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Understanding the economics of Britain’s wars

britanniaBritain is a very frequent participant in US-led wars. This stands in contrast to many other European states ranging from countries such as Sweden, to Spain, to Italy and Germany. The piece below examines the material reasons for this difference, and explains British politicians’ determination to join in US military adventures.

The widely held view that Britain’s contribution to an air war over Syria will make no significant change to its outcome also made little impact on the parliamentary vote for war. Military insignificance is even accepted by many advocates of action. Former Tory Defence Secretary Michael Portillo argues this boldly telling ‘This Week’ that Cameron had made no case for war, the arguments were flimsy and that there seemed to be no strategic plan. Nevertheless Portillo was in favour of war, saying that otherwise “the US will begin to regard Britain as an unreliable ally”. It appears that many MPs on both sides of House of Commons share this approach.

The question of Britain’s relations with the US has long been uppermost in the considerations of strategic policy making in Britain. The term ‘special relationship’ was itself coined by Winston Churchill after Britain’s failure to develop independent nuclear weapons technology. As such it is a sign of both Britain’s relative weakness and its resolve to participate in the US’s efforts to act as the sole global superpower.

This determination to act alongside the US is not simply reactionary nostalgia or imperial delusion, although these factors naturally play a role. There is a strong material reason for many British politicians’ eagerness for war, irrespective of the outcome. At the same time, there is a strong reason for all progressives, all socialists and all those who simply want to sustainably raise living standards to oppose those wars.

In a previous piece at Socialist Economic Bulletin, I outlined the most important economic factors in the global current system of imperialism. The term imperialism as generally used is not a precise economic categorisation. As such, it can and does fall into misuse. Therefore, drawing on the conclusions of the earlier piece, the term imperialism here is strictly meant as:

  • The global system of economic domination that has a specific headquarters, namely the US as sole global imperialist superpower.
  • That system requires continuous and expanding military and other interventions in order to maintain its rule.
  • This is because the imperialist powers together and the dominant imperialist power of the US are in relative decline economically (having reached their relative peak economic power in 1951).
  • They no longer exploit the world primarily through a system of capital export and interest payment inflows (as was the case in Lenin’s time).
  • Instead, of the US, Britain, France, Japan and Germany, only the latter two countries have net assets at all. The first three countries are in fact net debtor nations. As a group these five have a broad balance on international assets, neither net creditors nor net debtors as the net debts of the US, British and French combined broadly equal the net assets of Japan and Germany.
  • Yet at the same time all of these have continued to receive vast inflows of capital in the form of net interest payments
  • It is only possible to receive net interest when there are no net assets when there is a Mafia-style operation on a global scale, exacting interest and compliance at the barrel of a gun or the end of a Tomahawk missile
  • The economically weakened imperialist powers, led by the US with Britain and France playing the role of aides-de-camp, are obliged to become more vicious and militaristic. They require continuous military operation in order to enforce those inflows (as well as favourable trade agreements, strategic military outposts, below market price contracts for raw materials and so on). Naturally, Japan and Germany benefit from this overall system but are not motivated to lead it since ordinary contract law enforcement will secure their positions.

The case of Britain

Within this overall framework the British case is a specific one. It is the first of the imperial powers to register a persistent trade deficit and then the first to switch from being a net creditor nation to being a net debtor. These are both milestones in and contributors to Britain’s historic decline as an economic power.

Britain has experienced the most spectacular decline within the imperialist bloc. Contrary to widespread assertion the British economy is now the tenth largest in the world (World Bank pdf). Britain’s weight in the world economy has undergone a spectacular relative decline over the long-term, as shown in Fig.1.

Fig.1 Britain’s Share of World GDP
Source: Maddison, World Bank for 2014 data, author’s calculations

Maddison records Britain’s share of World GDP as 9.5% in 1870 and 9.4% in 1900. It is likely that there was a higher peak at some point between those two dates. As Fig.1 shows the weight of Britain’s economy in the world had halved by the mid-1960s, perhaps over a period of 90 years or so. According to separate World Bank data it has halved again in about 45 years since. So, in 2014 Britain accounted for just 2.3% of World GDP. While the weight of the imperialist countries in the world economy has declined since the 1950s, Britain’s decline has been taking place far longer and is the most pronounced of all.

