Tweet Summary (280 characters)
The European Union favours conservative,
neo-liberal policies. Why then did so many politicians from the British
Conservative Party want to leave? The answer:
- the party is dominated by the financial services sector wanting to leave the
EU to avoid competition and regulations.
Executive Summary (304 words)
The elite as Represented by
Conservative Party Split on continuing EU membership.
The British governing elite or
establishment has been represented for most of the last century and before by
the Conservative party. Normally the prime
objective of governing elites is to remain unified. Before the election in
December 2019, however, different factions of the Conservative party have been at
war and have openly split over whether they should leave the European Union
The EU Institutions follow
centre-right political parties and ideologies.
The EU is a treaty-based organisation
for trade in goods and services.
International trade has, and still does, disproportionally benefit the
higher incomes in any society. Thus, the higher income groups and their parties
in Europe support the European Union and as a result the EU institutions have
actively supported neo-liberal policies. The European Parliament although lacking
in power has always had a centre or centre-right majority. The European Council of the 28 member states
has likewise been led by conservative or neo-liberal governments.
British Financial Services
Industry Successfully Supported the Leave EU faction of the Party.
So, if the EU supplies wealth
through trade and support for conservative policies why did the British
Conservative party split on the issue? Logically
it should support the EU as a European coalition of centre-right policies and
parties. But one of the most important
sectors of the British economy is financial services and although it may
support socially conservative policies in general it was anxious to leave the
EU to avoid competition and possible regulation. The financial services industry then financed
and effectively secured support from important segments of the party ready to
leave the EU of which Mr. Johnson is the leader. Evidence
of financial services support for a Johnson leadership and from statements events
and statement of involved persons confirm this analysis.
Strange Case of the Imploding British Elite
The British elite has
split in two. The two parts are now viciously fighting each other and
regardless of who wins the current battle it is unlikely there will be a return
to the old cohesive, all-powerful ruling elite.
How and why has this happened?
Elites are groups, tribes
or classes who rule. Their two main functions are to control the non-elite and
gather income and wealth for themselves. These basic objectives usually
override any possible divisions and conflicts. Elite solidarity is normally
solid and impressive.
European elites were
frightened by the French and Russian Revolutions in which traditional rulers
were executed or otherwise eliminated but new elites were then formed and fear
served to create a stronger internal solidarity. The main problem was not from
internal uprisings but that elites frequently went to extended and costly
international war with each other, usually over wealth, including territory,
century European elites attempted to solve the problems of war and fear by
creating an international organisation now known as the European Union. Through
this they have cooperated regionally long enough to rule the non-elites of 28
nations using the arrangements provided by the treaties which form the European Union.
Treaties are agreements which create obligations for the signing government and
for all successive governments. Given the thousand-year history of European
national elites using their local power over the populations to enable wars the
cooperation and peace since 1957 may seem remarkable.
The anti-war aspect of
this arrangement may not seem so pure and overriding if it is understood also that
elites have always secured their wealth and income from things international –
international trade, migration, finance and, of course, international theft of
resources and goods from peoples other than their own. A regional
organisation which guarantees this source of wealth from its members other and, by
using collective power, perhaps from the rest of the world would be a highly
desirable product compared with the previous conflictual situation.
EU treaties then appear for elites as their
dearest wish come true. It committed future governments of originally six and
then swelling to 28 to ensure unrestricted imports and exports,
provide cheaper labour through migration and allow 28 different possibilities
for securing a surplus from investment. It established a raft of conservative
policies relating to privatization, budget restrictions, and directives serving
the needs of corporations. To compensate for a certain loss of global spread
the EU treaties also delivered restraints on any political movements which
attempted to interfere with the elites beloved free enterprise or introduce
serious state regulation. All the elite nightmares of the past were thus
banished - no more fear of nationalisation by socialists or protection of
employment or health by banning or taxing at the border.
The EU was God’s gift to
elites dependent on extra-national activities of the traditional type.
