The British referendum on the EU may be over but the debate still rages. Let’s just get one thing out of the way first. Nowhere in the UK has the working class anything to gain from Brexit and “Remain” equally meant nothing to a class already suffering the pain of austerity. A vote for either is a vote to give the national capital a blank cheque for more austerity. Britain is “divided” all right, but the division is not between London and the provinces, England and Scotland or young and old. The real divide is between those who want to boost their profits and those who pay for this in lower wages, precarious jobs and generally lower living standards. All those campaigning in the referendum (whatever their claims for Remain or Leave) were campaigning on the nationalist and capitalist agenda of “what’s best for Britain?” As we wrote back in November

“Our position as Internationalist Communists is crystal clear. The real choice for workers is to act in our own interests. Don't be drawn into the bosses' phoney debate”.[1]

We will return to the referendum and the working class later but for the moment it is clear that the dust has not yet settled on the consequences of the Brexit vote. Cameron’s resignation without invoking Article 50 of the Treaty of Lisbon has opened up a period of uncertainty. This means that the consequences of the vote look like being long-term and drawn out for not only Britain and Europe but also the wider global capitalist world. Undoubtedly the key imperialist players - including UK, US, French, German states and respective national/transnational firms - will use the time to find a solution that best matches their separate and common interests.

The first question we have to address is how did the British ruling class let it happen at all.

It’s not the first time in history that a ruling class when faced with a growing political and economic crisis has let short-term political expediency get in the way of its longer term strategic interests and then regretted it. The classic case is perhaps the decision of the Tsarist state in 1904, beset by rural riots and waves of political strikes to opt for the distraction of a “short victorious war” as the Minister of the Interior Plehve put it. So they picked a fight with those “little brown monkeys” (Nicholas II) in Japan only to find that Japan was light years ahead in technology and the ensuing war, though “short” was anything but “victorious”. Worse still its immediate consequence was the very increase of social unrest which the regime had been trying to avoid and which almost overthrew Tsarism in 1905. The 1905 Revolution gave the world “soviets” or workers’ councils and paved the way not only for the fall of Tsarism but also for the October Revolution of 1917.

The consequences of Brexit for the British capitalist class might not be quite so dramatic (we can dream) but the same short term calculation by the Conservative Party leaders has massively backfired in the face of the referendum vote that they allowed. Although the British bourgeoisie has long been divided over belonging to the EU its rather contradictory evolution has largely been in the direction that most British capitalists are happy with. The British have been in Europe for what they can get economically from it but don’t like any of the schemes for further supra-national integration which some European politicians openly espouse. However Britain had opted out of almost all the important EU policy areas: the euro; the Schengen zone of passport-free travel; justice and home affairs; and the charter of fundamental rights.

Economically for British capitalism it made no sense at this point to withdraw from a union which in general brought it more benefits than costs. The access to the world’s biggest market brought in direct investment from Japan, the US, China, Thailand etc. If it were not for the fact that the UK was their entry point into the EU these firms would not be here (as Nissan workers were told by their Japanese bosses). 45% of UK exports go to the EU as a result. The journals that tend to represent the mainstream of the capitalist class (the Economist and Financial Times) constantly warned that an “Out” vote would be an economic disaster for the UK and for the rest of Europe, a position echoed by the vast majority of economists and most of big business. In short the British ruling class had the kind of relationship with the EU that they wanted so the question that screams out is why would the British bourgeoisie’s favourite party want to risk that in the unpredictable lottery of a popular vote?

In fact the collapse of the Soviet Union allowed the British to push the agenda for “broadening” (rather than deepening) the EU in to Eastern Europe. Broadening meant that with 28 members any schemes for further integration would have great difficulty in passing.

None of this matters to the UK’s anti-Europeans. There has always been a strain of thinking (and not just in the Conservative Party) that for the UK to enter the EU (or EEC as it was at the time) was always a bit demeaning. After all the British Empire once covered a quarter of the world’s land area and “we” were on the winning side in two devastating world wars. They remember the time when British foreign policy was based on standing up (with carefully chosen European allies it has to be said) against the potentially dominant power in Europe throughout history whether it was Napoleon’s France, Nicholas I’s Russia or the Germans’ Kaiser and Fuhrer. What these little Englanders don’t get is that the fighting of those two world wars drained the UK economy and in the end undermined its imperialist domination. The British Empire was sold off to the USA which, even now, dominates the world with a new form of colonialism (which did not involve the costly occupation of much territory). Despite the never-ending propaganda about the “special relationship” the US extracted a high price in terms of handing over assets for its loans in both wars.