A key factor in that decline and a product of it is the structure of the British economy, with a very large financial sector and an industrial sector which has declined in relative terms for over a hundred years. (The industrial decline is now also absolute. Industrial production was lower in October 2015 than in the same month in 1988).

Formerly, the finance sector sucked up uninvested savings generated in the British economy and invested them overseas. This is the export of capital identified by Lenin. This was subsequently replaced with sucking in savings from the rest of the world and investing them globally, making a financial return on the difference.

Fig.2 below shows the UK current account balance over time. The current account is comprised of net trade flows (exports minus imports of both goods and services) as well as the net flows of interest and dividend payments between Britain and the rest of the world.

Fig.2 UK Current Account Deficit Over the Long Run

Source: Bank of England, ‘Three Centuries of Data’

According to Bank of England data the British economy first registered a deficit on trade in 1876. But persistent trade deficits did not appear until the period immediately prior to the First World War. However persistent deficits on the current account did not appear until the period immediately prior to the Second World War, 25 years later. This is because in the interim Britain continued to receive a very large net inflow on interest payments.

This component of the current account, the Net Investment Income balance is crucial for understanding the latest phase in the trends in the British economy. It also directly impacts on British policy making, which will be discussed below.

But the first effect of persistent deficits on the current account with the rest of the world is that they must be covered by incurring debts or the sale of assets. This rundown of overseas savings has taken place over a prolonged period since the approach of the Second World War. The initial effect was a rundown in the net balance of overseas assets versus overseas liabilities, which is recorded as the Net International Investment Position. This was then followed by a further rundown of overseas assets and a decisive switch from being a net creditor nation to a net debtor, as shown in Fig.3.

Fig.3 UK’s Net International Investment Position

The UK economy only definitively became a net debtor economy in 1995, 60 years after it first began to accumulate current account deficits. Prior to that point and boosted by the revenues from North Sea oil in the 1980s it registered its largest modern level of net assets in 1986. But that windfall was frittered away with the disastrous consumption binge of the ‘Lawson Boom’.

It is important to note that there was a further one-off spike higher in net assets in 2008. This was directly linked to the banking and financial crisis. UK banks had expanded enormously overseas through leverage, or borrowing. They repatriated many of those assets at a loss in 2008 in order to avoid bankruptcy and have continued to wind down overseas assets since. At the same time the overseas loans to British banks were withdrawn. Apart from that spike, the precipitate decline in the Net international Investment Position resumed. This a key feature of how the Global Financial Crisis specifically impacted Britain.

The direct consequence of this has been a collapse in Net Investment Income, as shown in Fig.4 below. The UK is not the same as the US. Unlike the US Dollar, the rest of the world is not obliged to hold the British currency in order to meet international trade payments and to service interest on international debt obligations. Within the Empire and then its vestige of the Sterling Area, other countries were obliged to hold British currency. The ‘Sterling Area’ collapsed in mid-1972. As a result, and combined with the UK’s chronic lack of competitiveness, the interest income account switched to a deficit in the 1970s.

This deficit was ‘rectified’ in the 1990s and the early part of this century by the growing role of the British banks in international finance, out of all proportion to the size of the UK economy. This was funded not by domestic savings but by international borrowing. Essentially, the operation was nothing more sophisticated than borrowing from other international banks and speculating on higher-yielding riskier assets overseas as well as on the domestic housing market. The benefit of this inflow accrued mostly to the banks and bankers themselves, and the Blair/Brown government came to rely on the tax revenue from them.

Fig.4 UK Investment Income Collapse

The gains from that operation were always a mirage, a stark confirmation of what Marx called ‘fictitious capital. As recently as 2011 the UK recorded a surplus of over £20bn on the investment income account and by 2014 this was a deficit of £32bn. This deterioration in overseas income of more £52bn represents 2.9% of 2014 GDP. It is an extraordinary slump, and transforms Britain’s ability to extract capital from the rest of the world.

The UK no longer has net overseas assets but substantial liabilities. It also has a persistent current account deficit. It is therefore difficult to foresee how this sharp deterioration in the net external position of the economy can be easily reversed.

Without a thorough reorientation of British economic policy and the current structure of the British economy there are in effect twin prongs to a recovery programme for Britain’s external financial crisis. The first will be to increase the rate of exploitation at home with lower pay and pensions, worse working conditions and public services. The second will be to increase the rate of exploitation overseas; to participate in the carve-up of nations, to access their basic goods at below-market prices and enforce onerous debts. This is what is meant by British politicians’ determination to ‘be at the table’ when the US judges that the maximum advantage has been extracted from wars or military interventions.

