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Brexit From Above: British Capital and the Tensions in Global Capital Accumulation

by | November 19, 2021

The following article first appeared in print in Salvage #10: The Disorder of the Future, our Spring/Summer 2021 issue. It appeared alongside another piece ‘Brexit From Below: Nation, Race and Class’ by Jonas Marvin. Our back issues are available to buy individually here. Our poetry, fiction and art remains exclusive to the print edition, and our subscribers have exclusive access to some online content, including PDF versions of all issues, and all audio content. New subscriptions can be taken out here. They begin with the next print issue, and give instant access to all subscriber-exclusive content.  



British politics and the British political system are in some sort of crisis. The question is: what sort of crisis? And why, precisely, was it the Brexit issue that seems to have precipitated this crisis? 

Some see the present situation as a sort of collective suicide, a popular, uniquely British revolt against reason – fuelled by nationalism, xenophobia and racism. Others point to a broader and common crisis in Europe and North America, and the emergence of an unstoppable populist force for reaction – a new Dark Age. Rather few have explored Brexit as a positive project; a struggle within British capital to define a strategic response to challenges in the production and appropriation of surplus value. 

There are, indeed, similar elements among Brexit and the startling political transformations in Europe and North America, and they arise from developments in the global capitalist system experienced by all countries and peoples over the last forty years. These are the massive restructuring of production and class relations in the capital-promoted and managed ‘globalisation’ process, and the subsequent (and consequent) reappearance of acute international economic rivalry ending the half-century of the hegemony of the United States. 

There are also very important variations in national responses to these developments, corresponding to different national configurations of capital and labour and modes of their insertion into the global capitalist economy. I suggest that the particular configuration of capital in Britain has led important elements of the British ruling class to respond to an emerging global challenge by binding the British economic system (or ‘their’ elements of it) even closer to a new form of US-dominated international economic system – and to withdraw from an European Union that is also seeking to articulate its own defensive re-positioning in the capitalist global economy, but is doing so in the ‘wrong’ way. 

Thus, very far from being a challenge to capital and an expression of a new popular power, Brexit has been promoted by important interests within Britain whose capital-accumulation strategies involve a shift in the country’s international alignment. Correspondingly, the ‘populist uprising’ – rather than being a new working-class, anti-elite movement – is best thought of as a highly engineered top-down ideological artefact drawing upon a political language and symbolism (of nationalism, xenophobia and racism) elaborated and fostered for well over two centuries by a British ruling class intent on domination and division at home and abroad – and enacted on an everyday basis by the British state. 

That was where the language of Brexit came from. Whether the language exerted a power above and beyond interest is not at all clear. Much has been made of ‘working class’ support for Brexit, and the putative influence of populism within it. The Brexit initiative did not come from the working class, nor did the bulk of support come from it, but it is probably true to say that Brexit would not have prevailed without significant support from a minority of workers. The basis of that support in the concrete experience of the effects of globalisation in Britain has hardly been explored – not just in relation to Brexit, but also in relation to the much broader question of working-class concerns and political alliances in the context of the local demise of the mass worker that played a critical role between the end of the Second World War and the outbreak of the war against the working class in the second half of the 1970s.



The Long Arc from Pax Americana to the Chinese challenge
For nearly thirty years after the end of the Second World War, the principal capitalist economies of North America and Europe experienced increasing labour productivity, increasing incomes, and high levels of employment and social security. This extraordinary transformation relative to the experience of the previous two decades was driven by the dissemination and adoption of a particular form of large-scale capitalist production pioneered in the US before the Second World War and perfected during it: Fordism. 

Mass production in systems gave rise to the mass worker capable of expressing mass demands both politically and econom-ically, demands that capital – flush with the enormous expansion of relative surplus value in the Fordist system – could afford to entertain, although it would never cease to seek to divide and rule, discriminate and super-exploit. Like all periods of capitalist expansion before it, this period ended in crisis, generating dramatically new spatial organisations of production and production relations, shattering the Keynesian illusion of economic management, and framing the problématique of the present.

For many working people (largely excluding working women and racial ‘minorities’) in these revitalised centres of capitalist production, this was a period of astonishing improvements in the conditions of life, including in their collective economic and political influence in unions and in mass reformist social-democratic polit-ical parties (be it under communist, socialist or social democratic headings). For the capitalist class who actually owned these new forms of production, it was also a period of enormous prosperity. The increase in productivity, and therefore of relative surplus value, in these new forms of production was so great that it permitted both an improvement in the lives of employees and massive profits among employers. 

In most cases, the prevailing form of political organisation within these countries became more-or-less universal adult suffrage for representation within parliamentary systems that ostensibly managed the massive state structures developed to provide the conditions for the functioning and expansion of capitalist production. To these were added basic provision of basic social security in terms of income, health, housing and education that might encourage social quiescence among the massive urban proletariats that quickly grew around the centres of large-scale production. 

In striking contrast to the previous half-century, this period saw relative peace among the major capitalist powers, or at least the re-peripheralisation of war. The US ruling class exercised hegemony in the capitalist world economy, and its international problems were limited to containment of the Soviet Union, on the one hand, and seeking to ensure that its local political and economic allies achieved and retained power everywhere else, on the other. Outside of North America and the US, the so-called ‘Third World’ represented not so much a threat as a problem: its poverty and underdevelopment limited opportunities for the ‘advanced’ capitalist areas (the areas with the highest level of organisation of production within the realm of capitalist relations, and the highest mass of capital-confronting labour) – in the form of export of goods and capital, as well as of imports of cheap raw materials.

This was, at home and abroad, very different from the recent past in Europe and North America (encompassing two world wars, revolution in Russia, the Great Depression, the rise of fascism, and so on) and very different from the present in the rest of the world. Nonetheless, it would shape prevailing ideas and expectations relative to ‘normality’ in economic life and in politics. 

What had quickly come to be considered natural and perm-anent was, in fact, exceptional and transitory, and, furthermore, the loss of the ‘normal’ has not been the result of some calamity that somehow just happened to ‘us’. On the contrary, this loss of the ‘normal’ has been the outcome of a massive and deliberate expansion and restructuring of the capitalist world economy to solve a problem of capital itself – with profound implications for class relations and conditions everywhere. Brexit is but one, arguably minor, local dimension of the consequences of this global reorganisation, played out against the backdrop of the particular position of leading fractions of British capital in global and local accumulation processes.

