The impact of Brexit

Well, I got it wrong. I thought that the British people would vote to stay in the EU, if narrowly.  Instead they have narrowly voted to leave.  The turnout at 72% was much higher than the last general election in May 2015 (67%) that saw the Conservative party narrowly returned to office with a small majority of just 12 seats over other parties.  PM David Cameron had managed to squeak through to victory by agreeing to call a referendum on EU membership.  This sufficiently weakened the burgeoning vote for the euro-sceptic UK Independence party (UKIP) which had been polling over 20% in the EU and local elections.  By agreeing to a referendum, Cameron managed to reduce UKIP’s representation to just one seat in parliament.

But this political tactic has now backfired.  Cameron has lost the referendum and has announced that he will resign and give way to a pro-Brexit leader as PM to conduct the fraught and tortuous negotiations with the EU leaders in the autumn.  Winning the election has turned out to be a poisoned chalice as I suggested.

It seems that sufficient numbers of voters believed the arguments of the pro-Brexit Tories and UKIP that what was wrong with their lives was ‘too much immigration’ and ‘too much regulation’ by the EU (although Britain is already the most deregulated economy in the OECD).  It was not to do with the global capitalist slump, the ensuing Long Depression and the austerity policies of Tory government.

Yes, many voters did not swallow the immigration and regulation arguments; but these were mainly the young; those who lived in multi-ethnic areas like London and Manchester and the better-off households in the urban south.  They were not enough compared to those who voted to leave.  They were older, lived in small towns and cities mainly in the north or in Wales far away from London and from the sight of any ‘immigrants’, but who have suffered the most from low paid jobs, public sector cuts, run-down housing and high streets and general neglect.

Along with these were the die-hard racist elements of the petty-bourgeois small businesses who gain nothing from EU trade or its financial largesse.  They reckon that in some way a return to the good old days of British imperialism standing on its own (“taking back our country”) will be better.  Only it won’t because, it looks very likely that the Scots, having narrowly rejected the call for their own independence in September 2014, and who voted heavily to stay in the EU, will now insist on another vote to leave the UK and stay in the EU as an independent state.  Going back to the good old days of British imperialism is more likely going back to the time before union of 1603 when England/Wales and Scotland had separate monarchs!

So what now?  Well, the financial markets have naturally reacted with panic, with the value of sterling plummeting against the dollar to its lowest level since 1985 at the time of (another) oil crisis.  Stock prices have also dropped sharply.  But this is just a shocked reaction to the unexpected.  How financial markets react in the coming months will depend on how the negotiations go (and they could take two years or even more!) and what happens to the UK economy.

In previous posts, I have highlighted the near unanimous view among mainstream economists that Brexit would damage the UK economy both in the short and long term.  Most now reckon that the UK will drop into recession before the end of the year.  Why?  After all, with a weaker pound, British exporters will be able to compete on price in world and European markets.  Surely that will reduce the dangerously large external deficit (now 7% of GDP) that British capitalism has been running with the rest of the world?  And the Bank of England is to provide as much credit as banks and companies want and may even cut interest rates towards zero to help households with their mortgages and companies with their debts.

Well, maybe – except that history has shown that devaluation of a currency is seldom successful in turning round the economic growth, productivity and even trade of a country.  I have cited before how the Keynesians were wrong when they reckoned the devaluation of the peso in Argentina would turn that economy around in 2001 – the Great Recession soon disabused that claim.

And in the Great Recession, the UK dramatically let the pound drop.  But the recovery in exports remained muted and the recovery in the domestic economy, driven by cheap interest rates and a housing boom, only led to a wider current account deficit.

And this deficit has to be financed by capital inflows – foreigners investing in British industry; buying British company stocks and government bonds; and depositing cash in British banks to earn interest or re-invest.  That funding had already started to dry up with the fear of Brexit – now Brexit is a reality.  The only way the deficit can be financed will be by raising interest rates on deposits and bonds, not cutting rates.

But the external deficit may actually shrink, not because exports will improve, but because imports of foreign goods and services will drop.  That’s because if the British economy shudders to a halt, companies and households will buy less from abroad, particularly as import prices will rise with the fall in sterling and inflation may come back.  That will squeeze real incomes in the average British household.

And the benefits of a weaker pound also depend on demand elsewhere in the world. If the Eurozone and US economy are struggling, then lower prices may be insufficient to lead to a big increase in UK export demand.  Also, in recent years, British exports have proved to be quite inelastic. British goods tend to be higher value goods and services – less sensitive to price change than manufactured clothes.

And here is the real point.  Devaluation only really affects demand. The other side of the equation is supply and productive capacity. Devaluation doesn’t necessarily do anything to promote investment and higher productivity. Some even argue that devaluation can reduce the incentive to be efficient because you become competitive without the effort of increasing productivity.  What really matters is what is going to happen to business investment and profitability.

Higher production costs from imports, weaker demand at home and abroad are likely to discourage UK companies from investing at home and foreign investors from stepping in.  And overall profitability of UK companies at the end of 2015 was still below the peak of 1997, while profitability in the key manufacturing sector for exports was half that of 1997.

If the UK tips into recession, the demand for EU exports (German cars, French wine, Italian clothing etc) is going to weaken.  And so a recession in the UK could push the EU back too.  And this is in an environment where global economic growth has slowed to its lowest rate since the end of the Great Recession, where global corporate profits growth is at zero and business investment is dropping in many economies.

