I have written in the past about the way sections of the English Middle-Classes so identify with the interests of Capital when in fact the interests of Capital are often not in their interests. I have also written about the contradictions and inconsistencies in much conservative thought. This extract from Michael Luntley’s 1989 treatise, The Meaning Of Socialism, I think gives another example of how the interests of Capital are not synonymous with the interests of the middle-classes and how in the UK specifically class places a crucial role in creating a contradiction.
Michael Luntley. The Meaning Of Socialism. Duckworth. 1989. ISBN 0715623060
“The conditions for successful agency in the domain of many small businesses are not the same as the conditions for successful agency for big business. The latter, generally, profit from the deregulation of financial markets and the freedom to transfer Capital and money across national borders. Indeed, for the multinational corporations that so dominate our economy, such deregulation and freedom is essential. It does not even matter to such large corporations if the foreign exchanges are volatile. For such businesses there is money to be made by diversifying into currency speculation; and, for the shrewd operator, the prospect of moving significant amounts of money around the foreign exchanges can compensate for export difficulties within one small area of its operation.
Things are different for the small specialist business. The conditions of successful agency for such concerns are not identical with the conditions of Capital’s success. Such businesses need an economic space in which to breathe and to develop products. They need a certain amount of money of security from the often hostile winds of deregulated financial markets.
A good example of this lies in the area of investment. A comparison is often made between the different banking practices in the UK and some of its major competitors, West Germany being a good example. The difference is this. In the UK banks are not geared to long-term investment strategies in a way that is common in West Germany. UK banks are much more likely top take a short-term view and assess a loan request with regard to how much return can be expected this year or next in order to pay a good dividend in the immediate future to its shareholders. This is not so in West Germany. There it is much more common to engage a bank in the sort of long-term financing which is so often essential for the development of new products. It is familiar anecdote about English industrial life that our ability to come up with new product ideas is matched only by our inability to find ways of financing that development, with the consequence that the new products end up being exported to a foreign manufacturer to develop. There is much more than a grain of truth in such anecdotes.
An important consequence of the attitudes of West German banks is that the West German stock market is not nearly so important to economic life as the UK stock market, for German firms do not need share issues to raise capital for investment” they get it from their banks. A consequence of this is to dampen the game-like enthusiasm with which English companies play the stock market looking for keen take-over bids and, once more, unsettling the smooth economic and financial planning so essential for a healthy small-business sector.
The German experience here is rather special, for the attitude of their banking system to investment is not something that has been imposed by state regulation. It has simply arisen, naturally out of different traditions. No doubt, once again, the fact that the UK banking system has not evolved like this is tied up with the class system. Banking is an occupation that has typically been recruited from a different class from that which the engineers and manufacturers have come. When engineering friends complain that their companies are run by accountants with a fine head for figures but an empty space where grasp of the needs of manufacturing should be, they are often enough voicing a class-based complaint. This is familiar: we should act to change it. No Socialist party can afford to ignore the business community: no socialist party with the courage to throw off the shackles of an outmoded class sensibility has any good reason for ignoring the needs of large sections of our business community.”
I Am Not A Number
Political and Philosophical Dispatches From An Individual Living In A Society