Posts Tagged ‘British Investment Bank’

The Spectator, A British Investment Bank, And the Globalised Chains of British Industry

April 27, 2014

I also reblogged on Friday another piece from Mike, over at Vox Political, The Tories have run out of momentum, ideas and even arguments criticising a piece in the arch-Tory magazine, The Spectator, by Frasier Nelson. Nelson was pondering the lead Ed Milliband was making over the Tories in the polls, and attempting to do his pit to prevent a Labour victory next year by criticising some of Milliband’s policies. Mike pointed out that his article was very much an ‘own goal’, as rather than showing how wrong Milliband and his policies were, they actually showed the opposite. Of course what frightened Nelson was the prospect of further state regulation. Mike turned the arguments around by showing how, if one replaces ‘regulation’ with ‘help’, all Nelson’s comments about Labour and state regulation actually appear as a ringing endorsement of Milliband’s policies. He’s invited Speccie readers to come over and comment on his piece, but so far, none have.

One of Milliband’s policies that particularly caught Nelson’s scorn was Milliband’s suggestion that there should be an investment bank for Britain, and two high street banks. This, said, Nelson, was a throwback to Neil Kinnock’s policies in the early 1980s. So it is. And it’s right.

The authors of the book Socialist Enterprise: Reclaiming the Economy, also urged the establishment of a British investment bank, because the existing banking and financial structure in Britain is geared to overseas, not domestic investment. The book was written in 1986, but it’s still true 28 years later. And British manufacturing has suffered as a result.

As for the foreign investment, particularly from the Far East, that the Conservatives have tried to attract to Britain, this has not supplied the amount of financial support that British industry requires. One of the complaints and criticisms made of the utility companies a few months ago was that they were mostly owned by foreign companies. These used them as a source of income, while not investing in their expansion or improvement. This is almost to be expected. The Chinese and other Developing Nations that Cameron and previous administrations have appealed to for investment in Britain are intent on developing and expanding their own industries and economy. They therefore have little interest in propping up the economy of what many of them see as a competitor and colonial oppressor.

I used to work with a former diplomat, who told me that the Chinese still feel an immense humiliation against Britain for their defeat in the Opium Wars and the conquest and domination of their country by the European powers and America in the late 19th and early 20th centuries. He was of the opinion that as China became a global power, it would deliberately destroy our economy, before moving on to do the same to the Japanese.

In this respect, de-industrialising Britain is similar to industrialising Russia in the 19th century, according to Lenin and the Russian Populists, who preceded him. In his Imperialism: The Highest Stage of Capitalism, Lenin argued that Russia had effectively been colonised economically by the European powers. Like their formal colonies, these used Russia to supply raw materials and agricultural produce to their manufacturing industries, and as a market for their own finished goods. They did not, however, want Russia itself to industrialise and provide a competitive threat to their own manufacturing industries and economy. The only solution, Lenin argued, was for the Russian workers and peasants to seize power in the revolution and ‘Smash capitalism at its weakest link’. Under the dictatorship of the proletariat, Russia would industrialise and take its place as a modern, industrial power.

Britain doesn’t need a Revolution and consequent bloodshed. But we do need a proper investment bank to supply the financial support British manufacturing industry actually needs, and which has been so lacking under the globalised economy promoted by the Neoliberals. Of course, this is going to upset High Tories like Frasier Nelson, for whom any kind of state intervention is automatically a Bad Thing, especially as it curtails the financial sector’s ability to make money however they want, regardless of the consequences. In his opposition to the Bank, Nelson has shown how little the Tories actually care about promoting British industry, beyond trying to find yet another foreign buyer. It’s another example how they’re prepared to sacrifice the wider economy for their greed of the financial sector.

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