Ergebnisse & Perspektiven des Marxismus

# Capitalist Conspiracy in Europe – Labor and the Common Market

The following article about the forerunner of the imperialist European Union (EU) was published in 1973 in Workers Vanguard,1 newspaper of the Spartacist League/U.S.

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The defeat of the Common Market referendum in Norway is a victory for the international working class. Throughout Europe the EEC is profoundly unpopular with the working masses, who correctly see it as a device to solve the acute economic problems of the monopolies at the expense of the exploited. This hostility would have long since destroyed the bourgeois Common Market, and opened the road to a united revolutionary mobilization of the European working class, if it had been clearly expressed at the political level by the dominant workers’ parties. However, the agents of the bourgeoisie who lead the Communist, Socialist and Labor parties of Western Europe have managed to distort, fritter away or simply ignore the mass rejection of the EEC at every crucial point. Thus the struggle against the bosses’ Common Market, for a united socialist Europe, is at the same time a determined battle against these treacherous misleaders of the working class.

## The Rich Man’s Club

Since Marxists have generally regarded the international integration of capitalism as providing the material basis for socialism, it may not be obvious why the destruction of the Common Market should be a major goal of the European labor and socialist movements. In the imperialist era, alliances between capitalist states, including their economic aspects, are directed against other states, advanced as well as backward states. The Common Market is essentially an unstable alliance between French and German capitalism on the basis of the most reactionary economic policies. Common Market trade policy is highly protectionist, particularly in defending backward French and Italian industry from the imports of backward countries. Thus, while 25% of the U.S. textile and clothing consumption is imported from backward countries, less than 10% of Common Market consumption is. And textiles is a critical industry for backward countries, one of the few that can effectively compete with the advanced capitalist countries.

An important „achievement“ of the Common Market is the Common Agricultural Policy which is thoroughly reactionary. Designed to benefit the big European grain producers, notably the French, who have rallied the remnants of Europe’s peasantry to their cause, the Common Agricultural Policy means artificially high food prices supported by government subsidies and an impenetrable tariff. Thus, Common Market food prices have normally been 50% higher than in Britain, even though Britain imports most of its food. Adjusting to the Common Agricultural Policy has been the most important single cause of the current rampant inflation in Britain.

The Common Market is a plan for the economic integration of West Europe on explicitly capitalist grounds. Article 52 of the founding Treaty of Rome calls for „freedom of establishment“ and „the right to engage in and carry out non-wage earning activities.“ Article 67 calls for the abolition of „restrictions on the movement of capital.“ Any workers’ party which signs or endorses the Common Market agreement is explicitly committing itself to maintain a capitalist economic system. With the British Labour Party’s acceptance of the Common Market, the right wing of the Labour Party finally succeeded in invalidating, in effect, the famous Clause IV of the Labour Party constitution (adopted in the revolutionary high tide of 1917) calling for the nationalization of the key sectors of the British economy.

A workers’ revolution, or even a sufficiently left-wing reformist government under capitalism, would face massive economic retaliation from the rest of the Common Market. It is true, of course, that any anti-capitalist or even reformist government is subject to international capitalist reprisals. However, by entering the Common Market, a nation links its economic structure more closely to the other capitalist member-states and encourages foreign investment, thus making it more vulnerable to international capitalist reaction.

## Fragile Partnership

The Common Market is based on agreement between the parties to undertake their plunder and exploitation jointly as long as the current expansionary wave lasts for all concerned. As soon as one or more of the participating capitalist classes begins to suffer from the effects of free trade competition with the others, however, the entire edifice will collapse and protectionist nationalism will reemerge.

Already the more nervous bourgeois forecasters in Europe stand in fear of the coming American economic offensive in the European market (viz: the French arms manufacturers are looking for a deal with their European counterparts to ward off an expected U.S. dumping of new arms as the Vietnam war absorbs less), and of increasing competition for shrinking markets between the European „partners“ themselves, leading inevitably to new crises. This process will bring collapse to the Common Market bazaar tent, along with a general economic slump and increased class struggle. As the crisis develops, it will be the same social-democratic parties and their CP allies which will form the last bastion of defense of the capitalist order itself, as did the CP in France in 1968. Recognizing the dual nature of these parties as workers’ parties with bourgeois leaderships, the revolutionary vanguard must seize every opportunity to set the base against the top, carrying on a merciless criticism of the sellouts by these misleaders of the working class.

