So, before the Russian recognition of the two breakaway Republics and their sending troops, PM Johnson was talking big about sanctions, but in the end, they were fairly minor.
The irony is that Britain could really hurt Russia, because a lot of Russian money is stored there, invested in real-estate, and many important Russians have homes in Britain, especially in London.
Various people have noticed this, for example:
Roman Abramovich – described as having a "father and son" relationship with Vladimir Putin – has amassed a British property empire worth £200 million.
Not a penny of that is being touched by Boris Johnson's announced sanctions.
— Ash Sarkar (@AyoCaesar) February 22, 2022
But thing to understand about the UK is that it has almost nothing left that the world wants. It offers:
1) The City for money laundering and access to world financial markets.
2) London itself, still a world class city.
3) UK law, for disputes — people trust UK law more than they trust their own law (or US law, the other common third-party option).
The UK doesn’t have a significant manufacturing sector any more. It has a few high-tech companies, but is not a leader in tech. It has some North Sea oil (being depleted), and it has some very pretty real-estate and that’s, well, that’s it.
Britain mishandled the post-war period and did not upgrade its manufacturing sector. Then Thatcher decided, quite deliberately, to liquidate it and concentrate on financial services and real-estate. That’s what both Labour and Conservative governments have done for the last 43 years.
There’s basically nothing left now but the “City” and real-estate games which are based on air. Without more money coming in from outside and from financial games, there’s no reason to be in London or Britain — except that London’s already a great world city with a big financial center. But there’s nothing else; no real industry, no high tech, and the great universities are being systematically defunded along with everything else.
So Britain can’t impose real sanctions because Britain’s one real product is, “Bring your money and yourself here and your money and your self will be safe and you’ll even make more money.” That’s now the central column of the entire economy; nothing else can replace it.
“Your money is safe here unless you do something nasty we don’t like,” isn’t safety. It means political whims can destroy rich people’s lives, and that’s the exact opposite of what they’re paying for when they take their money to the City and Britain. They can get that elsewhere; if they want to be “safe except for sanctions” then hell, go to the US, Canada, or Germany.
Or, if they want to be “safe from sanctions but our rulers can fuck you up any time they want on a whim and will,” then there’s Abu Dhabi.
London, the City, and Britain offer safety to all but the very very worst rich people in the world. Without that, what is left of Britain collapses. Maybe even past middle-income status (where they’re already headed).
There was a last “out” offered. His name was Jeremy Corbyn. UK Elites colluded and lied (at a rate of about 80 percent) to make sure he wouldn’t take power, because he would have redistributed some money away from them.
So now the course of the UK’s decline is set, and if the comfortable classes want a chance of living out their lives comfortably while the rest of society decays around them, the foreign, corrupt cash must flow.
Ché Pasa
And there you have it. Ba-dup-dup.
Mark Level
Yep, it all appears to be Kayfabe. The Media will report is as true, the dumb, complacent public will buy it (or forget it) without bothering to check. If it hurt anyone with power in “the West”, obvious it wouldn’t fly. Back in JFK’s day “ask what you can do for your country” and sacrifice perhaps was sometimes practiced even by elites (?), but under Reagan such gestures were refused as unworthy. The better deserve what they stole, why would they sacrifice a dime? . . . moonofalabama did excellent coverage with many commenters predicting this, once again they are correct. If memory serves they said there was one massive Oligarch living and banking in City of London who was tied in with Israel, and thus obviously with the Tory, Labour, etc. parties who destroyed Corbyn, pretty sure it was the Abramovich your Tweeter name-checks. “Same as it ever was,” Comforting the Comfortable and Afflicting the Afflicted/ Small dawgs.
Stephen T Johnson
Don’t forget, a lot of the British crop of Russian oligarchs are actually from the losing side of the early 2000s reining in of the oligarchs (Broadly, Putin and Co. told them “You can keep your cash, but stay out of politics”) – ones who didn’t play ball, either fled – like the late, not so lamented Berezovsky, or went to jail, like Khodorovsky.
So, If I’m VVP, I’d be delighted if the Brits put them under a financial microscope. But, of course, they won’t for the reason mentioned.
People are, however, quite unclear about how conflicted Putin’s relations with many of the oligarchs are.
