Londoners are reeling from the recent reminder that that they’re still part of the amorphous, wobbly shambles called Britain. Secession! NOW!
What began (surely) as a joke has morphed into a genuine claim. ‘Set London free!’ cried Mayor Sadiq Khan. Let’s leave Britain! London is an economic powerhouse saddled with a parasitic nation of feckless dolts
Well, he’s right, but also wrong. London is the beating heart of Britain’s most recent form of expansionism, kicked off by Maggie Thatcher in the mid 80s.
Forget sweaty colonial countries that hammer on your door long after you’ve sucked them dry. No! Maggie Thatcher’s newly remodelled British economy was a British expansionism you could enjoy in the comfort of your own home, without the indignity of having to translate ‘Hob Nob’ into Foreign. It was the dawn of a new age of neoliberalism, dominated by the newly deregulated financial markets.
Manufacturing and heavy industry: BAD
Financialisation of capital: GOOD
As we all know, the neoliberal era, dominated by speculative capital, has changed he nature of business. Labour market elasticity/precarity, declining worker conditions, capital flight – are all characteristics of the dominant neoliberal model. I won’t crap on about them here.
Now, let’s consider ‘Lexit’:
In 2014, the Financial Times reported that “barely 7 per cent of all tax paid by London’s residents and businesses is retained by its mayor and boroughs, compared with 50 per cent in New York.” The Independent.
This sums it up nicely, (even though the comparison with New York is meaningless – you can draw those lines wherever you like). But the main idea – that London earns the taxes while Britain spends them – is the kicker.
Tax is ‘spent’ on people who aren’t participating full time in the workforce – children, old people and the underemployed (ignoring all the tax spent on other essential infrastructure). All these people contribute to London’s existence. Who cleans your office, couriers your documents, slaughters your organic chicken or fixes your lights? Working class people do, while old people and other working class people look after their kids. The underemployed working class, revolving in and out of the workforce, provide London’s labour market elasticity.
London’s Mayor is asking for the next step in a seemingly natural process of wealth partition and consolidation – to identify wealth creation as natural and relegate the costs as externalities. Stigmatising the elastic workforce (welfare bashing, anti-immigrant racism) is just cost containment, a simple way to keep the associated costs down. Providing money to these ‘unproductive’ people is framed as social justice, not as an economic necessity. People, we are told, have a right to ‘welfare support’, but only as charity, not because it’s the cheapest way to maintain their position as an essential part of the economy.
Silicon Valley had a crack at this. In the 90s Silicon valley developed into a type of enclave economy, dripping with venture capital, innovation and technology. It was a high wage, high cost economy. Too high, as it turned out. The missing ‘second tier’ of the economy is populated by teachers, cleaners, nurses and economists. Silicon valley ran out of them pretty fast.
I’m still surprised by the common complaints about Silicon valley from those who’re at the top of the chain – it’s too expensive, there isn’t enough childcare or other services, housing is impossible, transport is fucked. These problems are infinitely solvable, especially with the amount of money washing around. And yet they persist. It always strikes me as funny that there is more than just an absence of services – the things that make life, life. There’s an absence of public imagination about what they might look like – a collective memory loss. Sure, Silicon valley is still there, but it’s being hindered by its lack of infrastructure.
The consolidation of wealth will always hit a tipping point, the point at which its becomes unsustainable. Dutch disease and Californication are examples where the concentration of wealth hinders the production of wealth. Londoners have lost sight of this fact, nourished by a fear of the unwashed. They’ve swallowed the fanciful idea that Britain writ large is nothing more than a lumbering parasite on an otherwise nimble host. The working class are just a bunch of wall-eyed dolts, putting the ‘lumpen’ in proletariat – an irrelevant, rent seeking inconvenience.
I say bring it on. Fuck off London, let’s see how long you last.