Brexit in the long run may not make a huge difference to the health of British capitalism, but right now it could help accelerate a new global recession.  And that would have a much bigger impact on the lives of those who voted for Brexit than the perceived problems of ‘overcrowding’ from immigration or regulation from Brussels.

55 Responses to “The impact of Brexit”

  1. Neil Proud Says:

    Michael, in this post you ignore the left case for exit, i.e. exit from a stridently neoliberal capitalist organisation which wants workers to pay the price for economic weakness. The public campaign was dominated by the right-wing factions but there are sound socialist reasons to leave the EU; it’s up to the left now to try to take advantage of this crisis to try to unite to defend workers’ rights and promote internationalism.

    • Roger Says:

      The Left case for exit always was too purist/utopian for its own good. A matter of ‘one leap and we are free from neo-liberalism’. Would that it was that simple! It will prove to be so, since its as likely to shift the UK further to the Right with Farage/Gove/Johnson now in the ascendant. The road to socialism or xenophobic fascism?

      • Neil Proud Says:

        Your analysis is too simplistic. The left case is not as naive as you portray. It says that the EU is, because of its undemocratic and irreformable nature, a very real barrier to even reformist progressive change, e.g. nationalisation or re-nationalisation. To achieve progressive change, Britain would have to leave the EU at some point, so if not now, when ? Some would argue – “wait until left governments have been elected across Europe” and recommended abstention but that is just postponing the fight. Whether politics move to the right will depend on what we in the labour movement can do next.

  2. kiitossakidila Says:

    Great insights.
    I think that “BREXIT” or “REMAIN” is irrelevant.
    What is at stake is TTIP.
    So this is consultation referendum is just a detail. On the past EU was able to digest other critical referendums.

    • Roger Says:

      To detach TTIP from Brexit is a mistake since there were signs the deal was on the ropes from within the EU public reaction to it So the UK will now be striking a worse bilateral deal with the USA. We know the ‘patriotic’ Tories will sell their grandmothers if the price is right (a feature of the short-term rentier capitalism that has always prevailed in Britain). Just one more tactical error for the Left case for Brexit.

  3. billjefferies Says:

    You’re ignoring geopolitics. France and Germany must punish the UK to disencourage others from following it. Depending on the scale of this, there could be anything from a mild slowdown to a serious recession.
    They’ve already made it clear that they are not prepared to wait for Boris’ coronation in October. I’m guessing they’ll kick the UK out next week at the 27 country meeting. After that things could move very quickly.
    This leaves the UK very vulnerable, highly dependent on parasitic finance on the edge of Europe with a diminished manufacturing sector, as it is.
    Then when you dial in the support for the racist leave vote by vast swathes of Labour supporters, then things could turn very nasty indeed.
    Having said that, its not easy to predict anything with certainty, given it is a political rather than an economic crisis at root. The scale of it really depends on the determination of France and Germany to push things to then end.

    • kiitossakidila Says:

      Your thinking is correct indeed if we think short term.

      However, what is at stake are little figure heads trying to grab POW€R for their careers/retirement.

      Whatever Germany (in danger already because the demographics are attacking her) and France with public finance in a mess are doing is not reversing TTIP.

      USA wants TTIP sooner and not later. And moving fast forward with TTIP would make UK and the rest of Europe together again.

      TTIP represents for the Northern Atlantic what the Rome Treaty represented for Europe.

  4. Daniel de França Diniz Rocha Says:

    It’s interesting that the reason Brexit won is about the same that could explain Donald Trump’s popularity.

  5. murray cohen Says:

    Isn’t the Bexit and Trump phenomenon about a struggle between large debtor capital interests who can’t get sufficient financing, and with little control over the state, and an international cabal of large creditor capital interests that are integrated with the state (“managed competition”) and who control tax revenues? It might have been a tweet joke, but supposedly Republican big shots made Trump an offer he could not refuse of a billion dollars to cease and desist rabble rousing. “That’s something to think about…” he supposedly (but in character) replied.

  6. Mike Ballard Says:

    Under the wage system, labour power is a commodity. If you increase the supply of a commodity, its price will go down. When the wages of the working class go down, their working conditions go down with them. This creates misery and without class consciousness about who produces the wealth and who appropriates the lion’s share, it leads to reactionary politics of blaming other workers aka various and sundry identities: Muslims, Jews, Chinese, women, etc, any identity other than the capitalist class.

    Solution: Abolish the wage system, establish common ownership of the collective product of labour under democratic control.

  7. Stuart Sweden Says:

    Mr Roberts is a first class economist, he has the benefit of Marxist economic understanding and a good political understanding. He should have used his knowledge to have a bet on the Brexit, because while I myself thought there was a chance we would exit, I also thought it was a slightly worse chance, but the odds on the bookies were good, and betting against the pound would have been good as well

  8. Claus Jensen Says:

    If you are this squeamish about (possible) consequences and retaliations of a Brexit, then, gentlemen, I suggest you go back to your dinner parties, essay writing, painting and embroidery, and forget everything about the revolution.

    • sartesian Says:

      Claus is exactly right. The EU is a confederacy of capitalists, their mutual aid society. Revolutionists have no more interest supporting British membership in the EU than they do supporting British membership in the IMF, OECD, WTO etc. etc. Opposing such memberships is a necessary part of opposing the bourgeoisie.

