Brexit is both part of, and impacted by, the dominant processes which are shaping a new era in political, social and economic history

Danny Byrne

“Remember Brexit?”, was the title of the New York Times’ main editorial on September 11. It summed up a sensation that was palpable during the Spring and Summer months of 2020, in Britain and elsewhere.

It reflected both a certain bemusement, and an acknowledgement of the dramatic and ever-increasing pace of events, which is a striking characteristic of our times. After an Autumn/Winter (2019) during which everything seemed to revolve around Brexit, not least the UK general election, the issue seemed swept aside by new, far greater, dramatic events: the global pandemic and onset of a new Great Depression.

But Brexit is now back, and with a vengeance, as conflict and tension mounts in the final tranche of negotiations for a UK/EU trade deal. Talks appeared all but broken down, following the UK government’s decision to initiate the “UK Internal Market Bill”. The specter of a possible “No Deal” and a storm of consequences — both economic and related to various complex political and national questions in Britain and Ireland — has reappeared.

Brexit in a New Context

While negotiations were never set to be straightforward and Brexit was never a “done deal”, how wider events have unfolded in 2020 is crucial to understanding the deepening of the quagmire. Brexit has returned to the surface in a new context. And this context lends it an even more explosive dynamic than before.

Brexit is both part of, and impacted by, the dominant processes which are shaping a new era in political, social and economic history. These include the process of de-globalization which has been accelerated by Covid, and the dawn of a New Cold War, both of which pose specific dilemmas for both British and EU capitalism.

The impasse also sheds light on the crisis facing capitalist economic policy internationally. In the public theatre of negotiations, which is an important part of modern high stakes deal-brokering, the latest Brexit crisis has centered on future arrangements for Northern Ireland, which is a crucial issue for the working class. However, the bigger obstacles to an agreement seem to centre on the more general issue of restrictions on “state aid” intervention by national governments, which have become an increasingly important part of EU law over the course of the last few decades. It is no accident that this comes at a time when governments around the world are carrying out state intervention on a historic scale, undermining neoliberal orthodoxy.

The negotiations also have to address secondary but not unimportant issues like fishing policy which has raised tension with France and other countries nervous about the new limits on foreign access to UK territorial waters.

At the time of writing, a deal, however minimal, seems more likely than not to be reached, and broadly speaking this remains in the interests of bosses and governments on both sides. But striking such a significant trade deal, in a world where everything is pushing events in the opposite direction, is a daunting challenge. For the working class and youth in England, Scotland, Wales and Ireland, who have no seat at the negotiating table and will not see their interests served by any outcome, deal or no deal, the task is to organize, and prepare to struggle for a socialist, internationalist alternative.

Breaking the Rules — a New Era in International Relations

The biggest Brexit drama yet was provoked by the UK government’s Internal Market Bill, which by its own admission, breaks international law, by overriding the terms of an agreement signed with the EU only half a year previously! The bill basically provides for national legislation to override relevant international treaties which might contradict it. It is presented by the UK government as a response to threats by the EU — which have still not been lifted — to place legal obstacles in the way of goods flowing between Britain and Northern Ireland, despite both being part of the UK state. Such a scenario is made possible by the terms of the “Northern Ireland Protocol” signed last year, under which Northern Ireland would remain subject to EU customs union rules post-Brexit.

The bill has scandalized politicians, journalists and legal figures the world over, from all sides of the political establishment, even uniting Britain’s last 5 Prime Ministers — 3 Tories and 2 New Labour — in condemnation. John Major wrote wistfully, summing up the concerns of this wing of the British establishment: “Over the last century, as our military strength has dwindled, our word has retained its power. If we lose our reputation for honoring the promises we make, we will have lost something beyond price that may never be regained.” But, often motivated by opposition to Brexit from a capitalist class standpoint, as well as by concern for the “honorable” reputation of British capitalism on the global stage, these unfortunate figures are relics who are yearning for a bygone age.

The reality is that this bill swims perfectly in line with the flow of capitalist world relations as we enter the 2020s. A new era of world relations is opening up, in which international alliances are shaken up and international treaties, laws and conventions fail to keep national tensions and conflicts under wraps. This was previsaged by the rise in economic and political nationalism which was a feature of the end of the previous decade, and itself was one of the driving forces behind Brexit.