An alternative would be to use the remaining strength of the British banking sector, which has been bailed out by public funds, to redirect its lending from speculative activity towards investment in public goods and productive investment. But that would require a thorough-going change of economic policy and structures.

Three trends in the labour movement

Historically there have always been two main trends in the labour movement (as well as a multitude of intermediary ones). There has been an overtly pro-imperialist current almost always willing to support Britain’s wars and only departing from that attachment if the US was opposed (as with Gaitskell and the Anglo-French invasion of Egypt to seize control of the Suez Canal). This pro-imperialist current has always dominated the leadership of the Labour Party and many of the unions.

The election of Jeremy Corbyn has changed that. There has always been a minority current inside the Labour Party (though often barely represented in its leadership) who opposed British military adventures, even when they were done in support of the US. The opposition to the actions of British imperialism now comes from the leader of a major political party, one which could form the next government. As such it is an anathema to the interests of British imperialism as a whole. This explains the ferocious and relentless media onslaught on the Corbyn leadership of the Labour Party.

Between these two poles lies another broad grouping. This was highlighted in the two recent votes on cuts to working tax credits and the vote on bombing Syria. On the former there was virtual unanimity to oppose the government and vote against the cuts. On the matter of war, 66 Labour MPs voted with the Tory government and a number of others abstained.

Irrespective of the confused or contradictory ideas of individual MPs or groups of MPs, these votes reveal three fundamental political trends that have persisted for over a century in the British labour movement. The first is an overtly pro-imperialist bloc, many of whom may now go along with the anti-austerity agenda on a purely tactical basis, such as the Blairites. The second is a bloc led by Jeremy Corbyn which is both anti-austerity and anti-imperialist. There is also a third bloc, which is anti-austerity, but pro-imperialist.

The outlook and ideas of this third bloc, like all ideas, spring from material conditions. Marxists understand that those material conditions amount to a separate layer in the labour movement known as the ‘labour aristocracy’. The ideas are what Lenin called ‘Economism’ but which has become known as ‘workerism’. That is a concentration on the immediate economic struggles of the workers and the poor and the relegation of ‘political’ matters, not least war and peace to an issue of second-rate or third-rate importance. In the specific circumstances of British Labour Party politics currently this might be expressed as the view that, while we oppose war it is much more important to unite around the issue of fighting the Tories on cuts.

Unfortunately the real world does not allow matters of war and peace to be relegated as if they are minor matters. The one issue that the population as a whole will always place ahead of its own living standards is its own security.

The open representatives of imperialism understand this. In his July 2015 Budget speech, where the Tories announced austerity mark II, Osborne mentioned ‘security’ 30 times, more than the mentions of ‘growth’, ‘prosperity’ or ‘deficit’ combined. The intention is clear; to trump discontent over renewed austerity with a claim to offer a belligerent and reactionary ‘security’ agenda. This is also the thread running increasingly through the government’s reactionary ‘security’ agenda on energy, civil liberties, immigration, schools and aid policies.

Therefore politically it is not possible to disregard the war offensive, to by-pass it and win on the terrain of anti-austerity. Politics comes before economics.

It should also be clear from the economic analysis above that the two-pronged strategy of increasing exploitation at home and increasing exploitation abroad through war needs a two-pronged response. The worker who has her wages cut, or sees bills rise with another privatisation or has her tax credits cut has no interest in Britain pursuing another Middle East war, or in it increasing its military spending, or in renewing Trident. She has no interest in ‘getting a seat at the table’ or Britain’s dubious military ‘successes’. The interests represented at that table will be Britain’s hobbled banks and finance sector.

Instead, Jeremy Corbyn and his closest allies are right to oppose both austerity and war and to remain committed to fighting both.

This article first appeared at Socialist Economic Bulletin

21 Comments

  1. David Ellis says:

    Despite some useful information this is a daft article. One thing British workers do not have an interest in is the descent of British capitalism from world dominating empire to Third World shit pit. What you are proposing is a programme precisely for that, despite this being a process that needs no programme, when what we really need is a programme for world proletarian revolution to transcend capitalist globalisation and its collapse. If you cannot offer that people will go down with the ship and they will prefer to do so rather than wear you sack cloth and ashes.

