The Guardian view on Britain out of the EU: a treasure island for rentiers | Editorial

When the UK entered the coronavirus age in March, dispute sources and collective dedication had been mobilised on a scale no longer seen since the second world warfare. A protracted time ago, Britain had revealed itself, thanks in share to being ready to marshal the financial might presumably also of the empire, to be a ambitious world vitality. Its financial system modified into once energised with breakthroughs in radar, atomic vitality and medicine.

Though the account of the pandemic has no longer but ended, there appears to be like to be no such transformation in search for under Boris Johnson. Quite depressingly, familiar traits of greed, incompetence and cronyism are reasserting themselves. That is execrable info for an financial system where there has been a crumple of socially purposeful innovation. Britain’s lack of hi there-tech manufacturing capabilities, particularly in scientific diagnostic attempting out, modified into once cruelly uncovered by the pandemic.

This country has change into extra of a procurer than a producer of craftsmanship. But it’s a remarkably inefficient one – no topic an terribly high percentage of attorneys and accountants within the working population. Connections appear to topic greater than innovations. How else to designate why, within the determined ride to safe private protective instruments, ventilators and coronavirus exams, billions of kilos of contracts possess long gone to companies either lag by company or supporters – even neighbours – of Conservative politicians, or with no prior skills.

Historical previous is no longer looking out examples where political insiders had been successful in extracting virtually the total surplus that the financial system created. Such influential interests moulded politics to delay their fragment of the pie. Greed modified into once restricted easiest by the possess to let the producers continue to exist. The shock of warfare, revolution, famine or plague affords an different to fix a broken society. But if, post-pandemic, UK politicians care less about reform than the retention of vitality, they’ll fail to restrain the greedy enrichment that undermines democracy itself.

Windfall earnings

Most definitely the most penetrating X-ray of this phenomenon on the original time is by Brett Christophers in his e-book Rentier Capitalism. The educational makes the case that Britain has turn accurate into a care for island for those seeking excess earnings from dispute-sanctioned management of pure sources, property, financial sources and mental property. Rent, paid by renters to rentiers, is tied to the ownership or management of such sources, made scarce under stipulations of restricted or no competition.

Mr Christophers says that the predominant trace of this new account for modified into once when Britain struck shadowy gold within the North Sea. He writes that MPs on the final public accounts committee infamous with incredulity in 1972 that “the predominant immense areas of the ocean had been leased to the companies as generously as if Britain had been a gullible Sheikhdom”. After that, public sources had been sold off cheaply. The non-public sector ended up controlling lightly regulated monopolies in gasoline, water and electric provide, and public transport and telecoms. Potentialities lost out, overpaying for sad carrier. In a rentier’s paradise, windfall earnings abound. Openly occupying the lowest staunch floor modified into once wanted, because the housebuilder Persimmon proved by earning supersized dispute-backed support-to-rob earnings prolonged ample to hand out a £75m bonus to its boss.

The banks, which took this country to the brink of crumple a decade ago, are on the coronary heart of a rentier dispute. France, Germany, Japan, the US all possess banking sectors smaller than the UK. While banks earning rents possess flourished, the households paying them – either in an instant as financial shoppers, or finally as taxpayers of a debtor dispute or prospects of debtor companies – possess floundered.

The nettle that such spivvery engenders is diffused politically by making voters complicit within the theft. The sell-off of council homes, says Mr Christophers, modified into once a privatisation that gave different those presumably most inclined to kick in opposition to Thatcherism a private stake within the venture. Culturally, Brexit performs the same form of role because the staunch to rob, insulating poorer jog away voters from the premise that they’ll suffer from the resulting insurance policies.

The high minister understands that Covid can change Britain, nonetheless lacks modernising insurance policies. He extols the virtues of free competition – both for itself and because such freedom, he causes, will a technique or the other liberate the spirit fluttering inside a pre-Brexit Britain caged by coronavirus. He is miniature doubt having a bet that the disruption of leaving the EU will seemingly be lost within the cry of an financial system taking off as an inoculated population returns to areas of work and shops.

Weakened regulations

The gap between affluent and sad within the UK is on the least as high on the original time, teachers calculate, because it modified into once staunch sooner than the launch of the second world warfare. That is basically since the British dispute that once mediated the fight between labour and capital has been taken over by rentiers. Weakening regulations, reducing the importance of fiscal protection and shredding social protections has corroded liberal democracy whereby a further and extra influential affluent few possess been having fun with a free lag. By hook or by crook, rentiers desire to spice up what the economist Michał Kalecki called the “stage of monopoly” in an financial system. This lets in them to limit the flexibility of workers, shoppers and regulators to handbook the markup of selling prices over prices and to defend the fragment of wages in output.

The EU says its labour, environment and buyer protections are a floor, no longer a ceiling, and that they’ll’t be traded away for frictionless market safe entry to. If we had stayed within the membership, our ability to listen earnings for monopolists would possess been stymied in future commerce deals negotiated by Brussels and originate to MEPs’ scrutiny. Birth air the EU, Mr Johnson can barter away such regulations – without parliamentary oversight – and scrap safeguards in new skills for larger monopoly earnings. Karl Marx wrote in The Eighteenth Brumaire of Louis Bonaparte in 1852 that “the Tories in England prolonged fancied that they had been in raptures about royalty, the church and the beauties of the extinct constitution, till a time of trial tore from them the confession that they had been easiest in raptures about rent”. His evaluation of early 19th-century Tories applies with unerring accuracy to on the original time’s Conservatives.

Mr Christophers’ insight is that the Tories under Mr Johnson are a occasion of – and for – rentiers, essential greater than the interests of productive capital. This explains why, after 2016, the Tory occasion embraced Brexit and shrugged off productive capital’s concerns about leaving the EU. This is in a position to presumably also additionally be to the extensive detriment of this country if the pandemic authorized Mr Johnson to mix demonstrate-day fears with a craving for hopeful change to persuade the stylish person to vote in opposition to their interests in due course. But historic previous many times repeats itself first as tragedy, then as farce.

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