2007 - 2022

Mayday Warning

Theresa-May-strange-stanceTheresa May’s speech today, and the whole tenor of the Conservative Party conference, marks a profound shift in the relationship between politics and economics in the UK. Britain’s exit from the EU has been the trigger, but make no mistake – this is part of a global shift that no country will be spared from.

Let’s start with what we are used to. We have a global economy. The major project of international capital is to liberalise markets, to privatise and to internationalise trade by breaking down the regulatory power of nation states. This process is twinned with a political strategy which we can describe as technocratic. Political parties jostle over which party is best at protecting citizens from the ramifications of unrestricted globalisation; changing the economy is out of the question.

But in the post-08 crash world the globalisation consensus is beginning to crack under the strain. Austerity and quantitative easing were supposed to provide the stability financial elites needed for another round of accumulation. It’s not happened. World financial flows are down 60% compared on their pre-crash peak. Rather than boosting bank balance sheets for real investment, the rich have hoarded the cash to re-inflate asset prices.

The historic collapse in interest rates is a sign that capitalism has stalled. Central bankers are now using monetary policy to competitively devalue the national currency against rival states. That policy is creating a liquidity crisis for commercial banks, which, according to influential financial sector analyst Nick O’Connor of MoneyWeek, is “the start of a banking civil war”.

O’Connor writes: “To be clear about what this means: central banks and commercial banks are fighting on opposite sides now. The central banks will do anything to save the system, even sacrifice their mates down the road. And through a combination of monetary and regulatory policy, that’s exactly what they’re doing.”

O’Connor argues that could lead to the nationalisation of retail functions in the banking sector to split them off from the “casino” elements of finance. Banks like Deutsche Bank, which like RBS and others tried to become global giants when neoliberalism was at its peak, are now looking at possible exposures to failing global capitalism of up to $60 trillion.

What all this means is it looks like the hey-day of globalisation is over – and this is central to the new strategies of the Right. Witness the Prime Minister today, in a speech that was the polar opposite of everything that came out of George Osborne and David Cameron’s mouth since 2008:

“It’s about doing what every other major and global economy in the world does. Not just about sitting back and seeing what happens – but in putting in place a plan and getting on with the job.

“So we will identify sectors of the economy – financial services, yes, but life sciences, tech, aerospace, car manufacturing, the creative industries, and many others – that are of strategic importance to our economy, and do everything we can to encourage, develop and support them.

“And we will identify the places that have the potential to contribute to economic growth and become the homes to millions of new jobs.”

As Iain MacWhirter said on Twitter: “Who’d have thought it would be Theresa May who delivered the last rights to neoliberalism.”

To be sure, some of May’s words are rhetorical flourish, but this is very real – in the post-Brexit climate it is no longer feasible for British state actors to maintain a fetish for failing ‘free markets’: they need to act, and they need to do it big. That means putting the interests of The City above all else, the Tories raison d’être since Thatcher, is no longer tenable.

This new economic protectionism is still taking form, but we can see signs of it in Donald Trump’s agenda, who has successfully painted Hilary Clinton as an unrepentant ‘globalist’ that was fully signed up to trade deals which exposed rust belt states to deindustrialisation. The new anglo-American Right are dispensing with the baggage of free-market dogma in favour of a dogged nationalist populism.

And of course this nationalism is deeply chauvinistic in character. When the Tories say ‘an economy that works for everyone’, what the messaging is really intended to say is ‘an economy for the indigenous working class’. Racism and xenophobia is now transparent – it’s now mainstream to say that immigrants as nothing more than commodities to plug skills gaps for a limited space of time before being dispensed with so British-born workers can take their place. If a ‘foreigner’ does take a job that Brits could be doing, ‘name and shame’ the employers to whip up a backlash against owners who don’t make employment decisions based on birth-right. This is a new level of racism that we’ve not seen from any UK Government in our lifetime.

But it’s a mistake to see this as simply lashing out. It is a perfectly logical part of the Right’s new populism both ideologically and electorally: protect the indigenous ‘national interest’ at all and any cost. State intervention? Needs must. Dehumanisation of ‘foreigners’? Why not. It’s Britain against the world.

The potential voter appeal of this agenda should not be underestimated. The left’s failure has been to allow immigration to become the major political proxy for discontent about globalisation. For many working class people, especially south of the border, immigration is now a lightening rod for anger over pay, housing, jobs and more. State interventionism combined with populist rhetoric on immigration could be a potent mix.