    But really what we have here is the transformation of `anti-imperialism’ into a de-politicised ideological one-size-fits-all template. In short, neo-Stalinism which greets the collapse of capitalist globalisation as a good thing that the degenerate Western left should tail end whilst supporting the rise of real anti-imperialists like Putin, an imperialist himself, and China, imperialism’s whore, to balance the West and bring world peace above the heads of the seven billion. Delusional Stalinist shit.

  2. swatantra says:

    This is plain appeasement by JC, and simply will not do. Bombing the ‘Syrians’ and ‘Iraqis’ with shock and awe tactics simply plays into the hands of IS. The only way to remove IS is by troops on the ground 100 000 has been suggested to root out the evil that is islamofacism. And that means all Nations involved Russia the US and Britain hopefully fighting under the UN flag. To expect the Arabs to do anything is simply wasting everyone’s time.
    And while on the point of united action, what is the point of imposing sanctions on Russia over Ukraine when all that does is sabotage any united effort?
    I’m not a pacifist: Evil must be rooted out wherever it rears its ugly head.

    1. David Ellis says:

      Racist.

  3. John Penney says:

    Interesting as this article is , and it correctly positions the UK as a directly benefitting junior partner of current US economic and political global hegemony , it is complete nonsense overall , in its tunnel vision analysis of what “imperialism” actually is on the world stage.

    The theory , popularised by Lenin’s book “Imperialism, the highest stage of capitalism”, that global capital flows , and related drives for territorial and political domination, by the dominant capitalist powers, alone explains the drive to war and conflict between capitalist powers and their colonial and hegemonic activity in the real world, is simplistic bunk. And it was over simplistic bunk when Lenin wrote his book, and is widely recognised as over-simplistic bunk by many, many Left historians and economists too. .

    It’s main political purpose throughout the USSR Stalinst empire era and unfortunately still across much of the Left today, is to so narrowly define “imperialism” that only the USA and key Western allies are “imperialist”. Every other power, particularly those previously on the old soviet foreign ministry list of “ally states” are therefore given a “free pass” for whatever tyrannical rule they impose on their own populations, and in the case of gross murderous tyrannies like, Assad’s Syria, Saddam’s Iraq, the Theocratic tyranny of Iran, or Gaddafi’s family dictatorship in Libya, these states are often awarded the accolade of “anti imperialist states” – meriting the (uncritical) support of socialists worldwide.

    Such daft – “stalino -Marxist” oversimplification of what “imperialism” actually was (in terms of the drivers for colonialism and war in particular) in the 19th and 20th centuries , and what wide range of drivers cause states to conflict with their neighbours today, is a disservice to rational analysis , particularly by socialists.

    To fail to see the current conflicts between , for instance, Russia and the EU/NATO over Ukraine, Russia and Turkey, and between Iran and Saudi Arabia – particularly given the proxy wars now breaking out all over the place from these hegemonic contests, as forms of “imperialist conflict” is to rob ourselves on the Left of the ability to analyse conflict drivers originating well beyond the narrow field of capital flows/economics.

    Not all history is the history of class struggle, and the drive for capital accumulation and profitability on its own does not adequately explain the world of real, emotional, ideologically complex, human beings. And the Falling Rate of Profit alone does not explain the current global crisis. Michael Burke always has a lot of useful, economic data-based , things to say about our world in crisis, but his blinkered analytical toolkit does no service to a Left desperately needing to escape the ideological impoverishment inherited from the world historic disaster of Stalinism.

    It is ironic that today, one of the most “simon-pure” examples of the Lenin-model of “imperialism,. ie, driven by a search for higher rates of return for capital without a profitable investment use domestically, is actually today, specifically China’s economic/political expansion in Africa . However since I understand that Michael Burke believes that both the Soviet Union was and China still is, some form of “socialist” state, we can hold our breath for any analysis of China’s current aggressive expansionism (particularly in the dangerous flashpoint South China Sea), as deriving from its current “imperialist” nature.

    1. David Ellis says:

      China remains a degenerate workers state. Its restless search for raw materials in Africa and Asia is driven by the need to supply Western manufacturing that relocated en mass to take advantage of cheap labour. It will be quite apparent when the rule of capitalism is fully restored in China because China will not survive that process. There is an urgent and desperate need for a political revolution in China to overthrow the greedy, usurping bureaucracy before it, in alliance with Chinese capitalists, warlords and external imperialist powers, overthrows the revolution.

