December 28, 2020 | 11 minutes read

Back to Basics on Brexit

Brexit is a sign of capitalism becoming ever more desperate, and thus ever more vicious. We must reorientate ourselves to the real decision at hand: the working classes or the capitalist class? Revolution or resignation? Socialism or extinction?

Back to Basics on Brexit

Brexit is upon us. A deal has been struck, and we have some picture of what January will likely bring. Big changes are coming, and we need to be prepared to respond. In order to do this, we must understand Brexit beyond its surface appearance as the product of a divided nation, and explore how we can handle its consequences. That is what this article is for.

Brexit is an expression of divisions in the British ruling class, catalysed by the deepening of rivalries between capitalist powers globally. In order to understand Brexit, we must first gain some understanding of these rivalries internationally, and then examine how they’ve manifested domestically.

What is Imperialism?

Politics is an expression of economics. The economic system in which we live is capitalism. Capitalism is an unstable system, which progresses towards its own downfall over time. We intend to produce an article explaining this process soon, but we shall explain it briefly here: due to the nature of how profit is produced, competition between capitalists results in profits falling relative to investments over time. In other words, capitalists get less out for the money they put in. Marxists call this process “the tendency of the rate of profit to fall” – and it makes the collapse of capitalism economically inevitable.

Capitalists respond to this process through imperialism: large capitalist monopolies make investments in countries where labour, raw materials and other costs are lower. This makes it possible for corporations operating in those countries to reduce workers' wages to  significantly less than the value of their labour, and therefore briefly return to profitability. As large monopolies control governments with their economic power, those governments will help those monopolies secure these investments. This happens through the enforcement of violent border regimes, to trap workers in countries where poor working conditions and low wages are maintained. It happens through diplomatic and economic pressures, such as trade tariffs, to force market deregulation in those countries – in order to maintain those poor working conditions and low wages. And it happens through military power, including wars to take control of territories and resources, and to overthrow governments who prioritise their own people over the needs of monopoly capital. Whilst capitalism may be temporarily returned to profitability by imperialism, the tendency of the rate of profit to fall is not eliminated. Eventually therefore, capitalism returns to crisis.

The Historical Context of Brexit: Imperialist Rivalries

To understand Brexit, we must now look at how crisis and imperialism have shaped the current global political order. The first and second world wars were wars between imperialist powers to take control of new territories, in order to resolve their own national crises. The massive destruction caused by the wars, the lowering of exchange rates, and the lowering of wages affected by fascism, created the conditions for capitalism to return to profitability. The US emerged from WWII as the dominant imperialist power in the world. The weakened European imperialist powers increased their cooperation, in order to remain competitive in the face of this increased US dominance. The US initially supported this union, as a united Europe was seen as valuable in combating the Soviet Union. This is the background for the formation of the forerunner to the EU, the European Economic Community, in 1957. Here we see the beginnings of a formation of two imperialist blocs: the US and Europe.

Having lost much of its empire, and been significantly weakened by the wars, Britain was left with a choice: which emerging imperialist bloc to ally with. Britain divided its loyalties. By planting a foot firmly in each camp, and situating the City of London as the centre of global banking, Britain was able to establish itself as the financial middle-man between US and European imperialism – as recently as 2016, 87% of US banks’ EU staff worked in Britain. Financial services fees allowed British capital to build its wealth parasitically from that of these two imperialist blocs, who exchanged their profits derived from their own imperialist systems through the financial institutions in London. British capital therefore depended largely on maintaining strong relationships with both of these competitors. It is in this contradictory alliance that Brexit was conceived.

In 1973, the post-war boom came to a close, and imperialism returned to crisis. Britain, the US and Japan all reported negative GDP growth the following year. With a return to crisis conditions, competition between imperialists was set to deepen once again. Peace among such virulent competitors is always temporary, and only happens when they can all extract vast profits. But when crisis returns, conflict returns with it. That same year, Britain finally joined the EEC. The European imperialists further solidified their relationships through the 1990s, to strengthen themselves in the face of this intensified competition. The European Union was established in 1993 following the signing of the Maastricht treaty between Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain, Netherlands and the United Kingdom. The treaty mandated the creation of the European Central Bank, subsequently established in 1998, and the creation of a common currency – the Euro, introduced in 1999. Each of these moves sought to increase economic cooperation between European states, so as to strengthen their competitive position relative to the US.