In the 1970s, the Fordist restructuring of the core capitalist industrial economies turned sour. Throughout the advanced capitalist world the rate of growth of labour productivity fell, the rate of profit fell, and inflation increased amidst a tangible sense of crisis. For bourgeois economists, much of the responsibility was placed at the feet of mass labour and its allegedly excessive wage and social service demands. The truth was somewhat different.

The ‘golden years’ had been rooted in a constant increase in the productivity of labour reflecting both the deepening of the Fordist transformation and its widening across more and more branches of industry. That increase slowed down as the initial technical-social leap forward was followed by a gradual reduction in additional labour productivity gained from incremental investment in machinery, and as the growing service component of production proved relatively impervious to restructuring and productivity gains. Returns to capital appeared to have entered a structural and secular downturn. 

It was this slowdown in the mass production of relative surplus value that precipitated the growing pressure on working conditions (more intense work and greater ‘flexibility’) that would generate greater worker militancy as a reactive and defensive phenomenon. The crisis, exacerbated by the oil-price shock that struck at the heart of a system so firmly based on harnessing fossil energy in processes of production and social reproduction, was largely internal to capital. One of its expressions, however, was the worker discontent that broke the boundaries of the mass union structures that had flourished to contain and channel the demands of labour in good times rather than defend them in the bad.

Capital’s answer to the deep crisis of profitability was a reversion. For a time, the Fordist opportunity had fostered a tremendous capitalist interest in getting as much of the new and more effective system of production of surplus value within its own sphere of control, within the national states whose collective management structures they had constructed and controlled. This shift to a greater focus on national development and growth (and all the associated panoply of planning and regulation) in the post-war period was not merely, in the case of the European states, a response to the loss of the reality and dreams of empire; it was an expression of the tremendous spoils to be gained from the new industry, and the more the better. For a time, it was better to have peace with the working class rather than miss this opportunity. 

When the good times drew to a close, capital adopted much more familiar tactics to address its profitability issue: attacking working-class organisation and income (wages and social goods) at home; and exporting capital abroad in a spatial rearticulation of class relations. It was class warfare at home and abroad. A war waged by capital, not by labour – and shrouded in the misdirections of the bourgeois economics about creating the conditions for the resumption of ‘growth’ without addressing the elementary question of who would benefit, apart, of course, from ‘the nation.’ This concept itself became increasingly problematic as capital turned to new and more extensive international engagements.

While the pressure on working people’s lives at home became constant, returns arising from squeezing domestic labour alone were insufficient to respond to the depth of capital’s crisis of profitability. That would require much cheaper labour, but labour within industrial systems – not the exploited peasant labour of the previous European empires, the hidden secret of imperialism, but industrial labour, proletarian labour. The first external response to the crisis of profitability in the core capitalist areas was the expansion of international finance capital: the simple and massive export of money in loans to ‘emerging economies’ in pursuit of the promise of high returns. However, in financial crisis after financial crisis, the capital of the core areas learned the secret of capital itself: money does not make money. Unless money is invested in an effective and competitive system of capitalist production and generates surplus value, there is no basis for the repayment of capital and interest. For capital to grow, it needed to be wedded to labour in the production process – weak labour, dominated labour, labour outside of the frame of the social-democratic compromise, but labour inside the mass production processes that had so stimulated the production of relative surplus value in the Fordist spurt.

While finance capital would maintain a position of prominence in the new global system, it would be able to do so only on the shoulders of reorganised production involving mass industrial labour under altogether more favourable terms for capital. In North America, Europe and Japan, capital sought out new areas for investment in production – areas with cheap labour controlled by states friendly to capital, and willing and able to employ everyday violence to guarantee undisputed control of the work process. 

American capital abandoned key areas of industrial and proletarian concentration and moved mass industrial production and jobs – but not necessarily those parts of the productive process less dependent on mass labour – elsewhere: first, to the US South where the racist legacy of tyranny over labour provided lower wages and weaker workers’ rights; then to Central and Latin America; and then to Asia. European capital joined in the game in Asia, and of course – in relation to its own particular ‘windfall’, the subordinate economic reorganisation and selective integration of the production systems and working classes of the former Eastern Bloc on the harshest terms – in Eastern Europe. 

Within a new and hastily constructed framework of international law and regulation creating opportunities and guarantees for investment and trade, and in alliance with local ruling classes seeking the expansion of their own opportunities for better exploiting ‘their’ working populations, the bourgeoisie of North America and Europe created a new world of capitalist production, exploitation and trade, upending the international division of labour upon which the temporary exceptionalism of North America and Europe had been built. This is what some economists and commentators call ‘globalisation’. Others call it the new imperialism.

In just a few years, capitalist relations of production expanded from their largely ‘developed world’ centres to integrate the mass of labour across the entire globe. At the end of the 1970s, while capital dominated and organised much of the global economy, enormous areas and populations remained outside direct and full integration into capitalist production, be it in alternative and self-styled ‘socialist’ forms of large-scale production and exchange, or be it in petty commodity production. Some always found these putative, proclaimed non-capitalisms suspect. Regardless, thirty years later, globally integrated capital undoubtedly ruled inside the productive process almost everywhere. 

The main new element of this vastly expanded system was China, where hundreds of millions of miserably paid workers were suddenly brought into new (and capitalist) transnational forms of production and exchange, a transformation made possible in part by massive flows of capital and technology from the US, Western Europe and Japan, on the one hand, and by opening of the domestic markets of the core capitalist areas to imports from China on the other. On the basis of very active collaboration between the Chinese regime and global capital, the size of the global proletariat was effectively doubled in scarcely more than two decades. The combination of low wages with relatively high productivity in production on a stupendous scale ensured correspondingly high profits in China and among those who directly and indirectly participated in its coming-to-capital.

