The delusional little Englander ridiculousness of "Empire 2.0"

In the wake of the EU referendum result there has been plenty of out-of-touch drivel spouted about Britain's future trading relationships with the rest of the world by Tory ministers, but talk of an "Empire 2.0" strategy towards Africa pushes the boundaries of delusional ridiculousness to a whole new level.

The idea that trade relations with Africa could be any kind of tier one priority at a time when Theresa May is slow-marching the UK towards a socially and economically ruinous nuclear Brexit would be laughable enough in its own right, but reports that this so-called plan is being referred to as "Empire 2.0" just go to show how divorced from reality people in the corridors of power are becoming.

Under normal circumstances the idea of strengthening trade relations with African countries, especially some of the Commonwealth nations, would seem like a sensible enough proposition, but in light of Brexit, it's an extremely odd priority to be going on about to say the least.

To say that post-Brexit Britain's diplomatic capacities are in for a sustained period of over-stretch is putting it lightly. 

Aside from all the non-trade related diplomatic issues arising from Brexit (security co-operation, legal issues, borders in Ireland and Gibraltar, the environment, education ...) UK diplomats will surely be so hard-pressed concentrating on stabilising trade relations with their main trading partners (the Single Market nations, the US, China, Canada ...) there's no way that a sustained effort to woo Africa could be considered a tier one priority.

A bit of perspective

The UK's biggest export market in Africa is South Africa where we exported £4.2 billion worth of goods and services in 2014. Exports to Africa in 2014 totalled £16 billion, which means that if the entire continent of Africa were a single country (population 1.2 billion), then they'd be vying with Ireland (population 0.006 billion) to be the UK's 5th biggest export market.

Africa is obviously not unimportant, but in the grand scheme of things trade with Africa is clearly of far less importance than trade with either the United States our European neighbours. 

A 12% drop in UK exports to Germany would be the equivalent of wiping out 100% of our export market in South Africa. Conversely a literal doubling our exports to South Africa (a staggeringly optimistic proposition) would be the equivalent of increasing our exports to the United States by less than 8.5%.
  A bit of geopolitical pragmatism

Brexit is going to be the biggest challenge that the United Kingdom diplomatic corps have faced since the 1940s. The negotiations with our 27 former EU allies are going to occupy a huge proportion of our diplomatic capacity, and then there's the job of making sure that Brexit doesn't severely damage trade relations with other major trading partners like the United States and China.

Of course our diplomatic preoccupation with trying to mitigate the Brexit fallout with our biggest trading partners shouldn't be used as an excuse to turn our backs on Africa, but a bit of pragmatism is surely in order.

Let's say that increasing trade with Africa is a seriously important international trade priority for all players on the early 21st Century geopolitical scene. Given that the UK diplomatic corps is going to be stretched to the absolute limits by Brexit, does anyone seriously believe that over-stretched UK diplomats will be in a better position to negotiate new trade deals with Africa than rivals like China, Russia, the EU or the United States?

It's obvious that attention of the British diplomatic corps is going to be divided and diverted towards other priorities, whilst our geopolitical competitors will have very much more available manpower to focus on trade relations with Africa should they see it as a priority.

If improving trade relations with Africa were a race, then Brexit represents a massive pair of lead boots for the UK, and anyone blabbering on optimistically about "Empire 2.0" is clearly guilty of bragging about how grand their new set of lead running boots are!

The trade balance with Africa

Aside from the fact that exports to the entire continent of Africa are lower than exports to small European neighbours like Ireland and the Netherlands, and the fact that Brexit is clearly a pair of diplomatic lead boots (not the wonderful dawning of a new era that many right-wingers are pretending that it will be), there's also the fact that the UK is actually running a trade deficit with Africa.

Of course the trade deficit with Africa is relatively insignificant compared with our overall trade deficit, which is catastrophically bad after almost seven years of inept Tory economic mismanagement, but we still buy more from African nations than we sell them, which adds to our alarmingly weak balance of trade position.

If we look at just the trade in goods with Africa the situation is even worse, but a significant chunk of this deficit in goods is offset by a trade surplus in financial services.

Given the importance in exported financial services in offsetting the worst of our trade deficit with Africa, the impact of Brexit on the financial services industry seems very important. Will Brexit actually end up having a negative impact on the balance of trade with Africa as Africa-based financial services customers begin to opt for service providers from within the Single Market region?