      • Edgar Says:

        The bourgeoisie are split on this issue, so opposing membership of the EU could mean lining up with sections of the bourgeoisie, and actually this is exactly what happened. The most rapacious exploiters of the working class led the movement to leave the EU and the backward sections of the working class followed.

        The living standards of the working class will surely deteriorate as a result of this vote. If reducing your economic power and position is considered a good tactical manoeuvre I think you must be reading the wrong books.

        Oppose all backward sections, they will not deliver any kind of feel!union. Anyone saying otherwise needs to get out more and put down the paint brush!

      • sartesian Says:

        “The most rapacious exploiters of the working class led the movement to leave the EU and the backward sections of the working class followed.”

        So those that urged Brexit are more rapacious than Cameron, than those in the City; than those who, working with and through the EU, have driven the Greece into catastrophe: more rapacious than say Siemens with its history of collaboration with and service to the Nazis?

        And the working class in Wales is more backward than the baristas in London, because they don’t buy the bullshit about “progress”? Because they’ve experienced up close and personal the asset-stripping that has been part and parcel of “borderless” Europe?

        “The living standards of the working class will surely deteriorate as a result of this vote.”

        So you mean if the vote had settled on “remain”– the living standards of the workers wouldn’t deteriorate? Like they didn’t deteriorate in 2009?

      • Edgar Says:

        “So those that urged Brexit are more rapacious than Cameron”

        Yes, absolutely, without an y doubt whatsoever. Cameron is clearly a hard right politician, but he at least had the understanding that being in a single market was beneficial and this overrode his natural belief that workers rights should be kept to the very minimum.

        Those that led the leave campaign are the very worst section of the bourgeoisie, their priorities do not go beyond their own portfolio’s. These people want exit because they want to attack working rights, they want to extend the working day beyond the limits set by the EU etc etc.

        This is no revolutionary situation, it is the most reactionary decision the UK could have taken, a giant leap backwards. Anyone who believes otherwise needs to get out more and stop it with all the dinner parties.

        Any Americans under this illusion need to put down the peanut butter and smell the coffee.

    • Claus Jensen Says:

      “The living standards of the working class will surely deteriorate as a result of this vote.”

      “These people want exit because they want to attack working rights, they want to extend the working day beyond the limits set by the EU etc etc.”

      Yes, and capitalism improved the living standards of the working class, so we’d be fools to give to up I presume?

      If the British voters, workers, unions need a corrupt EU to fight their battle for them they’ve already lost it.

      • Claus Jensen Says:

        “to up” = it up

      • Edgar Says:

        “If the British voters, workers, unions need a corrupt EU to fight their battle for them they’ve already lost it.”

        The working class need a progressive outlook, an internationalist outlook in order to win their battles. This vote is based on a reactionary outlook by the most backward sections of the bourgeoisie and proletariat. It is also a nationalist vote of the very worst kind.

        This is not the foundation for any sort of socialist revolution. Anyone believing anything to the contrary needs to put down the knitting needles and get out more.

        Those of use living in the real world and who are actively involved in the labour movement will find our jobs have been made much harder but as usual we will carry on.

        Meanwhile you can paint that dinner party scene set amidst the revolution.

      • Claus Jensen Says:

        The Brexit vote might be for all the wrong reasons, and to the extent that is the case it is regrettable, but we’re presented here with the dire consequences of ‘shocking’ the capitalist system and it’s neurotic financial markets, a purely economic argument for keeping the status quo. There will always be plenty where those came from.

        Just bet all you’ve got on the pound, and wait for the markets to take a valium. As Sam_w hints at below, it’s not the end of the world, worker mightn’t be but capitalists are and international brotherhood regardless. They will find a way to do their thing.

        Of course they will use this as an excuse to squeeze and punish the working class for daring to practice democracy – just as they do with everything else, including supporting Corbyn. When they do, call their bluff.

  9. Sam_w Says:

    My thoughts:
    “The only way the deficit can be financed will be by raising interest rates on deposits and bonds, not cutting rates.”

    Selling bonds is a voluntary constraint after the spend has taken place. BOE is the sole issuer of GBP and can always spend as much as it wants, set interest rates, determine bond yields without private market bond vigilantes affecting the auction system and pricing the yields too high. BOE holds treasury bonds until maturity to write off ‘debt’.

    “except that history has shown that devaluation of a currency is seldom successful in turning round the economic growth, productivity and even trade of a country”

    Canada, Australia, New Zealand, Iceland have all repeatedly demonstrated through lengthy history that floating your currency and letting it devalue is superior to pegging it to another currency or fixed currency. Yes this does change the mix of import/export and that is by design. Government can always spend to boost the narrow sightedness of private enterprise to push it in the right direction in an export period or import period. Eg: Australia spent its way out of recessions from 1945-1975 quickly by maintaining high domestic demand.

    As for damage due to the brexit:
    Norway sends about 22% of all its exports to UK. It wants UK in the European Economic Area or a similar scheme.

    Handelsblatt says it has been leaked an eight-page emergency plan with the “German strategy for Brexit”.
    Already watering down their “no access to single market” rhetoric and talking about associate trading status for the UK. So no stopping the German exports.

    Basically EU exports stuff in exchange for UK exporting its pound.

    As with Iceland (whom jailed the neoliberals bankers) soon all is forgotten and the capitalists need for profit drivesthem back to the feeding trough.

    “And overall profitability of UK companies at the end of 2015 was still below the peak of 1997, while profitability in the key manufacturing sector for exports was half that of 1997.”

