UKIP: the victory of the ruling class

Chris Dillow explores the elitism of Britain's most successful anti-elitist party.

In a protest against an out-of-touch political class, the British public have voted for a party led by someone whose class background is indistinguishable from Cameron's or Clegg's.

In this respect, UKIP's success demonstrates not the weakness of the ruling class, but the exact opposite - its complete victory.

I don't just mean this in the sense that political power is held in the hands of such a narrow group that the Dulwich-educated son of a stockbroker can present himself as an outsider.

What I mean is that, as Adam says, UKIP is not an anti-establishment party. For example:

  • The demand for tougher border controls is a call for an increase in the power of the state.
  • Whilst its possible that immigration control might be very slightly positive for low-wage workers, it would be bad for average wage-earners, and there are many better ways of improving the lot of unskilled workers.
  • Hostility to gay marriage is fundamentally anti-liberty, as it asserts the power of the state to intervene in private relationships.
  • The call for a flat rate 25% tax would be a big tax cut for the rich.
  • Cutting employment regulations would worsen working conditions and job security for ordinary workers, without creating many jobs.
  • The demand that welfare recipients do compulsory workfare and not buy cigarettes or alcohol would be a reduction in the welfare state safety net, to the detriment not just of actual recipients but also to those in insecure jobs who fear becoming jobless.

UKIP's policies, then, do not challenge either the power of capital over worker or (what is a similar but distinct thing) the power of managerialists.

This is why I say their support represents the victory of the ruling class, because it demonstrates their complete power. I'm thinking here of Steven Lukes' "third dimension" of power:

Is it not the supreme exercise of power to get another or others to have the desires you want them to have - that is, to secure their compliance by controlling their thoughts and desires?...Is it not the supreme and most insidious use of power to prevent people, to whatever degree, from having grievances by shaping their perceptions, cognitions and preferences in such a way that they accept their role in the existing order of things? (Power: a radical view, 2nd ed, p27, 28)

It's in this sense that the ruling class has triumphed. The discontent that people might reasonably feel against bankers, capitalists and managerialists has been diverted into a hostility towards immigrants and the three main parties, and to the benefit of yet another party with a managerialist and pro-capitalist ideology. In this way, even "protest" votes help sustain existing class and power structures.

This piece was originally posted on Stumbling and Mumbling, and has been reposted here with permission.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.