Chris Harman

Thinking it through

Continental drift

(March 1995)

From Socialist Review, No. 184, March 1995, p. 7.
Copyright © Socialist Review.
Copied with thanks from the Socialist Review Archive at
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

‘The country which once boasted of being the “workshop of the world” and which even in the early postwar years was the world’s second industrial power is now behind not just the US and Japan, but France, Germany and Italy’

‘Many of Mr Major’s colleagues believe he is preparing to fight the next general election on a little Englander platform ... They would be right to bring such a government down.’

When an Economist editorial concludes like that, it is clear that the disarray in the Tory Party is no longer merely a joking matter. The business magazine was an unstinting supporter of every Thatcherite nostrum through the 1980s. Its attack on Major is a sign of a fundamental division which goes to the heart of the ruling class.

Confirmation of this comes in the success of both the ‘pro-Europeans’ and the ‘Eurosceptics’ in mobilising heavyweight big business support.

The main bosses’ organisation, the Confederation of British Industry, is enthusiastically ‘pro-European’. It has the support of figures like Sir Patrick Sheehy of BAT, Sir Iain Valiance of BT, Niall Fitzgerald of Unilever and Ross Buckland of Unigate, and claims that eight out of ten industrialists back its views.

It was the pressure of such people that encouraged Geoffrey Howe, the Thatcherite chancellor of the early 1980s, to join with his old opponent, former prime minister Edward Heath, to savage the government. It also led the butcher of the mining industry Michael Heseltine to declare the Tory Party should not ‘wrap itself in the Union Jack’ (as if Heseltine himself had ever done anything else) and chancellor Kenneth Clarke to express virtual public dissent from the Major line of conciliating the ‘Eurosceptics’.

But the CBI is far from expressing a unanimous ruling class view. In a virtually unprecedented move a powerful group of businessmen led by Lord Hanson, Stanley Kalms of the Dixon group and Garry Weston of Associated British Foods stated a rival position in a letter to the Times. ‘Supporters of a single currency’, they complained, were ‘taking the name of business and the City in vain’. This group has the support of the Institute of Directors, of Lord Young, the former Tory minister who runs Cable and Wireless, Sir Colin Marshall, head of British Airways, and Sir John Egan, boss of BAA.

In the past it was often thought that ‘little England’ resistance to European integration was a small business, petty bourgeois force, representing outdated sections of British capitalism that feared increased competition. But this grouping is of firms as big and as competitive as its opponents.

Something has clearly changed since the Common Market referendum of 20 years ago, when every significant section of big business was in the yes camp.

In fact, there has been a twofold change.

First, the decline of British capitalism has proceeded at a much faster rate than big business imagined 20 years ago. Despite all the hype of the Thatcher years about an ‘economic miracle’, British capitalism recorded its first deficit on manufacturing trade in the mid-1980s and has been stuck with a negative balance of payments through a recession for the first time ever in the 1990s. The so called ‘export boom’ of the last 18 months has reduced but not eliminated this.

The country which once boasted of being the ‘workshop of the world’ and which even in the early postwar years was the world’s second industrial power is now behind not just the US and Japan, but France, Germany and Italy.

Whereas 20 years ago British big business could dream of exerting enormous influence on a common European economy, it now has to recognise that inside Europe it has to tag on to whatever Germany and France together decide.

This does not matter to some very powerful individual firms – GEC, for instance, which is making very profitable deals with German and French giants. But it matters to other powerful firms which are afraid their own deals elsewhere in the world will suffer.

This explains the Euroscepticism of some Tory politicians: Lord Young is more interested in the Far East than Europe, since his company’s main asset is the Hong Kong telecommunications system, and Jonathan Aitken is notorious for his links with Saudi businessmen and arms traders.

Such people have been trying to justify their position by pointing to another change since the 1970s – what is usually called these days the ‘globalisation’ of the world economy.

The internationalisation of production, finance and marketing means, they claim, that British capitalism can manage without being part of the sort of super-state which the pro-Europeans seek to build. Firms can make deals, move funds, open up plants, by deftly moving between the major potitical-economic powers rather than being tied to any one. This, they claim, is particularly important now that East Asia rather than Europe is the fastest growing part of the world system.

The government would not be able to help firms manoeuvre in this way if it lost the ability to manipulate the value of the pound with the inauguration of a common European currency. This, apparently, was the argument which Aitken used to some effect at a cabinet ‘think tank’ session a few weeks back.

However, from the point of view of much of British capitalism, the argument is full of holes. The world is an increasingly uncertain place.

Far from needing a powerful state less, many firms need one even more than in the past – to pressurise other states to provide them with orders for key sectors like telecoms and arms, to protect them against the seizure of their assets elsewhere in the world (as when Iraq seized Kuwait), to stabilise events close to their borders (as in Yugoslavia) and to protect them against the failure of overseas debtors to pay their bills (something Aitken himself will soon realise if, as seems possible, the Saudi government cannot afford to pay the £20 billion it owes British firms for arms).

The dilemma for British capitalism is that neither the Eurosceptics nor the Euroenthusiasts offer it a secure way forward. Its long historical decline now means it is in a cul-de-sac, from which individual powerful sections of capital try to escape by abandoning the rest. Their attempt to do so can only provoke ever more bitter divisions within the ruling class – divisions which can make it easier for unrest below to bring Major down and which will persist to plague his successor, whichever party is in power.

Last updated on 3 November 2019