You'd have to be an over-optimistic fool to refuse to even consider it as a possibility.

Not a bed of roses

Just the cursory look at UK trade relations with Africa should make it clear that it's all a lot more complicated than pretending that Brexit is some kind of amazing golden opportunity that can only turn out brilliantly, when it's clear that there are all kinds of potential pitfalls, especially since Brexit actually represents an extraordinarily heavy pair of diplomatic lead boots for the UK.

Empire 2.0

As if all of the ridiculously unrealistic over-optimism wasn't annoying enough, the fact people are actually calling it "Empire 2.0" is astounding. How on earth do you think a nickname like that is going to go down in countries like South Africa, Kenya, Congo, Algeria ... that suffered the terrible ravages of European colonialism?

Whoever came up with "Empire 2.0" could barely have come up with a more offensive name for the project if they'd tried ... Maybe "Colonialism Strikes Back"? Or "Operation Rape Africa"?

Feel good fodder for little Englanders

"Empire 2.0" is a nickname that could only ever appeal to little Englanders who idealise the bygone days of empire where Brits were free to travel to globe pillaging the resources of other countries and living the life of Riley, while "darkies" knew their place and stayed in their own god-damned countries.

An astounding 43% of Brits think that the British Empire was actually a good thing (rather than a brutal, repressive and deeply racist system of global wealth extraction), so this "Empire 2.0" gubbins is just a load of ridiculous feel good right-wing propaganda nonsense to keep them distracted from the fact that Theresa May is slow-marching their country towards a catastrophic nuclear Brexit.

Conclusion

It is a nice idea that Brexit could be a golden opportunity to improve our trade relations with Africa, but you'd have to be utterly delusional to imagine that this should be any kind of priority in comparison to preventing trade with our 27 former European allies falling off a cliff, or that the UK diplomatic corps will be suffering severe over-stretch because of Brexit.
If you take one thing from this article I hope that it's a little bit of perspective on the magnitude of all the Brexit consequences. As a political writer I spent hundreds of hours before the EU referendum researching and writing about the potential Brexit consequences, and trade relations with Africa barely made it onto my radar at all before the vote.

As a country we've voted for this thing, but the magnitude of the consequences is far beyond the ability of any one person to properly comprehend. Anyone who thinks they do know what Brexit is all about, and exactly how its all going to turn out in the end is clearly living in a bubble of underinformed self-deception.

"Empire 2.0" is a manifestation of this kind of self-deception. In reality the impact of Brexit on trade relations with Africa is going to be incredibly complicated, with many obvious pitfalls, but it's clearly being presented by the right-wing media as lightweight feel good nonsense for little Englanders who get some kind of nostalgic buzz from harking back to an age of Empire that very few Brexit voters are actually old enough to remember the appalling realities of.

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The Tory long-term economic plan

In the 1980s Margaret Thatcher and the Tories set about fundamentally restructuring the UK economy away from manufacturing and towards the service sector, especially financial services in the City of London. Now, with Tory "hard Brexit" they're intent on driving the financial services sector away from London by erecting a huge trade barrier against the rest of Europe.

In this article I'm going to take a look at this extraordinary Tory lunacy in a bit more detail.

Part 1

The two main reasons that the Tories steered the UK economy away from manufacturing and towards financial services were ideology and over-optimism.

The Tories wanted to destroy the power of the trade unions. The destruction of the heavy industries that the most powerful unions were based on was a core strategy in the Tory ideological war against worker power. Thus industries like coal mining, steel, ship building, rail industries and HGV manufacturing were left to ruin, or even subjected to deliberate ideological attack.

To put this Tory victory over worker power into perspective, the National Union of Miners had some 170,000 members in the early 1980s. Now there is not one single underground coal mine left in the UK and the once mighty NUM has just 100 odd members left.

Aside from wanting to destroy the power of industrial workers by destroying their jobs (and communities) the other Tory reason for this shift towards a financial sector dominated service-based economy was over-optimism. The 1970s was full of new theories like the post-industrial society, and the Tories thought that they could deliberately accelerate the process of becoming a modern post-industrial society by neglecting and undermining the industrial sectors and putting all of their efforts into turning London into a global financial services hub. They actually thought that they were modernising Britain when what they were actually doing was unforgivable economic vandalism. This delusional modernisation mentality was reflected in all of the slick political propaganda the Tories commissioned from trendy advertising agencies like Saachi and Saachi.