      1. John Penney says:

        If China is a “degenerate workers state” David, then I am a banana. I appreciate that Leftwingers not seduced by the Stalinist lie that majority state ownership alone does not equal “socialism”, have been searching for an accurate analytical term for Stalinist regimes ever since the late 1920’s counter revolutionary victory of the Stalinist bureaucracy in the USSR. But “deformed workers state” just doesn’t do it.

        You are of course correct that part of China’s recent massive economic (and associated political) move into Africa is part of its global raw material needs search. However the other, vital, interconnected, driver for China’s massive investment, particularly in infrastructure creation, in Africa is precisely equivalent to that of Britain in the 19th and early 20th centuries, ie, seeking profitable investment opportunities for its massive surpluses of domestically generated capital , because in China itself the rates of return have become inadequate. So China, in Africa at least, but also worldwide in its investment in a huge raft of western businesses, and Western government bonds, is exhibiting classic finance-driven “imperialist” behaviour. Not that this alone explains many other aspects of its current aggressive expansionism.

        China today is even more of a historically aberrant, hybrid, socioeconomic model than it was during its pure Stalinist “Maoist” period. There are more billionaires on the Chinese CP’s Central Committee today than were ever present in the US legislature. China today is in very clear transition to full conventional bourgeois capitalist restoration.

        For most of the period following the victory of Stalinism in the USSR in the 1920’s , and the vast expansion of Stalinist-model states after 1945, even the nominally non-Stalinist Left persisted in believing that “Stalinism” (using whatever title you want) represented a higher stage of economic development than conventional capitalism. Today it is about time the Left grasped that in fact “Stalinist” economies were vastly less efficient in the long term compared to conventional capitalism – and that far from these regimes representing any sort of “partial next step” to socialism, their actual historical role in fact was to hold back the development of genuine workers power-based socialism during periods of massive social revolutionary upheaval, through the relatively (in world historical terms) short term creation of grossly tyrannical states run by a collective parasitic “proxy bourgeois” bureaucracy – prior to , eventually, the complete restructuring of these societies on more conventional bourgeois capitalist frameworks – a la, Russia and its former empire, now Cuba, and soon, China.

        1. John Penney says:

          Oops, typo in line three, para one – I meant to say ” … Leftwingers not seduced by the Stalinist lie that majority state ownership alone equals “socialism” …..”

        2. David Ellis says:

          Then you are sir a banana. China is a deformed workers state. Not a socialist state or a workers state but a workers state with a usurping bureaucratic cancer that endangers the continued existence of not just the remaining gains of the revolution but the continued existence of a unified China. This is not just semantics. It has implications for programme. The kind of revolution needed against the bureaucracy is programmatically different to the one required to overthrow a ruling class. The Stalinists opposed the revolution against the bureaucracy in the Soviet Union and Eastern Europe but those who had already characterised the Soviet Union as a capitalist state failed to give that revolution a socialist character and ended up tail ending the restoration of capitalism by an alliance of imperialism and sections of the bureaucracy itself. We want the Chinese working class to hang the bureaucrats not an alliance of Chinese capitalists, bureaucrats, warlords and imperialists. Unlike Russia which was able to resume its reactionary imperialist history China will be dismembered and plunged into semi colonial barbarism if the bureaucracy is able to restore capitalism.

          1. John Penney says:

            Surely a “deformed workers banana”, David ?

            You are aware I assume that there never was any sort of working class led , socialist revolution in China, David. The Chinese “Communist” takeover , of a society devastated by warlordism and Japanese occupation, of an overwhelmingly peasant society , by a ruthlessly totalitarian “Stalinist-model” Communist party, never had any independent working class element to it.

            The Chinese “communist state” was simply a bureaucratic tyranny – based on the wholly nationalised state model of Stalin’s Russia. It had nothing to do with socialism or a “workers state”- however “deformed”.

