Cooking the Books I: Divided Business Elite
Writing in the Times (3 October), its chief leader writer, Simon Nixon, insightfully explained the Brexit controversy as resulting from a ‘division among Britain’s business elite’, or, as we would put it, among the British capitalist class.
Noting that ‘one of the surprises of Brexit has been the strong support for leaving the European Union in some parts of the City and among a handful of Britain’s wealthiest entrepreneurs’ and that ‘this support is in contrast with the continued anxiety over Brexit among the bulk of Britain’s business leaders,’ he explained that ‘the hedge fund industry sits at the apex of the shadowy world of offshore finance that emerged in London in recent decades. This world is quite distinct from the traditional business of the City, which is serving as a domestic capital market for British and, since the creation of the single market, EU companies.’
It was not therefore surprising, he pointed out, that:
‘[P]rominent hedge fund tycoons have turned out to be enthusiastic Brexiteers. The hedge fund industry likes to operate in the shadows. It manages private pools of capital and believes that this entitles it to be exempt from the more onerous rules that govern the rest of financial services. What turned much of the industry so virulently against the EU was the introduction of the Alternative Investment Managers Directive in the aftermath of the global financial crisis, which imposed modest reporting requirements on the sector. Although the impact of these rules was close to nil, this shot across the bows was deeply resented. Whereas the EU’s status as a regulatory superpower has bought benefits to most sectors, creating opportunities to reap economies of scale across a single market, for the hedge fund industry it poses a threat.’
There you have it. A split in the British capitalist class. On the one side, the traditional and normally dominating section which benefits from frictionless access to the European Single Market and, on the other side, a section that wishes to avoid EU regulation of its lucrative financial activities.
The capitalist class is not a monolithic bloc with a single common interest (beyond – that is – seeing their property rights protected and the working class kept in its place). It is every section, indeed every company, for itself. Who gets their way depends on who has the ear of the government as their class’s executive committee. The normal way capitalists seek to influence government policy and legislation is through lobbying but, when this fails and the section concerned feels the issue is vital to their profit-making, then that section takes the matter to parliament and ultimately to the electorate, the vast majority of whom are members of the majority class of wage and salary workers.
With the referendum called by David Cameron in 2016, those that Nixon called ‘the hedge fund industry’ saw their chance. They poured millions into the Leave campaign (while the other capitalist section poured millions into Remain) and, unexpectedly, won. However, a subsequent general election returned a majority of Remain MPs. Hence the political impasse that has dragged on for over three years now, providing an initially amusing but now somewhat boring side-show.
It looks as if the working class is going to be called in to settle the matter. But why should we back one or other of the sides in this ‘division among Britain’s business elite’? Better to abstain or, even better, write ‘World Socialism’ across the ballot paper whether it’s a referendum or a general election.