Euro, Euro on the Wall (2002)

From the June 2002 issue of the Socialist Standard

Tony Blair has used that pathetic excuse for accountability, the television interview (in which two powerful men get to spar verbally before the massed ranks of passive spectating viewers) to float the possibility that he might support a referendum over the Euro soon. It was on Newsnight’s series of interviews where Blair told Jeremy Paxman that he was willing to be remembered as the Prime Minister that took Britain into the single currency. This slight admission, couched in Blairean caveats and obfuscations, was immediately spun by the loyal sheep in the press as a serious indicator of the state of Downing Street thinking on the Euro, a move in the cabinet chess game.

The reason for Blair’s caution is the deep indecision over the Euro issue, not only among politicians, but also among their paymasters in the capitalist class. His position of stating that he will only ever act in the “national interest” (i.e. in the interests of those as own Britain) is merely re-iterating the obvious, until our masters can actually work out what actually is in their interest. Socialists are able to point this out with ease, as we have done several times in the pages of this journal. What we need to do, as well, is observe quite why the capitalist class is itself undecided.

 

In socialism, Europe will be fully unified by having no money

 

One of the basic premises of the materialist method of examining society is that ideas simply do not just fall from the sky, but instead develop over time through the actions of people within a particular set of circumstances. That is, human beings make society and its values/ideas, but within the constraints imposed by the actions of other human beings, and the relations between those people. This accounts for the clash of ideas and political opinions not only between classes, but within classes as well. It is the constraints and actions of people within the capitalist system that has produced the running arguments over the Euro.

Contrary to what some groups believe, the capitalist class is not an eternally cohesive, Machiavellian cabal perfectly capable of imposing its will and interest on wider society. It is riven by differences as each capitalist strives to pursue their own economic interest and seize as much a share of the surplus value produced by social production as they are able, by every means at their disposal: legal, political, economic or criminal. The means by which each capitalist secures their share of surplus value determines their economic interest, and each capitalist will do everything within their (considerable) power to secure and enhance that interest. Capitalists who export will want to see an army capable of defending their interests, manufacturers want stability and low wages, transporters want to see low oil prices, etc.

The relations of these economic interests of British capitalists to the EU can be seen by looking at the trade statistics; in 1999 the UK exported £84 billion worth of goods to EU destinations, as compared with £55 billion to elsewhere. Overall, then, 61 percent of trade was to EU purchasers. Further, the UK receives 52 percent of imports from EU member states. Taken on their own, these statistics – other considerations aside – indicate that the capitalist class should favour the Euro in facilitating trade with its major partners. If we look, however, behind the national abstraction of the UK capitalists’ interest, and look instead to the more specific details, then a different picture emerges.

For instance, each statistical region of the UK, bar one, exports the majority of their goods to the EU, some, such as Scotland, send 70 percent of their produce to an EU state. The exceptional region is London. London exports 55 percent of its produce to non-EU destinations. Of course, under capitalism, it is not the size or population of a region that determines its say, but its wealth, and London’s non-EU exports represents 8.15 percent of all UK exports, and 20.7 percent of all extra-EU trade: a total of £11.3 billion worth of exports. Likewise, London imports £21 billion worth of goods from outside the EU, representing 11 percent of import value, and 58 percent of the capital’s import trade. This represents an enormous share of UK trade, and much more than any other single region can lay claim to. (All Stats ‘Regional Trends 2000’, ONS)

This regional disparity is significant for one main reason: when looking at the distribution of national types of industry, it’s clear that over 80% of London’s businesses are in the service sector. Whilst this includes retail firms, it also includes insurance companies and stock brokers, etc. The presence of the City of London region, and the financial and stock exchanges is a big factor in this preponderance of the service sector in the region and many of its exports and imports are a product of international financial transactions, the shuffling of electronic claims to riches from one side of the world to the other, and trading in currencies.

A great many of these London firms, then, will be dependent on being able to extract economic rent from exploiting the restrictions on capital investment caused by currency blocs, whether from pounds to dollars or pounds to Euros. They thus not only have an interest in trading with economic partners other than the EU, but also retaining the pound to protect their income from transaction costs. It is this combination of interests which leads to economic nationalism being prioritised over joining a trading currency zone.

Given the historic and continuing cultural, administrative, and ideological importance of London, the national capitalist class would be unwilling, to say the least, to go directly against the interests of this important sector of British capital. Specifically, a great many of those service firms in London depend upon its centrality to the British state for their business, an interest they would be willing to defend. Add to all this that the minority of exporters to outside the EU still add up to a substantial number who will be willing to side with those who derive their interest from London, and then we begin to unravel some of the reasons why the capitalist class is at a seeming impasse about its potential future economic interests due to its divided internal composition.

