When #Lexit Just Won’t Exit, Part I

I told you bad jokes would be recurring.

Imagine my disappointment last week, when I did my weekly once-through of the JacobinMag
blog, to find Daniel Finn, the deputy editor of the New Left Review, hocking #Lexit [
https://www.jacobinmag.com/2017/02/brexit-uk-jeremy-corbyn-theresa-may-labour-ukip/ ] in
the face of Theresa May, the unelected strongwoman of the Her Britannic Majesty’s
Government, beating the drums on invocation of ‘Article 50’ of the Lisbon Treaty.

Wait, what?

I feel for the more novice among my possible readers that might have been so brave as to have
trudged through that Rasputitsa [ https://en.wikipedia.org/wiki/Rasputitsa ] that was the first
paragraph. Let’s back up.

JacobinMag is probably the biggest ostensibly straight-up socialist publication in North America,
in the wake of the 2007-8 crisis and helmed by radicalized millennials. The New Left Review is a
left-academic to soft-revolutionary journal which (as you might have guessed) emerged in the
primordial soup of the New Left in 1960. Theresa May is Prime Minister of the United Kingdom,
thanks to the purely palace intrigue rules within her party, the Tories, and equally palatial
constitutional conventions of British government, in the wake of the resignation of David ‘Pig
Fucker’ Cameron, the former UK PM. Cameron is renown not only for molesting innocent
porcines (for real []) but also for obliterating his own political career, together with the
Europhile political cause among British conservatism altogether, by calling for a referendum on
the UK leaving the European Union (‘British Exit’ or the more familiar ‘Brexit’) which he
subsequently lost due his own incompetence.

‘Article 50’ is the by-word for initiating the official procedure for EU exit negotiations, sexily
named after the eponymous and section of the equally sexy Lisbon Treaty that constitutes the
EU. UK mainstream politics has been fixated since the Brexit upset on whether Brexit will take
the form of ‘hard Brexit’ or ‘soft Brexit,’ differentiated by whether Brexit will prioritize keeping
the scary immigrants out (at the probable cost of being unable to retaining access for British
commerce to the free trade area of the EU, the so-called ‘Single Market’) or the reverse
(membership of the Single Market even if this means ‘freedom of movement’).

To complete our Brexit voiceover here at AXOLOTL—what is “Lexit”? Lexit, by analogy with
Brexit, means ‘Left Exit,’ and is a by-word for some ideas bandied about on the political left,
usually by soft, activist-trolling Lenin-Live Action Roleplayers [ thunderbolt video ] and ‘hard’
social democrats, who seem to find every political scenario a great platform for their one-size-
fits-all hobbyhorses. Lexit was all the rage of broad left napkin drawings in the six months
leading up to the Brexit referenda. ‘Lexit’ proposals generally take the form of a.) denounce
mainstream Brexit narratives (both Leave and Remain campaigns) as anti-working class, while
tacitly though clearly preferring Leave and endorsing a Leave vote, b.) ????????? , c.) workers
are Mad As Hell And Aren’t Going To Take It Anymore! , d.) Restoration of Atlee-style Labour, or
Old Labour-stand-in (such as the various ‘Labour 2.0’ ‘anti-austerity’ or ‘broad left’ formations
which bottom feed the waters at the margins of the Labour vote, including ‘TUSC,’ the Trade
Union and Socialist Coalition, and more recently, the probably moribund Left Unity proto-party)
government. As you can probably tell, here at AXOLOTL we don’t have particularly bright views
of this platform. It’s hard to tell sometimes whether those who advocate it actually believe it is
plausible, or cynically believe that bread and butter and manna from heaven is the best bet to
fishhook some idiot working people.

The fundamental issues are several. There’s both reasons for the implausibility of #Lexit, but
also for its undesirability, even given a veneer of plausibility for argument’s sake. We shall
proceed through the former, then the latter.

Implausibility, or, wishing on a rainbow

Lexit basically consists of the following: activate Article 50, withdraw from the Single Market,
and then, politicize the Bank of England, printing currency; public works programs; impose
progressive and heavier taxation; reverse the last decade of public service funding cuts; repeal
Thatcher-Blair period anti-union laws; and re-nationalizations of Thatcher-Blair privatized public
services and industries (particularly, commuter rail).

Taken in isolation, these measures would in fact improve the bargaining position in the
particular workplace, and the labor market in general, for British working people. It would
reduce income inequality and improve living standards for the lower quartiles of income. It
would reduce the power of the financial plutocracy based in the City and linked to European
and Commonwealth tax shelters (Channel Islands, Commonwealth Caribbean, Malta,
Liechtenstein, and Luxembourg).

So what gives? Sounds win-win.