    This is due to private sector aggregate debt. Plus an overly financial rent seeking parasitic financial sector.

    Brexit was the right decision even if made by raving nationalists.
    EU was designed by bankers for ponzi-scheme so they could sell and exchange debt. Now is the time for British to switch on and put the heel into the Tories then throw them out next election.

    Marx knows what happens to capitalism when this becomes the dominant force:

    “Talk about centralisation! The credit system, which has its focus in the so-called national banks and the big-money lenders and usurers surrounding them, constitutes enormous centralisation, and gives this class of parasites the fabulous power, not only to periodically despoil industrial capatilists, but also to interfere in actual production in a most dangerous manner – and this gang
    knows nothing about production and has nothing to do with it…”

    -Marx

  10. DianaX Says:

    There are other problems beyond the economy, how about research, the environment and climate change. The clock is ticking before we as EU react to taking action to stop global warming and this is best achieved as a large group. Brexit is many steps backwards and these are very sad days

  11. murray cohen Says:

    “Any Americans under this illusion…” I think I’m the only American who commented… But I’m under no illusions about Trump, his rump, or the those behinds behind Brexit. But it’s clear even from here that there is much working class resentment here and in England, which is both feared and manipulated by the most reactionary sections of bourgeoisie in both countries. Sanders dropped the ball because he is not a socialist and the US is not England. Corbyn should not have. Actually, I was having peanut butter and coffee this morning…

    • Mike Ballard Says:

      The emancipation of the working class will not come from supporting the more cosmopolitan bourgeoisie who wish to remain in the EU or the less cosmopolitan bourgeois who wish to leave the EU. The emancipation of the working class has never been nor will it ever be the result of nationalism of any sort. The emancipation from wage-slavery will be a class conscious act of the immense majority or it will not occur.

  12. Tony Holmes Says:

    I find it hard to believe that a Tory Prime Minister can afford to take the UK out of the Single Market, as it would risk losing the support of big business and the City. Already there are noises suggesting that either there will be some kind of bodge, so either we’ll stay in the EU, or be “Norway by any other name”. In 5 years time, we may look back on the referendum as little more than a very, very expensive way of holding a Conservative leadership election.

    • sartesian Says:

      I don’t think so. The referendum and its results cannot be isolated from what has occurred since 2008; the flaying alive of Greece; the barbaric refugee policy of the EU, so barbaric that MSF refused to accept any money from the EU; the paying off of bankers and bondholders at the cost of…. youth unemployment of 50%, at the cost of the decimation of social welfare programs.

      The vote is overture, and coda, of the impairment of the capitalist economy; it is the product of the self-deconstruction of the EU that’s always been in the cards, given that the deck is stacked of, with, by, and for capitalism.

      • kiitossakidila Says:

        What is MSF, please?

      • John E. Says:

        Médecins Sans Frontières, known as Doctors Without Borders in English. They’ve been heavily involved in Greece and elsewhere in Europe handling incoming refugees. The situation would be disastrously worse without their constant intervention.

      • kiitossakidila Says:

        Thank you. Why did they not accept, please?

      • John E. Says:

        After the Turkey-EU accord was signed (wherein the majority of arriving refugees in Greece would be deported to Turkey), MSF chose to reject all funding from the EU, as they did not believe that Turkey would guarantee safe passage or humane treatment to the majority of the refugees.

        It totals about $60 million lost in operating budget. However, 90% of MSF’s budget is from private donors, which is why they could afford to make a symbolic gesture against the EU’s treatment of refugees in Greece.

  13. Matt Says:

    Michael is correct about the economic argument, but Jensen / sartesian are correct about the politics. Well almost correct, because the political point is that Brexit/Trump exposes (once again) a deep division within the working class, in the US as well as in the UK.

    The primary culpables in the promotion of this division are not the reactionary provincial bourgeoisie (UKIP/Trump), but the very ultra pro-EU Blarite/Clintonite liberal capitalist politicians. It is they that have acted to throw the working class generally under the bus; it is they who deploy multicultural identity politics as substitute for the class variety, and as their chief to divide the whole class, heaping their liberal scorn on the more “backward” provincial workers.

    It’s our job to reach those workers in the provinces and unite the whole class. That’s not going to be done with economistic arguments about how the EU is the “lesser evil”, nor will these workers respond well to lectures about what is in their “real” short term economic interest. They *will* respond to Blairite liberal-bashing.

    The Blairites/Clintonites are the pivot of the united bourgeoisie in both countries. This is much clearer right now in the USA, where Clinton is all they got right now. But the Blairites are clearly plotting their comeback after Brexit Boris falls on his face, because Michael’s economic argument is likely correct. It is the Blairites that English socialists must center their fire upon, not Boris and the reactionaries.

    After all, who are the Blarites focused upon? Boris? No, Corbyn!

    Please, get a political clue!

    • sartesian Says:

      I happen to agree with Matt, almost completely, almost. It’s not Blairites (vs Boris=ites) where the fire should be concentrated, but against the class of capitalists, this system of accumulation, against the perpetuation of wage-labor.

  14. thebiggpicture Says:

    Remarkable double standards on this blog. Mr Roberts chides Martin Wolf for changing his tune on globalisation yet his own work contains its own contradictions.

