As the UK enters the final countdown to Brexit, the country is divided and polarised. Everyone has to take a side.
If you believe the media, Jeremy Corbyn is talking up a ‘Britain first’ national strategy to rebuild the industrial base of the UK in a post-Brexit world. The basic idea is that the devaluation of the pound is necessary to offset the damage of Brexit, but it also creates the opportunity to build up the export base and sell British goods at a much lower price than before.
The UK has rapidly destroyed its industrial base over the past forty years in favour of a strategy of offshoring production and even wealth. The nation-state was old news. The evisceration of trade unionism under Thatcher and the freeing up of credit was supposed to allow the ruling class to make fat profits and allow the poor to substitute their wage losses with debt.
This is how London was transformed into the centre of finance capital and a vast property bubble, while the rest of the country fell into stagnation. Not only did incomes fail to keep up. The rise of private debt far surpassed anything in the public sector. Much like how the current account deficit skyrocketed far beyond the budget deficit.
It was completely unsustainable to substitute wage gains with debt. And yet the liberal critics of Corbyn seem to believe it was possible to maintain this economy indefinitely. The only answer is to move towards a high-wage economy where the state embarks upon a long-term strategy of reconstruction.
Of course, it would be a mistake to pretend that there is no alternative but the alternative might have already run out of steam. The alternative is the Singapore model of a low tax, low regulation economy with few protections or rights for workers. Even British business does not want another tax cut after 25 years of falling corporate rates.
The Singapore model is the only alternative that is likely to animate the ‘hardest’ of Tory Brexiteers. Certainly, MP Jacob Rees-Mogg would like to see a semi-libertarian state with hard borders for people and completely open borders for capital and trade. The fact that this man heads the European Research Group (ERG) does not guarantee this vision will succeed.
Theresa May is still in office, but not in power. Instead, she’s caught between multiple factions. The loyalists and the ‘soft’ Remain crowd, alongside the ‘soft’ sceptics like Liam Fox, split the cabinet across three fractures. The resignations of David Davis and Boris Johnson helped make the cabinet much more coherent, while the ‘hard’ Brexiteers gather in the backbenches.
Somehow the PM has to make it work, yet once she succeeds she will no be longer useful. The only satisfying deal May can offer for the Tory constituency (namely finance) is some kind of compromise, where the UK allows free movement for business and not for workers. Yet this is unlikely to satiate the beast of right-wing Euroscepticism – it wants blood and red meat.
Once again, the Conservative Party is paralysed by the contradictions of its antipathy towards Europe and its allegiance to capital. If the UK could find a compromise, the May government might not be able to deliver it because of the strife it faces from inside the ruling party. This strife does not just threaten May, but the stability of the British establishment.
There is serious talk of the UK crashing out of the EU. Some people with diabetes are stockpiling insulin in the fear that they may lose their lifeline if the talks fail. Such a scenario might please the Tory hard-right, but it would likely be a death knell for the Conservative government. The same is true of a ‘soft’ Brexit, though the damage to the public might be much less severe.
It is hard to see what can save the Conservative Party at this point. This might be why the party is clinging to power with such desperation. If the party can hold itself together throughout this period, the Conservative government could survive until the 2022 election. Whether the nation will survive is another matter.
Photograph courtesy of duncan c. Published under a Creative Commons license.