The political crisis engulfing the British ruling class is now on the scale of the 1970s Watergate crisis in the US. An octopus of corruption and criminality has been exposed at the heart of the British establishment.

The speed with which new revelations and ramifications are emerging is subjecting the neoliberal elite to a blitzkrieg of political damage. It could not have come at a worse time for them. Just as the Con-Dem Coalition, with the backing of the bankers and the rich, launches a class war against the working majority, unprecedented in severity since the Great Depression, its credibility has been shattered by a storm of disclosures about the corruption of the political process.

News Corp is, of course, the canker at the centre of the crisis – guilty, as The Independent summed up, of ‘phone-hacking on an industrial scale, illegal payments to police officers, attempting to pervert justice, and trying to ‘own’ politicians’.

But all of this depended upon the willing collaboration of police and politicians, spreading the rot from News Corp to the highest echelons of the British state.

So instead of detecting crimes, the police were committing them, covering them up, refusing to investigate them, and employing the perpetrators of them in senior posts.

And instead of representing the constituents who elected them, politicians were doing the bidding of a foreign multi-billionaire businessman. Instead of defending the interests of ordinary people, they became the flunkies of a media empire committed to cuts, privatisation, and the greed of the rich, while directing a relentless stream of bile and bigotry at the poorest in society.

What has brought us to this? How are we to explain political corruption on this scale?

The British ruling class is formed of the leading personnel of the state and corporate capital. It constitutes an integrated political and business elite made up of around 250,000 millionaires and their families – about 2% of the population.

This class includes bankers, senior business executives, top professionals, military commanders, police chiefs, judges, political leaders, and of course the owners of large estates and property portfolios. 

Some have inherited their wealth and position. Many have been recruited into top positions from the professional and managerial middle class (a relatively privileged layer constituting about 20% of the population).

Within the ruling class, there is intense competition for advancement, both corporate and individual. News Corp is a global media conglomerate: in this case, the wealth and power of those who control it depends upon their success in commercial competition with other corporations.

But within News Corp, there is also a career hierarchy, with grotesquely inflated rewards for those who reach the top.

At the top, moreover, there is often a ‘revolving door’ between state and corporate appointments, allowing ‘top people’ to move from one to the other with relative ease.

News Corp’s systematic phone-hacking was driven by competition – the competition to sell newspapers, and the competition to advance careers within the corporation. What has turned this into a massive political crisis is the degree to which News Corp’s culture of corruption and criminality has infected the police and parliament. And what has made this possible is the hollowing out of democracy over the last 35 years.

As the revelations flow and the heads roll, Britain begins to look more like Republican Rome or Medici Florence than a modern parliamentary democracy. It certainly seems very different from Britain in the 1950s or 1960s, when corruption was occasional rather than endemic. As James Meadway argued in another article on this website, there has been nothing like the Hackgate Scandal in Britain since the Old Corruption of the 18th century. What has made it possible now is neoliberalism.

Murdoch is a neoliberal talisman. It is not simply that his papers – amid the sexism, scandal-mongering, and brainless celebrity tittle-tattle – pump out poisonous neoliberal politics. Of equal significance is his role as a champion of the neoliberal order in the class battles of the 1980s, when, as Lindsey German reminds us, the Fleet Street print unions were broken in a massive, carefully planned, police-backed scabbing operation. Here, in the class struggles of the 1980s, is the deepest root of the New Corruption.

What is neoliberalism? It is the ideological cover for a drive to redistribute wealth from labour to capital, from working people to big business and the rich, through a massive programme of outsourcing and privatisation.

This involves turning everything into a commodity. It means doing nothing for the public good, and everything for profit.

For the Murdoch empire to buy police officers and own politicians is wholly in the neoliberal spirit. It is part and parcel of the commodification and corruption of the state in the interests of capital.

But capital’s invasion of the state – or rather the exposure of its colonisation – has detonated a massive contradiction. For the ideology of the state is that it operates impartially in the interests of all, and it is largely on this basis that our rulers claim the consent of the ruled. There are private interests, but there is also public regulation. There is a free market, but there is also democratic representation. That is the line.