    In the text above, he claims that ‘racists’ and those who live ‘far away from any immigrants’ voted for leave while perpetuating the fiction that mass immigration does nothing to harm British workers. Yet in his blog on imperialism and super-exploitation, he writes:

    “Capitalism started with the exploitation of labour through absolute surplus value (a longer working day) and of course **bringing more people into the workforce**.

    https://thenextrecession.wordpress.com/2016/03/07/imperialism-and-super-exploitation/

    He also ignores how the employers associations resist all demands for restrictions on immigration and how the continual expansion of the population helps drive the bankers’ credit creation.

    As for those ‘living far away from any immigrants’, there isn’t a place in the country which hasn’t been touched by New Labour’s gift to big business and the data from Eric Kauffman at the LSE shows that opposition to immigration is highest in those areas which have had the highest relative change in population vis a vis new arrivals. He also ignores, like so many Marxists, the cultural impact that this unbidden phenomenon has and how many people, especially in the ‘multi-ethnic’ areas of Manchester and London now find themselves living in places they no longer recognise nor feel comfortable in and yet have little option, due to depressed wages and lack of affordable housing to move. These were the 40% in Manchester who voted to Leave. And in the areas surrounding the city, they were all for Out having seen how the place nearby had been transformed. He also ignores the fact that over one million Black and Asian Britons voted to Leave and the empirical data from numerous sources regarding how ever greater diversity undermines social cohesion, trust and increases a variety of pathologies.

    I really don’t understand the ideological denial here. Is it the ‘internationalist’ fixation or is the grotesque Left wing belief that importing ever more Africans and Asians will one day racially gerrymander a socialist government? I thought imperialism was the use of different ethnic groups for economic and political purposes… seems the British Left have spent too long learning from the capitalist class.

  15. VN Gelis Says:

    Great points.
    Roberts has been a soft globalist for as long as I can remember. He never admits that surplus labour affects the value of labour only because he wears the ‘marxist’ label like everyone else when it comes to the mass importation of labour: they fully support it.
    Also in order to be accepted by the globalist left you have to support mass migration and be seen to support it contrary to Marx who actually campaigned for repatriation of Europeans who were being shipped during the duration of the First International to break the living standards of British workers.

    • Lüko Willms Says:

      You would have to supply the source for your claim about Marx. Otherwise it is to be considered a callous lie. In one case, Marx and Engels issued a call to German workers not to accept jobs while the workers on Great Britain were on strike, but that is a call for international workers solidarity whiele “AN Gelis” calls for the opposite.

      • VN Gelis Says:

        Read the minutes of the meetings of the First International. They had whip rounds where they met imported labourers at the docks and paid for their repatriation. Throughout the existence of the First International no strikes or attempted displacement of workers occurred via the importation of labour.

        In our times union leaders, Labour Party leaders and mickey mouse tinpot leftists wear the free movement of labour with a badge of honour in the perpetual race to the bottom of capitalism. All else regarding ‘solidarity’ are just for show, political marketing for reactionary ends.

  16. VN Gelis Says:

    Marx A Warning
    https://www.marxists.org/archive/marx/iwma/documents/1866/warning.html
    Minutes of First International
    https://www.marxists.org/archive/marx/iwma/documents/minutes/

    • Lüko Willms Says:

      Thanks to “VN Gelis” for unveiling his lies. He points to the documents on the incident which I mentioned before: “a call to German workers not to accept jobs while the workers on Great Britain were on strike,”

      More on this from the footnotes to the IWMA minutes:

      https://www.marxists.org/archive/marx/iwma/documents/minutes/footnotes.htm#n195

      195 On March 26, 1866, 1,000 tailors went on strike in Edinburgh. The employers tried to replace them with tailors from Germany, 57 of whom were brought over in April. With a view to preventing the further import of foreign workers and to supporting the strikers, the German tailors living in London formed a committee of which Lessner was appointed president and Haufe secretary. On May 4, 1866 this committee issued the following appeal to the German tailors:

      “Fellow-Workers! The employers have succeeded in bringing in tailors from Germany to Edinburgh, to supplant those who are demanding higher wages and a shorter working day. Upon setting foot on English soil these men signed a contract to work for a specified period of time; violation of this contract holds the threat of imprisonment. In order to show our comrades at home why the employers in Britain want to use German workers, and in order to make impossible this modern trafficking in human beings, a committee has been formed which has as its object to frustrate the plans of the employers. The committee needs support if it is to be a success. We therefore call on all our compatriots to give us their every support. It is in our own interests as working men resolutely to check-mate the employers’ plans and to prove to our British comrades that we travel to other countries not for the purpose of obligingly helping to lower wages. As soon as means permit we will call a joint public meeting to discuss the measures necessary for achieving our object. The committee meets every Tuesday at 8 o’clock in the evening at the Crown Public House, Hedden Court, Regent Street, to receive voluntary contributions. On behalf of the Committee: F. Lessner — President, A. Haufe — Secretary. London, May 4, 1866.”

      https://www.marxists.org/archive/marx/iwma/documents/minutes/footnotes.htm#n196

      196 On May 3, 1866, Marx received the requested material from the German Tailors’ Committee in London and on May 4 wrote, on behalf of the General Council, the item “A Warning” which he mailed to Liebknecht the same day. The item was published in several German papers, among them the Oberrheinischer Courier, Mitteldeutsche Volkszeitung and the Deutsches Wochenblatt (see pp. 335-36 of the present volume).

      Please note that the London committee to defend the strike in Edinburgh was the Committee of German tailors in London. The core of the “Bund der Gerechten” and the “Communist League” had been German tailors working in London. Eccarius was one of them.

