Euro-capitalism or world socialism? (1984)

From the June 1984 issue of the Socialist Standard

At the time of the first European Elections in 1979, we asserted that the European Parliament was not a step towards world unity and nor was it meant to be. We put forward the socialist proposition that the only solution to social problems is the establishment of a world without frontiers, based upon common ownership and democratic control of the means of living, with production solely for human need.

This argument was a condemnation of the political and trading arrangements entered into by various European states, in order to further the interests of their capitalists. It also put out the challenge of positive and practical action which could establish a sane world operating in the interests of the whole community.

The argument still stands, vindicated by the experience of the past five years which have been tragically wasted. These have been further years in which society has remained trapped in the insanities of economic, political and military power structures.

What has happened during these years in this so called “European Economic Community?” Disregarding the empty promises of Labour, Conservative and other reformist politicians, what, in reality, did the electorate support in 1979? Governments have paid farmers to destroy cattle, tear up orchards, plough back vegetables and destroy fruit. They have created milk and wine lakes and butter mountains. Now they are cutting milk production in the overall interests of profit. All this in a world in which 40,000 children die every day from starvation. In Europe itself, over 30 million of the population are living below the official poverty line with many seriously undernourished.

In reality, what does the “common market” mean for workers? It is the labour market in which our powers of work are the commodities. We sell our skills and energies producing goods which the capitalists then own. Just as commodity goods are unsold when they are surplus to the market, so our powers of work are unsold when they are surplus to the labour market. Millions of workers are unemployed in the EEC, but at the same time billions of pounds, francs, marks and guilders are extracted as profit from those who are “employed”. We are used as the source of profit and live on wages or salaries while the capitalists maintain their economic power and their grip on the means of living.

This is what the “European Economic Community” is all about. It is part of the profit system, and to protect the capitalists interests involved, millions are wasted in the armed forces and in armaments production. This could provide for Europe as a power bloc to stand against such existing power blocs as America or state capitalist Russia.

Market surpluses amidst deprivation; unemployment amidst poverty; economic exploitation; preparations for war; waste and pollution of the atmosphere; these are the destructive forces which promote the interests of the capitalists in their so called “European Economic Community”. How many more years will be wasted on a system which is utterly unworkable as far as the interests of the whole community are concerned.

Only one interest rises above the economic, political and military divisions of national and international capitalism—our single, world-wide common interest as workers. Its political direction is clear—we must ensure the growth of the world socialist movement with the object of capturing political control of all the powers and machinery of governments by democratic political activity.

From this position we will enact the common ownership of the means of living. This will strip the capitalist class of their monopoly of land, industry, manufacture, transport and resources, whether maintained by private ownership or state control. We will establish free access by the democratically organised community to all these productive means and resources so that they can be freely used to provide directly for human needs.

This will involve the abolition of the state and the conversion of all useful government functions for the democratic administration of needs, operating through a decentralised system of decision making on world, regional and local levels.

Socialism will remove all economic constraints on social action, and will involve the abolition of not just the “common market” but all distribution by buying and selling through the use of money; and therefore will establish free access to all the goods and services which the community could more freely make available. The wages system, which is the market for labour power, will be replaced by direct co-operation between people.

With this world co-operation, socialism would abolish all armed forces and armaments production. Thus all the potentially useful resources of labour, materials, technique and equipment now used for the military would be re-directed for human needs. During all the years which have been wasted on support for capitalism, socialism could by now have solved the major social problems.

Again, the choice between capitalism or socialism is the issue which socialists are raising in this election. The urgent priority is for workers to join the growing world socialist movement. This is the only practical activity which is now being directed at the solution of social problems. Support for parties seeking to participate in the administration of capitalism through the European Parliament will prove as irrelevant and futile now as it did in 1979. But those who want and understand socialism will use the electoral process as and when possible. In the meantime they can show their support by writing “SOCIALISMUS”, “SOCIALISM”, “SOCIALISME”, as the case may be, across their ballot papers.

