Brexit, Marxists & the state

Was Marx wrong? This is the question posed by Brexit.

I’m prompted to ask by this from the government’s advice to business on what to do about a no-deal Brexit:

UK companies and limited liability partnerships that have their central administration or principal place of business in an EU member state may wish to consider whether they need to restructure to satisfy the requirements for incorporation in that EU member state.

Faisal Islam says this is the “first time in history a UK Govt [has] effectively suggested shifting HQs out of UK.” We’ve gone from Johnson’s “fuck business” to “fuck off business”. Brexit threatens even worse than prolonged slower growth than we’d otherwise have.

This challenges Marx. He thought “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.”

Now, there’s tons of evidence for this far beyond the state’s role in protecting property: state education prepares workers for capitalist drudgery; the welfare state helps to stabilize demand whilst incentivizing people to enter the labour market; and under Thatcher and Blair, a big part of economic policy was aimed at attracting businesses and maintaining confidence.

But no more. Brexit is antagonistic to the interests of capitalists. How, then, can we maintain Marx’s view that the state is a means of promoting the interests of capital?

One possibility is that the interests of capital do not consist merely in high and rising profits. They also require that capitalism be seen as sufficiently legitimate that it can persist without grievous unrest. Because egregious exploitation and inequality would undermine its legitimacy there is therefore a role for the state to impose some progressive taxation or labour regulation. Sometimes, capitalists must be saved from themselves; it is their collective interest that matters, not that of individual spivs. 

I’m not sure, though, that this is relevant to Brexit. Granted, backtracking from Brexit might undermine the legitimacy of the state in the eyes of some. But it wouldn’t delegitimate capitalism. And whilst it might provoke civil unrest, this probably wouldn’t be so great as to cost capitalism more than would a hard Brexit.

This leaves us another possibility, described by Ralph Miliband – that the state has relative autonomy. To borrow a neat analogy (pdf) from another discipline, think of the relationship between capital and the state as being like that between a woman and her dog on an extendable lead. In the short-term, the dog can run a long way from his mistress and do all sort of damn fool things. But ultimately, it usually* gets dragged back into line. Chile in the early 70s, France in the early 80s and perhaps the Tsipras government in Greece more recently are examples of this.

Brexit could fit this pattern in one of two ways. One way would be for us to end up with a “Brexit in name only” – if economic chaos, or just warnings thereof, cause a backtracking from a hard Brexit. Whether this happens via a general election or “people’s vote” is not important in this context.

But there’s another way. With even a smooth Brexit likely to depress longer-term growth, it’ll be more imperative than ever for governments to attract capital and maintain confidence**. In this way, capital’s hold over the state will strengthen; if Brexiters weren’t so stupid, I’d suspect this was their motive.

All this, however, leaves Marxists with a problem. If any policy whatsoever could be seen as examples of promoting accumulation, sustaining legitimacy or of relative autonomy, what might represent refutation of our theory of the state? Does this just become an unfalsifiable theory?

I don’t think so. The theory predicts that where there is a choice between promoting human flourishing and the interests of capital, the state will eventually opt for the latter. This prediction can be refuted by events, though it rarely is – but this is another story.

* In my picture, the dog runs to its death. Some of you might think this undermines my metaphor, others that it strengthens it.  

** Fiscal policy is not the issue here. MMTers are right to say the state can borrow as much as it wants, subject only to an inflation constraint. But this doesn’t alter the fact that tax and industrial policy must sustain profits.

Comments

[David Murdoch]

Chris, “In this way, capital’s hold over the state will strengthen; if Brexiters weren’t so stupid, I’d suspect this was their motive.”

My self questions are always, “Where’s the money?” and “What’s more likely?”

To which, while the Brexiteers are doing a fine job of appearing stupid, it feels very much as though there are forces behind them (Legatum?) for whom this is a strong motive indeed.

[Blissex]

«Brexit is antagonistic to the interests of capitalists»

Such a lazy generalization: obviously the sponsors of the Conservatives and New Labour are split over brexit.
That is obvious because all significant changes have a distributional impact, not just among classes, but also within classes, and some tory sponsors are likely to rationally think that brexit is best for them and others think it is not; and most will think it will make a small difference, despite the laughable "Projects Fear" on both sides.

[Matthew Moore]

'The theory predicts that where there is a choice between promoting human flourishing and the interests of capital, the state will eventually opt for the latter.'

I wonder how often such a choice actually arises? Especially if one considers future flourishing as well, I would argue that the interests of physical, financial and intellectual capital holders are normally well aligned with the holders of human capital (workers). Not always, but often enough that the opposite course (acting always against the interests of the 'boss class') is much worse for workers than acting for them (see Venezuela and every other such effort).

As always on the this blog, I acknowledge you have identified an institutional aspect that results in an outcome that falls short of some Platonic ideal. But I don't see the proposed institution that would do a better job. All actually existing alternative institions have been shown to be worse.

[Nick Drew]

@ Brexit is antagonistic to the interests of capitalists

To the extent this is true, it can also be true of declaring war

(I'm not sure it's clear-cut in either case, if you take a long view, which of course many - capitalists and non-capitalists alike - don't when they're polled: they just have a bias towards the known, the status quo)

But bourgeois states declaring war happens too. In fact, s**t happens all the time: so what? Anyone's theory has to accommodate the messy stuff

BTW, Marx of course reckoned that at the crucial moment the proletariat intuits their lot is so bad, that any change whatsoever in the political status quo will leave them better off: so presumably a marxist Remainer will argue the Brexit event is in no way happening at any kind of crucial Marxian moment.