      Note the signers of the call of German tailors in London on their class brothers in Germany: Friedrich Lessner (correct spelling: Leßner), born 27 February 1825 in Blankenhain (Thüringen), moved on 31 March 1847 to London where he joined the (German) Workers Education Association and the “Bund der Gerechten”, which became later the “Communist League”, after adopting the Communist Manifesto by Marx and Engels. Leßner took part in the 1848/49 revolution in Germany, and was later imprisoned for his political views, and moved to London after being released from prison in 1856. He worked closely with Marx, in the IWMA and the English workers movement. Leßner died 1910 in London.

      The other signer is Albert F. Haufe, another German tailor. His address (Crown Public House, Hedden Court, Regen Street, London) was given as contact address for German tailors in the call for worker’s class solidarity to German workers issued by the central committee of the International Workingmens Association, and signed by Karl Marx.

      One sees here clearly that the action of the communists and the international workers movement was and is the opposite to the reactionary agitation by “VN Gelis” who wants to pit workers against workers and each to submit to their own slaveholder.

      “The workers have no fatherland” was the battle cry of the communist movement initiated by Marx and Engels.

      BTW, the link given by “AN Gelis” for the solidarity appeal for the Edinburgh tailors does not work. The “l” at the end of the “.html” is wrong. Correct:
      https://www.marxists.org/archive/marx/iwma/documents/1866/warning.htm

      • kiitossakidila Says:

        Why don´t we study this in the university?

      • VN Gelis Says:

        Existing migrant communities in London wrote to 1st International demanding no importation of Labour. Now all rally behind ‘freedom of movement’. Anything else would be labelled nationalist and racist. The boss class finally have a Left in their corporate image. Rotten to their globalist core.

    • VN Gelis Says:

      Kittosakidila…
      Bourgeois universities don’t do Marx never have. You need to familiarise yourself with Lenin and Legal Marxism to understand what I mean…

  17. VN Gelis Says:

    ” We therefore call on all our compatriots to give us their every support. It is in our own interests as working men resolutely to check-mate the employers’ plans and to prove to our British comrades that we travel to other countries not for the purpose of obligingly helping to lower wages.”
    The above nowadays has become everybody welcomes…strikes and displacement are identical if you lose your job. No where did Marx argue…no borders.

    • Mike Ballard Says:

      Labour power is a commodity. Flood the labour market with skills and the price of those skills will go down and many of those attempting to sell those skills will be unemployed by the capitalist class. One only needs so and so many wage-slaves to produce such and such a good or service.

      Shorter work time is the solution to unemployment under the wages system of slavery legally imposed on them by the capitalist class. Of course, the workers should inscribe on their banners, “Abolition of the wage system” and abandon the fairytale notion of, “a fair day’s wage for a fair day’s work”.

      • VN Gelis Says:

        The call up until the 1970s from the old left was ‘Less Work Work for All’. Now its work for all the planet no work for the indigenous…. This is core Labour Party politics.

  18. VN Gelis Says:

    I don’t see the First International campaigning for open borders aka freedom of movement under capitalism as allegedly workers have no country, but using its influence to prevent the importation of labour…

    “INTERNATIONAL WORKING MEN’s ASSOCIATION
    “The Central Council met on Tuesday evening at 18, Bouverie Street, when Mr. Lee, the secretary of the Excavators’ Society, attended to report to the Council the cause of the late disturbances between the English and Belgian Excavators. Mr. Lee said an agent of Waring Brothers had succeeded in inducing 430 Belgian workmen to come to England and work for less wages than the English workmen were being paid, and the result had been that several Englishmen had been forced out of employment to make way for the cheaper labour of the Belgians. The 430 were made up of excavators, carpenters, and blacksmiths. The Belgians were receiving from 2s. 4d. to 3s. per day, while the wages of the Englishmen, were from 3s. 9d. to 4s. per day. This lowering of wages by the Belgians had caused the late disturbances, which he and his brother members regretted. They were ready to receive the Belgians into their society. He also wished to ask on what terms the Excavators’ Society which numbered several thousands could join the International Working Men’s Association. After the question had been answered, and the whole matter fully discussed, it was resolved — ‘That in case the Excavators’ Society take steps to form a branch in the district where the disturbance occurred, that the Central Council send a delegate speaking the Belgian language to accompany the excavators’ delegates to induce the Belgians to join the Excavators’ Society, also that the Central Council use its influence to prevent the importation of any more Belgians at such reduced prices.’
    https://www.marxists.org/archive/marx/iwma/documents/minutes/index.htm

    • Lüko Willms Says:

      He who can read has a clear advantage.

      The text says that the trade union is welcoming the Belgian “imported” workers in their ranks, and that said trade union is joining the International Workingmens Association as a member. The General Council is sending is sending someone with the necessary language skills to integrate the Belgian workers into the union and help them to set up a branch were they are working.

      Not a single word of sowing hatred among working people as “AN Gelis” is doing. Blind racist hatred is blind … even prevents the enemy of workers solidarity from reading, as Angelis shows by his/her example. .

      Workers of the World, unite! is the slogan of those who fight for the interests of the world wide working class. An injury to one is an injury to all.

      On the other side of the barricade, An Gelis shouts:
      “Workers of the world! Divide and help your boss to cut wages!

      Because when the boss alone controls the access of workers to the work contracts, he controls the market for labor power, and is thus in the dominant position to set the wages as low as he can.

