“The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.”
Recent news seems to vindicate Marx’s aphorism. Today, Robert Jenrick relaxed planning laws a few months after seeing big donations to the Tories from property companies. This is of a pattern with his giving planning permission for a development by Richard Desmond soon after Mr Desmond made a donation to the Tory party. Support for jobs and businesses is being used to pay dividends and big CEO salaries. And an advisor to Liz Truss made millions from selling unusable PPE to the NHS.
So, Marx was right.
Not so fast. My chart tells another story. It shows that there is a decent correlation (0.48 since data began in 1998) between the dividend yield on the All-share index and UK political uncertainty, as measured by Baker. Bloom and Davis*. Greater political uncertainty means lower share prices. The Brexit referendum, and uncertainty about the terms of our exit last year, greatly depressed share prices. In creating political uncertainty – much more so than under most of the Labour government – the Tories have costs capitalists billions. And with uncertainty still well above its long-run average, this cost is ongoing.
How can we reconcile this with Marx’s claim?
One possibility is that it shows that the state has a degree of autonomy. It does not mechanistically always do the bidding of capital.
Another answer is that the government is not the same as the state. The government comprises damn fools who do all sorts of silly things. But essential functions of the state do serve capital’s interests – for example, in providing infrastructure, skilled (and quiescent!) workers, protection of property rights and economic stabilizers to mitigate recessions.
But there’s something else. Although capital has some common interests, it also has conflicting ones: bankers versus manufacturers; small businesses versus monopolies; landlords versus retailers. And so on. The interests this government is best serving are not those of productive capital. Whilst it is cutting red tape for property developers it is imposing billions of pounds of it onto road hauliers and exporters. And whilst the lockdown is jeopardizing countless smaller businesses, the government is protecting banks and landlords.
It is, then, promoting the interests of rentiers (pdf) and spivs.
Which poses questions. Does this tell us about the character of this government, that it should align itself with shysters? Or does it instead tell us something about the nature of British capital – that its most regressive elements are those that are now most dominant?
* The correlation is far stronger between the yield and global policy uncertainty, where the latter has been raised significantly by the Orange Cretin.
«Does this tell us about the character of this government, that it should align itself with shysters?»
No different from M Thatcher's or T Blair's in that respect, etc. etc.
«Or does it instead tell us something about the nature of British capital – that its most regressive elements are those that are now most dominant?»
I guess that 40 years of thatcherism demolishing or discouraging industrial capital for breeding trade unionism have been recognized.
https://exepose.com/2016/03/02/thatcher-and-god-an-interview-with-eliza-filby/
«I press Filby as to whether Thatcher ever regretted unleashing the forces she did. “Yes,” comes the instant reply. “Peregrine Worsthorne [Telegraph journalist] once said that, ‘Margaret Thatcher came into Downing Street determined to recreate the world of her father and ended up creating the world of her son.’ It’s a pretty damning assessment but it’s actually quite true.”»
Posted by: Blissex | August 06, 2020 at 04:47 PM
«How can we reconcile this with Marx’s claim? [...] Although capital has some common interests, it also has conflicting ones»
The way I read his claim is that the "government" is like the board of a company, and that board as a rule has people representing different interests, and often among them strongly adversarial ones, even if they share some basic ones; also also that company boards are not all-knowing and all-powerful, even within their companies, and neither is the government. My guess is that his view was more that "capitalism" is a diverse, diffuse conglomerate.
Posted by: Blissex | August 06, 2020 at 05:00 PM
And what is the solution all you folks who are so keen on the EU and Freedom of Movement propose to the mass immigration you have unleashed? A projected population increase from 63m to 75-80m in a generation is an increase in a population of a medium sized European nation. Think Sweden or Netherlands. Logically, that requires us to build Sweden, or The Netherlands. Where were you thinking all those folks would live? In spare bedrooms?
Posted by: Dipper | August 06, 2020 at 06:43 PM
«population increase from 63m to 75-80m in a generation»
The argument by our blogger is that preventing that increase (if EU immigration won't be replaced by non-EU immigration) is indeed contradictory with *some* business interests, as it deprives businesses of more customers and cheaper workers within easy reach; but then it also deprives rentiers of more tenants.