So, if the EU delivers so
much to national elites why has the British ruling elite split so violently
with part of it wishing, it seems, to give up all the advantages and leave the
EU and the other part happy to stay within the EU?
The answer to this
question requires a brief look over the past decades at the changes in the way the
British ruling elite has captured its wealth.
By tradition many European elites
have secured a substantial part of their wealth through international
trade in goods often beginning with tea, sugar, wood, ivory and such similar
goods extracted from colonies. This was certainly the British case and once the local manufacturing
base had been established exports of the goods from British factories became dominant.
Whether the transfer of goods was forced as in the case of Empire or slightly
more voluntary as in trading exchanges it was, and still is, always the higher
income elites who benefitted the most.
This situation prevailed
for about 400 years up to the mid-20th century. Although there were occasional
disputes about whether the state should serve the interest of investors or
traders these differences were not sufficient to create combative factions.
Solidarity prevailed in both the management of the empire and the control of
the lower orders.
Then things began to
change. In the first half of the 20th century manufacturing goods
was still an important if not the most important source of wealth for the
British elite. But from 1960 onwards manufacturing declined and the so-called
“service” economy grew. Major services include health,
all sorts of management, transport, education, all public services and, the
most important, financial services which includes banks, fund management,
stockbrokers and attached lawyers and consultants. In the United Kingdom
services grew from 53 percent of national income in 1960 to 75 percent today in
In the last decades financial
services expanded three times between 1965 and 2006.For the first time in the
history of the British elite most wealth was to be made in the financial
sector. Some of the elite in manufacturing sold their holdings to foreign
elites and joined the banks and hedge funds.
For the first time then
the governing elite split into those who were dependent on, or where hopeful
for, large amounts of wealth from banking, property development and other financial
services and those who still clung to the “merchant” ethos of manufacturing,
exporting and importing. In a certain way this was a dispute between the
corporations and the banks about the future sources of income and wealth.
With this background the
strange case of a totally split British elite emerged into the daylight and the
precipitating issue was whether the EU could continue to deliver the benefits
for both sides.
For the financial
services section the EU institutions not only brought competition for the British
financial services sector (sometimes known as “The City of London”) from other
financial centres it made the expression of financial power more difficult as
regulations to protect the Euro affected the Pound. In addition, it made
cooperation with other financially-oriented elites in the world more difficult.
Logically, then, it would be better to secure global freedom and exit the EU. The
merchants and manufacturers did not agree. During the membership of the EU
wealth and income had been effectively distributed towards the top, supplies of
cheaper labour were available from Europe, most socialist and social democrat political parties
had been destroyed and alliances with other corporations, particularly those
from USA, had been facilitated. Further, the elite had been able to control the
non-elite to the extent that international investors continued to be confident of
UK political stability.
The administrative centre
of the ruling elite — the Conservative Party—then split into the supporters of financial
services and City of London versus the rest.
So it is that as Brexit
prime minister designate Johnson could say “f…k, business” because business is
not finance.He later rejected the
charge that he was anti-business by confirming that as Mayor of London he
“stood up for bankers after the financial crises more than anyone.” So it is that the principle negotiator for Brexit in 2019 finished
his stint in Brussels and then took a job in the USA – not in Google, or
General Motors or Pfizer but in the bank and global leader in financial
services, Goldman Sachs. Not surprising then that the major funders of the
Brexit wing of the Conservative party have been hedge funds which are at the core
of financial services. One study showed that of the 40 donations for Johnson's
bid to be prime minister 30 were from hedge funds and City of London connected
The leaving EU part of
the elite are the samurai for financial services and will take their chances on
being able to continue conservative social and economic policies at home without
The trading/manufacturing part of the elite are for remaining in the EU closeted
goods market and continuing to receive external help in maintaining
Statements and Opinions
in this Blogpost can be supported with analysis, documents and statistics which
are themselves based on evidence.
To check specific
‘Brexit Negotiator goes to Goldman Sachs’
‘Financial services support of Brexit’
claims to be using data from British Electoral Commission, Parliamentary
register of members’ financial interests and Financial
3) Remarks of Johnson on business