            Today, after the Chinese bureaucracy’s decisive turn towards free market capitalism a generation ago , there is a huge private capitalist sector in China, and the hugely corrupt Communist party/PLA Stalinist (Ok “Maoist) elite have been at the forefront of the rapid conversion of the once solidly total nationalisation “command economy” model – to a now unstable hybrid temporary interim stage of conventional private bourgeois capitalist economy slowly displacing the still huge state sector. In the process the Communist Party/PLA elite are transforming themselves into a conventional bourgeoisie – with at least a generation now of inherited privilege and a solid self identification of interests between the bureaucratic elite/new bourgeoisie’s members , such as to identify it as an emerging permanent classical bourgeois social class.

            Wake up, David ,ditch the rhetoric, China was never any sort of “workers state” – just a totalitarian bureaucratic tyranny. The historic task of workers in China to build real (democratic) socialism is no different to that of western workers – except for the particularly brutal totalitarian nature of the state machine of repression in China – and the major ideological problem that most Chinese workers and peasants think the repressive, murderous, nightmare they’ve lived and died under since 1949 IS socialism !

          2. David Ellis says:

            So you have invented off the top of your head a new kind of state that is completely independent of classes and is simply the plaything of a bureaucracy. What a genius. More likely a dunder-headed empiricist. This is anti-marxism. When the mass revolt against the bureaucracy finally erupts in China you will find yourself on the side of those elements of the bureaucracy, the capitalists, feudalists and warlords and their imperialist backers who want to restore capitalism as the SWP `state capitalists’ did when the Soviet Union collapsed. The degenerate Western left either supported the Stalinist state or restoration. It was completely incapable of providing an independent programme for the working class just as it has either supported Putin and Assad against the Arab Spring or tied its fate to the policy of the West.

          3. John Penney says:

            Try to bring yourself up to speed about the nature of contemporary China, David Ellis. Your ahistorical Dave Spartist sloganizing is just embarrassing.

            You must have noticed (or maybe not) that contemporary China is no longer the traditional 100% state ownership old Stalinist model of Mao’s era. Today China has a huge private -based ownership bourgeoisie, utterly intertwined with the ( now fully hereditary)elites in the CP and PLA. in other words the former Stalinist bureaucracy are morphing day by day into a traditional bourgeois CLASS – without any concessions at all to bourgeois democracy (which is why modern China is actually much admired as a state model by many Western capitalists, hankering after more fascistic societal models). The current Chinese model is a short-term hybrid – a stalinist state in full pelt transition to a highly authoritarian bourgeois capitalist one.This is far from “classless” of course – it has a newly emerging conventional bourgeoisie , rapidly absorbing the old Stalinist bureaucracy. It also has a vast working class – and a declining peasant class.

            The historic task of its working class is identical to the Western working class. Though whether by the time the Chinese working class fights for real democratic socialism there is any state owned sector left in China is a historical moot point.

            The fact remains that there is nothing essentially different about the Chinese state from the contemporary Western mixed economy capitalist states, or the task of their respective working classes to fight for socialism.

            Get up to speed on reality , David, or appear ever more ridiculous with your ahistorical Dave Spartesque sloganized nonsense.

      2. Peter Rowlands says:

        I’m really glad to hear that China is still a workers state – what I assumed to be the emergence of a form of capitalism is just ‘Socialism with Chinese characteristics’, as Deng put it.

      3. Jim Denham says:

        China is quite obviously state capitalist. generalised commodity production dominates, albeit under a high degree of state control. It is not a workers’ state in any sense, nor is it (as then old USSR was) a bureaucratic collectivist state.

    2. David Pavett says:

      @John Penny. I didn’t take the main thrust of Michael Burke’s article to be a defence of Lenin’s, let alone Stalin’s, concept of imperialism. If we discuss the article in that way then it will be difficult to avoid far-left wrangling about definitions and who said and did what in post revolutionary Russia 1918-1928. I can think of no bigger turn-off for those who have been fired up to come (back) into left politics by the Labour leadership election and beyond.

      In the appropriate circumstances raking over old revolutionary coals, along with finding the right terminology for Middle Eastern dictatorships and the current Russian and Chinese regimes, can be of interest but it is not what this article is about.

      Michael Burke presents a truly alarming picture of the decline of first the shift of the UK economy from production to finance and second of the decline of the real assets of its finance sector. If his analysis, and the evidence he provides for it, is anywhere near right then surely the left should be debating the means by which this situation can be transformed. I don’t see how a meaningful programme for social and economic change serving the interests of working people can be drawn up without doing that. And as MB says, the situation is no so far gone that turning it round is going to be very difficult indeed. That is what we should be debating, in my view and not whether Lenin was right or not about imperialism or what MB allegedly thinks is the nature of the current Chinese regime.