Anyhow that increase amounts to 1%/y for 25 years (to 80m) or 0.5%/y for 35 years (to 75m) and that's something that a big country with lots of unbuilt space (please don't use idiotic "average density" arguments) can very, very easily manage.
Anyhow the interests of spivs and rentiers might yet be realized:
https://www.ibtimes.co.uk/buyout-boss-says-brexit-will-be-good-his-business-will-mean-30-cut-uk-wages-1602631
“One of the biggest names in European private equity said that Brexit will be good for his business, but will mean a 30% wage reduction for UK workers. [...] He added that EU immigration will be replaced with workers from the Indian subcontinent and Africa, willing to accept "substantially" lower pay.”
The campaign about a small percentage of "Windrush" people who had failed to submit paperwork for decades seemed to me designed to normalize the idea that immigrants from the third-world countries of the ex-Commonwealth are genial cricket-playing "almost like us" good people, unlike the "nasty brutes" of eastern Europe.
Posted by: Blissex | August 06, 2020 at 07:05 PM
I’ve recently finished Putin’s People by Catherine Belton. What was interesting is how the KGB and its descendants created oligarchs to hold funds on trust to be used by the security state for less nefarious activities. I wonder if that’s how the Tories behave too. They need to create a few very rich property developers etc who will then reinvest their super profits in a seeming never-ending cycle of Tory victory.
Posted by: Boyo | August 06, 2020 at 08:43 PM
«Putin’s People by Catherine Belton»
I have only skimmed it, but it seemed to be mostly a not-that-informative hatchet job.
«the KGB and its descendants created oligarchs to hold funds on trust to be used by the security state for less nefarious activities.»
That seems to have been part of the plan. I think the better way of putting it was to create a constituency of self-interested people who were heavily invested in russian assets and the russian state and therefore would fight encroachment from foreign interests; but then people like Khodorkovsky thought they could manage that state themselves and/or sell their russian assets to foreign interests and run away.
Similar logic was behind A Hamilton's pushing for the USA government to take on the debt of the states after independence, and fund itself by issuing debt: he argued that rich americans (and foreigners) who would buy that debt would feel invested in and support the continuing existence of the USA as a debtor, while certainly if the English Empire reconquered New England they would repudiate it, and hang the owners of that debt for having funded the rebels.
A similar move explains the hereditary peanut monopolies of the USA south: they were designed to ensure that they would have the means and the motivation to continue funding segregationist politicians.
«I wonder if that’s how the Tories behave too. They need to create a few very rich property developers etc who will then reinvest their super profits in a seeming never-ending cycle of Tory victory.»
Having made supporting example aboves, I can now argue that in England that style of argument is however quite wrong, and the opposite is a fairer description: that there is a generic "ruling class"/"Establishment" made of the gentry/upper-middle class and the upper classes, related by marriages (everybody is somebody's "cousin"), which regard the UK as "the family business" (as they once regarded the Empire), and some of them then become tories, some become bankers, some become spooks, some become journalists, some become generals, etc. etc. (few go to work in "vulgar trades" like industry, except as directors). Some even go into Labour, but their historical opposition to Labour is also because it is not really a part of "the family business".
In particular they don't need to "create a few very rich property developers", because the "ruling classes"/Establishment are massive urban (and agricultural in the older families) property rentiers themselves.
So: many Conservative politicians don't represent the ruling classes, don't need to create rich lobbies to sponsors them, they *are* (part of) the ruling classes, they are (part of) the rich lobbies.
Posted by: Blissex | August 06, 2020 at 10:49 PM
@Blissex: taking your point, accurate enough I think in characterising the past in the UK, it makes me wonder if we are seeing something new: the troika of Johnson, Cummings and Gove are not of the old ruling class families. As interlopers, do they realise their power is dependent on creating new slush funds? Certainly the procurement corruption currently taking place suggests something is happening.
Thank you also for the additional information about the US, which I didn’t know before.
As an aside, I did sometimes wonder if Brexit was in part driven by the threat posed to control of the family business (as you style it) by outside powers.
Posted by: Boyo | August 07, 2020 at 07:01 AM
«makes me wonder if we are seeing something new: the troika of Johnson, Cummings and Gove are not of the old ruling class families.»
But the english "ruling class" is opportunistic and somewhat permeable to new entrants. Anyhow Johnson is part of the "gentry", Gove was raised by a middle class family, and Cummings also has a "gentry" background (e.g. all of them went to an independent school and then to Oxford, but I think that Johnson and Gove were on studentships at Eton).
