The Tottering Framework of Global Capitalism

In 1960 the United Kingdom was involved in the development of a “free trade” alternative to the “centralising” Common Market, which led to the formation of the European Free Trade Association [EFTA]. EFTA was originally composed of seven countries: Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom, to be followed later by Finland in 1961, Iceland in 1970 and Liechtenstein in 1991.

The attempts by the UK to enter the European Economic Community in 1961 and 1967 were vetoed by France, under the Presidency of De Gaulle. De Gaulle’s resignation in 1969 removed this particular obstacle.

The Edward Heath Government of 1970-4 soon turned into one of crisis and internal turmoil, having Inherited industrial strikes and wage claims from the previous Wilson Governments (1964-70). The unprecedented use of a State of Emergency on the docks and then in the mining industry had not been seen on this scale since the post-first world war period. The tri-partite wages and prices agreement (Government, Confederation of British Industries and the Trade Union Congress), then statutory freezes, were soon in tatters. The miners were determined to join the dockers in clawing their way up the “wages league”.

The consequences of the Yom Kippur war in the Middle East, with the oil producers in that part of the world limiting oil production and so forcing up oil prices, further compounded the industrial problems facing the Heath Government. It considered introducing petrol rationing (petrol ration books were issued) and industries were confined to operating a three-day week.

With London distancing itself from Washington, and North Sea oil about to come on-stream, Germany was keen to overcome French vetoes and open the way for the UK’s membership. In 1973, following negotiations, the United Kingdom decided it would join the now renamed European Community, along with Denmark and Ireland.

To set the seal on the economic processes that underpinned the historic decision to join the EC, and to resolve the clashes between the various English political currents, a popular referendum was held in June 1975. This was won by an overwhelming margin by those who wanted to remain in the EC, marginalizing the pro–exit camp, which, irony of ironies, was most intense in the Conservative Party. During the closing stages of the February 1974 General Election Enoch Powell, now a prominent opponent of the EC, called for a vote for Labour because of Wilson’s pledge to renegotiate membership terms and hold a referendum on remaining a member. The outcome of the 1974 election meant that Heath’s Government lost its majority, with the Liberals under Jeremy Thorpe holding the balance of power – the terms of the political “horse-trading” for a coalition with the Liberals was Heath accepting proportional representation for General Elections. It was Margaret Thatcher’s firm opposition to this voting system (on the basis that the Tories might never again gain a majority of MPs at General Elections) which led to the end of these talks, and the fall of the Heath Government.

But the United Kingdom’s membership within the ‘European System’ has been beset by a constant lack of agreement between, and within, the various UK parties on fundamental positions. All a ploy, one might say, in order to emerge from negotiations with more favourable conditions vis-à-vis the obligations which the treaties and regulations imposed. Certainly something the United Kingdom has been rather good at over the last 40 years.

The EU, with all its weaknesses and divisions, has formed a pole of political and military stability In Europe, an open market which, its bourgeois supporters hoped, was bound to guarantee, even if under the watchful eye of the strongest and best equipped, an almost unlimited catchment area for its own goods and a barrier to those from outside. To begin with it was even envisaged that there would be regulation of the capital market, though not in order to bring a minimum of rationality to it but to control the ferocious competition.

Naturally such a colossal task was in vain, beset by a hundred and one obstacles and stumbling blocks. Thus there came about, among the 24 members as there were then, an ensemble of rules and exceptions, inclusions and exclusions, and of partial acceptances of the agreements and treaties. This was particularly the case for the United Kingdom; a ‘member’ so important that the ‘exceptions to the rule’ it managed to negotiate were accepted without too much hair-splitting.

But from around 2000, up until the general crisis in the financial sector of the capitalist system in 2008, the emerging supranational European apparatus showed how intrinsically weak and illusory it was; incapable, and it could not be otherwise, of shaping a policy which all could unite around, or at least agree on. The objective fractures between the member states appeared irresolvable.

And the way things have proceeded since then, on a dispersed, or rather unilateral basis, has naturally operated in the interests of the strongest. Germany, rigorous and decisive towards other countries, and the custodian of the rules governing the other countries’ banking systems, has had no qualms about violating the financial ‘rules’ when it comes to its own banking institutions, and ‘amending’ them to suit its national interests.

The UK has kept its own national currency, maintaining the right to a looser economic policy than the one enforced in the Eurozone; but the need to devalue against other currencies was avoided. The EU contract is too strict for many of its member states, but represents a veritable straitjacket for the states whose capital-finance sector is more developed. Even with all the various concessions made, the cohabitation of Germany and the UK in the same organization became more and more untenable.