None of this should be assumed to say the ascendency of the new populist Right is unbeatable. One gets the sense that Theresa May is not even that sure of her new ideological footing. To make this agenda anymore than just rhetoric requires hard Brexit and conflicting with hard vested interests, including potentially the City. She could quickly become hated among Britain’s ruling elite, still rueful over the Remain vote. She may also struggle to keep her party together. Nothing is certain in this new line of march.

The Institute of Directors had this to say on Theresa May’s speech: “Plans to ‘name and shame’ companies who employ foreign workers, aside from adding to bureaucracy, send precisely the wrong message. The prime minister should instead listen to her own advice and remember that, in Britain, it doesn’t matter where you were born.

“Make no mistake, Britain is at its best when it is open and offering a home to the world’s brightest and best who want to study and build a better life for themselves, while contributing to the British economy.”

This reflects an emerging split between British capital and the party of British capital – the result of a political crisis the Tories didn’t plan for and a global economic crisis that is shattering the neoliberal centre. They sound confident but are in uncharted territory and do not have a clear route to stabilising Britain domestically, geopolitically or economically that can bring all of their key interest groups with them.

That means this moment, which feels like being on the edge of something very nasty, is also a massive opportunity for the left if it can adapt to the new context. We are the ones that for years have been arguing for the need for major state intervention in the economy and the dangers of the neoliberal doctrine. If, when the whole edifice starts to unravel, we are found wanting it will be a historic dereliction of responsibility.

Walden Bello, leftist politician in the Philippines and author of several books on globalisation, describes ‘deglobalisation’ as “not a synonym for withdrawing from the world economy. It means a process of restructuring the world economic and political system so that the latter builds the capacity of local and national economies instead of degrading it. Deglobalisation means the transformation of a global economy from one integrated around the needs of transnational corporations to one integrated around the needs of peoples, nations, and communities.”

He advocates 14 key principles of deglobalisation, which can be read here. This must be the basis of a left challenge to right-wing populism – the deglobalisation of capital and the internationalisation of solidarity between people. This includes classical Keynesian big state investment projects, like John McDonnell’s £500bn investment plan, but it must be a lot more than that, as Corbyn advisor and economist James Meadway has argued:

“Keynesianism, as a policy, is not enough. We are not just dealing with bad ideas, but a bad structure. Any programme seeking to end austerity in the UK has to push beyond the point of demand management or some macroeconomic tinkering, and seek to transform the finance-led economy we all now inhabit. It will not be enough just pull the levers in a different way. The machine needs to be rebuilt.”

The ownership structure of the UK economy needs to be fundamentally challenged and power needs to be dispersed more evenly throughout society: this isn’t just necessary to tackle deep seated economic issues like poverty and inequality, it is necessary to build a new base for left-wing politics in the modern world. Globalisation has fragmented the left’s electoral base – deglobalisation must rebuild it.

If we fail to do this – the left, collectively and internationally, in the broadest possible definition of the word – if we fail to understand the scale of the challenge we face and the radicalism that will be needed to match it, then the new and insurgent populist Right will sweep all before us, and the consequences for civilisation will be devastating.

Comments (31)

Leave a Reply to Crubag Cancel reply

Your email address will not be published. Required fields are marked *

  1. schweppeslimone says:

    I’ve just read the 14 principles.

    So – Siege Economy, then?

    Is this the New Left?

    Seems like re-heated late 70s / early 80s Leftist Protectionism.

    No-one; No-one at any scale is going to vote for this.

    This will get hammered at any election in Scotland, or the UK, or any modern successful European state.

    Seriously, you are in a world of your own here.


    1. Ben Wray says:

      What specific points do you disagree with? ‘Lunacy’ isn’t very helpful, unless you think what we have now is sensible.

      I don’t think it is re-heated leftism – we said in the article that Keynesian state intervention is not enough, we need decentralisation and democratisation as well. Look at the potential for that in renewables – every community could run its own energy system and for significantly cheaper than they do currently.

      1. Crubag says:

        No. Renewables work best at scale, that’s basic physics.

        And right now, they’re not competitve with hydrocarbons, hence the subsidy.

        Assuming a local community could afford the investment, without the subsidy from national level, they’d be reduced to intermittent and expensive electricity for all their needs.