      The mere hint of a challenge to the existing order of things represented by Jeremy Corbyn’s election has sent the media into vitriolic overdrive. We can expect that if the points raised here by MB were to recieve widespread attention and to become the subject of Labour Party discussions then that vitriol would be stepped up by several orders of magnitude.

      MB’s three-way division of labour movement attitudes to foreign wars and to austerity seem to me to be helpful. His attempt to ground those attitudes in real conditions of economic life, rather than as free-floating ideas, is, in my view, the right approach. Finally his analysis of the increasingly precarious position of the UK’s way of earning its way in the world should have alarm bells ringing wherever there is a concern to see team Corbyn come up with a programme to lead the way out of this mess.

      The article helped me to put the should-have-been economic bonanza of North Sea oil into place. No that is in decline the underlying fragility of the economy is being rapidly exposed in the underlying performance data indicated by the graphs provided. What if London should lose its pre-eminent position in international finance? There is nothing to say that its operations could not leak away to Frankfurt or elsewhere? Would we then not be faced by truly calamitous prospects?

      I had a general sense of the points that MB makes by seeing the data he presents has brought the danger of our situation home to me with real force. That for me is one of the many merits of the article – whatever Lenin may or may not have said.

      1. John Penney says:

        In my initial post, David, I openly acknowledge that there is a lot of very good analysis in Michael’s article – as there always is in his articles generally. I found it strange therefore that Michael found it at all necessary to slip in his narrow, quite historically incorrect, Stalino/Trot definition of “imperialism” – which added nothing , for or against, to his economic evidence in my view.

        This is not just abstract nitpicking on my part – as the ridiculously narrow “the US-led west are the only really culpable cause of the crisis in the middle east” mantra of StWC and too much of the Left, is seriously damaging our ability to either understand the complex nature of the Middle East turmoil, identify progressive forces, ie the Kurds, the Left should be supporting, and thereby alienating less blinkered left-leaning members of the general public.

        I therefore reserve the right to take up what might at first sight be a side issue with Michael’s otherwise excellent article.

        1. David Pavett says:

          Okay. I agree with you about the blinkered approach of the ‘all political problems across the world have their source in the US-led West’ school of thought. This always seems quasi religious to me: an omnipotent loving God has been replaced by an omnipotent and hateful devil. A second similarity with religion as that those who think this way have not understood that gathering all the information that is consistent with a chosen view while ignoring anything that doesn’t fit with it cannot make an intelligent case.

          1. J.P. Craig-Weston says:

            To me that seem like a lazy and unconvincing apology for an argument; in fact historically American foreign and economic policy has been a constant and systematic endeavor, to inflict American economic dogma, (their belief in the sanctity of private property or as they like to put it Americas mission to world, itself quasi religious,) on the rest of the world at least since Wilson and certainly long before that, (the Munroe doctrine, the Roosevelt corollary, free trade, open markets, the dollar gap, the general interference with and gradual abolition of the democratic state with state ownership and control and social programs etc…) is an all too familiar experience the same American driven and sponsored policies iterated ad infinitum continue to produce exactly the same outcomes for the majority of people wherever they are being inflicted, so it really isn’t that much of an exaggeration, (but I agree perhaps and oversimplification,) to argue that America really is at the root of much, if not most, of what is going on in world today and I would argue that current sate of the middle east and North Africa demonstrates that.

            I an admirable attempt to maintain an open minded and even handed perspective, you seem to me have got lost in the woods, this really isn’t anywhere near as complicated or as debatable as you would prefer to pretend.

  4. Bazza says:

    I think Labour’s 66 Syria bombers (interfering in another country) could be described as social imperialists, and big business does play a role in Western interventions; for example with large chunks of oil in Iraq and Libya now owned by western TNCs (and of course at £100k a bomb in Syria the arms industry is doing very well).
    But I think the top down, undemocratic Stalinists in the old USSR share some of the blame for inculcating Arabs with their bad practice.
    Of course there are other non-Western imperialist countries and what are so-called IS but imperialists themselves grabbing whatever land they can by force (and they openly state they want World domination).
    But for the left I think everything goes back to the early bourgeois ‘socialist’ leaders like Lenin, (would be leader) Trotsky, mass murderer Stalin, to Mao et al.
    All were top down, undemocratic, elite, and used secret police etc and took power for themselves, instead of being leaders who were facilitators who kept power with the majority of people.
    And we should belive in self-determination.
    My hope for the future is for left wing, grassroots, bottom up, participatory, peaceful, and democratic socialist forces in all countries including the Middle East, China, Russia, and the USA, who as facilitators keep power with the masses of people. We don’t need the ‘great men and women of history’ we just need ideas from the grassroots.
    My favourite books are still Paulo Freire and Paul Frolich’s biography of Rosa Luxemburg.
    Yours in hope, peace, & international solidarity!