The expression ‘globalisation’ gives the impression of a uniform transformation everywhere. In fact, China was the epicentre as it was transformed from a largely agricultural country to become the world’s largest manufacturer. Take away China (and Eastern Europe), and globalisation seems a paltry affair. By the first decade of the twenty-first century, there were more workers employed in the manufacturing sector in China than in the US, France, Germany, Japan and Italy combined, and by 2019 China’s manufacturing output by value was more than 60 per cent greater than the US, and four times greater than Japan. In 2018, China accounted for 28.4 per cent of all global manufacturing. By 2011 China had become the world’s largest exporter and by 2019, the country’s exports were 50 per cent greater than those of the US. 

This astonishing transformation in the balance and structure of the global economy, prompted by unparalleled opportunities to mobilise enormous masses of very cheap labour within mass industrial work processes, was made possible by the opening of trade to the core capitalist economies, but also by the opening of capital flows. In the first half of 2012, not only was China the most important destination of foreign direct investment among ‘developing countries’, but it was also the greatest recipient in the world, briefly even eclipsing foreign direct investment to the US, the centre of global capitalism. By 2010, foreign-invested enterprises accounted for over half of China’s exports and imports and for 30 per cent of all Chinese industrial output by value. 

Paradoxically, the capital of the core capitalist areas had found in ‘socialist’ China conditions propitious for its internationalisation of capitalist production even more attractive than in the less advanced capitalist areas. This new openness expressed the Chinese regime’s own accumulation problem. The defeat of the Cultural Revolution had put paid to a very particular vision of economic and social transformation, expressing a close and equitable relation between agriculture and industry, country and town, workers’ labour and workers’ power as represented in the People’s Commune. 

The regime embraced an industrialisation-first policy, to be financed – without consultation – by the peasantry and the still modestly sized urban proletariat. Focused on heavy industry, the strategy soon encountered its inherent limits: heavy industrial expansion was restricted by the lack of a dynamic domestic sector of consumer goods, itself limited by the low productivity of peasants and workers and the wage and price policies of the regime. For accumulation to expand, the sector of consumer goods would need to expand rapidly, and for the new weakness of the Chinese peasantry and proletariat to be fully exploited (in a cheap-wage, low-demand regime), the market would have to be external (with all that implied for technological change). The answer to the accumulation crisis of advanced capital for a time coincided with the answer to the accumulation crisis of the Chinese regime, a regime that mobilised capital and capitalist relations, and thrived on capitalist accumulation but which was not necessarily dominated by private capital and private property.

This expansion in mass industrial production on the basis of poorly paid labour – with no possibility for independent organisation and action to promote their own interests – represented both a vast addition to the global capitalist industrial stock and a profound spatial reorganisation. Factories were opened in Asia and elsewhere, as they closed in North America and Western Europe. According to the interests and political salience of industrial capital, this promoted either a rapid local shift from mass production to greater specialisation within the global division of labour (a path vigorously pursued in the core industrial centres of the US and Germany) or collapse (to an exceptional degree in Britain under the leadership of a different fraction of capital). 

The secure and relatively homogeneous working class of the relatively short era of mass Fordist production in the core capitalist economies was increasingly replaced by a much more fragmented and differentiated mass of workers, mostly in service-sector work with insecure employment and stagnant or lower wages. In North America and Europe, phenomena once common only in moments of recession became permanent and general. This is the well-known crisis of the mass working class in the core capitalist countries. 

For the much-expanded global capitalist class, the story was very different. The exploitation of a weakened working class in the old centres, and of a growing proletariat under repressive conditions in the new, promoted dramatically rising wealth and incomes among the few in the US, Western Europe and in the new centres of capitalist production. For the ruling class of the old capitalist world, this profitability was partially based on retaining control of key areas of production, commerce and finance that yield exceptional profits because of barriers to entry – while producers in China were concentrated further down the value chain. 

Nonetheless, the relations between the capitalists in the ‘advanced’ areas and those in Asia were relatively harmonious, because they were complementary. China produced industrial goods on the Fordist basis that had eventually become so economically and politically troublesome in the US and Europe. American, European and Japanese investors provided much of the capital, sophisticated tools and technology to make that production possible. This triad arranged for the Chinese output to be bought by their own working classes in the successive trade liberalisation agreements orchestrated by the entity created for that purpose, the World Trade Organisation. 

Both the Chinese regime and the core capitalists made huge profits, effectively saving global capitalism from the profits crisis of the 1970s. Yet the solution to every crisis lays the foundations for the next. It was precisely the development of capitalism in China – aided and abetted by the capital of the old capitalist world – that generated a radical challenge to that old world. No longer complementary, Chinese capital, egged on and strongly supported by the Chinese state that exercises a high level of control over its operations, is now planning and acting to defend its own profitability by breaking into the most sophisticated and technology-intensive areas of global production. These are the areas of production that are currently the bases of super-profits for capital in the core capitalist areas within the international division of labour, as well as the new but promising areas of production to which the old world has not yet staked out its monopoly claim (electric vehicles, 5G, alternative energy production, etcetera). This strategy is partly a response to rising labour costs and the declining productivity increases that are normal after the first phase of adoption of capitalist production processes and relations, and partly because of an over-accumulation of capital relative to the expansion potential of mass industry.  

Impelled by the over-accumulation of capital and the exhaustion of the industrial reserve army arising from the success of its complementary strategy, China now threatens the position and accumulation strategies of the capital of the core areas – from an industrial base mobilising the largest industrial labour force, in the largest factories, in the largest cities in the world ever to have existed. The Chinese regime has announced quite explicitly that it is planning to challenge the position of the core economies and their ruling classes economically, politically and militarily – and the Chinese state is central to these efforts. When an economy the size of China seeks to overturn the post-war order and redefine the contours of globalisation, everybody pays attention.

Suddenly the capitalist world, as Europeans and North Americans experience it, is on the brink of being plunged back into the past – from collaboration and free trade to competition and trade wars, from the Pax Americana to the sort of inter-capitalist and inter-imperialist rivalry reminiscent of the period preceding the First World War. Just as US administrations from Nixon to Obama played a central role in organising the support of US and allied cap-ital for subordinate capitalist development in China, the US government under Trump took the lead against the new ambitions of the Chinese ruling class, against its competitive development. 