A marxist Brexiteer, by contrast ... eh, McDonnell?

[john carrick]

Why -in an otherwise thought-provoking piece do you say"If brexiters weren't so stupid...." that sort of snide and unnecessary insult to a lot of people you don't know demeans you, not them, and undermines the rationality of your output. As a brexiter willing to listen to all aspects of the argument it would be easy to dismiss you as arrogant,and less willing than me to accept that sometimes views other than your own , may have merit.
On your fundamental point - your Marx quote is relevant but maybe, just maybe Karl was describing, though not approving the situation!!
As a left-wing Brexit voter my hope is that a UK independent of the EU is more, rather than less, likely to re-balance the distribution of wealth

[Nicholas Gruen]

Our representative democracy was being constructed, but had far from universal male suffrage when Marx wrote. So that's part of the explanation.

But the other part of the explanation is that, since we did get universal adult suffrage, democracy has become degraded by the lurch toward populism.

Contradictions – in the Marxist sense – have emerged so that media outlets compete with each other for eyeballs and outrage and in doing that they stoke up all kinds of demons.

As they did in Australia where it suited the laws of political combat to abolish carbon pricing. Not in the interests of the bourgeoisie but orchestrated nonetheless by a small faction of the elite.

We led the world with elite defying policy in 2013 and then the UK and US followed suit in 2016.

But I like the dog lead analogy – if we stray too far from the lead, one imagines things would be reigned in.

[Simple Simon]

This piece assumes an unanimity on the part of the bourgeoisie. What has become evident is that the capitalist class is as fractured as the working class (and indeed the country as a whole). Rees-Mogg, Soames and the rest of the toff Brexiteer Tories don't represent the interests of international corporate capitalism (even though they make money from fund 'management' and the like). Rather they represent the interests of the rural gentry, landowners, farmers and inherited wealth - still a significant force in the U.K.. Amazingly enough, we can detect this fracture in the capitalist class as far back as Peel and the Corn Laws controversy, which we saw again with (Joseph) Chamberlain and the Imperial tariff. Like the living dead, the carcass of the rural gentry survives impalement, gets back up and continues its zombie hunt for living flesh (the immiseration of all that depend on its private property for food and shelter. Not iphones! Not banks!).

[Mike W]

Yes, agree with the thrust of the folks above. Marx requires that the elite is a coherent body with essentially the same interest and 'conscousness' facing the w/class (as Marx hopes the w/class develops an identy as a 'class initself' to a class 'for itsef'. In fact the Rentier v Liberal market actor Tories ,have real divisions, and one hopes, these will tear the existing Tory party apart. Love the fact that Ireland will gets to play a part in Brexit too :) Hopefully those dull and crusty political historians will get to write about the Irish part in the destruction of both the Victorian, Liberal party and 21st century Tories in the not too distant future.

@Simple Simon,really liked your post. If you read Marx on, Henry George, 'Letter to ....' Marx found himself with three copies of 'Progress and Poverty', you will see that Marx points to George as capturing the real hatred within our 'masters class' as you outline them. But Marx, in my view, does not want to 'unmask' the problem of his own understanding of Henry George's Ricardian position for his own thesis of 'polarised' coherent classes, will be attacked from this direction as well. As it was:'why is there still a midddle class'? problem.

Just one thing. This wonderful section you write:

'Like the living dead, the carcass of the rural gentry survives impalement, gets back up and continues its zombie hunt for living flesh (the immiseration of all that depend on its private property for food and shelter. Not iphones! Not banks!).

For many Georgists, myself included, we do not use the word 'industry' for banking. It is part of the parasites amoury. Banking in the, 'too big to fail form', is not an industry in any sense that a business student could define the term of a atomic market actor,ie a firm with carrying costs or cost of production etc. Our problem is, does the land owning rentier control the city of London or do the banks control the rentier? We know they control the politicians. Not to really worry though Simon, I suspect it would be answer in a Robert Dahl like manner about the 'circulation' of elites power in time. Moreover with the Georgist tool, LVT, we know how to deal with both elements of the parasite class at once.

[dilberto]

Social progress is a consequence of the improvement in the material conditions of a society brought about by capitalist economic development and progressive values the result of populations adapting to those social and economic conditions or gentrification. When the limit of social progress is reached then the progressive consensus will become redundant, part will adapt to the changing social environment by adjusting their values in keeping with those changing conditions and part will seek to oppose that change in order to defend their vested interest and become reactionary. That is what is happening in regard to Brexit and the rise of what the cosmopolitan middle class establishment disdainfully refer to as populism

Economic growth and development is, like any change, selective in its nature requiring greater state subsidy in the form of welfare for those less gentrified parts of a surviving population disfavoured by that process of change in order to allow them to subsist. When the cost of that subsidy exceeds the economic benefits of further economic growth then that society may be said to have reached the limits of its potential for economic growth and social progress and will experience a debt crisis as a result and it is then faced with a choice, either to persevere with that process of progressive change and to ignore its economic and cultural consequences for the disfavoured groups because the level of subsidy required can no longer be afforded by effectively becoming an oligarchy or to seek to adapt the economy to reflect more broadly the population including the disfavoured groups so that they be less dependent on state subsidy.

This dichotomy characterises the contemporary political landscape in economically developed societies between their increasingly unrepresentative and exclusive cosmopolitan establishments and the emerging so called populism of which Brexit is but one manifestation.

The progressive left face the choice between further social progress and the values associated with that process of change including cosmopolitanism, cultural tolerance and multiculturalism and the defence of the economic existential interests of those groups disfavoured by that change which they were originally founded to protect.