How Britain can beat America

Review: Vassal State by Angus Hanton

Vassal State: How America Runs Britain

Angus Hanton

Angus Hanton is the last Goethean in the public eye. Every excursion he has made into the world has been a pure survey of the Facts from the viewpoint of a disinterested intellectual. He has no ideology and supports no political party. He is the sort of man who, 200 years ago, would’ve categorised all the rocks in Lower Swabia. In other words, an intellectual in the 18th century sense. Decidedly not ‘public’. His latest book details the extent to which Britain is thrall to the United States.

Although the USA has always been the world’s largest economy, people around my age will identify a novel pertinacy to this fact. At some point around 2007, Britain was slightly poorer than the U.S but it didn’t feel remarkably poorer. Unlike my colleague, I never once desired to be an American. The pound held its own against the dollar, and the disparity of growth rates was smaller than today. We didn’t interact with nearly as many American companies, there’s a hilarious “Britain in 2020” graphic from one of the extinct weeklies in which ‘leaders of future Britain’ are envisaged and ‘CEO of Marks & Spencer’ is used as the stand-in for ‘business’ as a whole. The story told in Vassal State is, thus, a relatively recent one, touching on trends we have all lived through. The means of this astonishing transformation of an American lead into a lap are manifold. One of them isn’t covered in the book, and is the embrace by U.S governments of fracking to become a net energy exporter. The others are the dominance of U.S companies in the Web 2.0 economy, the post-2008 rise of private equity, and the deliberate policy of the Conservative government vis-a-vis Foreign Investment.

Successive British governments have promoted ‘Foreign Direct Investment’ (FDI) as a means of inflating otherwise turgid growth figures. Being the paederastic incompetents they are, they have failed to distinguish between investment in plants and jobs, like the Nissan factory in Sunderland and the acquisition of equity in profitable companies, which then see their revenues spirited across the Atlantic into tax havens. U.S multinationals make up 30% of the U.K trading economy but the tax they pay on their profits amounts to barely 1% of the government’s tax take. If you think this is all a bit Jeremy Corbyn, consider that this burden is then taken up by working-class, self-employed Brits and young graduates: upon whom there is now a cross-party consensus no tax rate is too high. What’s worse is that the untaxed money doesn’t flow straight into the company coffers, the U.S itself takes a very hard line on tax avoidance, taxing everything arriving in America from tax havens; and so, untaxed profits made in Britain end up subsidising the U.S state. This itself is to ignore the simple flow of British capital into the coffers of U.S shareholders and account books: even if we made U.S companies pay their 25% dues, they’d still be funnelling 75% of their profits back to the USA, a figure of hundreds of billions of pounds in potential investment lost to the British economy.

There are a number of pertinent knock-on effects to U.S dominance of our economy which cannot be reduced to simple outflows. British tech, once acquired by American money, can be governed by U.S Presidential Decrees, meaning that we cannot decide with whom we shall share the fruits of our national genius. The monopolistic practices of these firms mean they can dictate what native firms, lower down the supply chain, may do and charge massive fees by occupying toll roads in the economy (i.e: Airbnb taxing Brits renting to each other). If you want to read all the cases where America dominates Britain economically, you’ll have to read the book. There are some truly harrowing passages which cannot escape comment, like the following description of how British start-ups are almost always swallowed up by American competitors:

“Consider the U.K computing firm Psion. It evolved the first effective pocket computers several years before Apple developed the Newton and Microsoft developed Windows for handheld services… In 2012, it was purchased by Motorola solutions of Chicago, Illinois.”

and…

“Britain’s groundbreaking semi-conductor innovations have also drifted away from our shores over the years… in 2011, Herman Hauser sold UK semiconductor innovator Icera to the U.S chip-maker Nivida for £367 million… four years later, it closed the U.K firm with the loss of 300 jobs in Bristol.”

To think what a British semiconductor industry could be doing today!