The Present: Breaking Point

This intensification of competition between the EU and US has achieved its most concrete and dramatic expressions under the Trump presidency. This is not to say that Trump is the driving force behind this process – he is merely the concrete expression of the wider historical forces we’ve discussed. We can see the increased economic tensions between the US and the EU in a number of US foreign policy decisions. We’ll give two examples. EU trade with Iran more than doubled in the two years following the signing of the Iran deal in 2015. Trump’s withdrawal from the deal, and subsequent sanctions on companies seeking to continue trade with Iran, forced a number of European corporations to withdraw operations from the country. Similarly, Trump has imposed sanctions on companies aiding the construction of Nord Stream 2 – a natural gas export pipeline, under construction between Russia and Europe, across the Baltic Sea. Several European politicians have condemned these sanctions as profit-seeking attempts by the US to force out their Russian competitors, opening the door to build their own energy monopoly within the European market. These are just two examples, but each represents a deepening of the fault lines between European and US imperialism.

These fault lines have manifested in Britain, in the form of Brexit. To reiterate: since the end of the Second World War, Britain has straddled European and American capital, securing the majority of its wealth through financial services. As the gulf between these bodies of imperialist capital has widened, this position has become increasingly untenable. Brexit is a division between two strands of British capitalism: that which wishes to strengthen alliances with EU imperialism, and that which wishes to strengthen alliances with US imperialism. The majority of big capitalists fall into the pro-EU camp. HSBC, for example, is a multinational bank based in Britain with extensive operation in Europe. HSBC have defied US sanctions in the past, and made statements counter to US interests in China. HSBC has been deeply anti-Brexit. The pro-US camp is constituted predominantly of right-wing members of the political class, who favour closer military alliances with the US, as well as sections of the capitalist class with close links to Big Oil and the military-industrial complex. The close personal alliances between Farage, Trump and Steve Bannon are illustrative of this.

Opportunism and Racism in Leave and Remain

The so-called “Lexiteers'' argue that the EU forced neoliberal economic policy and austerity on its member states through the Maastricht Treaty and subsequent policies. This is undeniably true. The EU is an enemy of the international working class. Upon leaving, however, Britain will be subject to the regulations of the World Trade Organisation – an institution which subjects participant states to precisely the same trade-liberalisation measures, which will continue to inflict harm on the working class. Britain has jumped out of the frying pan and into the fire. Furthermore, the notion of a “working-class Brexit” is based on racist and xenophobic conceptions of who constitutes the working class. So-called leftists – from George Galloway to Len McCluskey, and yes, Jeremy Corbyn – supported Brexit on national chauvinist grounds. “British jobs for British workers!” – that was the substance of their position. This is unsurprising, as neither the Labour Party nor the British trade union leadership are truly socialist. Both sustain British imperialism by bribing and deceiving the working class with promises of an improved life under capitalism, and thus suppress the revolutionary potential of the workers. By obscuring the true nature of Brexit as a rift within the British capitalists class, and painting it as a pro-working class project, these opportunists are tricking British workers into alliances with their own exploiters. Let us be clear: borders are a tool of imperialism. British nationalism is inherently racist and anti-worker, even when dressed up as left-wing.

The “Remain” camp is no more progressive, however. Their slogan of “Remain and Reform” is as much a lie to the British workers as the idea that there can be a “working class Brexit”. There can be no socialist reforms to an imperialist institution. To claim otherwise is just another iteration of the same opportunism that drives the Lexit camp. It is true that Brexit will disproportionately hurt migrants, and the remain camp has been less explicitly racist than the Lexiteers. However, to paint remain as a pro-migrant position is at best an over-simplification, and at worst, a lie. The European Union is responsible for some of the most brutal border violence in the world. “Fortress Europe” is a term used by activists to describe the border policies of EU states – policies that have led to the deaths of at least 40,555 people since 1993 and continue to trap refugees in detention centres at Europe’s periphery. The imperialist wars in which European states are involved, and low wage pools upon which EU imperialism depends, are themselves the root cause of many people having to leave their homes and migrate elsewhere. The free movement advocated by the remain camp is in fact the free movement only of European, and majority white, workers – meanwhile working class people from the global south are allowed to die in the ocean at the hands of the EU’s murderous border controls. Advocacy for migrants on the grounds that they are “crucial to the British economy” or that they “built our NHS” reduces human beings down to their productivity for the capitalist class. This is not a socialist or an anti-racist position.

From this understanding, we draw the following conclusion: there is no working class solution to Brexit. Neither of the choices offered at the referendum came from the real wishes of the working class, and neither "camp" held the interests of the workers and the oppressed in any regard. There is no working class position in the leave/remain dichotomy. It is through this understanding that we can begin to explore what a socialist response looks like.

