of the crisis onto the shoulders of others, but the others were not - chiefly components of the coalition focused on domestic property or financial services markets, or had interests overseas and long felt the EU was an imposition on their freedoms to move capital willy-nilly. Furthermore the most backward sections of British capital typified by land and food production benefited from their ability to pay EU migrant workers below market rates, but chafed at the free competition of produce flooding supermarket shelves, giving them the upper hand as large buyers versus an embarrassment of sellers. This was the backbone of bourgeois opposition to the EU, a contradictory unity of deregulated market fundamentalism and domestic protectionism. And what's more, some had already drifted into the orbit of UKIP. The most backward of the mostbackward certainly, but for Dave the existence of a semi-viable vehicle to the Tories' right wasn't just about a threat to a handful of seats or the disappearance of much-needed activists, who flooded over in large numbers following his championing of Equal Marriage for same sex couples. It was an instinctive grasp of the threat they posed the class alliance at the heart of the party. Hence the rush to placate the right wingers. The pledge for the EU referendum. The ramping up of two-nation rhetoric.

Come the 2015 election, it worked. After a fashion. The EU referendum pledge and the overall tone of deficit determinism was enough for all sections of finance. Especially when Ed Miliband's Labour offered to curb finance, at least around the edges (remember the predators versus the producers speech?). The division within finance capital was papered over and Dave returned to parliament with the Tories' first majority for 23 years. Unfortunately for him, while his coalition partners were eviscerated UKIP still managed four million votes, undoubtedly robbing the Tories of further gains. It was a warning of what was to come unless the abscess got lanced. And so as a means of keeping his coalition together, he made good his referendum promise. And it all went a bit wrong. The leave side and the remain side each had their city slickers, concerned captains of industry, federations of employers, and Tory campaigners. It was very clearly a dispute within the ruling class, whose politics dominated and framed the talking points. The workers' movement certainly had little push in the campaign, with Frances O'Grady sharing platforms with assorted worthies and making a case for remain any liberal-minded politician would have endorsed. The remain and reform line pushed by Jeremy Corbyn commanded little media coverage, getting much more after the fact, and the left wing case for leaving the EU was nowhere. The terms were bourgeois nationalism vs bourgeois internationalism, and by mobilising anti-immigrant sentiment above all leave turned out disproportionate numbers of mostly old, mostly socially conservative voters and swamped the rest. Dave had basically blown apart the division had set out to heal, and off he went to spend quality time in his overly expensive shed.

The most backward, uncompetitive and socially regressive sections of capital had led an insurgency and won. But, despite the atmosphere of excitement and despair, celebration and recrimination the Tories patched up the referendum divisions with unseemly haste. The candidates racing to succeed Dave combusted in a fireworks of unforced errors and spectacular betrayal, leaving Theresa May alone to survey the scene. On the face of it, the party united behind her and she was able to project an authoritative image, albeit one determined to reassert the Christian-adjacent one nationism she imbibed in her father's vicarage. It is exactly what significant sections of the electorate wanted to hear as well, and her poll numbers went stratospheric. Early on in her Number 10 stopover, she bid to placate the right ahead of Brexit negotiations by indicating her ridiculous "Brexit means Brexit" mantra meant a hard exit from the EU. i.e. No single market, no customs union, no freedom of movement for EU nationals, and a desire to live by bilateral trade deals (no doubt to be struck with much fanfare and ostentatious backslapping). This was a disaster from the standpoint of EU-facing finance capital, but for the moment there was very little it could do. The LibDems were still busted, Labour was in the throes of a second leadership contest in which the left were guaranteed to win, and May was unassailable. It had no choice but to stick with where the largest slice of the electorate were, and lobby and plead for a tempering of the Prime Minister's approach.