Hugh
I expect this comment will get squelched as my last one was in your previous Russia thread, and that’s OK. I came back to see if anything had changed, and it really hasn’t. Your comments are only open to Trumpers, anti-vaxxers, China propagandists, and conspiracy theorists. Progressives? Not so much.
With Putin engineering a war of conquest on grounds that are so dishonest even George Bush would blush, you have managed to ignore both Putin and the consequences of his war. In this post you do not look at what sanctions are possible: kicking Russia and Russians out of the global finance system, banning the travel of all Russians to the West, banning them, their families, and their assignees from owning any assets in the West, reducing Russian diplomatic staffs by 90%, eliminating Russia’s physical connections to the internet. If Putin does not want any part of the West, we should give him what he wants, as H. L. Mencken once said, “good and hard.” In our interconnected world, none of these kinds of actions would be 100% effective, but they would cripple Russia and reduce and make riskier the options of its oligarchs. Yet instead of any of this, you use the current crisis to go off on, not the Russians, but those pesky Brits. Good going.
Phil Perspective
Mark Level:
I think Abramovich has been spending most of his time in Israel. Not sure if they gave him citizenship yet. Wonder how much money he’s trying to move there. If the UK were to sanction him I wonder what it would mean for Chelsea Football Club. That’s just the thing too. If the UK were to sanction the Russians in any serious way it would certainly crash the London economy, especially the property market. It would probably crash the Miami property market as well. Which is why they won’t. Can’t have old people pissed off that their houses are only worth half what they thought they were.
Ian Welsh
The reason most of your comments aren’t let thru, Hugh, is that you insist on filling them with insults rather than just making your case. This current one is marginal, but as I wrote to a commenter who said something insulting about you (their comment wasn’t let thru) the person I feel I have some leeway to allow abuse of is me.
This blog is now fully moderated: everything goes thru me. As a result about a third of prior regular commenters aren’t here. The ones who wouldn’t stop spewing ad-homs and, in fact, most of the Covid alternative crowd who I believe are simply wrong and thus can mislead people in ways that could hurt them.
I am perfectly willing to support such crippling sanctions on Russia, so long as they also apply to America, which has invaded more countries and killed far more people over the last 20 years and to Israel which has violated the supposed sanctity of national borders and, just like Russia, annexed other nations land.
Something about the spar in your own eye.
Until sanctions are proportionate and just between countries I find them hard to support in almost any case, and I was using this case to make a point about Britain, not about sanctions.
As regards your comments, I doubt you are either willing or able to restrain yourself from ad-homs and insults, and if you can’t, I’d appreciate it if you simply didn’t write any further comments here. There are other blogs which doubtless meet your standards or you can write one yourself. It really is the best way to say exactly what it is you think a blogger should be saying. There are even free blogging platforms.
Be well.
someofparts
Darn. Leave town for a couple of days and they rearrange all the furniture.
Just wanted to say how much I appreciated this post. It is exactly why I keep showing up here – great analysis, stuff I had not put together yet, but which makes great sense and clears things up when you present it.
Hope M. Pontin stops by to comment, being recently relocated to some charming locale in the UK countryside.
Mark Pontin
I just saw this.
It _is_ nice and peaceful here in the Lake District. Yesterday I ate lunch in a pub that dates back to 1642, and as I type I can see through the window an 11th century castle’s ruins on the hill opposite, a river running below through town, and rolling hills surrounding the town that in some cases have probably been cultivated since the Romans. Since this is country that the Black Death and the Blitz — marginally outside the cities, true — rolled through in their time, there’s a sense this too will pass: there’s a shared sense of culture among people here — a way of being in the world together — that I only ever saw in the US when I was working in African-American churches.
I don’t argue with Ian’s assessment of the role of the City of London. Nor of Thatcher, who was a dreadful woman.
I do have questions about his assessment of the significance of simply manufacturing and ‘making things’ in the 21st century. For example, Germany’s model of essentially being the best 19th century industrial manufacturing economy that’s possible today, given the ever-growing capabilities of robotics and technologies like 3D printing, has become a model that depends on Germany industry continuing to have oversized energy and raw material inputs — see the news today –and continuing to convince the world that it needs to buy, forex, goods like overpriced, overengineered Mercedes-Benzes, even as countries like South Korea, China, Vietnam, and whoever’s next in that line of development become manufacturing centers. I don’t think the German model is sustainable. Developed countries have had reasons to deindustrialize beyond mere financialization.