The pandemic and new economic decline are sending this process into overdrive. Globalization, the process which dominated the last few decades, to which a relatively harmonious, “rules based” playing field for international trade and diplomacy was so important, has given way to de-globalization.

In September, Deutsche Bank published a major report announcing the end of four decades of globalization and the opening up of a new “Age of disorder”. In this era, capitalist governments and world leaders will be far quicker to overstep previously sacrosanct “red lines” in international law and diplomacy. Around the world, old rivalries are rekindling and alliances are breaking down. Under the pressure of rising inter-imperialist conflicts, the World Health Organization is in turmoil and faces fragmentation in the middle of a global pandemic, with similar rumblings in the WTO and World Bank.

“Reshoring”, “De-coupling”, and De-Globalization

Economically, spurred on by the pandemic, governments are reacting against long global supply chains, and seeking steps to “reshore” production, with dependency on existing supply chains increasingly spoken of as a “threat to national security”. While we have grown accustomed to this turn towards the politics and rhetoric of economic nationalism from the Trump’s and Bolsonaros of this world, 2020 is seeing the appeal of this political approach extend across the political mainstream.

US Democrat 2020 Presidential hopeful, Joe Biden, recently published a policy statement headlined, “The Biden plan to rebuild US supply chains…” vowing, “Joe Biden will bring back U.S. supply chains, put Americans to work, and strive to ensure Americans don’t have to depend on foreign imports…”. From the heart of European “moderate” politics, Angela Merkel and Emmanuel Macron in July released a joint statement affirming the need to reshore production in various strategic sectors to Europe, starting with healthcare and pharma.

Brexit, deal or no deal, is part of this wider puzzle, of disruption of the process of ever-increasing integration of global markets and supply chains. While it will not return Britain, or any part of the world, to the levels of national economic isolation of the pre-World War II era, it will have far-reaching effects.

For Marxists, this represents one of capitalism’s most fundamental contradictions, first explained by Marx and Engels in the 19th century, coming home to roost. This is the contradiction between capitalism’s tendency to outgrow national borders in search of profit, and the limits placed on this same tendency by the fact that the capitalist system rests on a foundation of separate and competing national units.

During the past four decades, the pendulum swung far in the direction of deepening globalization. The ending of the Cold War with capitalist restoration in the “Eastern Bloc” and China, and the global economic upswing which began in the 1990s broke down important barriers, and led to a world economy which was more integrated than ever before. In European terms, the formation and further development of the EU was an important part of this. The capitalist classes in Europe needed the EU both to act against competitors in the US and Asia, and as an instrument to use in their offensive against the public sector, welfare states and the working class in their own countries.

Now, with the pendulum swinging in the other direction, towards at least a partial reversal of globalization, not only Brexit but wider tendencies towards the fragmentation of the EU, follow in tow.

Brexit and the New Cold War

The first phase of capitalist globalization took place in the half century leading up to 1914. However, when it came to a shuddering halt with the outbreak of World War One, the world economy took another half century to return to pre-1914 levels of globalization, cut across by decades of turmoil, revolution and heightened inter-imperialist conflict. Already before the outbreak of the current crisis, signs pointed towards the beginning of the unravelling of the latest phase in capitalist globalization.

This, the deglobalization of the 2020s, is not triggered by World War, (thankfully!) with nuclear proliferation making great power rivalries less likely to follow their “logical path” towards all-out military conflict — though military clashes in general are already becoming more commonplace. Deglobalization today is driven by the development of a New Cold War between the US and China, which ISA has extensively commented on. While the New Cold War, between two imperialist powers, is fundamentally different from the first Cold War — which represented a clash between two rival social and economic systems — it has already shown a similar tendency to push the world in a “bipolar” direction (towards division into separate rival blocs).

For relatively minor imperialist powers like Britain, who sought to benefit from new economic connections, especially with China, in the post-Cold War, “open” global economy, the New Cold war arrives with a clear message: choose sides! Brexit has become part of British capitalism’s adjustment to the new global situation.

