Dear Reader,
People say Britain pays too much attention to American politics, but come on. The American project was born to British parents, and even if he has since become a multi-millionaire whose life choices long ago became inexplicable to us, and whose awkward visits to the nursing home grow ever more sporadic, we can hardly lose interest in his tumultuous life. Moreover, the world runs on stories, and the US – Washington as much as Hollywood – remains the great story factory. That would all be true even if so much of our political and cultural life weren’t a side-effect of American interests.
Yes, it is cringeworthy for Britons to make American electoral politics their preferred sport – worshipping their favourite players, fixating on data, being jubilant or crestfallen when their team loses. But we probably do need an unillusioned way to be obsessed with America, and one very helpful recent text is Angus Hanton’s Vassal State. It is not really about culture, and only a little about politics. Mostly, and sleep-disturbingly, it is about money.
Hanton is an investor and entrepreneur, and plainly a details man; prose-wise, the book is nothing spectacular, but it’s sufficiently competent to convey a certain authorial personality: genial, un-hysterical, but doggedly realistic and alarmed enough by what he finds to shout about it.
The headline is that American corporations have taken over much of the British economy. Before citing some statistics, a handful of vivid examples. Weetabix, the national cereal, belongs to a company in Missouri, which also owns most of our own-brand supermarket cereals. Half of our chicken – 550m birds a year – comes from US agribusiness. Cadbury belongs to a Chicago firm, Pedigree and Whiskas to one in Virginia. Fairy Liquid, Pampers and Tampax are making money for Ohio’s Procter & Gamble; Kleenex, Andrex and Huggies for Texas’s Kimberley-Clark. Boots, Costa, Costco, Gail’s, Majestic Wine, Morrisons and Waterstones are US-owned. The two biggest UK estate agencies are JLL of Illinois and CBRE of Texas. 60 per cent of our oil is processed by Texas-based refiners. Half our farm machinery, and most of the farm-produce processing and distribution, is from US firms. In 2020 one US private-equity outfit spent $4bn (not a typo) buying up British waste-management contracts.
And of course, that’s before you get on to the most obvious form of dominance, the bridges we traipse across every day to buy, sell, relax and communicate – Amazon, Apple, eBay, Etsy, Facebook, Google, Microsoft, Netflix, Taskrabbit, Ticketmaster, Tindr, Uber, and the card and payment companies who take a little slice every time you buy a pint of milk with a contactless beep or a Taylor Swift ticket with your debit card. All very convenient, and much of it unbelievably lucrative, because once a company owns an essential bridge it can keep raising the tolls.
Hanton quotes the investor Charlie Munger, of US giant Berkshire Hathaway: “Originally we didn’t know the power of a good brand. Over time we discovered that we could raise prices 10 per cent a year and no one cared.” Perhaps they don’t care, not visibly. But they might start to wonder, after a while, why their surroundings seem so much poorer, why their salary covers less and less, why the quality of daily life keeps getting more and more rushed, why everyday products seem to be getting more rubbish; and they might start to look longingly across the ocean at the glamour and wealth of another country.
Now zoom out to the big-picture statistics:
- From 2006-18 US firms spent $56bn more on buying UK firms than UK firms spent in the other direction; this represents the “biggest route of cross-border takeovers in the world.” (My italics; Hanton isn’t much of an italiciser.)
- Add up all the assets held by US firms in Britain, the EU, Eastern Europe, Russia and Turkey, and half of them – that’s 50 per cent, one in two, every other dollar – are in our green and pleasant land.
- US corporations have more employees in Britain than in Germany, France, Italy, Portugal and Sweden put together.
- The top 350 listed UK companies put together are smaller than Apple or Microsoft. And a quarter of shares in our firms are owned by US shareholders anyway.
- “Measured by sales, the largest US companies sell more than $700bn of goods and services to the UK, which amounts to over a quarter of the UK’s total GDP. That total, from the latest IRS report, is 36 per cent greater than it was just four years previously. Considering how much of GDP is necessarily made up of labour costs and rental income, these numbers are eye-watering. But it is worse: the true amount of UK GDP dependent on US businesses will be even higher since UK companies with less than $850 million of annual sales are not even included in IRS figures.”
So that’s chapter one. And the rest of Hanton’s book takes us with equal thoroughness us through the big-tech empire, the platform economy, the untaxable slipperiness of multinationals, the depredations of private equity, the privatisation of NHS services, the lack of investment in skills, training and R&D, and the mythical nature of the “special relationship” – all somewhat familiar subjects, but ones which take on a different aspect when framed by the power imbalance between the US and Britain.
Hanton also makes clear how little the government monitors these statistics – he has had to dig out many of them himself, and often comes up short. (A small instance: DEFRA doesn’t record how much UK farmland is owned by US giants.) As Hanton points out, our blindness to what’s happening gives a kind of unreality to our politics: ministers exult over Foreign Direct Investment (FDI) in Britain, but the figures conflate a commonsense definition of “investment” – Nissan opening a big factory in Sunderland – with, say, Boots being bought up and its HQ moving to Illinois. In one of the book’s rare flashes of anger, Hanton calls the FDI conflation “the big lie”.
And if these firms are as extractive as Hanton makes out, then many schemes for national renewal must be simply unworkable. Michael Johnson, father of Samuel, used to carefully lock up his workshop’s front door every evening, even though the back wall had collapsed and anybody could walk straight in. One wonders how many attempts to restore Britain’s public realm are similarly myopic.
So should we all rise up and hurl our iPhones into the Port of Boston, Lincolnshire? Does history await some British Gandhi or Nkrumah to declare independence? Presumably not, and of course you could do a lot worse than the American Empire. But after ten years defined by Britain’s attempt to regain “sovereignty” (and leaving aside whether that was worth the effort): whatever national independence we have is a tenant’s sovereignty, not a landlord’s. Supposedly the British acquired an empire “in a fit of absence of mind”. It might be worth admitting we have been colonised in the same spirit.
Still, our destiny is partly in our hands. Most significantly, parliament is about to vote on whether to institutionalise suicide as a health treatment. Anyone aware of the crisis of Britain’s big systems – the delays, the screw-ups, the desperate lack of resources, the exhausted frontline staff, the proliferation of tents on the streets, the abandonment of the vulnerable – can imagine where this might be headed. It is unusual for The Pineapple to appear before its readers issuing a call to action – it is unusual for The Pineapple to appear full stop – but I would urge British readers to write to their MPs, who need encouragement to vote against this grotesque proposal clothed in soft words.
Image: Michael Johnson (engraving by E. Finden)