Downloading PDF. Please wait... Issue 2809

Who pulls the levers of power in Britain?

The real power in society is hidden behind the appearance of democracy. Sarah Bates argues that while politicians play their part, it’s corporations and the state that matter
Issue 2809
The City of London—the bosses' lair

The City of London—the bosses’ lair (Picture: Flickr/ Images George Rex)

People across Britain will be heading to the ballot boxes soon. But will we really get a powerful say in who rules Britain? While 650 MPs take their seats in the House of Commons, those with the real power sit in the boardrooms at the top of skyscrapers.

These bosses act in the interests of their financial needs—and the needs of capital—and are often propped up by the state. Of course it matters who is sitting in Number 10 and votes can demonstrate big societal shifts—as this one will do.

The election period helps stoke up a political atmosphere where politicians have to at least pretend to care about what ordinary people think. Data from YouGov polling showed that the public is most likely to describe the economy as a “top” issue facing the country.

But big players in the world of private finance and investment are often unseen, always unelected and largely unaccountable. Politicians daily work with unelected arms of the state, including top bods in the world of finance, the military, the judiciary, bigwigs in the civil service and the police.

We’re not able to select the rulers of the capitalist system. We are only given the chance to choose arbiters for one small section of it. In The Communist Manifesto, Karl Marx and Frederick Engels write that “the executive of the modern state is but a committee for managing the common affairs” of the ruling class.

This super rich elite layer of society, sometimes called the ruling class, all share a common interest in maintaining the status quo. While politicians make important decisions, real power rests in the hands of the banks and big corporations that dominate the economy.

They decide what is produced, where investment goes and how resources are allocated. That’s why Keir Starmer has been bending over backwards to show he is a safe pair of hands for business. It’s also why any challenge to the system, no matter how timid, gets a pushback.

Financial institutions wield enormous power over elected officials. They do this most blatantly by buying off MPs with lucrative job offers, luxury holidays and offering them wads of cash.

Scandals like Greensill, which David Cameron was at the heart of, show how politicians hand out grants and loans in return for jobs and money. But the alliance goes even deeper than straight-up corruption. Engels wrote that there was an “alliance of the government and the Stock Exchange”. He described capitalist democracy as “the best possible political shell” for the system.

“Once capital has gained possession of this very best shell, it establishes its power so securely, so firmly, that no change of persons, institutions or parties in the bourgeois-democratic republic can shake it.” Writing in 1969 author and economist Ralph Miliband explained that this elite layer is drawn from a privileged cohort.

The elite, he said, had “a markedly disproportionate share of personal wealth”. He was absolutely right that they’re stinking rich—and they all know each other.

Chairmen and CEOs are enmeshed together through the formal and informal structures of private members’ clubs, boarding schools, luxury golf clubs and exclusive networking dinners. They conspire in the upper echelons of society to get the best for themselves. They make deals that affect the rest of our lives over a flute of posho Pol Roger Champagne.

And the economic power of the bosses shows that power doesn’t really lie in parliament. A report from the Oxfam charity in January showed that the richest 1 percent of people own 43 percent of all global assets. Some 148 of the world’s biggest corporations together raked in £1.4 trillion in total profits in the 12 months leading up to June 2023.

The bosses are purposefully elusive, and often present as normal people. In reality, they couldn’t be more removed from the needs of ordinary people. These are people like Noel Quinn, head of HSBC—one of Britain’s top five biggest companies. Quinn gets his £10.6 million annual fortune by lending money and charging people for the privilege. 

Charles Woodburn of BAE Systems deals in death and genocide. He gets £13.5 million a year plus added extras producing weapons for murderers like Israel. Meanwhile the mass of workers at the bottom of the ladder, propping the corporations up, are considered as nothing. Capitalist firms are set up to privilege the board room.

Their enormous economic power and political influence is a sustained and important dynamic within the system. The “markets” are often pitched as an abstract force that behaves somewhat randomly. But what happens to the economy is a direct result of the decisions made by a tiny cabal of the mega rich.

And when there’s an unwanted or unexpected result—like the 2016 Brexit referendum or prospect of a Jeremy Corbyn government—bankers will take their cash elsewhere, or at least threaten to. Miliband also wrote that the capitalist class “participate in the exercise of political power” and their “operations are sustained by the operations of the state”.

You can see this when bosses lean on the government to make decisions that mean they can keep trousering profits. In 2023, billionaire mining fat cat Andrew Forrest threatened to pull his cash from Britain if the prime minister didn’t support his hydrogen projects.

“I am a major investor here,” he said. “I am going to start pulling out. I will push my investments over to North America… I must invest where I know I have proper leadership, not leadership which is on a clickbait cycle.” And after the collapse of the bosses’ CBI lobbying body, Rishi Sunak rushed to set up a new “business council”.

Made up of bosses from 14 top companies in Britain, Sunak said it was so he could receive a “regular update on how well we are doing in delivery for business”. And the 120 business heads who wrote a letter backing Starmer will be excited at a chance to set and influence Labour’s agenda.

All parties are terrified of upsetting the markets—and the fate of Liz Truss shows why. Truss and chancellor Kwasi Kwateng’s shock budget in September 2022 promised huge government borrowing. As a result, the fat cats pulled their investments from the British economy and the pound sunk to its lowest ever value.

Because of this, interest rates shot up. Within days Truss and Kwarteng were gone—and the fatal blow was dealt by the bankers. The mega wealthy are able to pull economic levers that have huge influence. And in turn, the state protects the interests of private capital.

The state will also bail the banks out when they crash and burn to save global capitalism. Key parts of the state work together to maintain the bosses’ power and influence. And if it feels like it is being threatened, seemingly unconnected parts of the state work together to maintain class dominance.

For instance, when Corbyn was elected in 2015, a serving British army general said his government would face “mutiny and mass resignations”. The state also knows it’s got some 152,400 people in the armed forces and some 234,400 cops. 

For Marxists, it’s about locating the existing state itself but also understanding why capitalism in particular is a system that has produced it. Russian revolutionary Vladimir Lenin echoes earlier writings of Marx when he describes the state flowing from a society where the interests of the ruling class and working class are at odds with each other.

“The state is a product of and a manifestation of the irreconcilability of class antagonisms,” he wrote in State and Revolution. “The state arises where, when and insofar as class antagonism objectively cannot be reconciled.”

This analysis of the state has implications for how socialists relate to elections. It’s right to say that elections do matter, even in a system as rigged as ours. For socialists, intervention in the hugely political atmosphere generated by elections is crucial.

But it’s important to remember that a government represents only one part of the state, not its totality. To challenge the state as we know it would mean a much wider, more combative challenge.

It’s impossible to just peel off one section of the state and adapt it in workers’ interests. A real democracy would mean creating systems of decision-making where ordinary people get a genuine say—and the bosses are sent packing

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