The Executive Committee

The Socialist Party of Gt. Britain

European Elections: an appeal (1984)

Party News from the April 1984 issue of the Socialist Standard

Comrades, an appeal for support. The Parliamentary Committee of the Socialist Party, with Islington Branch and other members, are organising to contest the forthcoming European Election. The chance to bring the socialist case to workers beyond our national confines should be of concern to all socialists. The manifesto is being prepared now.

The advantages of contesting elections arc obvious, especially to Islington Branch members, who have seen a steady growth of their Branch since the last General Election which the Party contested. Elections also focus propaganda activities at a time when politics is a matter of widespread debate. So let this Election be an opportunity for all socialists to rally in support of our efforts. A general meeting to organise our campaign will be held on Thursday 26 April at 7.30 at the Prince Albert Pub. Wharfdalc Road, London N1.

Common Market: A Bore or an Opportunity? (1984)

From the May 1984 issue of the Socialist Standard

If the Common Market seems such a bore to so many people that's because, quite simply, it really is. As its name suggests, it is about tariffs, quotas, customs duties and other such matters of vital interest to capitalist firms but of no importance whatsoever to the great majority of us who have to work for a wage or a salary for a living. It's a businessmen's club whose main concern is buying and selling. All the same, if we want to understand why our capitalist rulers and their political servants are getting agitated over this matter we are forced to consider the world of free trade areas, customs unions and other trading arrangements.

Not even a Common Market

The Treaty of Rome, which set up the Common Market, was signed in 1957 by six European states (France, Germany, Italy and the Benelux countries) with the aim of creating a single vast market in Europe for industrial goods and agricultural products to be called, pompously, the "European Economic Community" (EEC). In 1973 the Six were joined, after protracted negotiations, by Britain, Ireland and Denmark and in 1981 by Greece. Spain and Portugal are waiting on the doorstep with 1 January 1986 provisionally fixed as the date for their entry.

The establishment of a European "common market" is an ambitious project in that it involves creating the same sort of trading conditions throughout Europe as now exist singly in each of the member states. In other words, not simply the abolition of customs duties but the establishment of uniform tax and monetary conditions too. Ultimately it implies, if not a single European state, at least a single European currency and a single European economic policy.

As anyone crossing a European frontier knows, this is far from being the case at the moment. VAT rates, not to mention other taxes, differ from country to country. The rates of exchange of European currencies fluctuate and have to be periodically adjusted. Europe is far from being a genuine common market, as Geoffrey Howe complained (on behalf of the "business community" who alone are really concerned) at a meeting of the Common Market Council of Ministers last September:

“The principle of the free circulation of goods and people and the free offer of services within the European Community is one of the foundation stones of the Treaty of Rome. Twenty-five years after signature however, it is still not a reality. The Community has got little further than the abolition of tariffs. This falls well short of our business community's expectations. What they experience day by day is a range of non tariff barriers and administrative measures which impede a true common market for both goods and services, which seriously add to the cost of trading across frontiers, and which indeed are in danger of growing, despite recent efforts to make progress in this area” (paper presented to Special EEC Council of Ministers meeting, 20/21 September 1983).

At the moment the Common Market is essentially only a customs or tariff union.

An EEC document explains:

“In international law, a customs union consists of an economic area comprising members who undertake contractually: (i) to refrain from applying to one another any customs duties, charges having equivalent effect, or quantitative restrictions; (ii) to apply a common external customs tariff to countries not within the union. ("The Customs Union", European Documentation, No 6/1983.)

So, in the EEC, there are no customs duties on trade between its member states while goods entering into the area are subject to a uniform tariff no matter which country imports them. This latter means that the EEC enters the world market as a single trading bloc; the biggest in the world in fact.

“The Community's common external tariff means that it is seen as a single trading partner by other world trading powers. By volume of trade, it is well ahead of its partners. Averaging imports and exports, the Community has 19% of world trade, compared to 14% for the United States and 8% for Japan” ("The External Trade of the European Community", European File, December 1983).