## U.S. Imperialism and the Common Market

The two political bases for the Common Market’s existence were the desire by the U.S. to strengthen West European unity against the Soviet Union and the desire of the French ruling class to take advantage of Germany’s political weakness stemming from its defeat in World War II. While the Common Market facilitated U.S. investment in Western Europe, American government support for the Common Market was based on strategic political considerations. The American ruling class wanted to suppress that historic economic conflict between the European powers for fear it would disrupt the military alliance against the Soviet Union. John F. Kennedy said this quite openly:

„The success of our foreign policy depends in large measure upon the success of our foreign trade and our maintenance of Western political unity depends in equally large measure upon the degree of Western economic unity.“

In its early period, the Common Market was very much part of American-dominated Europe. Thus, Walter Hallstein, then head of the Common Market Commission and the ex-foreign minister of West Germany who engineered the diplomatic isolation of East Germany, could tell a group of NATO parliamentarians in 1962:

„European integration is at present limited to economic subject matter, but potentially is a major political contribution to the strength of the Free World. That, not a common stake in ‚imperialism‘ as Premier Khrushchev alleges, is the true link between the EEC and NATO.“

Over time, U.S. political support (including support for British entry) has eroded, while its opposition to Common Market economic policy has increased. There are several reasons for this, centering on the growth of the European imperialists as economic rivals of the U.S. Having decided to put Europe and Japan back on their feet in 1947–48 in order to forge the Cold War alliance against the Soviet Union and preserve capitalism, the U.S. is now faced with the loss of its hegemonic position as the dominant imperialist power. Instead, it is merely the strongest among many rival imperialisms. This is reflected in the shift in world trade during the post-war period. Between 1947 and 1965, the U.S. (and Canadian) share of world trade dropped from 27% to 18%, while that of Western Europe as a whole rose from 34% to over 40% (these figures are modified by the fact that foreign trade is more important to the economies of the European countries than it is to the U.S.).

But while Europe experienced recovery, the U.S. continued its initial heavy investment in European industry, its capital assets increasing from $4 billion in 1958 to$14 billion in 1965. The imposition of capital export curbs by Johnson in 1965, rather than reversing the trend, increased the tendency of U.S. capitalists to finance their ventures on the European money market (see „American Empire Shaken“, WV No. 2, November 1971). Partly reacting to the American investment invasion, Gaullist France pursued a semi-neutralist foreign policy, which involved pulling out of NATO. Johnson’s 1965 measure was a partial concession to France, but in general, U.S. capitalism is increasingly less able to make short-term economic sacrifices to secure long-term strategic goals.

## Challenge to the U.S.

The U.S. has fought a basically unsuccessful battle to prevent the expansion of the Common Market’s commercial sphere of influence through tariff manipulation. Gradually the U.S.-dominated free trade area under the General Agreement on Tariffs and Trade (GATT) has been undermined as the Common Market has set up its own area of special agreements, based primarily on the former colonies of the European countries. The current French campaign to turn the Mediterranean into a Common Market lake is probably over-ambitious, partly because it is a direct challenge to U.S. foreign economic policy. The proliferation of preferential trading and associate agreements, which began with 18 former African colonies, chiefly French (Yaounde Convention), and is now taking in most Mediterranean countries and some Caribbean countries, angers U.S. capitalists especially because it tends to include preferences for European capital investment as well as trade, and because it is extending beyond the „traditional“ imperialist spheres of influence of the European countries: i.e., the „Six“ of the Common Market are doing a little poaching on what the U.S. considers to be „its“ territory. If successful, these agreements would destroy GATT, further marking the decline of the American empire. „If the EEC keeps this up,“ said a Nixon Administration trade expert, „they will have a system that effectively fences out all competition from the U.S. and Japan“ (Newsweek, 27 November 1971).