If we look at the UK balance of Trade the appalling consequences of this deliberate process of de-industrialisation becomes clear. Over the years the UK has been importing more and more manufactured goods, but this woeful trade imbalance has been partially offset by the trade surplus in services, mainly financial services.

Contrast with Germany

The contrast with the approach taken by Germany is profound. Instead of fighting damaging ideological wars with the trade unions, Germany actually has a law that requires worker representation on the board of company directors. Instead of taking an antagonistic class-warfare based approach to industrial relations the Germans adopted a more co-operative and conciliatory approach.

The difference in the German approach to industrial strategy is also profound.

Instead of gleefully kicking their core industries into the grave and concentrating on financial services, the Germans supported their manufacturing and heavy industries and encouraged modernisation with the aim of becoming a modern high-tech economy. Their success has been undeniable. While British vehicle, machine and machine tool industries have floundered and died off dramatically, the Germans have thrived.

The Germans don't need a vast over-sized financial services sector to offset their balance of trade deficit because they have a huge trade surplus.

Part 2

After having restructured the UK economy to make it fundamentally reliant on financial services the Tories decided to hold, and then lose a referendum on EU membership. After that they then decided to aim for a Tory "hard Brexit" that involves erecting a huge trade barrier between the UK and continental Europe.

London-based financial institutions are deeply worried that the new Tory trade barriers are going to lose them money, and they're drawing up plans to shift significant swathes of their businesses out of London to keep their access to the European Single Market. Cities like Paris, Frankfurt, Dublin, Madrid and Amsterdam are jostling to entice major financial institutions away from London. 

If the post-Brexit exodus of financial services happens, then the UK is going to be in deep economic trouble. The export of financial services will dwindle and stop partially offsetting the woeful trade deficit in goods, meaning the balance of payments is just going to get even worse than it already is.

The idea that this situation can be rectified quickly is absolute fantasy. Four decades of deliberate industrial neglect can't be undone overnight with a bit of optimistic Tory rhetoric.

If Britain wanted to rebalance towards high-tech industries in order to combat the trade deficit in goods, it needed a comprehensive industrial strategy a decade ago, not just some optimism-heavy but investment-light blibber blabber from Theresa May now.

Brexiter bobbins

The best that Brexiters seem to be able to come up with to justify the massive act of economic self-harm that we're about to do is to hurl the extraordinary accusation that "lefties" should hate banks, therefore they're hypocrites unless they support Brexit and the deliberate expulsion of tens of thousands of banking jobs, and £billions in tax revenue and £billions more in exported services.

The thing that makes this stance so extraordinary is the way that the people adopting it are so desperately willing to overlook the complete Tory U-turns on stuff like free trade (they're busy erecting a huge Brexit trade barrier with the continent) and banking (they've coddled the City of London for decades, but now they're intent on locking them out of the EU in order to please the baying hard Brexit mob).

You don't actually have to be a big fan of banking and hyper-financialisation in order to see the economic damage that Tory Brexit is going to do, you just have to be a pragmatist. It's just not a sane economic policy to spend four decades restructuring your economy towards financial services until you're completely reliant upon them, and then suddenly tell them all to "piss off"!

Part 3

Once the Tories have told the financial services sector to "piss off" what comes next?

What is the Tory plan when London loses tens of thousands of highly-paid jobs to the continent; when the Exchequer loses £billions in tax revenue; when the UK's already woeful trade deficit is made even worse by the exodus of financial services providers?

If the evidence of the last six years is anything to go by, then the prescription will be more austerity for the poor and ordinary, more wage repression, more politically partisan cuts to local government, more destruction of public services, and more tax cuts for corporations and the super-rich.

Conclusion

The long-term Tory economic plan that has played out over the last four decades is beyond belief:

"Let's put all of our eggs in one basket ... and then smash the basket up with a sledge hammer"

Despite the obvious economic lunacy of both parts of this "plan" people still insist on rote learning bizarre counter-factual narratives from the right-wing press about how the Tories are the party of economic competence. And the Tories will continue getting away with socially and economically ruinous incompetence as long as people keep rote learning ridiculous right-wing economic fairy stories from the right-wing press.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

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