  5. James Martin says:

    There is not always a direct link between the actions of a state or government and economic self-interest, and in the case of UK involvement in the non-stop wars this is very often the case. We therefore need to look at what the political reasons for this are, and that is impossible without looking at the ‘Atlanticist’ groups that have operated in this country for many years. Some of these are reasonably open, such as the Henry Jackson Society (HJS), others are more shadowy or even secret. The more shadowy includes the British American Project (BAP). Like HJS, BAP’s role from the 80s has been to gain support from politicians, senior trade unionists and media commentators for US foreign policy interests. Therefore it is pro-war and intervention, pro-nuclear and weapons industry, pro-NATO and anti-unilateralist/CND (and has previously indulged in ‘dirty tricks’ against CND). BAP was very much integral and central to Blair and Mandelson’s own ‘project’ of New Labour. This 12 year old article explains just how central BAP was within Blair’s cabinet: http://www.theguardian.com/world/2004/nov/06/usa.politics1 and while the HJS has taken on much of the running within the ‘moderate’ Party right-wing BAP is still in existence and still dangerous. More so are those secret or shadowy groups that rarely see the light of day. These are the ones that are often connected to funding transfers to those individuals or groupings that are working for US interests. In the 80s and 90s one of these shadowy groups was the Trade Union Committee for European and Transatlantic Understanding (TUCETU) that replaced the previous Labour Committee for Transatlantic Understanding. TUCETU had influence in a number of British trade unions, but in particular CPSA (now PCS) and the right-wing around Barry Reamsbottom and Kate Losinska. The key to understanding the role of groups like this in the unions was in both the way that they attacked the left and were actively pro-NATO. A fascinating summery of some of the dodgy links TUCETU had and its pro-NATO agenda is contained here: https://www.indymedia.org.uk/en/2002/07/36664.html The agenda of these type of organisations has not changed, and they are still highly dangerous and continue to attempt to bind the Labour Party to US and NATO agendas. Also of course it means that the question of complete opposition NATO is not unimportant or secondary to either socialist politics in general or the Labour Party in particular but utterly central, something the pro-NATO jingo socialists that have come on this site of late either can’t or won’t understand.

  6. David Pavett says:

    I have a question for Michael Burke (who unfortunately, like most other Left Futures contributors, is not in the habit of responding) or anyone else who can help.

    In the list of points characterising the current state of British imperialism we read

    It is only possible to receive net interest when there are no net assets when there is a Mafia-style operation on a global scale, exacting interest and compliance at the barrel of a gun or the end of a Tomahawk missile.

    I can’t see why that should necessarily be the case even though it is stated as something obvious. No net assets includes having both assets and liabilities. Is it not possible that the assets could produce returns at greater rate than the losses incurred on the liabilities, even if the absolute size of those assets it less than that of the liabilities? I am no economist so I have to work at it to make all these points make sense and I can’t see why this one should be thought to have the force of the obvious.

    Maybe I am being dense and have failed to understand properly. Or maybe Michael Burke is wrong or has failed to provide sufficient explanation for his claim.

  7. David Ellis says:

    Capitalism died in 2008. Western austerity is globalising the Great Recession to the rest of the world as spending power diminishes. For the first time in history the violence inherent in the capitalist system is directed not at establishing a new basis for its further development but at its dismantling and unraveling. Globalisation is in full reverse. The violence of capitalist decay will make that of its rise look positively soft-centered. Capitalism has been a relative fetter on human progress since at least the 1850s but now as it was predicted it would become it is an absolute fetter. No mode of production leaves the stage until it has completely exhausted its potential and even begins to reverse what progress was made. That point has arrived. We either transcend capitalist globalisation through socialism or we follow its unraveling to it and our graves.

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