As a matter of fact, the main economic conflict in the world today is not, as might be imagined from listening to Reagan, between America and Russia but between America, Japan and the EEC as these three trading groups jostle each other for markets, investment outlets and sources of raw materials. Even some of the political and military conflicts are not what they seem. For instance, the conflict in Central America is not so much between America and Russia as between America and the EEC, with America trying to prevent the EEC countries from entering its traditional hunting-ground.

The British ruling class made the choice to join the European trading bloc in the late 1960s. It wasn't a unanimous decision since it meant sacrificing the commercial interests of certain sections of the capitalist class: those who imported from outside Europe, especially the Commonwealth, and who would now face tariff barriers where none existed before.

The Labour Party made itself completely ridiculous over the Common Market, supporting it when in office and opposing it when out of office, but opposing it on the most inward-looking, nationalist grounds. Since the Labour Party accepts

capitalism, to make its opposition to the Common Market seem less ridiculous, it had to come up with suggested alternative markets for Britain's capitalists; these ranged from Britain's internal market protected by tariffs to the underdeveloped countries and the state capitalist bloc. Needless to say, the capitalist class wasn't convinced and even began to write off the Labour Party as the alternative government of capitalism to the Tories that it has traditionally been, creating and grooming the SDP to take over this role.

In opposing the Common Market the Labour Party in effect chose to identify itself with the interests of the more backward-looking sections of the capitalist class rather than with those which stood to benefit from the creation of a vast customs-free trade area in Western Europe.

The agricultural anomaly

Since the aim of the Common Market is essentially to create the conditions for freer trade and since trade in Europe is mainly trade in industrial goods, why has the Common Market adopted a "Common Agricultural Policy"? Or rather, why did it adopt one so early in its evolution (since the long-term aim of a true common market would indeed have to involve agricultural products too)?

The Common Market could have chosen to allow its member states to pursue their own agricultural policies, subsidising and protecting their farmers in the ways their national governments thought fit, while pressing ahead with progress towards complete free trade in industrial goods. This was the option taken by the European Free Trade Area (EFTA), set up as a sort of rival to the Common Market around Britain in 1959 and which still survives but is now dominated by Sweden and Switzerland (in fact free trade in industrial goods exists between EFTA and the Common Market so the whole of Western Europe is already a vast industrial free trade area). There is free trade among the EFTA countries in industrial goods but each country is left to pursue its own agricultural policy. Thus, although farmers in Sweden, Norway, Finland, Iceland, Switzerland, Austria and Portugal are subsidised like farmers in the rest of Europe, this is done by the national governments concerned, not by an inter-governmental organisation.

The answer to "the Common Market having an agricultural policy lies in the conditions under which the Treaty of Rome was signed:

“It is important to appreciate that the Rome Treaty was a delicate balance of the national interests of the contracting parties. Let us consider West Germany and France in terms of trade outlets. In the case of West Germany the prospect of free trade in industrial goods, and free access to the French market in particular, was extremely inviting. In the case of France the relative efficiency of her agriculture (particularly her grain producers) as compared with West Germany held out the prospect that in a free Community agricultural market she would make substantial inroads into the West German market. This was obviously likely to result if the common price level of grain, for example, was set well below the West German level but at or above the French level. Agriculture had therefore to be included (D. Swann, The Economics of the Common Market, 1970, p.78).

Or, as a more recent Common Market propaganda document puts it, "Community countries most dependent on agriculture inevitably made free trade in farm produce a fundamental condition of their willingness to open their markets to the industrial goods of their neighbours" (European File, March 1984, p.12). In other words, the Common Agricultural Policy (CAP) was the price industrial Germany had to pay to have a European-wide market for its industrial goods. De Gaulle kept the British capitalist class waiting on the doorstep until it too agreed to pay this price.