No Deal? No, Deal! No Big Deal.

Endless hours in the last few years have been spent debating whether or not Britain will get a deal with the EU. At face value, this seems significant. However, we must root ourselves in the fact that, no matter where this process ends up, there is no one at the negotiating table interested in the wellbeing of the working classes – and there never could have been.

Whilst an “oven-ready” deal is now agreed and being sold to us, to be voted on in Parliament on the 30th December, we should not ease our concerns in the slightest. The public points of contention – largely around fishing rights, competition rules and the governance of the deal thereafter – were largely conceded to the EU, despite claims to the contrary. And these are only the points of contention that are being publicised; fishing has been emphasised on the British side because it represents an imagined “Island Sovereignty”, not because fishing is particularly economically significant or likely to help us avoid catastrophe. A deal will not prevent the imposition of technical barriers to trade, such as in the form of regulatory checks, from the start of 2021 onwards. When we think of trade we often think only of goods, but services are included in this too. The British economy is built on services. Britain's vital services sector accounts for 80 percent of economic output, and indeed is not involved in the deal – Johnson’s reference to services was to say “there’s some good language…. Some good stuff about lawyers’.

All those years ago the notion of a 'hard Brexit' was contestable ground, whilst now it is being posited by once-Remainers as the best option. After repeated losses from the original referendum to calling for a second referendum, the Remainer position has whittled down to mere opposition to a no-deal Brexit. This is not to imply that no-deal would not be catastrophic, either. We would default to World Trade Organisation rules. That means taxes and tariffs would be introduced on goods coming from Britain and the EU, potentially raising the cost of imported products, such as food. The meagre benefits of trading with Britain would dissipate, and throw us into deep economic turmoil: the Governor of the Bank of England says that a No Deal would hit the economy harder than the pandemic. These two events would not be in isolation, but occurring at the same time: hyper-inflation, food shortages and even higher rates of unemployment are on our horizons.

What is important is that a great deal of this forecast may be the case regardless of the deal being struck.

With our conversations focused on whether we will get a deal with the EU or not, it is easy to forget the simple fact that the vote to leave the EU was an attempt to align Britain with US imperialist interests. A bad deal with the EU was expected to happen, but with the expectation that this would be remedied by a deal with the US - one that would supersede the supposed limitations of the EU. Trump and Biden's administrations appear to be aligned on how to approach negotiating this deal. Neither thinks there is any benefit to the US in rushing through a deal; these things take time, and it is Britain seeking the US' help, not the other way around. Better to let Britain sweat it out before begging the US for whatever scraps it will offer – scraps that will surely bolster the US far more than they will Britain. Biden, if anything, has positioned himself as even less keen to reach an agreement than Trump.

There is a simple truth to all this: Britain is a waning imperialist power. Its reliance on financial capital means the economic crises to come will hit swiftly and brutally, and it will be unable to support its population. A lorry comes hurtling down the road, there are two sides of the pavement. Britain has stepped out and has frozen, not sure whether to withdraw or continue to the other side. The lorry comes ever closer.

Britain's capitalists have set us all up – what can we do?

Revolutionary Possibility

We must not despair - there are options through this, which lead us to a society so much greater than is possible under capitalism. It starts with rejection: rejection of the faux-choice of Leave or Remain, Britain or Europe, Deal or No Deal. We have to see what's going on, whilst recognising that this is not inevitable.

This starts today, with concrete action. As migrants face ever more attacks and an even more violent border system comes into effect on January 1st, simply posturing our disapproval is not enough. We need to see migrant solidarity and anti-racist action across Britain.

Our communities, geographical and beyond, need to prepare to defend ourselves - the capitalists and their state won't look out for us, so we must look out for each other. This looks like building mutual aid structures, that go further than just providing food but by educating, resisting, revolutionising each other and making solidarity a practice, not a slogan.

We all need to get unionised, right now. Materially support migrant-centric unions like United Voices of the World and the Independent Workers of Great Britain. If you're in a different union, even one with a reactionary position on Brexit, organise. Work with others and get this necessary arm of the working classes in order and on task: to defend all workers via all means.

Brexit, an expression of bourgeois infighting, is a sign of capitalism becoming ever more desperate, and thus ever more vicious.  We must understand it and reorientate ourselves to the real decision at hand: the working classes or the capitalist class? Revolution or resignation? Socialism or extinction?