As well as reflecting globalization in Europe, British capitalism’s embrace of the EU project also reflected its long-term decline as a global imperialist power. From its position as the dominant world power at the beginning of the 20th century, Britain has been relegated from one division of the world capitalist hierarchy after another, now lucky to make the top 10. Rather than standing as an independent power, toe to toe with Europe’s continental big hitters (especially Germany and France), EU membership offered an opportunity to attach itself to, and benefit from, a larger market and more powerful trading bloc.

However, the English and British nationalists who see Brexit as a path to return to British “greatness”, only turn reality on its head. British capitalism emerges from the EU weaker than it went in, with significantly less weight in the world. Britain is leaving the EU not to regain its “greatness” or “independence”, but to establish new relationships of dependence and subordination to the rest of the capitalist world.

In the era of the New Cold War, its relationship with the United States, its natural “ally”, has an even greater weight within this. There have already been important signs of British imperialism “pivoting” in the direction of closer geopolitical alignment with the US in the last months.

The clearest example was the Huawei 5G saga. Boris Johnson reportedly “infuriated” Donald Trump last year by resisting pressure to fully exclude Huawei from British 5G rollout plans. However, the power of the forces unleashed by the New Cold War, and mounting pressure from the considerable US “hawk” elements within the Tory Parliamentary party, soon saw a full U-Turn on this (with France and Germany then following suit).

Such a sharp change in policy, which will delay 5G in the UK by at least 3 years and reportedly lead to losses of up to £20 billion, is a powerful reminder of the importance which British capitalism is attaching to its geopolitical positioning as close to the core of the global US camp, a factor which will undoubtedly also assume prominence in the post-Brexit scenario.

Events in Hong Kong, a former British colony handed back to China in 1997, pushed things a further step in the same direction. The CCP’s brutal crackdown there following an historic mass movement for democratic rights (link to articles here) definitively smashed any illusions in the already defunct “one country, two systems” principle which British capitalism held up to justify its 1997 handover agreement. Part of the outcome was an escalation of anti-China rhetoric by UK government and establishment figures.

Taking sides in the New Cold War is not just a Tory thing. Keir Starmer’s Labour Party, which is increasingly reminiscent of the New Labour of the Iraq war and “special relationship” era, has sought to out-hawk the government in relation to China and Huawei, describing the government’s approach as “naive” on national security.

The perspective of Britain outside the EU, more closely aligned with the US, is a specter which haunts the Brexit negotiations. During the 2019 UK general election campaign, dominated by Brexit, Jeremy Corbyn at times effectively shone a spotlight on this issue, from the point of view of consequences for the NHS, as well as safety and food standards, etc.

In the context of the momentum behind “Get Brexit Done”, which delivered a Tory landslide, these issues were largely successfully dodged by the Tories, but they are likely to resurface sooner rather than later. Implicit in the pro-Brexit UK capitalists’ perspectives for the future — behind the rhetoric about “global Britain” — is a drive for a race to the bottom in standards, rights and regulations. The goal is to gain an advantage in the struggle to attract global investment in a new era, especially from the US.

State Aid — From Thatcherism to “positively Rooseveltian” Tories?

At the time of writing, the question of state aid is the key point of contention in negotiations. This comes down to the extent to which Britain must retain EU rules and limits on providing state aid to UK companies, in exchange for a trade deal. It provides a useful glimpse into the dilemmas facing capitalist government foreign policy in a new global crisis.

The EU’s rules on state aid were co-designed and enthusiastically supported by then-British Prime Minister, Margaret Thatcher. Her government fought tooth and nail against a softer regime at the time of the founding of the EU’s single market. Part of the vanguard of neoliberalism’s march through Europe, Thatcher famously claimed, “We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level”.

Today, it is ironically those who claim to be Thatcher’s devoted disciples, set to post a 20%+ budget deficit for 2020, who are threatening to walk away from negotiations rather than submit to these same rules. Despairing right-wing economic commentators, such as William Keegan in the UK Guardian, have commented on the strategic political thinking behind this stance: “Insofar as there is a theoretical economic justification for the massive disruption on the way from Brexit, it is that, by freeing themselves from putative constraints on state aid imposed by our membership of the EU, the Johnson/Cummings/Michael Gove [Prime Minister/Special Advisor/Cabinet Minister] triumvirate can invest public funds — difficult, by the way, to get hold of, given the other calls on the virus-afflicted budgets of Chancellor Sunak — in technologies of the future.”

