Britain's ruling elite is made up of two components, the financial elite based in the city of London and the commercial class. Both were active across the world. At its greatest expansion the imperial trading zone stretched from Argentina to East Asia, from Britain to South Africa, from Canada to Australia. However the region in which Britain historically had least influence was Europe.
Britain was at its most effective when it could align the interests of the financial elite based in the City of London with the nation`s commercial interests and harness the popular imagination in support of a national striving for global influence. Britain took little interest in continental European politics in peacetime, its eyes looked across the oceans, its global expansion beginning in the reign of Elisabeth the first in the 16th century when Britain colonized the New World. Britain, whose currency later became the world´s reserve currency and underpinned the classical gold standard, took a keen interest in the global gold trade and established the City of London as the focal point of the world´s monetary system. From the 16th century, when British popular heroes like Sir Francis Drake would seize gold laden Spanish galleons, to 20th century adventures such as the Boer War in which the young Winston Churchill particpated and which gave Britain control of Southern Africa`s gold and diamond mines, Britain´s imperial expansion combined the export of British notions of civilizational improvement – amongst other things spreading the Christian faith, building railways, creating civil services and modern government structures, providing justice and education - with undertakings which were also, or maybe even primarily, of a commercial and financial nature and which aimed at strengthening Britain´s global power and wealth. In many ways the global war on terror in which Britain has been involved since 2001, echoes back to this imperial tradition. On the one hand the GWOT claims to make the world safe for democracy and to improve standards of governance and human rights. At the same time it ensures that competition to the petrodollar standard is eliminated. One of the stated aims of the War on Terror is regime change and It is undeniable that regime change takes place in countries whose governments, like Iraq, were attempting to free themselves from the petrodollar system, or, as was the case in Libya, were planning to introduce a gold backed currency.
The first world war with Germany, which cost Britain an enormous amount of money, fundamentally changed Britain´s situation. Britain`s financial weakness forced it into a financial alliance with the USA. Following the second world war this was a relationship in which the USA was the dominant partner. Nevertheless the British ruling class` desire for Britain to remain an actor with influence on the world stage persisted, although the realisation that this could no longer be achieved through the formality of a British Empire led to a change in strategy. Since 1945 the British elite have aimed to exercise global influence by controlling institutions of global governance in partnership with the USA.
The policy of integration into a federally organized and centrally governed European Union, which would effectively transform the UK from a fully sovereign state into the European equivalent of Texas, can only be considered an aberration in historical terms. It can therefore be no surprise that the British politicians who campaigned for accession to the EEC claimed Britain would be only participating in a free and common European market and hid the fact that the aim of the project even then was to create a supranational state, whose laws and institutions would override the constitutions and parliaments of its member states.
When considering the behaviour of the British elite in the present debate, one must therefore differentiate between those who share this supranational goal, and those who remain wedded to promoting a distinctly British national interest.
One would expect the latter group to view the EU positively only in as far as it served as a mechanism for extending Britain´s global influence into Europe following the military victory in 1945. This would provide an explanation for Britain´s enthusiasm for enlarging EU membership eastwards, even as far as Turkey, thereby creating a near identical membership list for both the EU and NATO, while simultaneously trying to slow the process of European political integration and harmonisation pursued by those members close to Germany, who began the European project in the 1950s and now form the backbone of the Eurozone.
There are undoubtedly those in Britain who would like to see Great Britain operating at the same level and in the same manner as countries like Finland and Hungary, but it is hard to imagine such a vision having much appeal to the financial and commercial elite in London, accustomed as they are to thinking and acting on a global scale. Some politicians may also have seen EEC membership as a means of emancipating the UK from the USA. However breaking this special relationship was always unlikely, given the depth and breadth of the links between the two countries. These are not primarily financial, but are embedded in a common language, culture, legal system, history and in a common desire to lead the world. In any case, replacing indirect dependence upon the USA for direct dependence upon a European Union can in no way be considered an attractive alternative to those political forces wishing to reassert Britain`s independence.
Recent developments in the EU have surely made the EU even less attractive to the British elite. The British government has lost influence over EU policy debates, not least because it has remained outside the Eurozone. The Euro has been a source of so many European problems in the past decade and consequently has occupied much of the EU´s time, energy and imagination. The EU bureaucracy has begun to articulate its own policy agenda in recent years, accelerating the process of subordinating national governments to the policies of EU institutions. At the same time amongst those national governments Germany has become dominant. The German government`s unswerving loyalty to the idea of European political union has allowed it to set the agenda and to lead the efforts to solve the many crises that have befallen the EU in recent years. Britain has lost standing in continental Europe and is perceived to be disinterested and disengaged.
The EU has become a wild card for the City of London. German Finance Minister Schaeuble`s attempt some years ago to empower EU institutions to regulate the City of London must have been perceived as a serious threat by the City, accustomed as it is to enjoying privileges and autonomy that go back centuries.
It is therefore no surprise that the treaty changes Cameron has negotiated in his attempt to keep Britain in the EU include, according to the BBC, „safeguards for Britain’s large financial services industry which will protect the City of London and prevent eurozone regulations being imposed upon it, as well as guarantees that Britain will never have to give up its currency autonomy or have to become part of a unified EU state.
The question is, will this be enough? In recent years Britain has seems to have moved to loosen its ties to the USA and strengthen its ties to Asia, suggesting that London is trying to remain a global player by adapting to changes in the distribution of global power and influence. Particular attention should be paid to the flows of Gold from the West to China and India and how London and its London Bullion Market Association, which to this day remains the fulcrum of the gold market, react to these changes. The fact that Britain chose to join China´s Asian Infrastructure Investment Bank alongside Australia and South Korea against the express wishes of the Obama Administration is highly significant, as is the fact that the Bank of China replaced Deutsche Bank as a participant in the London gold fix.
These developments would suggest that London has no intention of acting just within the confines of a European Union and that a Union beset by a multitude of crises, amongst which one may list sovereign debt, youth unemployment, demographic instability, uncontrolled immigration, currency uncertainty, unfunded pension and welfare state liabilities, an inability to solve problems, a lack of unity of purpose, a massive loss of support for the EU amongst the people of Europe and increasing evidence of divisions between Northern and Southern, Western and Western Europe is becoming less and less important in this era of globalization. Indeed a case can be made that German leadership of the EU has been disastrous for Europe and that the Britain should make plans for the eventuality that the EU will disintegrate under the weight of its internal contradictions, regardless of whether or not Britain votes to stay or leave at the end of June.
One last thought regarding the fact that the decision over Brexit will be reached through a popular referendum. It was argued earlier that Britain is most successful when its financial and commercial interests are aligned and the popular imagination is mobilized in support of these interests. For centuries this was the case, as Britain expanded and built the Empire, and it remained so during the world wars of the 20th century. It was true even during the cold war. This unity of purpose between the British people and the British elite has been increasingly lost in the last few decades. This is of course not only a result of membership of the EU. Globalization and the move to global governance have generally limited national governments´ ability to define and pursue distinctly national strategies. But it is hard to imagine that the EU will be able to inspire the hearts and minds of the British electorate. Regardless of the outcome of the referendum in June, it is surely more likely, in these years of uncertainty and crisis, that Britain will rely more strongly upon those constitutional and commercial arrangements that stood it in good stead for so many years, and less likely that Britain will abandon its objections to European political integration and commit itself irrevocably to the so-called “European Project”.