It took six years for the wheels to come off Dave's car. May managed it in nine months with her witless calling of a general election. The Tories this time were blind sided by a left wing insurgency in defiance of every mainstream prediction. May's coalition of voters was the largest polled by any party since the record set by John Major in 1992. The problem was Jeremy Corbyn returned the most number of votes Labour had managed since 1997, thanks to the anti-hard Brexit sentiment of anti-Tory voters, the arrogant ineptitude of May's campaign, but mainly thanks to articulating the interests of millions of people hitherto excluded from the terms of reference of mainstream politics. May's government was rendered permanently unstable, while the left's control of Labour proved itself assured. Even more interesting, while May was able to hold together a semblance of a party in the Commons for the time being it was the hard right, the anti-EU sections of capital and their satraps who made the running in Tory divisions. May's position was weak, but the would-be leadership contenders were divided among themselves conferred her a a certain strength and room for manoeuvre. This she did not appreciate until late on, and spent most of her negotiating time pretending she was bowing their way. When it turned out her deal wasn't congenial to their interests, the toys a-flew from the pram and she suffered vote after humiliating vote. Meanwhile, the other side of finance capital grew aghast and started looking for alternative avenues of influence. Chief of which were the astroturf outfits of the continuity remain campaigns and the silly (and doomed) centre party project fantasies of Blairites and Cameroon Tories.

Ultimately, Theresa May's efforts ran the party into the ground, but more than that it demonstrated the party had become even more sectional and beholden to the most atavistic beasts of British capital. This was confirmed by the ease with which Boris Johnson won the subsequent leadership contest, and helps explain how utterly reckless his approach to Brexit has been. Not only has he sacked the MPs most closely associated with the now departed wing of finance capital, he has further insulated himself from a core constituent of the bourgeois interest and why he would go full no deal if push came to shove. Meanwhile, those same interests are abroad, flitting hither and thither. A rejuvenated Liberal Democrats? Why not. Throwing more money at continuity remain? Sure. Flattering and pushing the "dissident" Tory MPs? Fill your boots.

And this is where Corbyn's Labour comes in. So egregiously bad the Johnson government is proving to be that certain sections are thinking the unthinkable. It was one thing for finance capital to go for Tony Blair's Labour. After all, the only red he countenanced was on the carpet he rolled out for them. What's happening now is entirely different. Despite Labour's economic programme, which promises curbs on the City as well as other measures aimed at redistribution and, crucially, tilting the balance of power away from capital to labour, it is obvious some would prefer this than the calamity of a no deal Brexit. They're coming to Labour not on their terms, but ours. No doubt they hope they'll be able to persuade and smooth some of the edges of the next manifesto when it comes to implementation, but it is quite a turn around when, for entirely self-interested reasons, wodges of finance capital are eyeing us up. Us, a left wing Labour Party. Who ever would have thought it?

This more than anything underlines the possibly terminal crisis of the Conservative Party. If it wasn't bad enough that your mass constituency was in long-term decline, and your pandering to their interests pitted you against the rising tide of the new class cohort of younger voters, it is surely symptomatic of The End now the core bourgeois component is hopelessly split and one wing is entertaining Corbynism as a port to shelter in. Can this split be resolved? Of course it can, should its class interests become seriously imperilled. All forms of capital have more in common than with labour. What is uncertain is thanks to the deep and widening split in finance capital is whether the Tory party will be the scene of its inevitable reconciliation. One thing is sure, whatever the end point is its journey is sure to be back with immolation, pain, and disintegration. It would be rude not to watch.

Image Credit


Dialectician1 said...

Many thanks Phil, a great read. You offer an interesting historical overview of the imminent contradictions within the Tories and how some sections of capital are now recoiling with horror as these contradictions become manifest daily. Capital needs 'a measure of class peace' and the backward sections of the Tories are not providing the secure platform required for future investment and longer term stability. It is interesting that Corbyn's old fashioned, social democratic model of regulatory capitalism offers them this. Maybe post-war corporatism is back in fashion?

Boffy said...

You are quite right that the Tories have never been the party of the whole of Capital. The Tories were the party of the ruling class when the ruling class was the old landed aristocracy and the financial oligarchy that was closely associated with it. They split over the Corn Laws, but as Engels says, it was Manchester Liberalism represented by the Manchester Guardian, which itself was a product of Peterloo, that represented industrial capital.

Again as Engels says, the Liberals themselves could only perform that function, because they pulled in behind them a long working-class tail, and when the Labour Party was created it basically just reflected that reality of the preponderance of working-class voters, whilst retaining essentially the same old bourgeois liberal ideology that even under the Liberals had become a social-democratic ideology based upon compromise, and management of what were assumed to be shared interests between workers and large-scale industrial capital.