This is the context behind the talks on European security which are already in a preliminary stage in Helsinki, the strategic arms limitation and balanced force reduction talks (SALT and MBFR), and the planned trip of Nixon to Europe next summer to discuss trade. The Nixon Administration is attempting through these negotiations to play its Western „allies“ off against the Stalinist deformed workers states by utilizing the considerable relative superiority which U.S. capitalism still enjoys. Lying chiefly in the greater size, resources and technical superiority of the U.S. corporations, this relative superiority will enable the U.S. to move more massively and more rapidly than its rivals into the newly-opening market in the Soviet Union and the East European deformed workers states. European capitalists are already having panicky visions of U.S. automobiles, made with cheap labor in Eastern Europe, flooding West European markets. Shortly after the huge wheat deal, which alone quadrupled Soviet-U.S. trade (to about $1 billion), the U.S. announced impending agreement on another deal which dwarfed even it: three U.S. companies would build a$10 billion natural gas piping system to transport \$45 billion in natural gas from Siberia.

The U.S. will attempt to blackmail the West European bourgeoisies into providing more favorable terms of trade for the U.S. through a limited threat of U.S.-Soviet cooperation. U.S. negotiators at the arms talks, particularly MBFR, are in a good position to ensure a favorable balance of military forces in Europe for the Soviet Union, through an extensive withdrawal of U.S. troops, which European rulers oppose. The holding of the conference on European security in the first place is seen as something of a diplomatic victory for the USSR, which has been calling for it for years, although it is mainly a function of the capitalist drive to exploit new markets. The U.S. will wield its diplomatic club so as to extort concessions from the European capitalists without handing any qualitative victories to the Soviet Union.

## France vs. Germany

In addition to the original U.S. grand design, the Common Market is a product of the French bourgeoisie’s attempt to take advantage of the disparity between German economic strength and political and military weakness. The forerunner of the Common Market, the European Coal and Steel Community, originated from Allied occupation of the Ruhr steel complex. There is no doubt that the French bourgeoisie would have opposed returning the complex to direct German sovereignty. On one level, the Common Agricultural Policy is a subsidy to a section of French capital reminding one of the post-World War I Versailles reparations exacted from Germany.

However, since the fifties, German economic strength has gradually overcome the effect of its defeat in World War II. The balance of power in the Common Market shifted slowly, but clearly, to the disadvantage of France. British entry marks a partial victory of Germany over France. The fragility of the German-French economic alliance was clearly demonstrated during the 1971 international monetary crisis which destroyed the utopian project of a unified West European currency system. The Germans unilaterally upvalued the mark and forced the French to devalue the franc, thereby demonstrating that when the fundamental interests of its member states conflict, Common Market agreements are worth less than the paper they are printed on.

## Reformist Betrayals

There are few more significant proofs of the rotten reformist leadership of the West European labor movements than its failure to combat the Common Market. While in the first years of the Common Market, the French and Italian Communist Parties ritualistically denounced it, they never mobilized their mass base against it. And paralleling Soviet support for Gaullist style neutralism, the West European Stalinists have adopted an attitude of benign neutrality toward the Common Market. The Social-Democratic labor parties of Europe are being relied upon heavily to drag the working class along by the nose.

In Denmark, the Social Democrats managed to secure a „yes“ vote for entry into the Common Market, but only at the expense of desertion of the party by the core of its working-class base. A trade union bureaucrat was then brought in as premier to help prevent a deepening of this split and subordinate the workers’ movement more securely to the government policy.

In Germany, the election between Brandt of the Social Democratic Party (SPD) and Barzel, witch-hunting anti-communist of the Christian Democrats (CDU-CSU), was a key test for U.S. as well as German strategy and Common Market policy. Brandt ran on his record in office of opening up ties to the East: Ostpolitik. With a little help from the Soviet Union and the East Germans, who granted new concessions just before the elections, Brandt won handily and secured the parliamentary majority (together with the small, bourgeois Free Democrats) required for the passage of his treaties. Rather than a shift to the left, Brandt’s election was simply a confirmation of the German bourgeoisie’s plans to penetrate its old markets in Eastern Europe once again, this time through deals with the Stalinist bureaucrats, who are desperate for capitalist trade, technology and even capital investment. The election also confirmed the German ruling class’ partnership with the U.S., in which the German mark has been re-valued upwards (a sacrifice of competitiveness on the world market) several times and backing given to the dollar in exchange for U.S. support for the Ostpolitik. German workers, however, are paying for this partnership and the economic expansion through very heavy inflation. West Germany has the highest inflation rate in Europe, $6.4$%, up from $2.7$% during Brandt’s three years in office alone. (The Common Market countries generally have high rates of inflation compared to the U.S. – France: 6%, U.S.: 3%.) Barzel attacked the inflation, but supported the same basic policies, which rendered his criticisms irrelevant. Brandt won support in the working class by appearing to be moving left, away from the Cold War hysteria represented by Barzel (whose political history is strikingly similar to Nixon’s). The bourgeoisie stuck decisively with Brandt (except for the right wing represented by Barzel’s chief ally, Franz Josef Strauss) because of the SPD’s demonstrated ability to tame the demands of the workers through the trade unions upon which the SPD is based. If Barzel had been elected with inflation continuing, the trade union bureaucrats would have lacked a good excuse to keep holding down the wage and other demands of the workers.