The above-mentioned Dominic Cummings, widely seen as the “brains of the operation” in the Johnson administration, is reported to favor the British state using its financial firepower to “pick a winner”, in order to develop a flagship British tech company which can compete for supremacy in the 21st century economy. He has repeatedly cited the US Eisenhower administration’s “Arpa” (Advanced Research Projects Agency), which coordinated big state backing for strategic technological projects, including space travel and many of the key projects which led to what we currently know as the “internet”. Cummings is reported to have sported the byline “Get Brexit Done — then ARPA” as a status on his Whatsapp account during some of the key months of the EU withdrawal process!

Such an approach is anathema to the neoliberal dogmatism of the Thatcherite political family. To hear a Tory Prime Minister describe his government’s policy plans as “positively Rooseveltian” in 2020, as Johnson did this summer, would surely have raised Thatcher’s eyebrows.

The Johnson government’s sudden embrace of state capitalist intervention has been likened to the political zig-zag by fellow Tory PM, Ted Heath, in the 1970s, which appears to have seen the phrase “political U-turn” coined for the first time. Elected on a “free market” manifesto which broke with postwar “Keynesian” economic consensus, in the midst of mounting industrial strife, Heath was forced into a series of bailouts and nationalizations — including that of Rolls Royce.

However, Johnson’s policies do not amount to any meaningful “New Deal” for workers in the UK. State intervention under this government is much more likely to assume the form of costly incentives to private sector actors than that of the mass, direct creation of jobs by the public sector, or wholescale nationalizations. During this month’s October Tory conference, he was at pains to remind the party’s base of his continued loyal devotion to the private sector, and we have no reason to doubt his sincerity in this.

It is precisely this — a desire to rescue, secure, save and defend the profits of big business — which drives the state interventionist policies which the Tories, together with their counterparts across the globe, have turned towards. However, it is a striking illustration of the bankruptcy of the capitalist system that, at the gates of the 2020s, the economic house can only stay standing thanks to the guarantor role of the state, which 40 years of bourgeois “wisdom” teaches us, should be kept out of the affairs of the market.

After the 2008 Great Recession, governments also reached into their pockets to bail out the profiteers, but then quickly reverted to type, and doubled down on the neoliberal manual. However, this had far reaching consequences. From an economic point of view, the hollowing out of manufacturing in countries like Britain, depression of demand through a decade of severe austerity, and an anemic jobs “recovery” based on extremely precarious conditions, all deepened the vulnerability of the economy to the devastating impact of the 2020 New Great Depression.

There is also the “small” matter of the working class and young people, the majority of the population, for whom the last 12 years has been the incubator of a process of widespread rejection of austerity, public spending cuts and privatization. This sea change in mass consciousness compared with the last crisis can quickly be expressed on the streets, and even electorally, if the government is seen to return to the path of austerity.

In this context, Brexit has also become a factor in the search by sections of the ruling class for an alternative cocktail of economic policies to weather the capitalist storm of the 2020s. For socialists, one thing is clear: whatever “solutions” they come up with will offer no path forward. Sooner or later, the question of “who pays the bill” will come to once again dominate British politics and the class struggle.

Whether via new trade deals which entice investment based on a bonfire of labor, safety, environmental, etc, regulations, or via intensified workplace exploitation on the back of “homeworking”, or a multitude of other avenues of mass misery, the working class will once again be asked to pay for this crisis, Brexit or not, and deal or no deal.

State capitalist measures have little in common with socialist policies. Socialist Alternative proposes revolutionary economic change based on common democratic ownership of the commanding heights of the economy, which would allow unprecedented public investment, not to bail out capitalism, but to change the fundamental motor of the economy from one driven by profit for a few to one centered on economic planning for the majority.

Prime Minister of England?

Brexit and the wider crisis of British capitalism has many other far reaching consequences. Not least among these is the threat to the “United Kingdom” itself, where “centrifugal” (towards fragmentation) tendencies are also powerful. In her condemnation of the Internal Market Bill, Boris Johnson’s predecessor as Prime Minister, Theresa May argued that the government’s approach, “in turn will lead to some communities having less willingness to trust the United Kingdom government and that would have a consequence on the willingness of people in Northern Ireland to remain part of the United Kingdom”.