"capital, as a collective, is foremost concerned with preserving the class relations and power dynamics underpinning private ownership"

But, it isn't. It is foremost concerned with reproducing the relation between capital and wage labour, and as Marx and Engels point out, the very process of capital accumulation destroys private ownership, because private ownership became a fetter on capital accumulation, which meant that it was scrapped and replaced by socialised capital in the form of the cooperative and joint stock company.

“The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself...

It is the point of departure for the capitalist mode of production; its accomplishment is the goal of this production. In the last instance, it aims at the expropriation of the means of production from all individuals. With the development of social production the means of production cease to be means of private production and products of private production, and can thereafter be only means of production in the hands of associated producers, i.e., the latter's social property, much as they are their social products.”

(Capital III, Chapter 27)

Or as Engels says,

“Capitalist production by joint-stock companies is no longer private production but production on behalf of many associated people. And when we pass on from joint-stock companies to trusts, which dominate and monopolise whole branches of industry, this puts an end not only to private production but also to planlessness.”

Its not the Tories that represent that socialised capital but Labour. The Tories represent a step backwards from it, which is also the basis of their support for Brexit.

BCFG said...

This article is very light on empirical data to back up the ‘historical’ narrative. There is a good reason for this; the data does not back the argument being made!

One thing is for sure, whatever section of the bourgeois we are talking about, a statistically insignificant amount will ever support Corbyn. This is enough proof to understand that every man jack of them has no belief in anything that could be even semi described as social democracy! And the reason every man jack of them has no belief in social democracy is because they know it does not serve their interests. I mean do they have to unravel the whole New Deal again to prove this point? Or re-privatise everything again or lobby states to water down legislation yet again! Or reduce their taxes still more?

Fracking produces more methane than any other industrial process, did this so called socialised system of planning factor that into their equations? Oh no, lets just frack away, have we missed anything in the plan? Nothing other than the end of the fucking world as we know it!

And so what if the Tories are not representing the whole of capital? It’s a nice historical narrative, but why do we need historical narratives anymore. Hadn’t Marx established the truth of historical materialism already? Do we need to continually label the point? It’s starting to get in the way of the truth of the matter now, if you ask me.

The main thing to point out is that the capitalist class are fully represented by Bourgeois politics and any conflict in bourgeois politics is really a reflection of bourgeois interests. Which leads us inexorably to make that point that beneath the pomp and ceremony and bullshit about plurality there lays a one party system, i.e. the system of the bourgeoisie, a system that seeks to reproduce the system by whatever means necessary.

So what if the natural outcome of the bourgeois system is concentration and centralisation of wealth and power, it doesn’t really change its fundamental nature. Private Bourgeois interests are being served, whether you want to call this socialised capital or not. At the end of the day they have their Yachts, their mansions, their children’s private education. And they plan for their private interests, they leave little things like the end of civilisation out of the plan. So much for this socialised planning!

At least Boffy is no longer quoting capital volume 1 to make his case that Marx believed capitalism meant the end of private property. He used to laughably quote Chapter Thirty-Two: Historical Tendency of Capitalist Accumulation, which if anyone cares to read that whole chapter, which isn’t long, will soon see that Marx is not talking about socialised production in relation to capitalism but is actually imagining the future demise of the capitalist system and the “expropriation of a few usurpers by the mass of the people.”

And given this was the only published work on the subject we can take the rest with a degree of caution.

Capitalism is system where a mass of people work collectively for the interests of a few. Boffy is arguing that this whole set up can be simply overturned by a few tweaks to the law, this is literally implied within his argument. Marx was absolutely clear that this was not the case and that to overcome the bourgeois system of production required a little more than the subtle conversion of capitalist enterprises into socialist ones.

Capitalism is a death cult, planning my arse!

Phil said...

What a bizarre comment. "Light on empirical evidence"? Haven't you been following politics at all recently?

If we're serious about transforming the world instead of bemoaning it, we have to take the politics of the ruling class seriously. Not because it's interesting in and of itself, but to understand what they have in store for us and what they're doing to buttress and advance their class interests. For someone who claims to be au fait with Marx's Capital, it's incredible this very basic position of socialist politics has to be explained to you.

Boffy said...


You ought to know by now that BCFG/CAAC/DFTM/Sentinel/Chris/Dave/anonymous is not au fait with any aspect of Marxism other than what he can Google for some quote he can misuse so as to take an oppositional view as is the wont of all such trolls.

Best let him stew.