      • VN Gelis Says:

        Preventing the (further) importation of labour ie explicitly not supporting freedom of movement if its purpose is to undercut labour rates of pay was part of the reason the First International was created.
        It wasn’t there to support labour surpluses to be used by bosses for their class advantage by a perpetual race to the bottom.
        The previous poster assumes Marx was an anarchist and wanted a global free for all.
        That’s why he originally pretended Marx only dealt with workers on strike whereas in this case we have workers being removed from their posts.
        However much Luke tries he cannot turn Marx into a globalist.

      • Lüko Willms Says:

        If there is a top “Globalist”, then that is Karl Marx.

        The Communists are further reproached with desiring to abolish countries and nationality.

        The working men have no country. We cannot take from them what they have not got. Since the proletariat must first of all acquire political supremacy, must rise to be the leading class of the nation, must constitute itself the nation, it is so far, itself national, though not in the bourgeois sense of the word.

        National differences and antagonism between peoples are daily more and more vanishing, owing to the development of the bourgeoisie, to freedom of commerce, to the world market, to uniformity in the mode of production and in the conditions of life corresponding thereto.

        The supremacy of the proletariat will cause them to vanish still faster. United action, of the leading civilised countries at least, is one of the first conditions for the emancipation of the proletariat.

        https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch02.htm

        “VN Gelis” (Vangelis? from Greece or Cyprus?) campaigns against the right of workers to chose themselves where and whom to sell their labor power. The capitalist state should have the right to bar workers on arbitary criteria from working where they would like.

        The result of VNgelis’ campaign is exactly what promted the International Workingmens Association to intervene in the two cases VNgelis cites, it.e. import of workers by a capitalist or a group of capitalists, in Edinburgh explicitly in order to break a strike, and in London in order to fight a trade union of construction workers.

        In the Edinburgh case, the workers “imported” by the bosses were bound to a contract nearing slavery, with prison should the worker break the contract. In the case of the Belgian workers imported by the bosses of the London construction indusry, the minutes of the IWMA do not provide much about the contractual conditions imposed on them by the London bosses except that they were given lower pay.

        The top of the anti-worker conditions VNgelis campaigns for, is found in the Arab petroleum dictatorships on the South bank of the Persian-Arab Gulf, where the proletariat is composed by two thirds or more of workers from the Indian subcontinent, notably Nepal, Philipines and other south and south-eastern Asian countries.

        Since those workers do not enjoy the right to sell their labor power to whom they please, they are under slavery like conditions. On their arrival, the bosses take way their passports, to make the workers totally dependent on their boss.

        Another form is what is called in English probably “detached workers”, i.e. workers being employed by a company in their “home” country at conditions prevailing in that country (mostly at lower wages), but are sent to another country to work.

        How the capitalists see such conditions was highlighted in Germany, when the two year “grace period” after the entry of Romania and Bulgaria in the European Union ended, in which workers from those two country could work in Germany only as “detached workers”. As soon as Romanian and Bulgarian workers were allowed to sign a labour contract on their own with a German employer, paying taxes and social security levies to the German state, the “Christian Social Union”, the Bavarian sister party of Angela Merkel’s CSU, raised a big hue and cry about how Romanian and Bulgarian workers would come and exploit the German Social Security system, just the same way as Brexiters on the Island spread in their lying propaganda.

        That is what VN Gelis’ agitation produces: the total rule of the capitalists over the workers.

        Only the free movement not only of commodities, services, and capital over national borders, but also of people and their only commodity to sell, their labor power, is needed to combat such manipulative ways.

      • thebiggpicture Says:

        “Only the free movement not only of commodities, services, and capital over national borders, but also of people and their only commodity to sell, their labor power, is needed to combat such manipulative ways.”

        Which coincidentally is what global capital wants.

        It’s no wonder the working class is on its back with representation like this.

        As for workers ”having no nations”. Presumably every person in the world who loves their country and culture is suffering from ‘false consciousness’. I suppose a stint in the Gulag would absolve them of this.

  19. VN Gelis Says:

    Luko affirms what I said all along. He supports the EUs four core freedoms and attributes them to Marx, wants the neoliberal EU to encompass the planet as a whole and pretend as well that Merkel is against EU expansion. A total globalist whose only concern is the perpetual race to the bottom.
    First he alleged Marx only complained about strikes then when another source was found about worker displacement he pretended it didn’t exist. If it was just about strikes he could in theory have a point. But it wasn’t.

    No serious country has open borders. Try getting into Cuba and Vietnam and parrot this globalist rubbish. About having the right to go anywhere and set up shop without taking into account the unions, rates of pay, labour laws. Globalism always wanted a free for all.

    • Lüko Willms Says:

      “Neoliberal” is a designation for ceratain set of bourgeois politics, but for states? The EU is not a political party, but a coalition of bourgeois states, i.e. of capitalist dictatorships. A coalition which became possible only by the absolute supremacy won by the US empire in the course of the two great wars of the first half of the previous century (interesting lecture: Memo PPS23 by George F. Kennan) and also the desintegration of the British Empire.

      Started as the European Community for Coal and Steel in the early 1950ies, it grew into the European Union of today with currently 28 member states, all of the dictatorships of a national capitalist class over its “own” working class. And there is the internal contradiction of the EU – it has created an internal market, a process which in the times of the emergence of capitalism was identical with the creation of a national capitalist class. But there is no way that existing national capitalists classes merge into one. That is the source of the centripetal forces which have shown themselves in the “Brexit” campaign (although I am convinced that none of the Brexit campaigners actually believed in their success, and hardly any of them had been really interested in leaving the common market, which had been the condition of the re-emergence of an automobile industry on the island and of the growth of London as financial center of the Union, that’s why they all chickened out from the responsibility or organizing the exit into the unknown).