This situation accounts, at least in part, for the political situation with regards to the Euro. The Tory Party has traditionally had a strong faction of ideological nationalists whose attachment to the idea of Britain is not contradicted by any personal interest in pursuing the Euro project (indeed, many, as small business folk, will have to bear much of the implementation cost of the Euro). Likewise, the Tories established themselves as a party close to the financiers in the City of London during the Thatcher period and, just as importantly, as being closer to the political, cultural and economic interests of the United States and Wall Street than the EU. These attachments currently enable Labour leaders to try to depict the debate as being about unregulated international finance capital versus domestic industrial/manufacturing capital, playing on old prejudices of ‘wealth producers against bankers’ and attracting support from their allies in trade unions associated with manufacturing.

It is not a question, though, of the ineluctable differences between two essentially different models of capitalism, as Labour hacks will kid themselves, but personal competition between capitalists and the political fallout from this. Furthermore, the consequences of this situation are already beginning to be played out. A week prior to Blair’s statement, Prescott and Byers announced plans for English regional devolution: that is, greater political autonomy being removed from London and spread to regional assemblies as want it. Aside from tapping into the same liberal seam of thought as inspired national devolution to Scotland and Wales, it also provides a means for capitalists in regions outside London to be able to have more control in order to be able to direct their affairs without the interferences by capitalist interests in London. This is in line with the concept of a ‘Europe of the Regions’ by which the supporters of the Europe project hope, among other things, to bypass the influence of those interested in British ‘national’ capital and its historic ties with US finance.

Of course it all goes to show that the nation, and nationalism, are not an eternal and essential characteristic of human beings as some would have it, but are solely a tool for pursuing the further interests of sections of the master class at given points in history. Indeed, the current situation of market interpenetration between British capital and that of its EU partners is itself the result of over forty years of state policy (a fact that some capitalists will be aware of), and if they finally decide against pursuing economic union with the EU, they could equally look around the world for other options.

As such, the working class has no interest in this passing show of inter-capitalist squabbling over the Euro, except to note the spectacle and prepare for the day when there are no more nations to be interested in and money to squabble over.

Pik Smeet

The euro and the sovereignty myth (2002)

From the January 2002 issue of the Socialist Standard

The euro debate is a dispute between rival sections of the capitalist class and is of no concern to workers

On 1 January in 12 of the 15 countries of the European Union new notes and coins came into circulation. After a shortish transition period these will replace existing francs, marks, pesetas, liras and the others and the same money—euros and eurocents—will come to be used throughout the whole area.

In terms of capitalism, it will be a historic event. As many people for years (more in fact) have used dollars and cents in a single area will now be using a single currency in another area. And that, of course, is what it is all about from a capitalist point of view. The capitalists of Europe have decided they have a better chance of winning out in the competitive battle on world markets if they get together as a single economic bloc. To do this, they have already created—some time ago now—first, a customs union, then a single market and, now, a single currency. They are still divided on whether to take the next step, a single economic policy which would require a single “economic government”. But some are determined to go down this road and envisage, at the end, a single, federal United States of Europe as a powerful state to rival the USA for world hegemony.

As far as us ordinary workers are concerned, it’s going to have no effect on our wages nor on our standard of living generally. The introduction of the euro will be as neutral—and as irrelevant—in this respect as was the introduction of decimal currency in Britain in 1971. So, there’s no cause to get worked up either way over the issue.

Having said this, it is clear that being able to use the same money throughout the greater part of Europe will remove one of the minor inconveniences that has existed up till now: having to change your coins and notes every time you cross a frontier (and having to pay the money-changers a commission for the privilege). Of course the major inconvenience of having to use money at all to have access to things which should be ours as of right will remain but, as long as the money system continues, it can’t be worse to have fewer currencies than more.

Divided capitalist class

So, joining or not joining the euro is nothing to get upset about. But there are people who do, especially in Britain. You can’t open a local paper there these days without reading a letter from someone complaining about “our loss of sovereignty” or about the disappearance of the queen’s head from “our” money (actually, it could still appear on the coins, but who cares?).

This reflects the fact that the capitalist class in Britain is split on the issue. A section, with capital investments mainly in North America, would prefer Britain to join the North American Free Trade Area (NAFTA) rather than become irrevocably tied to the European Union. They include the newspaper tycoons, Rupert Murdoch of the Times, Sunday Times and Sun and Conrad Black of the Telegraph, who have not hesitated to use their control of these papers to beat the anti-euro drum to defend their own personal capitalist interests. The Tory Party, too, has also decided to throw in its lot with this section of the capitalist class, perhaps unwisely since this section is only a minority.

