Of the Markets, By The Markets, For The Markets

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Rishi Sunak Bankers
Rishi Sunak Bankers

Article by Gary Lefley

Who Rules Britain?

The Truss government announced a ‘mini’ budget. The markets didn’t like it. The government reversed all its proposed measures. The Prime Minister was forced to resign.

This was not dictated by Parliament, let alone the electorate. Jill Rutter, a senior fellow at the Institute for Government, commented while Truss was still in Office:

“Whether or not she remains Prime Minister, her whole agenda now, her ability to pursue her political project is really out of her hands. Her fate is now in the hands of the markets”.

The tail wagged the dog and Truss was gone. So who rules Britain?

When politicians and TV analysts refer to the ‘Markets’ they mean the financial markets, where shares, bonds (loans) and foreign currencies are bought and sold. These transactions are dressed up in terminology such as ‘securities’ and ‘derivatives’ but essentially, financial markets are where very rich people try to increase their wealth by trading shares, loans and currencies – finance capital – without actually producing anything.

This is finance capitalism: nothing is produced, the wealth that has been created by production, that is by workers, is expropriated in the form of profit, and is consumed, or redistributed, or exported by a sub-class of financiers. The financial market then, is a casino where enormous financial assets are gambled in search of ever-greater riches. There are winners and losers. The number of finance capitalists continues to shrink as wealth concentrates in fewer and fewer hands.

An inherent flaw in this casino economy is that assets become massively over-valued (boom) and then crash (slump). While a handful of speculators gamble away untold wealth, and the gambling class shrinks still further, the real price is paid by society and its producers – the working class – through unemployment, wage cuts, austerity and savage attacks on social expenditure, as the capitalist class seeks to either retrieve its gambling losses or re-double its winnings, at the expense of the people.

Real value, real wealth, is created by work and production. The rest is just rearranging the chairs on the first class deck.

FINANCE CAPITAL AND THE CONSERVATIVE PARTY

It is hardly a secret that the Tories are funded by capitalism. 12 months ago the Pandora Papers – the largest leak of offshore financial data in history – prompted fallout across the world, with inquiries announced in India, Pakistan, Mexico, Spain, Brazil, Sri Lanka, Australia, Panama, and the Czech Republic. The Guardian reported on the “Tories facing calls to return cash from donors named in the Pandora papers”.

In February of this year, The Times reported that multimillionaires were being “ushered into the heart of government as part of a secret advisory board” in return for £1/4 million donations to the Conservative Party.

This practice is not new. At a post-election celebration in July 2010, of a dozen couples or individuals who dined with Prime Minister David Cameron, six were financiers, including three hedge fund managers, and two were property magnates. Baron Peter Cruddas, an English banker, founder of online trading company CMC Markets and a former Tory Party Co-Treasurer, arranged dinners at Downing St. with Cameron for a fee of £1/4 million per head, on the understanding that any policy concerns would be fed into a prime ministerial committee.

Open Democracy has revealed that since the 2019 general election The Conservative Party has received £11m from the finance sector. Its analysis shows how the party is dependent on bankers and hedge fund tycoons, who are now responsible for almost 40% of all donations to the Party.

Baron Cruddas has given £843,854 to the party since the last election. He gave half a million pounds just days after being given his seat in the House of Lords. Other donations included £372,000 from the Britannia Financial Group, which is a client of former Tory chairman Ben Elliot’s Hawthorn Advisors.

Open Democracy concluded that Financiers are buying “unparalleled access to the very heart of government”.

All of the above is as expected. The Conservative Party is the political executive of the ruling elite, and the ruling elite in Britain is the capitalist class. That class is defined by its ownership and control of the means of production and finance capital.

The chaos of recent events has laid bare the reality that Tory MPs regard themselves as accountable not to the British electorate but to their own vested interests and to the economic interests that constitute and fund the Conservative Party: namely capital – or the ‘Markets’. The tenures of Churchill, Thatcher, Johnson, Truss, and whoever is next, equate to government Of the Markets, By the Markets, For the Markets.

PUBLIC OWNERSHIP AND SOCIALISM

If there is a conflict of interest between the financial markets and an elected government there is more than one way to resolve the contradiction. Either the markets, that is, finance capitalists, can exercise their power and influence to bring the government to heel, as we have just witnessed. Or the government can take control of the financial markets, diminish and even abolish them.

Today, rather than Parliament governing the markets, the markets are governing Parliament. How transparent does the intrinsically anti-democratic character of capitalism need to become for the Labour movement to embrace and fight for programmatic public ownership and socialism, where a government of the people dictates political and economic policy; where not only energy, transport and communications are nationalised but also the banks and other financial institutions?

Keir Starmer made headlines when he spoke to the CBI on 2nd November 2020:

“A Labour government under my leadership will back British businesses… We will champion businesses of all sizes…”

The markets may tolerate the current Labour leadership, as they tolerated Blair’s New Labour, because it is not a serious threat to the wealth and power of the monopolies and the finance sector. But imagine how the markets would have reacted to a Corbyn government in 2017 when the general election resulted in a hung Parliament. Does anyone doubt that the Tories would resort to extra-parliamentary means to bring down an elected left-wing government?

And can anyone imagine the next Tory leader saying the Conservative Party ‘will back British trades unions…’ or ‘champion trades unions of all sizes’? Of course, that will never happen. The Tories fully understand which class their Party represents. Instead, the government plans further legislation to repress organised labour with its Transport Strikes Bill.

The Tories argue that ‘one nation’ Britain is served by promoting the interests of business (and subjugating organised labour). ‘One nation’ is a myth. When the Labour movement en masse determines that the interests of Britain and beyond are best served by subjugating capital to the interests of the working class, then the markets should really begin to worry. And labour, workers, will need their own extra-parliamentary instruments of organisation and power.

In the meantime rail workers, dockers, postal workers, teachers, health workers and more, are blazing a defiant trail of resistance: of the working class, by the working class, for the working class.

Article by Gary Lefley

The Socialist Correspondent

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