## British Labor and Entry

However, it is in Britain that the clash between the labor movement and Common Market has been most intense. Any attempt to understand the Labour Party’s policy toward Market entry must begin with the fact that the Wilson leadership’s opposition to entry is completely phony. The Wilson leadership is just as committed to British entry as the Conservative Party and did everything possible to get Britain into the Market while the Labour Party was in power. In fact, pro-Market Labour politicians regularly bait Wilson that it was he who won them over to British entry in the first place. The Wilson leadership only came out against joining the Common Market after it had been voted out of office, i.e., when the Labour Party could „oppose“ entry in words without affecting entry in fact. Wilson’s „opposition“ to Market entry is designed solely to recoup the popularity the BLP lost while governing and to prevent the anti-Market campaign from being dominated by the Labour left and reds. (An opinion poll in 1971 showed 73% of the British population opposed to entering the EEC). Even now, the Wilson leadership is careful the Labour „opposition“ does not present a real threat to British entry. While the Trades Union Congress (TUC) voted to oppose entry on principle, the Wilson-Benn leadership pushed through a resolution at the last Labour Party conference merely to re-negotiate the terms of entry.

But this was not enough for these traitors. When the pro-Market wing of the BLP, led by Roy Jenkins, threatened to break party discipline in the October 1971 vote on affiliation in the House of Commons, Wilson okayed it in exchange for a promise to support the leadership in filibustering against the specific enabling legislation later on. Then, when the filibuster was staged last March large numbers of Labour MP’s, including several party leaders, were conveniently absent at the voting, leading to the collapse of the maneuver.

The TUC resolution opposing Market entry on principle is a victory for the British working class, but a hollow one. The leadership of the British labor movement has a history of supporting noble-sounding socialist resolutions at conferences and then ignoring them (the 1959 Labour Party conference resolution in favor of unilateral nuclear disarmament being a classic example). The leadership of the British unions must be forced to stand up for its „principles.“ The British working class has shown its ability to overcome parliamentary cretinism and resort to industrial action when its fundamental interests are attacked: Common Market entry is a fundamental attack on the British working class; the trade unions should meet British entry with a general strike. By demanding that food prices be reduced to pre-Market levels, the British labor movement can attack the Common Market at its weakest point and gain widespread popular support for an anti-Market strike.

## French CP Defends the Fatherland

The French CP provided a virtually identical example of sham opposition, adding to it a typical Stalinist „theoretical“ explanation. Faced with a surprise referendum on the expansion of the Common Market by Pompidou, the CP leadership called for a militant-sounding campaign on the slogan, „No to the Europe of the Trusts.“ However, the CP was in the middle of negotiations for an electoral alliance with leaders of the Socialist Party, who had for years favored the EEC in general and British entry in particular. Rather than fighting it out over this crucial class issue, the CP agreed to let the SP call for abstention, while formally calling on its own supporters to vote „no.“ A month later they signed the joint, popular-front program with the SP, naturally leaving the question of the EEC unresolved.