Does the UK have almost nothing left that the world wants beyond the City’s financial services, some charming real-estate, and third-party legal arbitration? I’d actually say it’s _potentially_ better-placed than it’s been for a long time.
Fifty-sixty percent of all global genetic sequencing is currently done in the UK.
Arm, the chip company, will remain in the UK. Arm doesn’t make anything, Ian, only designs and provides standards so that one-hundred percent of the world’s data is processed at some point—either at an endpoint device like a PC or smartphone, along a data network or in the cloud—by an Arm chip.
DeepMind, currently the world’s most advanced AI, is headquartered in London. It’s subsidized by Alphabet/Google, true, but I suspect that Goggle won’t ever be able to move it elsewhere.
These are the growth industries of the 21st century, especially the first — the biogenetic technologies. I don’t make policy here but those are what I’d be pushing. Based on past performance after WWII, the UK may screw up the advantages it now potentially has. But maybe not.
Ian Welsh
Glad to be corrected on some of the tech stuff by Mark Pontin. Let’s see if the UK can turn those into industries.
Trinity
I’m not sure there are ANY growth industries, unless they are focused on easing the world into a much smaller energy and resource footprint per capita. If I was queen for the day, I would shut down bit coins, server farms, and anything that requires big data, while ramping up public transportation where it’s needed, especially in the US. Netflix can go back to mailing discs. AI is a disaster waiting to happen. Amazon and Meta Facebook (and others) would be broken up into tiny pieces and some of those pieces would be disappeared.
But other than that, I’ve really enjoyed both these articles and the comments on this topic.
Astrid
Mark,
I am glad to hear that you’re having a lovely time.
I just bought Charles Dowding’s new gardening book and several RHS monographs. Prior to Brexit, I would have purchased some sweet peas seeds from Roger Parsons. I ended up buying a bunch of primrose seeds (really) from some British expats living in Brittany. Britain still leads in hobby horticulture (the Dutch being better on the big business side, the Germans and Japanese better at breeding really good cut flower and vegetable varieties).
Unfortunately, this tends to translate to Americans unsuccessfully trying to grow many plants that were bred to perform in a maritime climate, as anyone trying to exhibition Spencer sweet peas or English roses (hate hate hate…I have 7 poor performers, when the German and French bred roses are bulletproof champs) in the eastern USA will tell you.
GM
>Glad to be corrected on some of the tech stuff by Mark Pontin. Let’s see if the UK can turn those into industries.
Well, he mentioned that the UK does a lot of sequencing.
But what good does that sequencing do?
People will quickly forget because of the war but we are still in a pandemic.
Nobody sequenced more genomes than the UK. Its scientific infrastructure tracked the course of the pandemic better than anyone other than Denmark and a couple other places.
But what was the point of it given that absolutely nothing was done in the end to contain the virus?
And right now all containment measures have been dropped, even the requirement to isolate, and the rumors are that we are soon going to see and end of data reporting.
Now who took that approach (cover it up and pretend there is no pandemic) first?
Turkmenistan and Tanzania.
So despite its advanced sequencing capability, the UK has turned out to be, when it came to what really mattered, i.e. stopping transmission, on the same level as Tanzania.
It didn’t have PPE at hand when the pandemic first hit, nor did it have the capability to produce it.
And it never managed to organize itself to mass test everyone and then isolate the positives, as they do in China.
So again, what good was all that sequencing for?
Meanwhile good old manufacturing might (of actual physical stuff) allowed China to give its healthcare workers multiple layers of top notch PPE from the start, and not even its healthcare workers – if you’ve been at an international airport over the last two years, you might have seen Chinese people dressed from head to toe in better PPE than healthcare workers ever got in many places in the West. And it also gave China the logistical capability to actually contain outbreaks
So yeah, being able to make stuff matters. A lot.
Mark Pontin
Thanks for the responses, all.
Yes, the response to COVID by Johnson’s administration was particularly ludicrous. For almost two months at the start, they stuck — through a combination of stupidity, cowardice, and dishonesty — to the wrong pandemic plan designed for an entirely different pathogen.
This is aside from the neoliberal response of the West in general where maintaining the heirarchy of debt and financialization that places current elites at the top was prioritized over the overall health of the populace.