The dominant section of the capitalist class in Britain want to join the euro, but they have a political problem. Their representatives, in the Labour and Liberal parties, have for some reason committed themselves to holding a referendum on the question. This was unwise, from their point of view, as this is to subdelegate a decision of vital interest to them to a population of workers that is largely uninformed on the issue and whose heads have been filled over the years with patriotic nonsense for other purposes. It is by no means certain that they would win a referendum, though they might be if they time it right and craft the question carefully and put the media organs they control into top gear. But that’s Blair’s problem.

The main argument put forward by the anti-euro section of the capitalist class is that joining the euro would involve a loss of “our” sovereignty. It may well involve a loss of their sovereignty but the rest of us have no “sovereignty” to lose. Certainly, we have the vote and we can use it to elect politicians to Westminister. But neither Parliament nor the government can control the way the economy works. They can try but if they go against the profit logic of the system they just make things worse. The most they can successfully do is go along with this logic.

What is sovereignty?

Old-fashioned radical liberals like Tony Benn (who, as he said of the Labour Party, is not and never has been socialist) who use the same argument concentrate only on the formal side of things. They emphasise Parliament’s “constitutional right” to control the economy, completely ignoring the fact that experience has shown this to be a purely paper right. The capitalist economy works according to certain economic laws which no government or legislative body can over-ride.

So the argument about sovereignty is not really about what the constitution may or may not say. It’s about the effective power that a capitalist state can exercise within the capitalist economy. Capitalism has always existed within a framework of competing states, none of which is strong enough to impose its will on all the others. States, as weapons in the hands of rival groups of capitalists, intervene to further the interests of the capitalists that control them. They do this by using state power to set up protected markets, raw materials sources, trade routes and investment outlets. In normal times their weapons are tariffs, taxes, quotas, export rebates and other economic measures. When they judge that their vital interest is at stake their weapons are . . . weapons. They go to war.

The extent to which a capitalist state can distort the world market in favour of its capitalists depends both on its industrial strength and on the amount of armed force at its disposal. This is why all states are under pressure to acquire the most up-to-date and destructive armaments that they can afford. In the jungle world of capitalism might is right. “Sovereignty”—the margin of independent decision-making that a state has—also depends on might.

Over the years capitalism has become more and more international, more and more globalised. This has tended to reduce the margin of manoeuvre open to states, i.e. has reduced their “sovereignty”. Fifty years ago, six West European states—France, Germany, Italy and the Benelux countries—realised this and decided to pool some of their economic decision-making powers in order to increase their total sovereignty. In the capitalist world, just as much as for workers bargaining over wages, “unity is strength”. Certainly, this involved the individual states concerned giving up some of their sovereignty but the objective was to increase the collective sovereignty of the members of the Common Market as a whole. Thirty years ago the majority section of the capitalist class in Britain, too, decided that this made sense and joined along with Ireland and Denmark. Since then Spain, Portugal, Greece, Austria, Sweden and Finland have also signed up.

Not our concern

The sovereignty argument is really an argument within the capitalist class as to whether they should give up some of the might of their state to be able to benefit from the greater might of a larger grouping. Tony Benn, the UK Independence Party and the BNP really seem to believe that a capitalist Britain would be better off going it alone. Murdoch, Black and the less stupid Tories are more circumspect. They realise that Britain can’t really go it alone, but has to be associated with some larger grouping. Their argument is about which this should be: North America rather than Western Europe.

The Trotskyists, who feel that they must have a “line” on everything, too, join in the argument, predictably alongside Benn and the Green Party, but also the UKIP and the BNP. They want a capitalist British state to have the full, paper power to pass the reformist programme they dangle before workers.

As socialists, we don’t take sides in this inter-capitalist argument. We don’t support one section of the capitalist class or the other, and we don’t have any illusions about the “sovereign power” of Parliament to pass reformist legislation that can make capitalism work in the interest of the exploited class of wage and salary earners. Capitalism just cannot be reformed to work in this way; so transferring some of the powers of the House of Commons to a European Parliament in Brussels or Strasbourg makes no difference.

Whether or not the British capitalist class join the euro is not a working-class issue. Let the capitalist class and their parties and supporters settle the matter for themselves. In the meantime we continue to campaign for the establishment of a world society without frontiers where the resources of the Earth are the common heritage of humanity and are used to produce the things we need to live and to enjoy life for us to take directly. Under these circumstances they won’t be any need for money and both the euro and the pound can join the Roman and Anglo-Saxon coins in local museums.