Even more interesting is the CP’s justification for its reluctant „no“ vote. It seems that the expansion of the Common Market is one of the „dangerous aspects“ (as opposed to the „positive aspects,“ perhaps?!) of Pompidou’s foreign policy, because it is „contrary to independence and the national interests.“ Lest anyone should imagine that the CP preserves any vestige of Leninist proletarian internationalism, the CP explains:

„The European conceptions of the French Communist Party, as with any responsible policy concerning the national interests of France, attempt… to determine the scientific ways and means of authentic national independence. We refer to the thesis of the Communist Manifesto where Marx indicated that the liberating struggle of the workers begins in the national framework…. The founders of scientific communism stood opposed to national nihilism. For them the fatherland is a powerful factor in the class struggle led by the proletariat.“

– „Le manœvre européenne de M. Pompidou,“ France Nouvelle, 28 March–3 April 1972

This is a fundamental betrayal of the most elementary principles of Marxism, a betrayal common to all Stalinists, who seek to accommodate to the „progressive sectors“ of the bourgeoisie. In the Communist Manifesto, Marx and Engels wrote, „In form, though not in substance, the struggle of the proletariat against the bourgeoisie is primarily national.“ To make their meaning even clearer, they state, „the workers have no country.“ Revolutionary internationalism, not reactionary French chauvinism (or any nationalism), is the only basis for consistent, working-class opposition to the bourgeois Common Market. The CP position is a direct reflection of the class interests of the wealthier sections of the petty-bourgeoisie, who are threatened by the domination of the big trusts and are in need of national protectionism for their enterprises. The CP makes clear that its opposition to the Common Market is not on the basis of principle: „[CP] hostility to the Treaty of Rome… is naturally accompanied by a positive alternative…. The refusal to imperialist integration and supranational institutions necessarily requires … a revision designed to democratize the EEC, where workers’ and democratic formations must be represented with real rights.“ The CP position is not „down with the bosses’ Common Market,“ but for a petty-bourgeois Common Market!

This betrayal on a fundamental class issue is, of course, typical of international Stalinism since its inception. It was Stalin himself who branded the slogan, „For a Socialist United States of Europe“ a Trotskyist position. This led naturally to the French CP’s „defense of the fatherland“ position in World War II, to the refusal of the West European CPs to oppose the Marshall Plan in the post-war years, to the French CP’s support to French colonialism in Algeria, and to the recent declaration by Enrico Berlinguer, head of the Italian CP, that it is not necessary to demand immediate withdrawal from NATO! It is the same logic which led the reformist social-democrats throughout the world to support their own bourgeoisies in World War I – the logic of class collaboration.

## Smash the Bosses’ Common Market!

Both the impulse toward supra-national capitalist institutions and toward proletarian internationalism share one objective base – that the national state now constitutes an obstacle to the expansion of production. It is, therefore, a question of fundamental importance for the socialist movement whether capitalism can overcome its national limitations or whether these limitations must lead inevitably to inter-imperialist war, with the concrete possibility of the annihilation of the human race. When this question attained decisive political importance for the socialist movement, in the Second International, Kautsky answered it with the theory of ultra-imperialism. The theory of ultra-imperialism projected the peaceful integration of the international monopolies leading to the creation of a genuinely international bourgeoisie and an effective (capitalist) world state system:

„Cannot the present imperialist policy be supplanted by a new, ultra-imperialist policy, which will introduce the common exploitation of the world by internationally united finance capital in place of the mutual rivalries of national finance capital? Such a new phase of capitalism is at any rate conceivable.“

– Kautsky, quoted in Lenin, Imperialism, the Highest Stage of Capitalism

For Kautsky, the role of the proletarian socialist movement was to act as a pressure group on the more progressive, far-sighted sections of the bourgeoisie. The concept of ultra-imperialism was the theoretical basis for Kautsky’s pacifist-reformist policy toward inter-imperialist war. Lenin compared Kautsky’s view with that of the English liberal J.A. Hobson, who sought to console the English middle class after the exhaustion of the Boer War with a vision of new, united world imperialist order (he called it inter-imperialism) which could ensure peace.