Nostalgia for empire really does form the background to the die-hard eurosceptics mentality but they are also fighting other battles from the past. What scared them in the 1980s was the ambitions of Jacques Delors to deepen European integration and create a “social Europe”. They in fact see themselves as true heirs of Thatcher in that they don’t much like state regulation of the economy in any shape or form. Whilst they see the EU as a failing institution they also fear any proposals currently being discussed to make the EU more accountable or “democratic”. The report of the Presidents of the 5 main EU bodies, published in June 2015, calls for reforms towards economic, financial, fiscal and political union. This is to be achieved in two stages the first to be completed by 2017 and the second by 2025. The report argues that unless these reforms are implemented the EU may not survive the next crisis, the outcome which the Brexiteers want above all. More powerful in the Conservative Party than in the ruling class as a whole, they became a serious problem for the party leadership once the UK Independence Party (UKIP) began to win more votes. The threat that Tory supporters would defect to UKIP before the next general election was a real one. So offering a referendum “in the next parliament” seemed the best way to hold the party together in the coalition with the pro-European Liberal Democrats. It was clearly in the minds of Osborne and Cameron that they would not get a majority in 2015 so they expected that the promise would not have to be acted upon. In the meantime it kept the party together and limited the defections to UKIP (which got only 1 MP in the 2015 election). However Labour’s electoral meltdown in Scotland brought the Tories narrowly to power without their Liberal Democrat allies. Thus, despite even most Tory MPs being against a “Brexit” Cameron was still left with nothing other than to go ahead with the promised referendum.

Even here the incompetence and arrogance of Cameron’s strategy was unbelievable. No attempt was made to stipulate that for a massive constitutional change such as leaving the EU a two thirds or clear majority would be required, as is done in most other countries. “Lucky Dave” got away without such a stipulation in the Scottish referendum so why not in a UK one? And then there was the timing. It has been quite clear since the global financial meltdown of 2008 that Project Europe has run into all kinds of problems from the euro crisis through the Ukraine war to the refugee crisis in Syria, which has been grist to the racist mill of UKIP and the Tory Right. Everything pointed to a need to delay any referendum as long as possible. However with a majority of only 12 in the House of Commons and a stagnant economy (despite all their boasts) the Tory leadership decided that they would try to lance the eurosceptic boil before it festered further. Cameron thus called the election for June 23 and set off for Brussels to “renegotiate” the UK’s position in the EU in February. His special deal from the European Council allowed the UK to dock in-work benefits to EU citizens (most EU citizens in the UK never claim them) and absolved the UK from the goal of political integration and “ever closer union”. It was too little for the euro-sceptics in his own party and the UK was thrown into a dreary campaign which became one of the nastiest on record (culminating in the murder of a Labour “Remain” MP by a white supremacist and British nationalist) and which still goes on.

Behind this political cock-up by arrogant Tories however there lies a number of deeper issues about the current political and economic hegemony of capitalism. In the first place it is part of a wider phenomenon of the traditional ruling class losing its grip everywhere. In turn this is due to the fact that capitalism is in an economic dead-end. The fact that a UK exit from Europe is possible now is symptomatic of the general global crisis of a system that is economically stagnant. The end of the speculative bubble in 2007-8 has only revealed that the apparent growth of the previous two decades was based on an exponential expansion of debt. In short the future has been mortgaged and the political parties are running out of quick fixes to disguise the current crisis resulting from the reduced profitability of capital. As we have written many times what capitalism really needs is a massive devaluation of capital. Such devaluations require the destruction of a lot of value – the kind that can only be achieved by a generalised major war amongst the leading imperialist powers. Despite increasing tensions, rivalries and local wars across the planet, all the conditions for this are not yet in place. In the meantime the capitalists have two polices. The first is to bail out the banks (quantitative easing, low or negative interest rates etc) in order to save the financial backbone of the system and stimulate investment. This has not worked as the rate of profit is too low for investment and the funds have gone into speculation. The second is to boost their rate of profit by making workers work longer hours for less money or to put it technically to acquire more absolute surplus value from the working class.

Even many capitalist economists see the problem in the way that we pose it (there is much speculation about the next global meltdown in the posh papers). But in a system where the ruling ideas are those of the ruling class via their control of the media they don’t focus on such systemic problems.[2] The fault has to lie elsewhere. With a rabid tabloid press headlining and deliberately linking the economic problems of the UK to immigrants[3] and then to the fact that this is due to UK membership of the EU the anti-immigration card was, and is, the key to the victory of the Brexit campaign. Since Thatcher’s time large sectors of the old working class have seen the loss of their better-paid manufacturing jobs as the casual restructuring of the 1980s meant those jobs went abroad where the bosses found cheaper labour costs. Under Blair Labour largely ignored them (attempting to buy them off with benefits) as New Labour sought the middle class vote and pursued identity politics. Then, as a result of the global economic crisis came austerity policies since 2010 which have hit the low paid and vulnerable, a situation which the tabloids are hardly going to dwelling on. Much easier to find someone or something to blame. The capitalist left blamed it on the banks (rather than on the system as a whole) whilst the right say it’s the EU and migration. This is a transparent lie (and Brexit will not solve the problem) but to those who are the victims of the crisis and feel left out by the system it sounds plausible. Generally the working class voted against austerity and the decline in their living standards and this translated into a cross for “leave” on the ballot paper. Many who had never bothered to vote in the past now turned out to vote against immigration. One unemployed male with a family in Leicester affirmed that he had never voted before and would never vote again. He did not think that anything much would change but “anything is better than what we have now”.[4] There is a certain irony in this Brexit alliance between raving free marketers like Farage, Gove and Lawson and the victims of their free market ideologies but that contradictory fact seems to have been the backbone of the vote for “Leave”.

