At first glance, it seems an almost inexplicable paradox. A right-wing British government has invited companies controlled by the Chinese Communist Party—and in one case, the Chinese military—into the heart of the U.K.’s strategically vital energy infrastructure. The nuclear deal between Britain and China goes against the advice of the security services, the military and the U.S. government.
So to explain this paradox, we must look carefully at another major deal in the British government’s flirtation with President Xi Jinping: the inter-penetration of the two countries’ financial services.
There would seem to be no possible connection between Chinese companies building and operating nuclear power stations in 2020s Britain and a curious political role created in 1571. But the fact that the Remembrancer, a representative of the City of London Corporation, is allowed to attend and monitor debates in the House of Commons, says much about Britain’s priorities.
When considering economic and budgetary policy, the Remembrancer is at hand to ensure that our elected representatives remember that, whatever other interests they might serve, the needs of financial services must be paramount. And the near-invisible hand of the Remembrancer seems recently to have been at work ensuring that Britain’s infrastructure is made accessible to Chinese state-owned companies.
London Capital
London is at the heart of the matter. It is the focus for the country’s economic, cultural, and political power. Its primacy has been sharpened as Britain’s elites are reproduced through the same private schools and universities, and operate within the same social networks. The state has emerged with a structural propensity to privilege the interests of London elites over all others.
The problem emerged at the end of the 17th century and continued for the next 260 years via the opportunities for financial and commercial speculation enabled by what was the British Empire. Gradually, the interests of financial services came to dominate economic policy formation.
That would be problematic in any economy, but in Britain it has been doubly so because of the City’s strong preference for global speculation, or “casino capitalism.” This has come to supersede investment which supports the renewal of the productive, manufacturing basis of the economy.
Against the Common Good
Consequently, in the late 19th century, when British manufacturers were first confronted by German and U.S. competitors, they were effectively abandoned. With their obsessively short-termist orientation, banks and the stock exchanges fought shy of investing in innovation, product renewal, and advanced production processes. And no government since has intervened to reconfigure the interests of City of London institutions to match more closely our common good.