Ernest Mandel, leading spokesman for the pseudo-Trotskyist United Secretariat and bourgeois academia’s candidate for the foremost „Marxist“ theorist, has emerged as a somewhat agnostic believer in ultra-imperialism, at least regarding Western Europe. Just as Kautsky contributed nothing new to the pious wishes of the liberal Hobson except the new prefix, „ultra-“ instead of „inter-,“ so Mandel adds nothing to Kautsky except another new prefix; this time it is „super-imperialism.“ Mandel’s Europe vs. America contains the following speculations on a possible „super-imperialist“ capitalist united states of Europe:

„Once private property becomes extensively internationalized it cannot be effectively defended within the framework of a French, German or Italian state. European Capital demands a European bourgeois state as an adequate protector and guarantor of profit…. As soon as the EEC finds itself in the grips of a general recession, … ‚European‘ companies will therefore be forced to demand anti-recessionary policies on a ‚European‘ scale. In other words, they will tend to demand that national governments lose their right to take decisions in critical areas of economic policy and hand these powers to the supra-national authorities of the European Community.“

Mandel’s reasoning is as follows. Since international economic and political integration is in the best historic interests of capitalism, it is, therefore, possible. This is rationalism gone berserk! It is also in the best historic interests of capitalism to expand production in the face of a falling rate of profit. In the most general sense, it would be in the best historic interests of the bourgeoisie to carry out the program historically associated with revolutionary Marxism thereby eliminating working-class discontent and the very possibility of proletarian revolution! But it cannot, and neither can the various national bourgeoisies, in the epoch of imperialist decay, amalgamate their economic and political interests.

The belief that the Common Market is leading to a bourgeois European state is a utopian fantasy fit only for EEC bureaucrats, pacifist pollyannas and revisionists like Mandel, who are taken in by superficial phenomena. Superficially, the Common Market appears to be heading toward greater political integration, since the first summit meeting of its new nine-state membership in October reached new agreements on legal and fiscal policies and declared a „European Union“ with a parliament based on univeral suffrage to be a goal. However, the real material bases for this pompous illusion are, if anything, weakening. Mandel assumes that the need to meet American competition will increase the tendency toward supra-national companies and capital accumulation, which will in turn require political union. He admits, however, that the term „multi-national corporation“ is misleading, since many remain clearly under the control of the original families in their base countries (the twenty biggest are all in this category). For Mandel, true „interpenetration" of capital occurs when two or more companies merge into one across national lines without dominance on either side. Yet it is precisely these mergers, such as Dunlop-Pirelli and Fiat-Citroen, which are proving most unstable. Inevitably, one „partner“ or the other proves stronger, while the weaker attempts to maintain existence on the basis of the original equality. Thus the Dunlop-Pirelli combine, in which management is by consensus between the two original companies, is shaky because Pirelli’s losses are threatening to submerge Dunlop’s profits. Such mergers will crumble along with the rest of Mandel’s pipe dream (he expected the common European currency to continue) at the first general downturn, as all the European capitalists scurry back to their nation-states for self-protection from each other. Thus Mandel merely aids in the spreading of pacifist illusions among the European working classes. This is indeed one of the goals of the Common Market bureaucrats.

## For a United, Socialist Europe!

The Common Market is in no sense progressive. It is originally the product of U.S. imperialism’s mobilization against the Soviet Union. It is an arena in which the European national bourgeoisies bilk one another and the rest of the world. It is a vehicle for capitalist collaboration against the European labor movements, which have shown little international solidarity.

Despite the national divisions of the capitalists, the increasing interconnectedness of the world market and international socialization of the means of production are real. The greater rationality of large-scale, centralized units of production and distribution is offset under capitalism, however, by the even greater irrationality of the competition between world-wide oligopolistic monsters driven for the sake of profits only. Thus unity under capitalism is not only a myth, which will be shattered in the first serious economic downturn, but must necessarily be directed against the working class, as each national capitalist class attempts to become „competitive“ through a policy of „rationalization.“ This requires rigid wage freezes, massive devaluations, strike-breaking, the liquidation of whole industries, large-scale unemployment and inflation. It is hard to shove such policies down the throats of organized workers, so the bourgeoisies in the respective countries are forced to resort to center-left and labor governments in order to implement them. Such viciously anti-working class governments have been in power in Britain and Italy, and now in Germany, and it is this role which a CP-SP-Radical popular front coalition will play in France if elected.

Only unity on a socialist basis, accomplished by proletarian revolution and the expropriation of the giant monopolies, can institute rational world-wide economic development without exploitation. A socialist united states of Europe can only be created on the basis of the most vigorous struggle against the capitalist Common Market and all it stands for. And only under united control by the workers themselves can the productive capacity of Europe be put at the service of the entire world’s working peoples.