Some consequences are already coming home to roost. The SNP leader in Scotland has already called for a new referendum on independence for Scotland (which voted massively for “Remain”) and in Northern Ireland (which also voted decisively to “Remain”) the Good Friday agreement is being questioned with nationalists calling for a United Ireland once again. The Protestant heartlands around the North East of Ulster voted for an exit and so once again the community sectarianism is back on the agenda. 2 million plus people at time of writing have signed a petition calling for the referendum to be rerun given that the margin of victory for Brexit was only 1.3 million votes out of 34 million cast. There are precedents for a second referendum when capitalists regard the result as wrong, as in the case of Denmark over the Maastricht treaty and Ireland over the Nice and Lisbon treaties but such a request is unlikely to be granted in the immediate circumstances. At this stage trying such a blatant reversal of a referendum would expose the true charade that is “capitalist democracy”.

In any event the Brexit vote means that the incoherence of the European project has now been further revealed after the earlier eurozone debt disasters and the failure to deal with the migrant crisis. More challenges to Europe on a nationalist basis can now be expected. In economic terms there is much uncertainty and the effects are likely to be more long-term. However HSBC has already announced that it is moving its Euro operations (and 1000 jobs) to Paris whilst Tata has put a question mark over the saving of steel jobs as it pulls out. International credit rating agencies are in the process of downgrading the UK’s credit rating (making borrowing costs higher and thus undermining the reduction of the deficit).

Some things are clearer. The standout issue is the way that this has obliterated any working class independent movement. This whole campaign has been a campaign against the very idea of the working class in several ways. In the first place it has allowed both sides to whip up that notion of defending the nation, the epitome of capitalist rule. Rabid English Irish and Scottish nationalism all will now get extra force.

Then there is the very fact of holding referendums themselves. The UK does not hold many such voting exercises so two inside two years is something of a departure. What they have done is breath new life into a political process which was clearly losing its legitimacy.[5] Like the Scottish referendum the only choice here for the working class is about which set of political gangsters will administer a system which exploits you all the same whoever is in power.[6] Whatever the outcome of the vote the “debate” remained and remains a capitalist one. Not only has this been useful in keeping class issues off the agenda (what do we learn of the French strikes in the British media just now?) but will define a new nasty nationalist and racist political culture well into the future. The UK is not alone here. The rise of the Front National in France, the AfD in Germany, the Freedom Party in Austria as well as the victory of the ultra-nationalists in Poland and Hungary (the British Tory Party is in alliance with some of them like the True Finns, the Danish People’s Party and the Polish Law and Justice Party)[7] all indicate that we are in a nightmarish period in history. Imperialist machinations have created living hells across the planet from Afghanistan to Africa. These wars have driven over 65 million people across the planet out of their homes. Eventually some flee towards the supposedly more stable environments of the states that started the devastation in the first place. Many die on the way and the survivors are herded into camps or become victims of various mafia. And the racists and nationalists in the rich states play on this for their own immediate ends. It’s a vicious circle which turns the spectre of rising nationalism into another threat to the future of humanity. Only an international and internationalist working class that recovers its class voice and its capacity to fight capitalism can oppose it.

CWO

26 June 2016

A longer version of this document which will deal more widely with the international repercussions, as well as the political fallout for the ruling class, will appear in Revolutionary Perspectives 08 (due out in July).

Notes

[1] This was in the article “EU Referendum: More Capitalist Choices to Reject” [leftcom.org] and we recommend it to readers.

[2] We have written many articles on the precise causes of the economic crisis of capitalism which can be found on our website but the most comprehensive is leftcom.org .

[3] And not just the tabloid press. Cameron and his cronies as well as the entire ruling class have played a hypocritical game on immigration to divide the working class. See leftcom.org or leftcom.org or leftcom.org and many more.

[4] Speaking to Channel 4 News 24 June 2016

[5] The actual voting went 17.4 million for “Leave”, 16.1 million for "Remain", 12 million abstained and 7 million more did not even bother to register to vote meaning that the “Leave” decision is based on the votes of 33% of eligible adults. The participation rate at 72% of the registered electorate was the highest for a long time and up from 65% at the 2015 general election.

[6] See leftcom.org

[7] See leftcom.org