What the adoption of the CAP meant was that farm prices and farm subsidies are fixed annually by Common Market Agriculture Ministers meeting in Brussels. In view of the large number of lobbies and vested interests involved it is not surprising that these sessions have often lasted all night before coming up with a compromise agreement. So, with the CAP, European farmers are subsidised, feather-bedded as the Americans say, from European funds rather than directly from national funds. Up to 70 per cent in fact of the Common Market's total budget is devoted to agriculture. Since it is the industrial countries, Germany and Britain, which contribute proportionately more to the Common Market budget, they are at the same time paying proportionately more towards subsidising European farmers. This is what the famous "budget issue" is all about, with Britain complaining loudly and Germany more discreetly.

The fact that agricultural policy is decided at European level has meant that decisions to stockpile or destroy agricultural so-called "surpluses" (butter mountains, wine lakes, bulldozing of tomatoes, pouring diesel oil on peaches) are made in Brussels, not in the national capitals. This has given rise to the illusion that it is the Common Market that is responsible for these actions, thus allowing anti-Marketeers to turn people's legitimate indignation at this destruction of food and productive capacity against the Common Market. But this is to mistake the real cause. It is capitalism, not the Common Market, that is responsible. Milk, for instance, was being poured down disused mineshafts before Britain joined the Common Market and this would happen again from time to time even if Britain withdrew. All the Common Market has done in this respect is to centralise the process by which these decisions are made, but it is the logic of capitalism that imposes such decisions whether they are made at European or national level.

The British capitalist class's campaign against its "unfair" contribution to the Common Market budget has involved trying to drum up mass support through such exhibitions of mindless nationalism as the Sun's anti-French campaigns. But this issue does not concern wage and salary earners. It is not "our money" that is going to subsidise French, or for that matter British, farmers. The only money that is ours is what we are paid as wages and salaries plus any state hand-outs to which we may be entitled. What we produce over and above this belongs to the capitalists to use as they think fit. We have no control over what they do with the wealth they take from us and certainly no interest in taking sides when they fall out over how to use it.

If Heath and his Tory government negotiated a bad deal for the British capitalist class in 1972 (as it now seems) that's too bad for them, but we have no interest in allowing ourselves to be stirred up by them as a means of trying to renegotiate a better deal today.

A single crumb

Since the Common Market represents to a certain extent a normal stage of development of capitalism ― towards bigger trading units and bigger markets ― it would be surprising if it didn't bring a few marginal improvements for workers. We've scraped the bottom of the barrel and have only been able to come up with one relatively insignificant change which could be seen as an improvement compared with what happened before; namely, the free movement of labour. But we hasten to add, this change does not warrant abandoning a position of complete indifference to the Common Market. We merely note it as a consequence of an inevitable trend under capitalism to break down national frontiers and national differences.

We appreciate too that the free movement of labour is only a corollary of free trade in other commodities since what we are talking about here is free trade throughout the Common Market in the commodity labour-power. All the same, this has meant that workers have been able to travel freely over a larger area than previously (even if this is only a return to a situation which existed in Europe before 1914) and this is a real, if marginal, improvement.

The first thing to notice about the European Parliament is that it is not really a Parliament. Real decision-making power in the Common Market lies with the Council of Ministers from the various member states who come to decisions on the basis of proposals from the European Commission in Brussels. The so-called Parliament is merely a sort of advisory committee that is consulted in the course of this decision-making process.

When elections to the European Parliament take place workers in countries with a total population of 270 million (320 million if and when Spain and Portugal join) are being given the opportunity to express their views at the same time. At the moment they misuse this opportunity by confining their support for capitalism but, when the socialist movement has reached a more developed stage this will provide an occasion for socialists to demonstrate their strength across frontiers, to turn these at the moment meaningless elections into a Europe-wide referendum on the issue of "socialism or capitalism"?

Elections to the European Parliament are taking place next month, on 14 June. Socialists will be able to express their support for world socialism by writing "WORLD SOCIALISM" "SOCIALISME MONDIALE", "WELTSOZIALISMUS", "SOCIALISMO MONDIALO" across their ballot paper.

The Socialist Party of Great Britain will not now be contesting the forthcoming European Election in Central London. We will, however, be mounting an intensive propaganda campaign, during which your help will still be needed. Please contact the Parliamentary Committee at Head Office for details.