        1. Mathew says:

          The fossil fuel industry is subsidised to the tune of £3.4 tn a year!

        2. Graeme Purves says:

          Havers! There is a wide range of renewable energy technologies, and many of them can be deployed very successfully at a small scale. We just need mechanisms to facilitate that.

      2. Karl Greenall says:

        You are absolutely correct in this. People forget that in many, if not most areas, the local infrastructure of water, gas and electricity was established and developed by the local town council. Nationalisation in 1948 simply grouped them together into much larger units, and their privatization in the 1980s can best be described as a new outbreak of primitive accumulation, much as was the privatisation of the commons in the 18th century land enclosures. Localism and democratisation are indeed key to the future of the left.

    2. patrick says:

      My friend, the time has not yet come, but you can start automating yourself for better results.
      Science is more than a body of knowledge, it is a way of thinking. I have an omen of the time of my children or grandchildren, when the United States is an economy of services and information; When almost all major manufacturing industries have gone to other countries; When the incredible technological powers are in the hands of very few, and nobody representing the public interest can even understand the problems; When people have lost the ability to set their own agendas or question wisely those who have authority; When, embracing our crystal balls and nervously consulting our horoscopes, with our critical faculties in decline, unable to distinguish between what feels good and what is true, let us slip back, almost without realizing it, into superstition and Darkness.
      Scotland must be Independent Now before to later.

  2. Alistair Livingston says:

    This line from the article “putting the interests of The City above all else, the Tories raison d’être since Thatcher, is no longer tenable.” is the bit the confuses me.

    If it is no longer tenable for the Tories to be the political wing of the City of London, what are they? For the best part of 40 years now, under Conservative and Labour governments, the UK’s economy has been adapted to serve the City of London’s interests.

    If that link is now being broken, then we really are heading into uncharted waters.

    1. Ben Wray says:

      Lets say it’s becoming frayed. If The City was still the be all and end all they would be putting passporting right at the top of their negotiating list with the EU, but they don’t seem to be doing that. The limits of what The City can do for the UK economy have kind of been exposed by the crisis. The Tories still know where their bread is buttered, but Osborne style laser focus on The City’s interests means sacrificing things like house building (if you build lots of homes you push land value down, hurting banks) which the Tories are clearly identifiying as part of a state interventionist policy of targeted intervention in big potential growth areas.

      1. JaceF says:

        I wouldn’t be surprised if The City of London becomes a fully independent city state within but out with the UK, it’s already half way there.

  3. Crubag says:

    Isn’t the Scottish Christian party more likey to take up the reins than RISE?

    No doubt there are serious times ahead, but articles like these read more like a bad sales job – this is our product, now what was your problem?

    Like it or not, immigration and the failure to manage it was a factor in the defeat of Labour. I’m not seeing you learning anything from that defeat.

    1. Frank says:

      Is it just me or does anyone else think that Crubag is straying out of their intellectual depth/comfort zone in trying to ‘rubbish’ this article? A critique of this article would be good but sadly I don’t think Crubag is the man for the job…

      1. Crubag says:

        Fair enough, it’s the Internet, but do you mean RISE’s underwhelming election performance where rather than being the new Syrzia (despite New Labour/Pasok’s implosion) they weren’t even the new Scottish Christian Party? Or indeed, the new Solidarty (I had to look that one up to see which it was, 9 years later, 2 court cases and Sheridan is still the Scottish socialist to beat?!)

        Or their apparent open borders policy (there being no such thing as “foreigners”). If RISE does rise again to risk a deposit, and they stand on a policy of no immigration control…? The counters won’t need to weigh the votes, they’ll need a microscope. Even in Scotland.

    2. douglas clark says:

      Fascinated that you see the Scottish Christian Party as the future.

      1. Crubag says:

        As opposed to Solidarity, the frontrunner?

  4. Terence Callachan says:

    I disagree,globalisation will continue China and Africa will push on with it along with the EU Russia etc etc.UK politics is reactionary and make no mistake about it Westminster will do anything to keep control of Scotland.If it loses control of Scotland and Scotland becomes independent then it will also lose control of Wales and Northern Ireland and pretty much all else.Westminster is looking out for England’s interests as it has done since it began.

  5. Willie says:

    The time has come where we need to physically resist this neo fascist Conservative Government.

    Like 1930s Germany the hatred against foreigners is palpable.

    We ignore this at our peril.

