Vassal State: How America Runs Britain
By Angus Hanton
Swift Press
£12.99
Reviewed by Cormac Kelly
“Mississippi is the poorest of the 50 US states: one in five lives in poverty and it has the highest mortality rate in America. Yet, if the UK were the fifty-first state, it would be, by some estimates, poorer than Mississippi and certainly among the poorest five or six US states.”
This is how Angus Hanton in his recent book Vassal State chillingly describes the state of Britain in the age of imperialism. Methodically outlining what has happened to British capitalism and the working class, he exposes how US corporations in particular but not exclusively have taken control of the economy and decides what workers are paid, what is bought and how we buy goods and services. They buy up UK assets which are then bled for huge profits, remove vast rents, pay virtually no tax and, most of all, super-exploit workers.
Hanton is described as a “successful businessman and investor with 40 years of entrepreneurial experience”, who through research has uncovered the extent of US corporate domination. He is of course no Marxist, and has no real understanding of the role of imperialism. The solutions he presents in Vassal State centre on making the system work. However, his book provides some valuable sources for socialists, as it powerfully exposes some of the forces behind the current state of British capitalism.
The extent of US imperialism
When we go into shops, a great many of the products bought are produced by US companies. Your shopping at the checkout is scanned by American Machines such as NCR Voyix. You pay with Visa, Mastercard, Amex, Google Pay or Apple Pay. A cup of coffee is bought at Starbucks. McDonalds, Subway, Caffe Nero and Costa are all US chains. As the book documents, an average cup of coffee bought from a high street retailer costs 30p to make and is sold at £3 or more. Most high street chains are American owned. All aspects of digital technology are dominated by Meta/Facebook, Apple, Microsoft, Amazon and Alphabet/Go.
Amazon accounts for 30% of all retail sales in the UK. While two thirds of sales are delivered directly from a British firm, Amazon acts as the gatekeeper taking a cut. Goods are then likely to be delivered by an American company. Most on-demand video services are from US media giants. US companies control the development of artificial intelligence, and also dominate advertisement, particularly for American ruling class interests.
The US embassy employs hundreds of staff looking after the needs of their corporations and puts a huge amount of effort into lobbying the government together with keeping an eye on anyone critical of US multinationals. US vulture funds such as Blackstone, Apollo, Silverdale and KKR hoover up UK companies through what’s called FDI (Foreign Direct Investment), only to then move the profits offshore, laundering the tax money before siphoning it off to the US capitalists.
The buying of UK businesses is encouraged by both the Labour and Conservative governments and in turn leads to an attack on workers, as was the case with the purchase by Kraft of Cadburys, which was subsequently followed by the closure of the UK factory. When a local company faces economic problems, capitalists launch an operation to buy them up and shut down sections they think they cannot make money out of.
Workers impoverished
For workers, the result of all this is that one in seven (4.4 million) get work through ‘platform capitalism’ apps, with a company taking a fee. Uber, Deliveroo and Amazon are built on the employment of insecure zero-hours gig workers. At Amazon, workers face a precarious lifestyle of minimum wages with insecure employment, no pay if ill, long days and backbreaking work supervised by bullying managers in controlled, prison-style conditions.
As a result, workers at Amazon in the US are fighting battles with the support of our sister organisation Socialist Alternative, for higher wages, paid holidays, job security and decent conditions at work. In the UK, the GMB only narrowly lost a recognition vote at Amazon Coventry last June.
Workers in the UK work for a swarm of private equity companies who on average during the first two years of owning a company cut one in seven staff, reduce wages and raise prices. One in twenty workers are on minimum wages or below. The private equity giants take over companies, squeeze them for profit, load them with debt and then clear off, with workers and their communities destroyed. They will quickly lend large quantities of money, quickly demand repayment, and organise a pre-planned bankruptcy to get control of the company. This way they dump pension obligations to their staff. The government is then expected to pay compensation in the form of reduced pensions to former employees through the Pension Protection Fund.
The grip of imperialism
The once hegemonic British Empire used to claim to be ‘ruling the waves’. Its ginormous power and brutal conquests put the British ruling class in a position to take culture and artefacts at will from weaker states, such as the Pantheon Sculptures robbed in a deal from Greece or the Benin bronzes looted from what is now Nigeria. Now there is enormous (and correct) pressure to return them.
While Britain today clearly remains an imperialist power in its own right, it has increasingly come under the domination of US imperialism, beginning with the end of WWII. Whether it’s supplying pharmaceuticals to the NHS or IT and computer systems, US corporations have an iron grip on supplying the British government with technical and digital facilities.
But one department in particular totally depends on the US. The UK buys most of its military equipment through the US Foreign Military Sales programme, an organisation dedicated to strengthening the US arms industry. This is no doubt a contributing factor in Trump’s relentless pressure on British capitalism to spend more on defence.
Lenin’s analysis
The role of imperialism in creating blocs, the subordination of ‘smaller’ nations to more powerful ones, is nothing new. Lenin in his book Imperialism, the Highest stage of Capitalism wrote about “the indissoluble bond between imperialism and the international trusts and, therefore imperialism and the very foundations of capitalism.”