The Hackgate Scandal has blown the cover. What it reveals is that neoliberalism has not only done massive damage to the economy and to society, skewing the former away from production and towards debt and speculation, and imposing upon the latter obscene inequalities on a scale unknown for a century. It has also hollowed out the political system.

Democratic rights empower the majority, not the minority. That is why they always have to be fought for. That is why they are always under attack.

Neoliberalism was a ruling class response to the gains made by working people between 1945 and 1975. In this period of relatively fast economic growth and more or less full employment, workers built strong trade unions. These enabled them to increase average wages at the expense of profit. There was a modest redistribution of wealth from the rich and big business in favour of working people.

Trade union strength was reflected in political demands and social-democratic reforms. Progressive taxation policies – where the rich paid more – underlay the development of council housing, state education, the NHS, and welfare provision.

The post-war Labour Party was the main political expression of this. It was a genuine reformist party in the sense that – though reality invariably fell short of rhetoric and promise – it carried out major progressive reforms when in government. And when the Tories were in government, they did not dare dismantle these reforms.

In the 1980s, under Thatcher, the ruling class launched a massive counterattack against the unions, the welfare state, and the working class. One group of workers after another was attacked and defeated. The most decisive defeat was that of the miners, starved and bullied back to work after a year-long struggle to save their jobs and communities.

The miners had broken the back of the previous Tory government with two great strike victories in 1972 and 1974. The defeat in 1985 of what was widely regarded as the fighting vanguard of the British labour movement was a decisive event in post-war history. The confidence of the organised working class was shattered.

At the same time, Thatcher attacked local democracy. The resistance of Labour councils in Lambeth, Liverpool, and London in particular – which were attempting to use local tax-raising powers to carry out social reforms – was broken.

And, not least, the neoliberal programme of privatisation began to unroll. Its purpose was to sell off nationalised industries and public services, thereby breaking up large bargaining units formed of well-organised workers, and creating the conditions for a ‘race to bottom’ in which wages could be driven down as rival capitalists sought to undercut each other in the competition for franchises and contracts.

The Labour Party mirrored the political changes. As the defences of the working class were battered down, as the confidence of workers to fight ebbed away, as the ruling class offensive began to rip into public services and welfare provision, Labour leaders adopted the neoliberal mantras of free-market capitalism.

Trade union membership has almost halved since the 1970s. The strike rate is at its lowest level in a century. New Labour has become an unashamed party of the rich and big business, its suited right-wing politicians representing little more than their own careers inside the neoliberal establishment. British parliamentary democracy has become a shell.   

What is missing is the essence of all real democracy in a class society: a mass movement of ordinary people able to challenge the ruling class. Between 1945 and 1975, that mass movement was represented by strong workplace organisation, combative trade unions, and a Labour Party that expressed, however inadequately and inconsistently, the reformist aspirations of ordinary working people.

The Hackgate Scandal has demonstrated the urgent need to create a new mass movement today. It has also created the opportunity.

Less than three years ago, Britain’s bankers presided over the biggest financial crash in the history of capitalism. Today, as a result of that crash and the state bailouts necessary to rescue the banks, the entire European economy hovers on the brink of a second crash. Across the Continent, programmes of austerity unprecedented since the Great Depression are being imposed on working people. Despite this, Britain’s bankers have awarded themselves 20% pay rises and £14 billion in bonuses this year.

Now, the credibility of the neoliberal political elite responsible for this policy, already severely dented by the MPs’ expenses scandal, has been shattered by the News of the World revelations.

But we need to be clear. Even if Cameron is forced to resign, even if the Con-Dem Coalition eventually collapses, the neoliberal consensus remains.

Miliband has swum with the tide in attacking News Corp. But New Labour is also deeply tainted by political corruption. New Labour was also in bed with Murdoch, and Miliband represents the same brand of identikit neoliberal politics as Cameron and Clegg.

To turn the crisis of our rulers into the possibility of a world transformed, we must build a mass movement of ordinary people. The Coalition of Resistance is likely to be at the heart of any such movement. It has to become the expression not only of mass resistance to cuts and privatisation, but also of the revulsion of millions at the greed of the rich and the corruption of a political elite that fawns on them.