An instrument, a casus belli, had to be found to escape from the cage, or at least widen the gap between its bars. Maybe a referendum like the one in 1975, or the one in Denmark in 1992 which rejected the Maastricht Treaty might do; or the pretext could be the differences in foreign policy. Eventually, prompted by what on the face of it were internal matters for the party of government, the chance arose to break out in a ‘democratic way’, much to the jubilation of the anti-EU petty bourgeoisie, who managed to garner a mass of ‘protest votes’, against who knows what, but certainly not against ‘class rule’.

Speaking of which we should mention some vile literature which has been spread about which has the nerve to define itself as ‘left-wing’. This stuff shamelessly declares that the votes cast for Brexit in the poorest districts inhabited by the proletariat and lumpen-proletariat mark a ‘progressive’ event in class terms, since it is a protest by the lowest strata of the population against their desperate living conditions. Certainly such a protest is justified, but this vote can’t be seen as marking a resurgent class consciousness; in fact quite the contrary!

Also the referendum certainly wasn’t an ‘accident’ as some have claimed; the rulers didn’t make a ‘mistake’; and it certainly doesn’t mark some kind of re-awakening of those hit by the Thatcher era ‘reforms’, or by Blair’s ‘refinements’ of them. The vote could have gone the other way, but the historical arrow still points in the same direction: if ‘remain’ had been the verdict of the ballot boxes, the British state would have eventually found another pretext to get out.

It is easy, after the mass of rubbish and nauseating propaganda both before and after the referendum, to blame everything on the clearly oligarchic, closeted procedures of a non-elected executive ‘committee’ which is free from any democratic popular control and engulfed by a no-holds-barred laissez-faire ideology. It is true: the ‘thinking brain’ of the EU is financial and not political. Yet if the European parliament is composed of a despicable bunch of idlers, worse even than the national parliaments (which is saying something), a structure without any objective power, these national parliaments, and also national governments, have themselves all handed control of the State machine over to the financial system – that is, to an all-pervasive and anonymous command structure representing the last form to be generated in the historical trajectory of Capital.

Similarly, this same anonymous business committee, supranational in substance if not in form, uses measures that are ever more laborious and inefficient in its attempt to reduce the violent impact of the crises. This superstructure, which is politico-economic, voluntarist and ideological, is imposed on the workings of the states and the governments.

Equally anti-historical and impotent is the idea that the UK, having finally freed itself from the fetters of the EU, can now recover from the social crisis which followed Thatcher and Blair’s laissez-faire cure, using its new found freedom to realign sterling’s foreign exchange rates, and take back its political, economical, commercial and fiscal autonomy etc, etc. All these are self-serving falsehoods in that they wrongly blame all of the social disasters tormenting the lower classes on the economic policies imposed by the EU: now that they are free of the EU, lackey of the banks, high finance and German treachery they claim, the national future is full of possibilities for recovery and wealth generation.

With the destruction of a large part of the social body, society’s dynamic is evolving towards the destruction of any illusions about progress happening under social democracy. But this won’t be due to the fact that the European Union’s umbrella is no longer there to offer its protection: we have to constantly bear in mind that this Union is a bourgeois, capitalist and financial construction which is objectively and inevitably anti-proletarian.

The frightening negative reactions that have been predicted, the economic and financial tragedies threatened by a section of the pro-Europe bourgeoisie will certainly come about, but not because the cosy ‘community home’ – a veritable nest of vipers for big-capitalist lobbyists – has been abandoned, but because all these problems were already present in the asphyxiating and rotten economic-financial capitalist system, which is global, European and British.

Already there have been tremors in the property market on which part of fictitious capital rests. If on the one hand an unruly deregulation of the capital market could give the City an advantage over its continental equivalents, on the other hand, despite the ‘competitive devaluation’ in which English capital is desperately placing its hopes, the future of trade and industry are in difficulty in the face of ruthless competition.

The British economy is supported by financial instruments based on property and is founded on an enormous family indebtedness – private not public debt! – which characterizes a major systemic fragility affecting Great Britain. A potential crack in this crucial sector, coming on top of the extreme fragility of the entire banking system of Europe, could be fatal.

Everywhere financial capital predominates over productive capital. And if in relation to the worn-out EU the names of the ‘important players’, the financiers, fund managers, governors of the central banks, of the various boards, etc, hold no interest for us, equally in the case of the various states the particular parties, heads of governments, professional politicians we also consider irrelevant. To speak of a ‘People’s Europe’ counterpoised to a Europe of the financial and capitalist elite, which should react and win back a violated democracy, is a foolish and reactionary aim and expresses a petty-bourgeois position.

The current situation – which had been building up for some time before it was consummated in the democratic orgy of the ‘should we stay or should we go’ referendum, but which has not yet concluded in Britain’s formal departure – is a sign that the community’s entire structure is crumbling: in fact it is bound to become unsustainable in the face of the encroaching capitalist crisis, which as it progresses will disrupt all of the economic, commercial, political and military certainties which were established in the wake of the Second World War.