«As interlopers, do they realise their power is dependent on creating new slush funds? Certainly the procurement corruption currently taking place suggests something is happening.»
They are not interlopers like the big men of the trade unions, and their power and wealth is dependent on making sure the government helps the rest of the ruling class, not just themselves, make money, not necessarily via outright slush funds, but more via highly favourable "tilted field" legislation and regulation.
Most UK corruption and self-dealing is not of the trivial "brown envelopes stuffed with used banknotes" sort (more common at the local government level), it is group-wide corruption and self-dealing, where favoured groups enact themselves a big edge from government policies and legislation. Things like 0% unlimited roll-over overdrafts for bankrupt City banks, Right-To-Buy for their electoral base, Help-To-Buy for the property industry, access to the "good jobs" greatly eased by going to expensive fee paying schools and Oxbridge so most go to the scions of the "gentry", etc.
«As an aside, I did sometimes wonder if Brexit was in part driven by the threat posed to control of the family business (as you style it) by outside powers.»
I think so, not all, but a large minority of the english ruling class decided that they would rather be in sole control of the UK than have an equal minority share in the EU; better big fish in a small pond, than average fish in a big pond.
Their model seems to be the Dubai ruling class. In part because they seem to have decided that leasing the shield of sovereignty to dirty-money owners worldwide is their future, and they cannot do that if they don't have have that sole control over that sovereignty.
Posted by: Blissex | August 07, 2020 at 09:15 PM
Gov't own reviews and evidence from LGA show there is no shortage of planning permissions being granted, permissions consistently outstrip delivery because developers bank them and eke out delivery slowly to keep prices high. So, we know these policy changes don't address the problem, they actually reinforce it, whilst benefiting political donors. We also know the peanut gallery (which includes the msm) is stupid enough to be distracted by waffle about red tape.
Ergo I wonder if it's possible to crowdfund political donations to get better policy? For example donations from a campaign group advocating use it or lose planning permissions, backed up by the threat of CPOs at pre-permission values, would seriously incentivise actual delivery of permissions.
The shameless purchasing of political favour (from current administration at least) is clearly permissible. Or does it also need a longer term incentive for the current decision maker? Not just a bung to the party now, but a reliable (even if implicit) promise to reward the minister later when they're no longer in office?
Posted by: MJW | August 07, 2020 at 10:52 PM
«Ergo I wonder if it's possible to crowdfund political donations to get better policy?»
That is called "political action" and one of the reasons J Corbyn was so violently attacked was that because of him Labour got a lot of new members and with a lot of new subs Labour became well-funded and independent of big donors. That's of course against the norms of "liberal democracy".
If you remember New Labour was constantly complaining that the trade union subs were also funding Labour and thus influencing policies, and they switched New Labour to being funded by wealthy donors, which of course don't donate funds for pure generosity. In imitation of the "DNC" democrats:
«RALPH NADER: Do you want me to go through the history of the decline and decadence of the Democratic Party? I’m going to give you millstones around the Democratic Party neck that are milestones.
The first big one was in 1979. Tony Coelho, who was a congressman from California, and who ran the House Democratic Campaign treasure chest, convinced the Democrats that they should bid for corporate money, corporate PACs, that they could raise a lot of money.
Why leave it up to Republicans and simply rely on the dwindling labor union base for money, when you had a huge honeypot in the corporate area? And they did.»
Posted by: Blissex | August 07, 2020 at 11:26 PM
«Not just a bung to the party now, but a reliable (even if implicit) promise to reward the minister later when they're no longer in office?»
I guess this is a rhetorical question, and in the USA "ingratiating" payments directly to a politician are perfectly legal being "free speech" even while they are in office.
In this country "the family business" has nice sinecures for everybody, here is a quote from the 1990s debate in the USA about derivative regulation, by John Rainbolt (at the time Chairman, International Issues Subcommittee of the American Bar Association’s Committee on Futures and Derivatives Regulation):
«Avoid the British experience. As the professional market legislation also proposes, U.K. regulators concentrated on the politically correct goal of protecting small punters, leaving professionals to their own devices.
