Tories for whom?

Whose interests do the Tory party serve? The knee-jerk leftie answer has long been: big business. But I wonder if this is true.

As Simon points out, leaving the EU would not be in the interests of business. And even if this isn't what the Tory leadership intends, the mere fact that it is creating uncertainty about the possibility of exit is itself bad for business; uncertainty depresses investment and share prices.

This isn't the only way in which the Tories harm business interests. So too do immigration controls (note: it is possible for some policies to harm the interests of both capital and labour).

And it's quite possible that even austerity is not in the interests of non-financial business*. Granted, in the 80s public spending cuts helped weaken workers' bargaining power which in turn helped raise profit margins. At a time of wage-led growth, though, such cuts simply depress aggregate demand and therefore profitability; official data (pdf) show that non-financial profit rates haven't risen much at all since 2010**.

Now, you might reply that this merely shows that Tories are the party not of big business but of economically illiterate little Englanders - hence its vulnerability to Ukip.

Even this, though, isn't wholly clear. Austerity has clobbered a lot of traditional Tory voters - older, wealthier people who have suffered from low returns on their savings.

This makes me wonder whether our (OK my) longstanding prejudice is actually true. Maybe the Tories are not any longer the party of big vested interests in general***.

Of course, this does not automatically invalidate the Marxian claim that the state favours big business. Many anti-capitalist policies such as a basic income, steeply progressive taxes and worker ownership are filtered out of practical politics by ideology, the need for "credibility" or alleged infeasibility. But as we're seeing, this filter doesn't block other anti-business policies. It seems to be only intelligent anti-capitalist policies the Tories are opposed to: they are quite happy with stupid ones.

* It's certainly helped finance, because QE has raised asset prices and because low interest rates help to keep "hoovering up pennies" strategies profitable.But the City might well lose from leaving the EU so this doesn't establish the Tories as the party of finance.

** In fact, official data might overstate the health of profits. They are based on measuring capital at replacement rather than historic cost. Because capital goods prices have fallen, this understates the capital stock and so overstates profit rates.   

*** I stress in general because, of course, some business donors to the Tories are doing well.  

Comments

[pablopatito]

I thought the knee-jerk leftie answer has long been The City, not big business?

[paulc156]

Could someone spell out how "low interest rates help to keep "hoovering up pennies" strategies profitable"?

[Simon Cooke]

I've spent a great deal of time thinking about WHAT my party is "for" but little time thinking about WHO it is "for". Indeed, I would argue that the manner in which you frame your question betrays your collectivist preferences - you see the political process as a game of competing group interests.

So rather than thinking in this way think about the different sorts of conservatism and ask whether the party meets their expectations and whether the policy 'demands' of different groups conflict.

[Stevenclarkesblog.wordpress.com]

I'm being a pedant, but your ** comes before your * in the main body of the blog post.

[chris]

@ paulc - simply by reducing the cost of borrowing.
@ Steven - ta: correction made.
@ Simon - I'm not sure I have collectivist preferences. Surely most politicians ask: whose interests should we serve? and the answer is always some kind of group.

[Stevenclarkesblog.wordpress.com]

@ Simon & Chris - Michael Oakeshott's view is attractive, suggesting government should let different groups and individuals pursue their own interest with the minimum of conflict:

"Governing is a specific and limited activity, namely the provision and custody of general rules of conduct, which are understood, not as plans for imposing substantive activities, but as instruments enabling people to pursue the activities of their own choice with the minimum frustration."

I personally see that as a more liberal conception of government.

Outside of political philosophy and in the real world, many of the Tories I know (also very true of my Leftie friends) see politics as about helping 'their kind of people' against others - as I suspect many voters do, alas.

[Boffy]

"Because capital goods prices have fallen, this understates the capital stock and so overstates profit rates."

No it, does't because the only point about the rate of profit is the extent to which that profit represents an "expansion of capital". The expansion of capital for Marx and for Marxists is the actual physical capital, the productive-capital that involves the employment of additional labour-power, by which even more surplus value is created.

The expansion of capital as Marx sets out in Capital II and II, can only be measured against the productive-capital, not the money-capital initially thrown into circulation. The extent to which any given quantum of surplus value can be accumulated into additional constant capital, and, therefore, given the technical composition of capital, additional labour-power (and hence further expansion of surplus value) depends on the current reproduction costs of that capital, not on some past monetary expenditure.

That is why Marx says the rate of profit must be calculated on the current reproduction costs of productive-capital plus merchant capital, and not on the historic costs. The historic costs are only relevant if you believe that the purpose of capitalist production is to obtain capital gain not produce surplus value, and that capitalists engage in production with the intention of ceasing after each year, rather than on the basis of continuous and continuing production.

[rogerh]

Depends from which angle you look. From the rational voter's point of view the question is 'which party is the least rubbish?'. From a rational business person's view the Tories may be marginally better than Labour but they both seem worryingly unstable - hardly worth a donation to either. I should say political parties exist to serve themselves, a sort of mutual backscratching operation of no use or interest to anyone else. But there are still important numbers of tribal voters who are well served by the tribal meeja, so serving the news barons seems a good bet.

But who do the news barons suck up to? The advertisers probably which means those who sell to the consumer markets. Which means cars, cruises, houses, tellys and Iphones and stuff that goes with them. So the news media aims at the consumers. So the chain of support goes back to those who buy cars, cruises etc, nothing else matters to a politician so nothing else gets done.