Under Trump, the US state is superglued to the interests of the big corporations. His cabinet is worth $340 billion and stuffed with the bosses of multinationals. He sees the ethnic cleansing of Palestinians from Gaza as part of a real estate deal with huge profits to be made from a new ‘riviera’ for the rich in the Middle East.
Billionaires such as Jeff Bezos, Elon Musk and Linda McMahon might easily be categorised as greedy individuals obsessed with avarice, as indeed they clearly are. But they reflect the objective interests of the US ruling class, as its multinationals trade across the globe looking for control of markets. This can be done through the seizure of territory, the creation of protectorates, the overthrow of governments, the building of military bases and through economic penetration in the neo-colonial world.
Role of the politicians
As Hanton’s book thoroughly documents, company takeovers are encouraged by Westminster politicians through the welcoming of Foreign Direct Investment. This used to mean genuine new investment in industries, such as the Nissan factory in Sunderland, opening in 1986. Now it means corporate purchase of existing companies followed by sackings and asset stripping. A world of opportunities has been created particularly for companies in the technological field, with a subservient British capitalist class obsessed with the idea that attracting millionaires to buy firms or mansions in Mayfair is commendable.
In parliament, their politicians pass laws making it easier for wages to be driven down, together with anti-trade union laws with the intention of making struggle more difficult for the working class. As a result the enormous size and monopoly power of these companies mean they can extract vast profits in the UK. UK assets owned by the US probably represent about 30% of all US overseas investments.
Parasitic nature of imperialism
Despite dressing itself up in the language of ‘innovation’, imperialism is fundamentally parasitic. Whilst huge technological developments continue to grow in areas such Artificial Intelligence and Robotics, the venal nature of imperialism means that ruling class employs thousands of lawyers in offices in London to protect their interests, coupled with endless lobbying and PR events such as at the COP conferences, where they impose their demands and ensure nothing is done to undermine profit.
US imperialism listens carefully to anything discussed that affects their vital interests. This is the basic meaning behind terms such as ‘foreign policy’ in US capitalist circles. In its growing conflict with rivalling (and equally predatory) Chinese imperialism, the US spies on rival companies in other nations and uses extraterritorial laws to police economies across the world. The US stifles new ideas with threats and the extensive use of patents to undermine development and dictate to countries what they can produce and what they can’t. In many parts of the world where they have deemed it necessary through history and today, they have used military power to impose their economic will.
It buys the loyalty of politicians such as Blair, Cameron, Johnson after they finish being Prime Minister, with highly paid jobs, lucrative lecture tours, advising multinational companies and governments, all rewards for looking after the interests of capitalism. After all, it was the leading right-wing Labour politician and now UK ambassador to the US, Peter Mandelson, who infamously announced the government was “intensely relaxed about people becoming filthy rich as long as they pay their taxes.” What he missed out was that he is himself a habitual tax dodger!
Despite being generally the more powerful of the two superpowers in its rivalry with China, US imperialism is still fundamentally in a drawn out process of decline. It goes to great trouble to look after its interests as it fears an angry international working class much bigger than ever in world history. Their anxiety is well echoed in Shakespeare’s famous line: “uneasy lies the head that wears the crown.”
‘Made in Britain’ nationalism is no alternative
While Hanton has produced a book with many valuable sources of information, his analysis is limited by the fact that his conclusions are still pro-capitalist. He implies that if only these corporations were ‘tamed’ then everything would improve. He implies that workers’ conditions and wages would improve if only they were employed by British firms. In doing so, uses a nationalist argument which falsely suggests that there is a common interest between British workers and British bosses. Nothing could be further from the truth.
He ignores this country’s own parasitic capitalists with a history of exploitation and greed. When the mutimillionaire Sir Philip Green took over the retail giant BHS, he inherited two pension funds with a surplus of £43m. He then insisted on a pension holiday where the company stopped paying in, turning into a deficit as the company lost money. BHS was eventually sold for £1 with 11000 workers losing their jobs and pensioners taking a cut to the pension fund. This was a British boss doing exactly the same thing as US corporations, precisely because profit is the bottom line of capitalism – whether British, American, Russian, Chinese or anywhere else.
In the past at British Leyland, car workers were treated brutally, constantly bullied into working harder with lower wages under the management of Michael Edwards. His style of management was copied by BL manager Ian McGregor who was later to attack working class people as the chair of the National Coal Board, shutting down mines after the great miners strike of the mid 1980s.
Nothing US or other multinationals are doing has not already been done by UK bosses.
What socialists say
Angus Hanton naively believes that stopping the sell offs of business, active government support for innovation and upskilling workers will somehow prevent imperialism from swallowing up the UK. It might slow the process down a little, but fundamentally imperialism flows out of capitalism’s need for new markets and never ending sources of profit through monopolies and the expansion of finance capital. However in spite of flaws, the book enables socialists to drill down into how imperialism works and affects everyday lives. It contains an up to date wealth of detail on the methods and tactics employed by US imperialism in its domination of the British economy.
Lenin wrote that imperialism is the highest stage of capitalism. For millions of workers that means exploitation and misery. For the rich it means undreamt amounts of wealth. It’s a system that will inevitably lead to more wars in the battle for markets. The Russian revolution was the first attempt to destroy this system. Another uprising of the working class on an international scale is needed to bury capitalism once and for all, laying the basis for socialist world, doing away with this system’s racism, climate catastrophe and exploitation.