Capital everywhere faces the same issues: how to respond economically to competition from China, on the one hand, and the US’ ‘tightening’ of relations with its lesser clients and partners, on the other? And, given the enormous size and resources of China, with whom to ally economically and politically? With China? With the US? Or with the third great capitalist economic bloc, the EU? The current ‘concern’ of the capitalist states with the conditions of the Uighurs in Xinjiang and the protesters in Hong Kong masks a much deeper concern with which capital occupies the commanding heights of the global economy, and who grabs the lion’s share of global surplus value.



Fractious Capital in Britain
Throughout the old capitalist world the same questions are emerging. The ruling class everywhere is seeking to develop and impose new economic and political strategies to maintain power and accumulation at a time when the old political formations are weakened because of the transformation of the global order they reflected. The policies and answers of the past are inadequate to the interests of important segments of capital and labour today. Everywhere there are attempts within the ruling classes to create new winning coalitions around new approaches that obscure the class relations from which they arise. This, of course, is the essence of right-wing populism – new forms of political mobilisation around new capitalist objectives that escape the old political order and its institutions of management and containment. 

Capitalist state power has been built and employed not only to ensure the conditions for maximum exploitation of labour, but also to facilitate the accumulation of capital by some groups of capitals at the expense of others. It has thus been also a field of struggle among different capitalist interests to define the state and the polity in terms of their own particular accumulation strategies, which extend far beyond immediate commercial regulation to the entire structure of support that the modern capitalist state provides to capitalist production and accumulation – including international relations. 

In the context of a working class weakened by the effects of a globalisation process promoted by capital itself, contemporary politics are shaped principally by conflicts within the ruling class and among its fractions. These conflicts have become more critical as the rise of China demands new strategies. Brexit is one product of this situation, reflecting both the general global situation and the specific issues of the British ruling class with regard to its own component fractions and the working class. 

The chaotic nature of Brexit reflects bitter conflict within the ruling class over Britain’s global economic relations and alliances, and its ‘populist’ dimension expresses opportunities for enlisting the support of working people in these conflicts. Such opportunities arise from the weakening of the older political party structures as a result of the earlier processes of capitalist globalisation, economic destruction and re-composition. Brexit is not about national independence. It is about a choice to disengage from an evolving European model of accumulation and class relations stimulated by the changed global context, to ally (in a subordinate role) with the US ruling class and its response to the rise of China: with militant global imperialism and the leadership of finance capital.

Two special characteristics of British capital help account for the motivation for, and dynamics of, Brexit from the point of view of Britain’s ruling class: the first is economic, the second political. As the first great global capitalist power and pathbreaker in the development of capitalist imperialism, the country was long the centre of a vast global system of financial exchange, investment and management. If Britain’s industrial pre-eminence faded quickly in the latter part of the nineteenth century and early twentieth century, its financial eminence did not. 

Finance capital, financial services and the export of capital to finance industrial development elsewhere remained critical to the British ruling class – and, indeed, to the global capitalist system. Finance capital has an exceptional place in the heart of British capital. Partly because of the great resources of its imperial system, Britain was the only European capitalist power that was not defeated in the Second World War. Notwithstanding both the huge sums it paid to the US for its material and political support in the war, and the eventual dismantling of most of its formal empire after 1945, Britain retained very large overseas financial interests and investments, a very significant part of which were in the US. Moreover, the financial service sector in London continued second only to New York in global terms, managing finances, insurance, and so on, not only for Britain and its ex-empire and colonies, but for much of the rest of the world. The result has been that for a century or more, for large sections of the British ruling class the health of the financial sector has been very much more important than the health of the industrial sector – just as the prevalence and defence of capital globally has been as urgent a concern as internal accumulation dynamics. In other words, a significant part of British capital appropriates – in the course of financial management functions and investment – surplus value produced elsewhere rather than in Britain itself.

International finance capital and associated financial services have expanded enormously since the 1970s. First, in the context of the mass of petro-dollars thrown on financial markets as a result of the oil-price shock and the turn towards lending to ‘emerging countries’ (reflecting problems in the production and appropriation of surplus value in the ‘advanced’ capitalist areas themselves). As a result of the massive extension of capitalist production (and consequent financialisation) and the shift in the capital-labour relationship – led by the integration of Chinese state power and labour in the surplus-value producing machine – there was an overproduction of surplus value. This was supplemented by the grinding down of the share of domestic labour in value added in the core areas. 

In this context of massive global surplus value and international financial flows in search of remunerative investment, the deep engagement of British capital in international investment and financial management has become even more pronounced. The deregulation of the British banking system in the 1980s promoted London’s role as one of the most important centres of financial management for global capitalism and radically changed the composition and functions of ‘the City’, which, like the industrial sector of the past, came to involve a much more complex structure of activities and interests – belying the continuity and cohesiveness suggested by the ‘City’ conceived as a single entity. Indeed, if US-led financialisation has become a critical dimension of the organisation of capital (and, indeed, production) globally, then the British financial service sector has become a vital component of the overall mechanism. The salience of financial services in London stems not from the relation of these to production of surplus value in Britain, but in the entire world – hence its apparent gross disconnnect from the growth or lack of it in the rest of the British economy.

British industry, by contrast, has languished since the 1970s. The industrial sector in Britain, the birthplace of the industrial revolution, accounts for 19 per cent of British GDP. In Italy it is 24 per cent, and in Germany 31 per cent. Even Spain, at 23 per cent, has a bigger share of its economy in the industrial sector than does Britain. Outside of the defence-related sectors, particularly aerospace, British state policy towards industry has not been particularly supportive, especially since the 1980s, when Thatcher allowed huge swathes of British industry to fail. Indeed, the maintenance and broad modernisation of British industrial capitalism was more of a Labour party project (before the Blairite turn) than a core Conservative party concern. The British industrial sector is still significant in absolute size, but there are few national champions independently leading important global or even European sectors in terms of control of key value-adding processes and the organisation of global and trans-European supply chains. 