    1. Peter C says:

      You’re right. James O’Brien got it right as to what is starting to develop: http://www.lbc.co.uk/radio/presenters/james-obrien/james-amber-rudds-speech-echoes-mein-kampf/

  6. Alan says:

    That means this moment, which feels like being on the edge of something very nasty, is also a massive opportunity for the left if it can adapt to the new context. We are the ones that for years have been arguing for the need for major state intervention in the economy and the dangers of the neoliberal doctrine. If, when the whole edifice starts to unravel, we are found wanting it will be a historic dereliction of responsibility.

    Yes, but let’s just start with the “historic dereliction of responsibility” that the Left believes that neoliberalism itself doesn’t involve “major state intervention in the economy”. You can’t fight what you fail to understand.

    1. Willie says:

      Alan, the failure to understand was never a restriction to fighting. Indeed, the failure to understand is all too often the very grounds for fighting.

      But aside, we act at our peril when we fail to resist resist the xenophobic resentment that unfolds before us.

      1. Alan says:

        I agree. Maybe I should rephrase that as fight an effective battle against what you don’t understand. The Left’s failure to grasp the major role of the state in neoliberalism is part of why they have waged such a weak challenge to decades of neoliberalism, in fact worse than that, a large section of the so-called Left was co-opted.

        The problem now is that the neoliberalism we are used  to is probably about to mutate into something new and quite probably much worse.

        1. c rober says:

          You mean National Socialists , now where have I heard that before?

          1. Alan says:

            @ c rober

            And what’s that got to do with the rest of the thread? Please explain.

          2. c rober says:

            @ Alan.

            “The problem now is that the neoliberalism we are used to is probably about to mutate into something new and quite probably much worse.”

            To whit , I said National Socialism , but for clarity I may obviously have to add workers party on top.

          3. Alan says:

            I meant a risk of some new form of nastiness; not a return to some past evil.

  7. Butch Cassidy says:

    In 1990 the World Bank first calculated how many people were living in absolute poverty and it was 35% of the worlds population.

    Today it is 10.7% and this massive reduction is largely due to China and India abandoning centrally planned economies in favour of the free market.

    What the left call neo-liberalism is simply natural human behaviour which has led to continual improvements in living standards for the whole of society since the Industrial Revolution.

    The only alternative system proposed, ie Marxism, failed on economic grounds because the absence of a market mechanism and price indicators meant that goods and services produced did not meet the needs of consumers, ie everyone in society. Man is economic creature and attempts by Marxist states to eliminate freedom of choice and expression led to the horrors of the Gulags and Cultural Revolution.

    1. c rober says:

      Takes the chinese to disect both capitalism and communism , then stir fry it. The scots do something similar , take a salad and a desert and deep fry it.

  8. john young says:

    “Quantative easing” robbery without a gun,until therewill never be stability until there is a change in how the financial world is operated.It is one giant Ponzi scheme.Scheppeslimone are you just an idiot or acting like one?.

    1. c rober says:

      And there in lies the problem of private central banks , perceived by the public as state owned.

  9. Martin Farley says:

    This article, though interesting makes the mistake of assuming that it is government policy that has driven globalisation (and will drive deglobalisation). In reality, technology will continue to flatten the earth and all the walls, immigration controls and ‘lists of foreigners’ in the world won’t stop it. We need to find a way to share the benefits of globalisation more equally, and in that govt can play a very important part.

    1. c rober says:

      Problem there is the rise that GB is still there , still a major player globally , still an empire , still rules the seas and so on. Could this therefore be a generation lost again , only to end up in the EURO mechanism as a result?

      It is beginning to think that the EU trade deal can be sacrificed , whats on the cards as a replacement TTIP? And this is probably the reason why the export drive has ended up with lower pound as a result , a short term dead cat – means decreasing imports will be next as low pound value affects imports , thus higher prices based on them , so higher prices on cars , not that there is any British car makers left , increased prices on food and even Gas… just as well we have a housing boom that will result from kicking out johnny foreigner on the horizon eh?… well apart from the non doms.

Help keep our journalism independent

We don’t take any advertising, we don’t hide behind a pay wall and we don’t keep harassing you for crowd-funding. We’re entirely dependent on our readers to support us.

Subscribe to regular bella in your inbox

Don’t miss a single article. Enter your email address on our subscribe page by clicking the button below. It is completely free and you can easily unsubscribe at any time.