[ChrisA]

I would agree with Roger, it is pretty transparent that political parties are all about staying in power, so they are trying to follow policies that they think will be successful in doing that. There isn't much chance of a decent bribe or payoff in the UK system, the house of commons has too many people on it to be worthwhile bribing anyone. In the few cases we have evidence of bribes like the cash for questions cases, the actual payoffs were pitifully low. It is a significant financial hit to most MPs when they lose their seats plus also huge loss of prestige. So MPs are pressurising the government to follow policies that they think will be popular with their constituents. So when you say the Tories for instance don't seem to have monotonic preferences, you are really talking about the voters.

[Tom]

Thanks, very interesting stuff (as usual!) I'm not sure if the answer to the question 'whose interest is served by whom' is central to question 'how do people chose to vote' or even 'how do governments chose policy'. Generally, I think people vote to affirm their identity and politicians usually react to this with ideological, rather than practical, policies. Either way, the issue 'whose interest is served by whom' is important, so thanks for blogging about it!

[Dave Timoney]

The Tories have been a periodically unstable alliance of different capital interests since the days of Robert Peel. Arguably, the intermittent Parliamentary success of the "progressive" opposition, from Liberals to Labour, has depended on division in the Tory ranks (protection vs free trade, Europe vs empire etc).

Big capital (pro-EU and pro-state contracts) has conflicting economic interests with small capital (anti-regulation, pro-wage repression). The decisive factor has long been finance capital, which is part of the reason for the imbalance of power in the modern economy.

The resolution of the current iteration of Tory strife will depend on the City's calculation of where its best interest lie, which is why the guff about EU tretay renegotiation ultimately boils down to removing constraints on finance - i.e. if Cameron can preserve the City's privileges, the small capitalists can go hang. Until then, UKIP are useful idiots.

[Tristan]

I think we've reached a point for the Tories and Labour that their purpose is to continue to exist in a position of power. I'm not even sure its for the benefit of their leading members but for the parties as institutions.

Political parties are coalitions of various interest groups, they can sway things on the margins, and occasionally cause one ideology to rise to the top - perhaps UKIP is causing that in the Tories, but that ideology doesn't serve any particular group (except perhaps angry white men of a certain age).

[Boffy]

David,

The points made above though are relevant. Its a point Paul mason made some time ago about politicians in Europe too compared to bureaucrats. That is they have to get elected.

The Tories could never get elected by being an all out social-democratic party, because their membership and electoral base is made up of the small capitalists, and as Marx says in relation to the 18th Brumaire, those who share that outlook. They are always constrained in their actions by the fact that they have to operate within the constraints of the fact that all modern states are bourgeois social democracies, i.e. the state is founded on a compromise between the interests of big capital and the working-class, mediated via the labour bureaucracy.

At certain points, generally periods of greater affluence like the 1950's and 60's, the Tories own social-democratic wing is more influential, reflecting the greater influence of those ideas within wider society. (Its interesting, however, that these ideas are always present within the Tories. The fact they pushed through the Factory Acts was class spite against the liberal bourgeoisie, by the landed aristocracy that still dominated the Tory party, but it was Neville Chamberlain who developed the basic ideas for the Welfare State, back in the 1920's).

In the last 30 years, it has more been the failure of social-democracy to provide for the needs of workers that explained the success of conservative parties, rather than the either the greater progress of conservatives, or the fact that social democracy failed to meet the needs of big capital, causing it to shift allegiances. In other words, it failed to meet workers needs as the consequences of stagnation in the 80's and 90's, and workers simply failed to vote for Labour and openly social-democratic parties in sufficient numbers to enable them to win.

That conservative parties were the beneficiaries of that and not the Left, says a great deal about the failure of the left to provide workers with an appealing alternative.

[joe]

Globalisation has made it hard for any party to stay relevant to protecting the interests of any particular group within a nation. Perhaps the Tory Euro sceptics think that with Europe and perhaps Scotland gone they will rein supreme within the remains of UK. They won't - the multinationals will decide which country and firms thrive economically and which fail and where taxes will be paid. We cosy up to China, for example, to fund the very power and rail infrastructure that enables to nation to stand still let alone progress. The UK's City fails to be able to fund any of these mega projects it was once renowned for.

[Blissex]

«Whose interests do the Tory party serve? The knee-jerk leftie answer has long been: big business. But I wonder if this is true.»

Since they are a varied coalition which specific interests they server and which compromises they endorse varies as the previous commenter says:

«The Tories have been a periodically unstable alliance of different capital interests since the days of Robert Peel.»

Now there is a unifying thread. The thread must be the interests that over time sponsor the party, that is pay its bills, rather than those who just ally with them and trade their support for some boons.

An american author has written a book to state that "reactionaries" (which he mostly identifies with conservatives) are also a motley coalition that varies in time, and the unifying thread is reacting against "emancipation".

That seems ridiculous to me, and deeply influenced by that authors' arbitrary desire to include gender issues in the argument, which instead seems to be completely irrelevant, except for expedient reasons in the USA, to conservative and reactionary interests.

After long reflection I think that the Tories like all conservative parties have indeed a unifying threads, and it is not the protection of capital, or of property, or being against emancipation, but in general the protection of the interests of incumbents.

Conservative politics is the politics of incumbency, whichever incumbency is dominant at any one time.

The political genius of Thatcher was to create a mass of new petty incumbents in residential property in marginal Southern seats, and of Blair to recognize that and that New Labour had to promise to protect the interests of those mass incumbents to win elections, that is to become in large part a conservative party.

Because Thatcher's (or Joseph's or Rifkind's?) policy to create a base of mass incumbency in the Southern seats was based on the finding by a research body that given the same income and class people who owned cars, houses, stocks voted to the right, and people who rented, used public transport and had pensions voted to the left.

[McDuff]

Uh, landowners in London?

Seems pretty obvious to me.