Arguably, a much stronger industrial-sector lobby is the mass of smaller capital engaged in relatively low-technology, low-design industrial production for national markets – in activities relatively protected from the rigours of international competition. Its interests do not involve what is characteristic of ‘advanced’ industrial capital – the establishment of a stronger platform for industrial competitiveness through concentration and technological leadership, focusing more on quality/innovation competitiveness and less on cost-minimisation in key value-adding processes. Left outside the leading areas of international industrial development and its constant striving for monopoly rent through innovation, the accumulation interests of the rump of British industrial capital revolve around cost reduction through containment of salaries and workers’ rights: niggling capital; cutting-corners capital. In this regard, its interests with regard to labour, at least, are similar to much of the service sector, where limited productivity growth has put a premium on wage compression and ‘flexibility’ in employment.

The special prominence of British financial capital and its global investments, the relative weakness of industrial interests, and the particular relationship with the US have combined to make Britain a relative stranger to the main thrusts of EU economic policy, oriented from the beginning to the deepening and coord-ination of industrial development and internal integration of European capital. The divergence became ever greater from the 1980s onward, especially after the 2007-8 financial crisis and the quite wide divergence between the rates of economic recovery in the US and the EU. If the EU was a train to which to hitch the British wagon, it was quite a slow one. 

The corresponding strategies of capitalist crisis management between the EU and Britain reflect this difference. In spite of an evident desire to promote a more neoliberal agenda (and its actual pursuit of the same where it has a free hand, as with its management of the Greek debt crisis and the entry of Central and East European countries in to the EU), the overall direction of EU policy reflects the internal political and economic equilibrium in the major continental European states: a quite strong emphasis on the regulation of the capitalist economy; and clear social-democratic elements in the regulation of social rights and the relation between labour and capital. Notwithstanding important attempts to contain the cost and rights of labour (a strategy at the heart of Germany’s migration policy and export-led growth campaign), the core of the EU today looks, in the eyes of important fractions of UK capital, more like Britain in the 1970s than Britain in the twenty-first century. There is no need to invoke political tradition here. 

In Germany, in particular, the key role and prominence of industrial capital, and its commitment to an important and continuing role for its transformed industry and industrial working class in the international division of labour, dictated a continued subscription to a modified Fordist-compact form of politics. In Britain, by contrast, mass industry was virtually abandoned, not least, one suspects, because it and the working class associated with it had become ‘unmanageable’ in the eyes of their rulers – and with it, its characteristic politics of ‘partnership.’ Under the aegis of neoliberalism, the British ruling class, with Thatcher as its coordinating political agent, launched a sustained and successful counterattack against the economic and political position of mass labour – mirrored across the Atlantic. 

The industrial centres of labour militancy in the US and Britain were allowed to collapse, trade-union rights were restricted, social services were reduced, public sector production and services were privatised, and job security was undermined. The hoped-for results soon followed: stagnation in worker income; virtual elimination of mass strikes; reduction of public expenditure; and greater opportunities for private capital in social services and industries that were previously public. Correspondingly, the concentration of income and wealth in the US and Britain rose rapidly – to make these two great democracies the most economically, socially and politically unequal societies in the core capitalist world, just as their partner in globalisation, China, rushed to the head of the league in inequality within ‘under-development.’

The difference between the British and core EU capitalist economic structures and interests, on the one hand, and the corresponding political experiences and projects, on the other, suggest that there would always be tensions within the British ruling class about policy towards the EU, and tensions between Britain and the continental capitalist countries about the EU’s direction and future. Part of the British bourgeoisie in the mid-level, inward-looking industrial sector and the personal service sector saw the future in terms of cheap local labour, and an impoverished welfare system – something that US capital could always be relied upon to support. Another part, in finance capital, saw the future in the expansion of deregulated finance and closer association with the US as the global centre of accumulation and financial management, and greatest market for financial functions. A larger section of the British bourgeoisie, however, had developed significant interests in the EU system of production, finance and trade over nearly fifty years. 

Between these various fractions of capital, an uneasy peace prevailed, in which the manager of their collective interests, the British state, sought to keep Britain both within and outside the EU. It was in the EU, albeit as a late entrant and unwavering opponent of greater integration and federalism, and remaining outside of the European Monetary Union and attached to the US. Internal peace prevailed as long as Britain could have its cake and eat it. That, however, would depend in part on external developments over which the British ruling class would exercise no effective control.

The dramatic relative weakening of British capitalism for over a century has precluded the pursuit of a truly independent capital accumulation strategy. This weakening has necessitated for the last half-century uneasy semi-integrations with competitors in the form of a unique balancing act between the US and the EU. The rise of capitalist production in China, and the subsequent bid of the CCP to escape its subordinate position in the global division of labour and surplus value, and the re-emergence of serious inter-capitalist and interimperialist rivalries made this British balancing act increasingly unsustainable. 

On the one hand, in a process that started before Trump and will not end with him, a more unilaterally oriented US is following a more belligerent policy in defence of the interests of US capital both at home and abroad, and demanding greater alignment with its interests among its international ‘partners’ – not least through aggressive bilateral trade and investment agreements creating special conditions for the operation of US capital. On the other hand, the EU’s response to the threats of Chinese competition (not least within Chinese markets themselves) and US bilateralism has been to strengthen European market integration and competitiveness through industrial consolidation; promoting further EU political and economic centralisation, and pursuing the development of a more independent foreign policy and combined offensive military capability. Success has been very limited, but the direction is clear.

For a significant part of the British ruling class, remaining in the EU as it responds to the challenge of China and the US would have meant several sacrifices. These would include reducing the possibility of having privileged access by British capital and financial services to the international economic zone that the US is building one bilateral trade agreement at a time (an issue made more acute by the collapse of the elaboration and adoption of the proposed Transatlantic Trade and Investment Partnership between the US and the EU); support for industry of a sort that had not been seen in the UK for two generations; and, possibly, limiting opportunities for the further unrestrained exploitation of local labour of the sort that had developed in Britain much more than in the rest of core EU economies since the 1980s. In effect, the apparent consensus of core EU capital is to move in a direction that is antithetical to the interests and position of a significant element of a British ruling class as it seeks to promote quite different accumulation strategies and economic alliances both globally and within Britain itself. 

It was this challenge that gave urgency and impetus to the bid to redefine Britain’s relationship with the EU (noisily and overtly) and the US (quietly), a bid by a growing, albeit minority faction of British capital for state power to redraw both external and internal economic and political relations for the rest of British capital and the whole of the British population. 

