Tufton Street is a pretty lane in the London district of Westminster overlooked by elegant Georgian-style buildings. Numbers 55 and 57 house the offices of the most important British pro-Brexit think tanks, think tanks inspired by an ultra-liberal economic philosophy with eloquent names: Adam Smith Institute, Tax Payers Alliance, Leave Means Leave and others. Their lenders belong to the most innovative and unscrupulous segment of last generation finance: hedge funds, investment banks, hedge funds in general, the crème of the City in short.
Whether it was these the major supporters of the research centers in favor of the separation of London from Brussels it can surprise. A narrative has mostly passed across continental Europe that the UK has split in two like an apple split in half over Brexit: with the financial world, young people and the more dynamic parts of the economy who would have been supportive of the Remain, while the older and more conservative sections of the population and business would have lined up for the Leavenworth. But evidently the story is more complex and this partial narration is in some respects a self-consoling exercise for those who have remained inside Fortress Europe.
The latest issue of The Diplomatic World releases UK Electoral Commission data on campaign finance for Brexit referendum, broken down by fodder of the Leavenworth and Remain. Surprisingly, 57 percent of Leave disbursements came from the financial sector versus 36 percent from the industrial sector, what once would have been called the oldeconomy. Not only: there was no homogeneity of choices in the financial sector. Banks, pension funds, consultancy and communication companies, i.e. the traditional protagonists of finance focused on the collection of savings for short-term investments inspired by prudence, supported, albeit to a limited extent, the campaign of Remain, while the actors of the so-called "second financialization", hedge funds in the lead, have almost all committed themselves to the Leavenworth.
The reason is twofold, economic and political. Seen from Paris, Rome or Berlin, the choice of Brexit appeared as a closure of the United Kingdom within its insular borders, precisely when the world was tending to break down all borders in a process of growing integration. Seen from the hedge fund trading rooms of the City, however, Brexit looked more like an opportunity for opening than a risk of closure. The dream of the actors of the "second financialization", today increasingly influential across the Channel, is make London a western Singapore, or rather an offshore market, a sort of tax asylum for all those, institutions or individuals, in the world who wish to move their assets in a regime of total freedom. The English press called it the dream of a "Singapore on the Thames”. For the exponents of this segment of finance, leaving the European Union is equivalent in other words to get rid of the cage of rules and controls that Brussels imposes on financial institutions to protect stability, paving the way for internal liberalization policies.
That for the United Kingdom, Europe has always been a bit like a cumbersome lover, from whom more and more is being asked to keep the relationship alive, we have known since the days of Margaret Thatcher. Brexit now uncovers the ancient liberal impulses of Adam Smith's country multiplied n times (as we shall see): all this just at a time when Keynesianism and the importance of the role of the state are making a comeback in continental Europe, especially after the pandemic.
In the essay The era of authoritative finance, the French monthly investigates the cultural background of the forces that supported London's exit from the EU and probes the ideas championed by the Tufton Street think tanks. The bottom line is that the Brexit project is not so much inspired by neoliberal ideas: it goes far beyond Margaret Thatcher and Milton Friedman to arrive at libertarian positions in economics associated with forms of political authoritarianism. The adjective "libertarian", therefore, should not be understood in a sense of the left, so to speak, but in the sense of a total prevalence of the market over the state and of the individual over the state's claim to regulate the rights of individuals, all accompanied by sympathy for muscular positions in the political field.
The libertarian approach then extends to the question of relations between states, where multilateralism is rejected not in favor of forms of isolationism, but of relations between individual states defined solely on the basis of their relative economic interests. According to David Friedman, son of Milton, the state should also leave the public services sector, such as the police, justice or defence, which should be privatised. From a libertarian point of view, collective well-being is not the result of an invisible hand that guides the drive for profit of individuals towards it, but the desire to get rich is an end in itself that is independent of a collective purpose.
With the victory of Leavenworth on Remain and the arrival of Boris Johnson at 10 Downing Street, the exponents of this second generation finance they began to occupy key positions in the Johnson cabinet, entering the control room of His Majesty's administration. Last February Rishi Sunak, founder of the hedge fund Theleme Partners and a leading member of the right-wing think tank "Policy Exchange", was appointed Chancellor of the Exchequer for example in place of Sajid Javid, banker of Deutsche Bank and deputy. Co-founder of hedge fund Somerset Capital Management Jacob Rees Mogg has moved on to the prestigious and influential post of Minister for Parliamentary Relations. But we could go on.
These developments help to understand the background of Brexit and the choices of Boris Johnson, a character who seen from across the Channel can sometimes appear folkloric. In the last decade, in reality, the ultra-liberal ideas of the Tufton Street think tanks, generously supported by second-generation finance, have gained share in the Atlas Network, a transatlantic network of ultra-conservative think tanks in which the major think tanks also participate of the American radical right. It's about a politically coherent galaxy whose extreme positions lead to the justification of authoritarianism. Hence the definition of "authoritative finance” chosen by The Diplomatic World.
In its radical forms, in fact, this right-wing libertarianism in which the market without rules dominates the scene also considers the existence of compensatory and redistributive mechanisms of income put in place by democratic regimes to guarantee social cohesion to be superfluous. The logical consequence of this approach is the use of force to ensure social control otherwise ensured by democratic regimes.