Knowing the relevant history, a U.S. politician worth his or her salt should wonder if the Conservative government’s approach to market oversight has something to do with the number of Tory resumes on the street, and if a vote to duplicate U.K. market regulation communicates this disease»
Posted by: Blissex | August 07, 2020 at 11:31 PM
@ Blissex: I’m not sure your model for understanding “ruling classes” is entirely correct, although it is what is traditionally accepted. The people you refer to - “a gentry” (and using your example of a family business, but I would say actually a network of sometimes cooperating and sometimes competing businesses or “houses”) are in fact a foreman class. They don’t own or have call on the assets that consist of the businesses - and consequently seem to me to be involved in acts of primitive accumulation. You are right that there is a permeability, but you get your seat at the table by carving out a valuable asset and powerbase for yourself.
Posted by: Boyo | August 08, 2020 at 12:24 PM
@Blissex, to clarify: it’s the troika of Johnson, Gove and Cummings currently involved in acts of primitive accumulation in the current procurement scandals.
You might say: why do they need to, they already run the country. And the answer is that government is an impermanent and not very powerful source of power in the UK. In accordance with what you point out, you really need to control and source of long term rents.
Posted by: Boyo | August 08, 2020 at 02:30 PM
«The people you refer to - “a gentry” (and using your example of a family business, but I would say actually a network of sometimes cooperating and sometimes competing businesses or “houses”)»
Perhaps you were never part of a big extended family, so you never experienced the many occasional conflicts, shifting alliances, and confusions that they have :-).
«are in fact a foreman class. They don’t own or have call on the assets that consist of the businesses»
The upper-middle class are more like that, but they also usually have "small" asset portfolios, and anyhow they intermarry with the "gentry" and the "upper class" too. The model of "primitive accumulation" you have a bit simplistic, the “carving out of a valuable asset and powerbase” does not need to be done in a single generation by pillaging, it can be by entirely legal if self-serving means a bit more slowly.
I was just reading that "The Guardian" being very excited that some big donors have started donating to New New Labour now that it is once again aligned with Likud-style politics, and only one name was made, and a DailyMail article of some years ago relevant to that is an one of many illustrations of the links between upper-middle class, "gentry", and upper class families:
«Andrew Rosenfeld [...] has left his wife and set up home with one of the Labour leader’s first girlfriends. Father-of-four Rosenfeld, 50, whose donation means he will overtake Harry Potter author J. K. Rowling as Labour’s biggest donor, is to be found ensconced in considerable luxury on the edge of Regent’s Park with slim brunette Juliet Soskice, 44. She, too, has been married. Last year she separated from her husband Dan Brooke, Channel 4’s marketing chief and the son of former Tory Ulster Secretary, Lord (Peter) Brooke. [...] The only daughter of economist and LSE professor David Soskice, Juliet declined to comment at the £6 million Nash terrace house.»
And as to Lord Brooke Wikipedia says:
«Brooke is the son of Henry Brooke, Baron Brooke of Cumnor, a former Home Secretary, and Barbara Brooke, Baroness Brooke of Ystradfellte. [...] His younger brother was the judge Sir Henry Brooke»
A big multi-ethnic "family", with shifting marriages, relationships, etc.
Posted by: Blissex | August 09, 2020 at 08:08 PM
«are in fact a foreman class.»
But the definition of "middle class" is "foreman class". The upper-middle class however are not just foremen, they usually have a portfolio of assets usually in the low-millions range, mostly property, but not large enough to live just off it, and also they usually own a small business, like a professional practice.
They largely overlap with the "gentry", who can almost but not quite live off their capital, and who often thus engage in the "professions", politics, or Crown service, or work in property and finance. They have much easier access than "hoi polloi" to highly paid careers, whether for the Crown or for private magnates, which allow the building up of smallish family fortunes.
Posted by: Blissex | August 09, 2020 at 11:13 PM
Blissex,
Since you brought up Likud, how plausible do you think it is that Israel's dramatic shift to the (economic) right totally eviscerating the original socialistic kibbutz traditions is because its ruling class realized that they needed a desperately poor Jewish underclass that they could weaponize against the Palestinians?
(For example, most inhabitants of West Bank settlements aren't religious fanatics, but people who were attracted to suburban-style living and couldn't afford it in Israel proper...)
Posted by: George Carty | August 10, 2020 at 11:31 AM