If this question of strategic choice between accumulation strategies and partnerships linked to the EU or to the US seems distant from the public discourse in Britain about Brexit, publicly focused as it was on the relation between Britain and the EU, consider concurrent processes and facts. At the same time as the British state sought to play a hard game with the EU over the terms of the divorce, the British Prime Minister, Theresa May was the first major international political figure to visit Trump and congratulate him on his election as president. Against great popular criticism, Trump was invited to make a rare ceremonial State Visit to Britain, discussions were rapidly initiated for a hoped-for fast-track bilateral trade and investment agreement between Britain and the US, and Britain acted as US-proxy relative to Iran and elsewhere in the Middle East (in defiance of EU attempts to articulate an independent position). 

In short, the narrative of wanting to leave the EU to have an independent British economic and military policy has been contradicted by preparations for a deeper and more comprehensive relation with the US and its national and global economic and military systems. If the principal proponents of Brexit referred ad nauseam to Britain’s experience in the Second World War, then it cannot have been far from their minds that the survival of the British regime depended heavily on the sub rosa support it received from the US – long before the US formally entered the war. 



Structural Fragmentation and the Possibility of Brexit
The global emergence of competing international blocs pursuing different – even antagonistic – strategies, and the increasing implausibility of Britain being able to pursue a ‘balanced’ international economic and political course, forced a choice, and a more strident thrust towards leaving the relationship with the EU on the part of important, but minority, elements of the British ruling class. 

The Labour party was opposed to a divorce, if at the same time its leadership (at least under Jeremy Corbyn) was critical of the EU. Furthermore, even if the parliamentary proponents of leaving the EU belonged to the Conservative party, the party overtly of capital and the ruling class, the majority of the Parliamentary Conservative party had been in favour of the policy of seeking to continue to combine membership of the EU with Britain’s special relationship with the US. The centre-right and centre-left political establishments were not pro-Brexit. It is clear that if the dissident fractions of capital wanted to gain control of the situation, they would need to take the extra-parliamentary route. How, then, did the referendum happen at all, and how did Brexit come to dominate the British political scene? And to what extent did this reflect deep structural shifts in production and class relations that would inevitably redraw the contours of British politics – contours that had already been changing under the orderly appearances that the British electoral system was designed to generate?

The Conservative party and the Labour party had together controlled the British political agenda since the end of the Second World War, and that control had included taking Britain into the EU (eventually) and keeping it there, albeit always in the special British arms-length way. As long as, between them, these two parties maintained their overall political management of British parliamentary processes, the prospects of those parts of the ruling class who saw a better future for themselves in breaking off to forge an even closer relationship with the US and its accumulation model remained dim. 

However, partly hidden by the peculiarities of British electoral system, the leadership and the parties were, in fact, losing control, albeit not yet at the parliamentary level. It was fear of that loss of control that made Brexit possible. When David Cameron agreed to propose a referendum in response to the insistent demands of the pro-Brexit minority of members of his own Conservative party, it was partly because his party had a small parliamentary majority that could be entirely eliminated by the pro-Brexit group within. 

As important, however, was the leadership’s fear of losing the loyalty of a significant number of Conservative voters, who appeared ready to desert the party for UKIP, an apparently single-issue party with no history and no transparency. In the 2015 General Election, UKIP received over 3.8 million votes (12.6 per cent of the total), replacing the Liberal Democrats as the third most popular party but retaining only one seat in parliament (as a result of a Tory defection). Cameron feared that the position of the pro-EU Conservative party leaders and the party as a whole was much less secure than even its weak parliamentary majority would suggest. The new leader of the Labour party, Corbyn, had similar premonitions about the solidity of the Labour base. In effect, their management of the EU membership question demonstrated the weakness of the authority of both parties: neither party sought to exercise party discipline in the referendum campaign because neither wished to test the reality of their political leadership in either popular or Parliamentary terms. 

To widespread astonishment, the Leave option narrowly won the referendum. What is striking is how many voters who had previously voted Conservative also voted against the anti-Brexit position of the leader of the party and the majority of the parliamentary Conservative party: little short of two-thirds, 62 per cent. What is also striking is how many voters who had previously voted Labour voted against the anti-Brexit position of the new Leader of the party and the majority of the parliamentary Labour party: 32 per cent (many, but also many, many less than among Conservative voters). It can be argued that the ambiguity in party positions makes this a poor measurement of political loyalties, but it can equally, and possibly even more strongly be argued, that this was the feared disloyalty that precisely drove the ambiguity in the party positions. 

On the Brexit question in the referendum, with a direct choice on a key issue, a majority of the voting electorate as a whole did not follow the leaders of the parties they had voted for in the last election. This loss of control by traditional political parties of labour and capital in Britain should not come as a surprise. Notwithstanding the illusions of British exceptionalism, Britain has been subject to many of the same forces and processes that have led to the complete transformation of the political landscape in Italy and France, to Trump in the US,and to the withering-away of the SPD in Germany. The dramatic reduction in mass labour, the fragmented organisation and process of much of the huge service sector that has absorbed the majority of the labour force, the difference in condition between the sections of the working class engaged in new and internationally competitive production and the rest, and the emergence of new fractional tensions within the capitalist class itself. In short, the corollaries of the global restructuring of the division of labour and the capitalist integration of China, in particular, have eroded the stability of political formations and policies oriented to a prior moment of capitalist development ended by capital itself. The restructuring of economic and social life that is the consequence of globalisation in the core capitalist economies has created new challenges and opportunities much more heterogeneous and contradictory than within the Fordist regimes – both between and within classes and class fractions. 

The traditional parties that remain anchored in their solutions to old problems and interests have lost some authority, creating spaces for new ‘movements’ mobilising new mechanisms of communication and influence. Were it not for chicanery within the bureau of the Democratic party in the US to exclude Bernie Sanders from the Presidential nomination, it might well have come to pass that the candidates of both the Democratic and Republican parties in the 2016 US Presidential election would have been ‘outsiders’ forced upon the parties’ controllers by external ‘movements.’ 

