Was Marx wrong? This is the question posed by Brexit.

I'm prompted to ask by this from the government's advice to business on what to do about a no-deal Brexit:

UK companies and limited liability partnerships that have their central administration or principal place of business in an EU member state may wish to consider whether they need to restructure to satisfy the requirements for incorporation in that EU member state.

Faisal Islam says this is the "first time in history a UK Govt [has] effectively suggested shifting HQs out of UK." We've gone from Johnson's "fuck business" to "fuck off business". Brexit threatens even worse than prolonged slower growth than we'd otherwise have.

This challenges Marx. He thought "the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie."

Now, there's tons of evidence for this far beyond the state's role in protecting property: state education prepares workers for capitalist drudgery; the welfare state helps to stabilize demand whilst incentivizing people to enter the labour market; and under Thatcher and Blair, a big part of economic policy was aimed at attracting businesses and maintaining confidence.

But no more. Brexit is antagonistic to the interests of capitalists. How, then, can we maintain Marx's view that the state is a means of promoting the interests of capital?

One possibility is that the interests of capital do not consist merely in high and rising profits. They also require that capitalism be seen as sufficiently legitimate that it can persist without grievous unrest. Because egregious exploitation and inequality would undermine its legitimacy there is therefore a role for the state to impose some progressive taxation or labour regulation. Sometimes, capitalists must be saved from themselves; it is their collective interest that matters, not that of individual spivs.

I'm not sure, though, that this is relevant to Brexit. Granted, backtracking from Brexit might undermine the legitimacy of the state in the eyes of some. But it wouldn't delegitimate capitalism. And whilst it might provoke civil unrest, this probably wouldn't be so great as to cost capitalism more than would a hard Brexit.

This leaves us another possibility, described by Ralph Miliband - that the state has relative autonomy. To borrow a neat analogy (pdf) from another discipline, think of the relationship between capital and the state as being like that between a woman and her dog on an extendable lead. In the short-term, the dog can run a long way from his mistress and do all sort of damn fool things. But ultimately, it usually* gets dragged back into line. Chile in the early 70s, France in the early 80s and perhaps the Tsipras government in Greece more recently are examples of this.

Brexit could fit this pattern in one of two ways. One way would be for us to end up with a "Brexit in name only" - if economic chaos, or just warnings thereof, cause a backtracking from a hard Brexit. Whether this happens via a general election or "people's vote" is not important in this context.

But there's another way. With even a smooth Brexit likely to depress longer-term growth, it'll be more imperative than ever for governments to attract capital and maintain confidence**. In this way, capital's hold over the state will strengthen; if Brexiters weren't so stupid, I'd suspect this was their motive.

All this, however, leaves Marxists with a problem. If any policy whatsoever could be seen as examples of promoting accumulation, sustaining legitimacy or of relative autonomy, what might represent refutation of our theory of the state? Does this just become an unfalsifiable theory?

I don't think so. The theory predicts that where there is a choice between promoting human flourishing and the interests of capital, the state will eventually opt for the latter. This prediction can be refuted by events, though it rarely is - but this is another story.

* In my picture, the dog runs to its death. Some of you might think this undermines my metaphor, others that it strengthens it.

** Fiscal policy is not the issue here. MMTers are right to say the state can borrow as much as it wants, subject only to an inflation constraint. But this doesn't alter the fact that tax and industrial policy must sustain profits.