      The EU is not a superstate, not the “United States of Europe”, is not even a state at all. It is, as said, a coalition of 28 national states, and can’t become a single state by eliminating the existence of the separate national capitalist classes, and this either by one capitalist class overpowering the ruling capitalist classes of other countries, which means war, or by the working class taking the power out of the hands of each and every single capitalist class one by one, which can only be done by the working class of that capitalist country, even if the process of socialist revolutions will certainly be intertwined. And the working class in power will certainly not return to a balkanized Europe, but march forward towards a world without borders. That is the task for the coming period.

      In the mean time, let me refute the claim that “Marx […] complained about strikes” — on the contrary, Marx organized solidarity with strikes and strikers, and one instance of that was the call to German tailors not be lured into slavery like contracts to break a strike of their class comrades in Edinburgh.

      In general, freedom of engaging in labor contracts is one of the fundamental democratic freedoms of workers as contrasted to slavery or the mediaval guild and cast system.

      Working conditions and wages are being improved by the workers struggling and organizing themselves for that purpose in trade unions, not by relying on the capitalist governments. The differential of wages between countries and continents due to different levels of economic development and different places in the neo-colonial system of unequal exchange is exercising its influence on the labor market also over national borders, even more so when those borders are being closed for workers, but open for export of capital and commodities and services, as our friends VNgelis and “bigpicture” want it to be.

      The capitalist can easily move production of his commodities to other countries with lower wages, as they do especially in the textile industry, but the workers cannot join forces to fight for higher wages and better conditions for all. This is possible only when the borders are open also for workers, not only for capitalists.

      • VN Gelis Says:

        2m new surplus labourers were added onto the EUs unemployed mountains in 2016 but allegedly the borders are …closed. Presumably for them to be open 500m would have to arrive in the EU.
        Anyone who supports open borders under capitalism and the expansion of surplus labour armies works for capital pure and simple or Juncquer directly who called border the worst invention in human history….

      • Lüko Willms Says:

        Those “surplus labourers” did not come from the sky, there are hundreds of millions of people who are being excluded by capitalism from taking part in the collective productive effort of mankind. That is part of the overall nature of capitalism and the imperialist oppression by the old European colonial powers and the USA.

        Apparently our opponent “ANgelis” wants the working people of the world being kept in cages controlled by the capitalist rulers, and being pitted one against the other, in the way “ANgelis” hurls his hate against the working people of the world.

        He is dead set against working people having the right to chose their employer and place of work themselves, of joining together in trade unions and political workers parties to defend their common interests against the capitalist masters.

        Only by combining our forces, we working people can defend our interests, and to achieve that we have to overcome the artificial borders set up by the capitalists to separate us and thus to perpetuate their dictatorial rule.

        BTW, on Angelis previous contribution: it is easy to get to Cuba. Just go to a travel agency, get a Tourist card, and buy a plane ticket.

        The socialist revolution will abolish all “national” borders.

      • VN Gelis Says:

        “even more so when those borders are being closed for workers, but open for export of capital and commodities and services,..”
        Luko
        Borders are closed but 2m arrived. Presumably if 500m new migrants aren’t added in a single year, borders are closed. With logic like that Luko proves he is a bosses fink. He talks solely about ‘individual rights’ in freedom of movement. Collective rights, the rights of unions to set labour rates, the rights of the closed shop (who works where and at what wage) is neither here nor there. He dreams of a globalist free for all, whereby bosses can have a free trade zone from Brussels all the way to New Delhi, hence he argued previously the EU isn’t neoliberal as it isn’t a state entity or even in the process of formation of one. Being presumably German/Austrian he is a Merkelite to the core. All else, ie marxist phraseology is there for show.

      • Lüko Willms Says:

        A bosses fink is somebody who wants to give the bosses the exclusive power to limit the right of workers to chose their place of work.

        I for my part do not only care for the individual right of each and every worker to freely chose his employer and place of work, but more so the rights of our class, the proletariat, to organize and defend our rights collectively and as the next step to take the power out of the hand of “the bosses”, i.e. the individual national capitalist classes. This can only be achieved by thinking globally, i.e. as an international class of working people who “have no fatherland”, as the early communists said, and acting locally, i.e. removing the dictatorship if each and every capitalist class one by one.

        Vangelis on the other hand seems to assume that the capitalists rule forever, and that the class dictatorship of the national capitalist class is the best protection for the workers under the bosses heel. Nothing could be more off the mark.

        He raises the issue of the “closed shop”. A “closed shop” can be a tool of the workers to prevent the boss to employ strike breakers and workers for lower wages than the ones achieved by the workers struggle. That was the case of the IWMA’s fight against the Scottish textil capitalists importing German tailors bound with slavery like contracts, similar to the conditions of the proletariat in the oil dictatorships on the Arab Peninsula, which is in its large majority not of Arab, but of Nepales, Philipino, Pakistani and other South and South-East Asian nations. They have a kind of “closed shop”…

        A “closed shop” under control of a trade union becomes in the absense of a class struggle orientation of that union a “job trust”, where a burocracy controls access to the the jobs for the benefit of their peers, and which involves mostly a racist discrimination.

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