The recent British experience has not been so very different. Corbyn was effectively forced upon the parliamentary Labour party in the context of a new opportunity for the mass of party members to choose the leadership. And Boris Johnson’s ascent to the leadership of the Conservative party and the British Government was clearly impelled by forces outside the parliamentary party, including the wider (if not very wide) membership of the Conservative party and, above all, the anticipated response of elements of the Conservative party’s traditional voter base, which it was feared would desert the party electorally if its new leader took a less committed position on a decisive break. This was not part of the normal to-and-fro of the British parliamentary system, as subsequent events have demonstrated. Rather, the experience pointed to a new situation reflecting a realignment of political institutions and relations to better reflect the vast changes in class interests and relations in Britain over the last four decades. 

In short, British society had changed profoundly, but the parties had not – and the way lay open for rebellious factions of capital to make a new and direct appeal to the electorate in a mechanism that, for once, did not stack the odds in favour of the existing large parties: the referendum.



The British Working Class: ‘National’ and ‘Class’ Consciousness
Analysing and understanding the totality of the current British social formation, what it is today as part of the global restructuring of capitalist production and appropriation of surplus value, and all that involves for national and international political relations, is a necessary task for the contemporary Left. Central to that analysis must be an understanding of the composition, interests and politics of the British working class in its post-Fordist configurations, after the local demise of the mass labour regimes that shaped so much of its reality and imaginary.

Perhaps Brexit can cast some light on this. Much of the ‘blame’ for the outcome of the referendum has been placed by anti-Brexit commentators on the British working class, and on the failure of the Labour party leadership to control it. This is patently absurd: it was a faction of the parliamentary Conservative party that forced Cameron to agree to the referendum; the co-leader of the Leave campaign (Boris Johnson) was and is a notorious member of the Conservative party (and was subsequently selected as its leader); and the large majority of Brexit voters came from the ranks of Conservative voters. 

In the real world, a minority of those who had voted for the Labour party in the previous Parliamentary election voted for Brexit in 2016 against the eventually clear position of the leadership of the traditional ‘working-class’ party, and these were a minority of all those who voted for Brexit. But why did this group vote for Brexit? And why did some of them break from their support to the Labour party in the following parliamentary elections? Discounting the obviously interested attempts to frame the British working class in terms of racism and xenophobia (in a country whose ruling class and its instruments of domination have been for centuries stand-out perpetrators of the same), how would we account for the relative strength of the Brexit vote in the decayed industrial towns and among a segment of the historically Labour-voting working population, and what does it imply for the politics of the future? 

A possible simple reading of the situation might be this. The section of the working-class located in the most economically and socially decayed ex-industrial centres had suffered extreme social and economic dislocation as a result of British capital’s abandonment of huge swathes of industry and mass labour, and had been reintegrated into new processes on much worse terms. Aspects of their challenges were highlighted in the Leave campaign, providing a frame for understanding those challenges and a possible response in the promise of increased social spending and economic revival. The Remain campaign promoted the maintenance of international relations that had, or could be represented as having, contributed to the desperate circumstances of those whose lives had been most blighted by the results of globalisation – a process embraced over the last four decades by both the Conservative and Labour parties. 

From this perspective – of the transformation of the dominant processes of production and reproduction as concretely and particularly experienced by a section of the British working class – it can hardly be argued that this section of the working class betrayed its own interests. As was said at the time, it was not so much that this section of the British working class had abandoned the Labour Party, but that the Labour Party that had embraced globalisation and financialisation had long abandoned them. It may well turn out that the promises made to those working people were fraudulent, that Brexit will do nothing to alleviate their plight, but their choice was not irrational: better to have the possibility of disappointment with the new than its certainty with the old.

One of the results of globalisation in the core capitalist world is extensive new differentiation in class position and experience, and the shifting of the world of mass relations elsewhere. In this regard, the experience of the decayed industrial areas in Britain is symptomatic rather than anomalous: it is a part of the decomposition of the sort of common (class) experience that was born with Fordism, and has shifted elsewhere with the spatial reconstitution of capitalist production – leaving extensive and numerous new fault lines within and among classes. This is not just a British disease. To a great or lesser extent it affects all the core capitalist areas as fractions of capital strive to define new bases of accumulation and as the experience of labour loses any semblance of homogeneity. The new challenges this brings for creating stable governing coalitions are self-evident.

A striking dimension of the Leave campaign was – apparently – the resonance of nationalism among the working-class voters who embraced it. This can be, and was, viewed in terms of the common ruling-class construction and use of nationalism as a mechanism of displacement of internal contradictions – and domination of other nations elsewhere. This is certainly how capital would like to use it, but is it how it was understood by working-class people during the Brexit campaign? Is such folderol really the stuff that new working-class dreams are made on? 

A different interpretation is possible: that ‘nationalism’ represents an aspiration in which economic and social relations are not governed by distant ‘market forces’, but are subjected to management by the state mechanism within the area controlled by the state on behalf of the people who make up its population. In short, nationalism can represent an aspiration for collective self-management (as it did in Europe in the first half of the nineteenth century), for national politics rather than global economics to be in command, for local classes to be protagonists of their fate. When the international system seems hostile, a desire for local control makes sense. 

In Britain, the importance of working-class nationalism in areas devastated by globalisation had already been prefigured in Scotland. From some perspectives, that might be seen as a platform for progressive politics. If ‘internationalism’ in practice is to embrace the mechanisms of capitalist accumulation on a global scale as agitated by the Chinese regime, then bringing control back home could be seen as a step towards the possibility of politics shaping economic relations rather than following them. The extraordinary success of Brexit was to weave the nationalisms of elements of a working class in trouble together with the nationalism of the middling bourgeoise seeking a free hand to pursue its attack on working class lives, all under the leadership of the most internationalist fraction of capital. How long that coalition can survive the test of deeds rather than promises remains to be seen.



Brexit in Perspective
In the end, however, there is the temptation to ask the deflating question: so what? The new Tory administration claims to be poised to adopt a different strategy to the austerity coalition of a decade ago – but this will likely consist of throwing a few treats to its new constituencies in the North while continuing to promote greater labour ‘flexibility.’ The British ruling class will continue to promote finance capital and services, and watch industrial capital –and especially that part of industrial capital mobilising the mass worker – dwindle further, promises to ‘build back better’ notwithstanding. It was doing much the same while Britain was a member of the EU, and its membership was little hindrance to anti-working-class policies – no more than, say, in Hungary. It is difficult not to see Brexit as a storm in a ruling-class teacup. 