The problem is, we cannot take that platform in isolation. It abstracts from the real situating of
the British Isles political economy in a world geopolitical system of states and the attendant
world-market, and the institutions which mediate and interpenetrate those levels of
abstraction (what?). I am saying, this is acting like the UK is a bubble universe, like there are no
other national leaderships to contend with, and that money is like vapor—it can pass
seamlessly across boundaries and over mountains and seas.

[ADD 500 WORDS EXPLAINING FINANCE STUFF]

The problem is ‘the national economy’ depends on certain minimum levels of particular values.
Let’s discuss (by no means exhaustive) four, for instance.

(I.) The UK, and any country, must maintain certain levels of foreign reserves (this is
other countries cash with which you buy imports and trade in financial products).

(II.) It must maintain certain rates of capital investment (this means that private
corporations can afford short-term lending, and, more long term, the financial
markets will be available for corporate bond-issuings).

(III.) Following from both, the national currency in foreign exchange markets (forex) must
not fall too far or too quickly, or it will become impossible for major financial
institutions to afford their international obligations (for example, debts whose
contractual terms specify value denominated in dollars, and coupons and/or
maturity paid in dollars). Meaning, as the balance sheet of the systemically
important financial institutions (SIFIs) takes on water from its bloating foreign
obligations, this will cause them to reduce lending, which will undermine (II). It also
will become unaffordable to buy foreign currencies with domestic currency in forex
markets, which will undermine (I).

(IV.) Following from (I-III), as the economy goes into recession/depression as investment
plummets like a stone, a sea of liquidity becomes a veritable desert, and the national
currency’s value evaporates, the wealthy and investing classes will attempt to secure
their wealth in more solid forms, which means moving it abroad and converting it to
foreign-currency denominated forms (aka capital flight). This will further damage the
health of domestic financial institutions, reduce capital investment, and depress the
national currency in forex markets.

Without capital investment, employers will be forced to reduce output and cut hours, if not
shutter and layoff. This will rapidly deplete the purchasing power of working people. Further,
since the UK is not nationally self-sufficient in food, it requires imports (which must be bought
in foreign currency) to avoid starvation shortages within a month. I think we can see where this
is going.

Even for a country self-sufficient in food and with considerable dirigiste (state-driven)
employment, such as France, these issues would be severe. [Mitterand]

[Usually pain threat is sufficient]

Furthermore, we can see from the fate of US National Security Advisor Flynn, there are
interests deep in the normative and para-states (meaning, life-career military officers and
security-associated civil servants on one hand, and, on the other, the ‘foreign policy
establishment’ associated with a handful of elite university departments, think tanks, and policy
conferences with a rotating-door to-and-fro service in federal appointeeships) which actively
intervene above, beyond, and outside legal and electoral channels, to steer the ship of state
within ‘reasonable’ and ‘proper’ bounds. The discipline visited upon a sloppy nationalist with a
hobbyhorse of rapprochement with Putinite Russia would pale before a left-wing regime which
overturned economic normalcy in the heart of NATO…

[Intensification of sabotage; foreign bribery and meddling]

In the cases of countries like the UK or France, there is also the dirty but indisputable open
secret that the US, the reigning dominant power, regards its allies’ sovereignty as limited and
conditional. In the heady days of the 1950s-1970s, even among indisputably Western countries
like Italy or Germany, repeatedly cloak-and-dagger activities by secret service personnel who
belonged to what the US/NATO called euphemistically ‘stay-behind’ networks, intervened in
electoral or extra-electoral domestic politics. In Greece and Turkey, these forces overthrew the
normative constitutional regime and seized dictatorial power, multiple times in Turkey’s case. It
would be naïve to assume these forces do not exist in the British secret/security/military state
(MI5, MI6, Special Branch, Ministry of Defence), the selfsame which airily discussed mutiny in
major media if Jeremy Corbyn ever was ensconced at 10 Downing Street.

The neo-Keynesians who are today heirs of yesterday’s ‘Alternative Economic Strategy’ and the
‘British Road to Socialism’ heralded a half-century ago by the Moscow-franchise ‘official
communists’ of the day, will surely balk at this. “No evidence that the pound will fall that far in
forex such that starvation ensues; nor that liquidity would dry up to the point of mass
unemployment…” This is true. It would not happen overnight to an economy of the British
stature, and one more philosophically, cannot guarantee predictions of the future. But then,
when you’re enjoining the enemy on the battlefield, it is instructive to take note of one’s and
the enemy’s reserves. That reality, however distant or non-immediate, is in their reserves. What
do we have to match it? Gumption? Hope? At this point, we have gone from wishing upon a
rainbow to a promise to play chicken, and without a Plan B. Historically, it has only been
necessary to impose a taste of this pain in order to, given a coalition founded on the basis of
loyalism to the constitution-as-is and peaceful arbitration with the deep state and plutocracy,
induce a rout in that coalition’s ranks.

ffff

Implausibility, or, wishing on a rainbow