While these words reflect real phenomena, in relation to the undermining of the fragile “peace process” arrangement which has formed the basis for the Northern Irish status quo for the last decades, for most British capitalists, it will be images of Scotland which May’s words more quickly conjure up. Recent polls have put support for Scottish independence in a consistently stronger position, with the latest October Ipsos/Mori poll putting support for independence at its highest ever level (55% compared with 39% against).

While both Brexit and the UK’s disastrous experience of the pandemic, have boosted the momentum for Scottish independence, the most commonly cited reason for supporting independence in this poll is given as wanting to take the country in a “different political direction”. Moreover, even if starting from a low base, there has also been a marked increase in support for independence in Wales.

The dominant impression which exists, that Scotland’s nationalist government has handled Covid far better than the Westminster government is almost entirely illusory — if infection or death rates are anything to go by. Nonetheless, it has definitely struck a chord with workers and especially young people, as yet another example of how the connection with Westminster is a source of weakness rather than strength.

With the UK’s laws on the regional devolution of powers leave the Covid response, which has often varied considerably, in the hands of the Scottish, Welsh and Northern Irish assemblies, with the Westminster parliament only legislating for England. This has led commentators to frequently cast Boris Johnson as “Prime Minister of England” when it comes to Covid. Will this be closer to reality overall coming out of the 2020s? What is clear is that the depth of the crisis we are entering into, on every level, will shake all the pillars of the status quo, including the territorial model of the “United Kingdom”.

The Tories fought the last general election campaign on a promise to refuse a second independence referendum for Scotland, and Labour also do not support calling one. This opens up the possibility of a significant mass movement in Scotland, driven by young and working class people, for the democratic right to decide their own future. While the situation is different, there could be shades of Catalonia in 2017, where the fight for a referendum and the brutal response of the Spanish nationalist central government which had the support of the EU sparked off an historic mass movement, and a deep political crisis which is far from being resolved.

SNP politicians have neither the intention nor the ability to wage a mass campaign based on the mobilization of the working class to secure a referendum. Working class organization from below, combined with a real political alternative for a socialist Independent Scotland, as part of a socialist federation with a socialist Ireland, Wales and England in a socialist Europe, is the only way to resolve the national question in the interests of the majority.

In Northern Ireland, the Socialist Party (ISA in Ireland) fights against any attempts to use either Brexit or Covid to fan the flames of sectarian tension and conflict between working class communities. As the joint statement by Socialist Alternative (ISA in England Wales and Scotland) and the Socialist Party (ISA in Ireland) pointed out:

“Socialists oppose any measure which would heighten sectarianism in Northern Ireland — that includes any hardening of a border — either East/West or North/South. We support the right to self-determination for the Scottish population, including the right to have a further referendum on independence, something which both Johnson and Starmer are opposed to. We need to build solidarity between workers in struggle across the continent and fight for a different kind of Europe: a socialist Europe, run in the interest of the millions not the billionaires, in which the democratic rights of all are protected.”

For a Working Class, Socialist Alternative

Opposing the consequences of a Tory Brexit, and to save the majority from another, worse, decade of misery under capitalism starts from the organization of a mass movement. It must start from the independent organization of the working class and all the oppressed, and not from the “teamwork” approach of Starmer’s fake “opposition”, an approach unfortunately shared by the leaders of the British TUC.

A new mass plan of organization and action must unite the trade union movement together with new generations of young and working class fighters born out of the magnificent Black Lives Matter protests, Climate Strikes, and feminist movements of the last few years. Socialist Alternative members are campaigning to initiate “Conferences of Resistance” bringing together all these activists and more in cities and towns across Britain.

Only the working class, organized internationally and armed with a socialist, internationalist alternative, can offer any hope of a road out of global capitalism’s new “Age of Disorder”. Socialist Alternative fights, as part of ISA, organized in 30 countries in all continents, to put such an alternative at the forefront of the inevitable working class fightback which is developing around the world today. Join us!