In today’s letter… why Brexit may never happen… a very British coup… a warning from history… and “operation Clockwork Orange” returns.
Tonight MPs will vote to grant, or deny, the government the right to trigger Article 50 and make good on Britain’s vote to leave the EU.
It seems a near certainty the vote will pass. But still, according to some reports as many as 100 MPs will vote against it. And I’m sure plenty of people who vote for it will do so through gritted teeth.
It’s worth remembering just how much Britain’s vote to leave the EU shook up the political and financial establishment (and, arguably, much of the mainstream media too). The establishment may have superficially accepted what’s coming – repeating the words “Brexit means Brexit” enough times will do that – but deep down, it’s still seething. You can be sure of that. Expect to see the mask slip a little tonight.
But let’s follow that thought further. Here’s the question I’ve been asking myself. If so many people – many of them powerful establishment figures – were against Britain leaving the EU… are they really going to accept the result? Or are they just biding their time waiting for an opportunity to hijack the process and warp the outcome?
I don’t mean politically. The referendum delivered a clear result. I would expect that result to be ratified by Parliament soon. The question is, does Brexit threaten the interests of powerful people beyond Parliament and if so, what are they going to do about it?
In short, does Brexit threaten the Deep State?
The real seat of power in Britain
I use that phrase – the “Deep State” – fairly often in Capital & Conflict. As do Bill Bonner and Dan Denning. But what do we actually mean by it?
The Deep State is an informal organisation of certain parts of government, the financial industry, the military industrial complex and certain elements of major industries. It is (mostly) unelected and advances its agenda outside of normal democratic structures.
Mike Lofgren, the former US politician and author of The Deep State, puts it this way:
The Deep State is the big story of our time. It is the red thread that runs through the war on terrorism and the militarisation of foreign policy, the financialisation and deindustrialisation of the American economy, the rise of a plutocratic social structure that has given us the most unequal society in almost a century.
To that, I’d add that the media now plays a huge role in advancing the agenda of the Deep State and demonising the views of people who challenge it. You only need to think back to the way the referendum was covered in the media to realise just how true that is: it was a huge exercise in telling people what to think. And it didn’t work.
Media… finance… government… military. It’s all connected. And it’s a story of how money and power warp the system in favour of some people over others.
Permanent government… Deep State… parasite-ocracy… call it what you want. The question you need to ask yourself is: does the Deep State feel threatened by Brexit?
I would argue it does. Britain’s vote to leave challenged the status quo on so many levels. If you work in finance… in the military… in politics… or in many other major industries, it’ll likely bring about major change.
I’m not here to argue whether that change will be good or bad. But it’s hard to argue that everything will remain the same. And it is a universal truth that people fear change. For those in power that’s doubly true: any disruption to the status quo threatens to disrupt your own position.
So what happens? If the Deep State does indeed perceive Brexit as a threat to its access to money and power, what next? Would it attempt a more explicit effort to “grab the steering wheel”?
I wouldn’t rule anything out at this point.
It may surprise you to hear this, but there have been several occasions in recent history when the Deep State has attempted, or prepared, to take power in a much more explicit way. These events have always coincided with periods of both political and financial turmoil.
Sound familiar?
Let me tell you the story of one.
Operation Clockwork Orange
Operation Clockwork Orange was the code name for the campaign of the Deep State – primarily the secret service and “establishment” politicians on the right – to smear the government of Harold Wilson in the mid-1970s.
Wilson was perceived as a lurch to the left. He was even described as a Soviet “plant” at one point. It also came after the 1967 devaluation of the pound – a threat to the financial establishment and the ties between money and power.
The idea was to delegitimise and discredit him. The campaign operated involving a hybrid of public and private organisations (for instance, the secret service that was nominally in the command of Wilson, and the press).
Take the politics of the left and the right out of it, and Wilson was really just a threat to the status quo. He represented change. He challenged the incumbent system. And with that challenge, came political, social and financial volatility.
That’s what motivated operation Clockwork Orange. On one level it appeared to be one part of the state attacking another, in concert with private interests. But that’s not really what was happening. It was the Deep State defending itself.
We don’t have to look back that far. Remember The Sunday Times story that broke shortly after Jeremy Corbyn became Labour leader? An unnamed general in the British army had claimed there’d be a “mutiny” if Corbyn was elected PM.
Again, take politics out of it. Corbyn may be (ironically enough, given the story I just told you) more at home in the ideological battles of the 1970s. But now isn’t the time to critique his ideas. The point is, if he were elected… he’d be prime minister. That’s how the democratic system works.
But that’s not how the Deep State functions.
It is only loosely associated with democracy. It’s far more closely related to wealth, power and status. And there’s no doubt Corbyn would be a threat to that arrangement. The “mutiny” story was a shot across the bows: a rare explicit threat, delivered with the help of the media.
We see a similar process when it comes to the financial markets. The increasing intervention of the state in the market, a move towards greater control over personal freedom with new electronic currency, the war on cash, capital controls and the like – they’re all advanced in the same way. Economists in “authority” put them forward, supported and legitimised by experts in the media and adopted by those in power. It’s the same process: the Deep State pushing its agenda with only a veneer of democratic accountability.
What does all this mean for Brexit?
Who knows exactly what comes next.
But I certainly believe Brexit is a threat to the interests of the Deep State. And I doubt it’ll be a smooth transition.
In fact, I could foresee a situation during Brexit negotiations in which political turmoil – an internal dispute in the Conservative Party, for instance – coupled with financial instability, like another big drop in the pound, could force Theresa May from office.
As a result, given no obvious alternative, we could see a relative unknown rise through the ranks; perhaps someone with a past working in the military or financial services industry.
In other words… a born-and-bred Deep State status quo supporter… come to “reinterpret” Brexit. Or… perhaps a champion of the Deep State past will return? Can you imagine Tony Blair getting on the Brexit means Brexit bandwagon?
It may sound like fiction today. But the conditions and motivation are there. Watch this space.
Until next time,
Nick O’Connor
Associate Publisher, Capital & Conflict
Category: Brexit