Most important about Brexit was not so much what it did as what it revealed about Britain, particularly the tremendous impact of the globalisation promoted by capital on local/national class structure and class relations – and its unfolding consequences for political structures and electoral politics. The most important, elementary point is that the mass industrial worker is disappearing quickly in the core capitalist countries (sometimes in the context of the local disappearance of industry, sometimes in the context of its radical reorganisation). This change calls into question the relevance and sustainability of all the political institutions, ideologies and relations that were directly and indirectly built upon that key social phenomenon. 

In the context of this tectonic shift, itself another example of the normality of periodic dramatic ruptures with the existing organisation and spatial distribution of capitalist work and life, different fractions of capital (themselves differentially distributed among different states) struggle to impose the particular conditions of their own accumulation on other fractions – and the rest of the population. This is what politics under capitalism is normally about, albeit occasionally wracked by the need for significant realignments. We see the same phenomenon across the core capitalist world, and it is the attempt by fractions of the ruling class to seize control of the state to follow new paths of accumulation that lies at the heart of ‘populism’. Populism is the product of a struggle within the ruling class, the resolution of which requires mobilisation of working people in electoral politics according to a new ‘availability’ that reflects the lack of fit between old prescription and new predicaments. Populism, then, is a label given by established political interests to processes and forces that they do not yet control; it is not about reason and unreason.

Precisely because this is a project of fractions of the ruling class to create a better framework to pursue their own interests, their appeal to the working class (the entire population constrained to work for capital – minus the upper layer of functionaries serving it) cannot be phrased in terms of class interest, least of all in terms of the class interests of workers, given that any capitalist initiative must involve raising the exploitation of labour and reduction of social expenditure on them. The result is recourse to old symbols of nation and race – of belonging to them, and of the threats to them. Their problem in pursuing this course is that these symbols are already used extensively by the factions of capital whose current control of the state is being contested. 

Capitalist classes everywhere have cultivated and used nationalist, xenophobic and racist symbols to divide and rule working people, particularly at moments of acute inter-imperialist rivalry. Given the time required to articulate and inculcate a new ideology, and the impossibility of using the unvarnished truth, the only option available to the disruptive capitalist factions is exaggeration of the enemy without and within. There is absolutely nothing new in the racist and xenophobic elements in the populist repertoire – rather than challenge the public ideology of the dominant fractions of capital, the insurgent fractions pay it all the flattery of repetition, albeit more shrilly. If the previously dominant fractions of capital find their position threatened by this, they are being wounded by a weapon they themselves have forged. 

Brexit is not about a popular insurgency; it is about a conflict within the ruling class – and the symbols used by the capitalist insurgents are those used by Britain’s ruling class and its mass media whenever it faces a difficult internal and external challenge. 

Is pessimism then in order? Are the working class of the countries newly dominated by capital and globalisation quiescent; and has the traditional compact working class of the old capitalist countries been dissolved, to be replaced by a fragmented mass of workers prey to populist rhetoric? There are other ways of assessing the global situation. The working class in China is still very ‘young’, but there are unparalleled conditions for the development of class awareness and class action. In the globalisation process, capital dramatically weakened the great historic centres of working-class organisation and politics in Europe and North America, only to re-establish them in China. The conditions are being established for future struggle on a titanic scale – and it is this prospect that has led the Chinese regime to develop its grinding obsession with controlling every dimension of the lives of the Chinese people. What haunts the imagination of the Chinese ruling class is not just Tiananmen Square, but the Cultural Revolution – a contradictory but nonetheless mass uprising against oppression and exploitation that will surely not be the last. 

Whereas the newly capitalist countries of Asia have the potential to become important new centres of class contestation, in the old capitalist centres previous working-class patterns of mass work and life have changed dramatically. They will not return. If most pro- and anti-Brexit commentators in Britain had a common ground, it is surely that the working class has become an unstable element, open to ‘capture’ by atavistic ideological appeals. Given the domination of the media by the scions of capital and its hangers-on and the appalling, explicit and persistent snobbery of the social imaginary in Britain, a certain susceptibility to denigrating working class people and their reasoning might be anticipated, but the repetition of a trope does not make it true. The evidence that the British working class has been deeply swayed by the
racist and xenophobic rhetoric of the ruling class is fragile, but there is some evidence that segments can be moved by groups making new claims to address the objective economic plight of particular segments – with or without ‘populist’ tropes. In part, this susceptibility reflects the fact that the structure of the working class and its experience have changed, and that the political discourse of the established parties has not, or not enough. 

The issue is not one of politics in a post-class world, but of politics that responds to the new forms and configurations of class relations that capitalist dynamics constantly generate and accelerate – unequally across the capitalist system of production as a whole, and in a particularly fragmenting way in the ‘old’ capitalist centres as mass labour disappears there. Johnson’s bold sally onto new ground, playing on the fears and justified resentments of significant elements of the working class, displaced from mass labour but offered no meaningful alternative – and ill-served by the mainline Conservative and Labour narratives of national development – marked a new departure. It remains to be seen whether the Conservative rump will be willing to pay the price necessary to consolidate a gain based on promises. In encasing himself in a flabby middle-ground common sense, Corbyn’s successor Sir Keir Starmer forgets that common sense reflects common experience, and that is hard to find in the fragmented social and economic relations of contemporary Britain. 

The only path lies not in the nationalism of three centuries of British imperialism and of the abominable flag that waved over it all, but that of collective control over collective fate and a repudiation of the subsumption of labour under the requirements of global capitalist accumulation. 



Gary Howe was educated in the UK. He taught and researched in Brazil, the US and Mexico on social transformation in the post-WW2, post- Empire global restructuring. Subsequently, he worked in the UN on rural subsumption practices and the artful discourse of development. He lives in Italy.

This article first appeared in print in Salvage #10: The Disorder of the Future, our Spring/Summer 2021 issue. It appeared alongside another piece ‘Brexit From Below: Nation, Race and Class’ by Jonas Marvin.