The left was right to campaign against leaving the EU in 2016. Based on the tenor of the campaign, it was clear the Leave campaign would embolden the xenophobes and nationalists that exist across the class spectrum in the UK. This prediction was proven chillingly correct with both the spike in hate crime that followed the referendum and the movement that has emerged around Tommy Robinson over the last few weeks.
The left should deplore and, if necessary, physically resist such acts of violent racism. But fighting fascism does not mean accepting globalisation. The fact is, working class people are right to be pissed off about global economic and financial integration – especially those in the places that have been most ravaged by it.
Financial globalisation has led to the concentration of capital in a series of financial entrepots, more integrated into the global economy than they are with their own countries. Rather than using this capital for productive investment, these centres have repurposed it for the kind of financial wizardry that caused the 2008 crash. London is in many ways the global financial hub par excellence, with the City of London the vampire squid sucking on the face of the global economy.
The left should be making a case for Brexit that involves resisting financial globalisation, whilst welcoming immigrants from the parts of the world that have been most ravaged by both colonialism and free market neocolonialism. This is not as hard a case to make as some people might argue. Indeed, there is evidence that anti-immigration sentiment – distinct from outright racism – is falling in the wake of the referendum.
The share of people naming immigration as one of the top three most important issues facing the UK has fallen from 50% pre-referendum to just over 20% today. And there is a strong internationalist case for resisting financial globalisation too.
Just as capital is sucked out of the UK’s peripheral towns and cities to feed London’s insatiable appetite for cash, it is also sucked out of the Global South. Sub-Saharan Africa loses three times as much in capital flight each year as it gains in aid, and much of it is channelled (often illicitly) through banks in the City and into London property, or the UK’s vast network of tax havens. Unfair trading practices – often supported by the EU – have subjected subsistence farmers around the world to the caprices of global commodities markets, whilst denying many states the opportunity to industrialise by protecting their infant industries.
Brexit should be used as an opportunity to move towards a system in which capital is embedded in national economies rather than constantly moving around the globe. Alongside reducing capital mobility and the size of our finance sector, this should involve a radical programme to transform ownership and investment. At the local level, inspiration should come from the experiments in community wealth building conducted by councils such as Preston. At the national level, any socialist government must consider radical propositions to transform ownership and investment – through, for example, the creation of national and regional investment banks, or a Meidner Plan for the UK.
Whilst state intervention as a passive shareholder is perfectly permissible under EU law, interfering with capital mobility by directing capital through industrial policy, public loans, and strategic investment, is not. Any attempt to limit capital flows, either through direct restrictions on capital movement, or through a prohibitive tax on financial transactions triggered during a crisis, would also be interpreted as an infringement of the four freedoms. What’s more, the implementation of EU law depends upon EU jurisprudence – international law, we must remember, is socially constructed and therefore strongly influenced by existing power relations.
Leaving the EU could provide the left with an opportunity to build an economy that does not rely on capital extracted from the rest of the world to ensure growth and prosperity. If the UK could build such an economy outside of Europe, it would act as a beacon of hope to countries like Greece and Italy, currently struggling under the weight of the EU’s neoliberal technocracy.
The British left has the opportunity to create a significant dent in the armour of financial capital by showing, once and for all, that there is an alternative. We must seize it.
Abridged from here. Grace Blakeley is economics commentator for the New Statesman.