Adam Buick

Voice From The Back: Worldwide genocide (2001)

The Voice From The Back Column from the October 2001 issue of the Socialist Standard

Worldwide genocide

Under the headline “Scientists to probe worldwide genocide” The Observer gives yet more proof about how awful modern capitalism is. “The world’s first centre for the investigation of genocide is to be set up by British scientists with experience of working with some of the most appaling war crimes of modern times. The International Forensic Centre of Excellence for the Investigation of Genocide (Inforce) will use expertise gained in excavating mass graves in the Balkan conflict to provide independent evidence of war crimes and state-sponsored killing from across the world … The new centre, which could be up and running by the end of next year, plans to investigate atrocities in Sierra Leone, Central Africa and Indonesia. It is estimated that about 170 million people have been murdered by their own governments in the past century.” A hundred years of political reformism, thousands of “peace” conferences and this is what capitalism produces. Inside a socialist system we will have no need for an organisation called The International Forensic Centre of Excellence for the Investigation of Genocide. Who knows? We may even have one called The Global Centre for the Understanding of Diverse Cultures.

Sour notes

Rupert Murdoch’s Times has been sponsoring a long running campaign against the British government adopting the Euro currency. Now it seems they have another reason to be anti-Euro – it offends their aesthetic sense. “The euro banknotes are stark, bland and dead. With no recognisable building and no friendly humanity, they look as though they have been designed by committee, as they have … The design principle could not differ more from those of the pound. On the £20 note an imposing portrait of the Queen dominates. Flip it over and there is Sir Edward Elgar, with Worcester Cathedral in the background. There is nothing so bold on the euro notes.” The Times, 31 August. But all those lovers of bits of paper depicting parasites and monuments to outmoded institutions should not despair. Inside socialism you would still be able to see them in the Museum of Ancient Artifacts alongside such displays as the flint axe and the suit of armour. Who knows, it may even be housed in Worcester Cathedral.

Freedom of the press

Shock, Horror, Probe, Startling Revelations and all the other stupid cliches of the media. The Guardian of 6 September astonished us all with its findings. “Rupert Murdoch’s influence over editorial policy at his most prestigious British title, the Times, is so great that journalists are censored by executives frightened of offending their proprietor, according to a former member of the paper’s foreign staff. In a stinging attack in the London Evening Standard Mr Kiley wrote that Mr Murdoch’s friendship with Ariel Sharon, Israel’s prime minister, and Mr Murdoch’s extensive Israeli investments led executives to extensively rewrite copy.” Of course, the proprietors of The Guardian never interfere in the dissemination of truth. That is why you often see articles in that journal attacking private property and advocating World Socialism. Don’t you?

Another brilliant ‘Marxist’

The Socialist Party has always insisted that China and Russia were never socialist, had nothing to do with Marxism and were in fact examples of state capitalism. The recent antics of the Chinese leadership show how correct we were. This piece of nonsense was reported in The Guardian (13 September) under the heading “China’s leader tries to wed Marx and Blair”. “President Jiang Zemin of China has stolen the mantle from the late Mao Zedong in a new press campaign that suggests he is a brilliant Marxist as well as a great leader. Mr. Jiang has made a “new contribution” to Marxist theory which should be studied throughout the country, the Communist party’s official newspaper, People’s Daily, said this week. And according to Hong Kong reports of a recent top level conference, Mr. Jiang and his supporters now wish to study the experience of European social democracy: “Many in our party believe that the Third Way is not such a bad idea,” a party theorist, Yan Shuhan, told Asiaweek magazine, referring to the credo with which Tony Blair is most identified.”

A mad, mad world

Amidst the millions of words pumped out by the media on the hijacked aircraft carnage in the USA, the following short letter in the Guardian (13 September) contained probably the wisest. “Shortly after 3pm British time, as the events in the US were unfolding, BBC News began analysing how the situation would affect share prices – surely yet more proof, as if any were needed, of what a sick world we live in.”

Is the Pound worth saving? (1999)

From the June 1999 issue of the Socialist Standard

Some said it would never happen, yet on 1 January of this year the Single European Currency became a reality. Five months on, we have seen the fall of Oskar Lafontaine, the German Finance Minister, the resignation of the entire European Commission and the Euro steadily fall in value.

Despite all of this, New Labour has started to come off the fence and demonstrate that they are preparing to recommend Britain’s entry to the project, subject to a referendum of course. This policy shift (especially after publishing the National Changeover Plan), has only intensified debate across the country, spawning a plethora of ad hoc organisations, dedicated to both sides of the argument.

Without equivocation, we in the Socialist Party say that the introduction is a capitalist question which has nothing whatsoever to do with the interests of the working class. Our class interests can only be furthered by the abolition of the capitalist wages system and all money no matter which name our masters wish to give it.

The “pro” and “anti” positions span the political spectrum from right to left. Some of the Eurosceptics to be found on the extremes of the Conservative and Labour parties are actually in favour of EU withdrawal, whilst the majority are just hostile to the Single European Currency. In the case of the Europhiles, they can be found anywhere from the Tory left, the Liberal Democrats through to New Labour. It is interesting to note that the vast bulk of the pseudo-revolutionary Trotskyite sects are defending their own variation of the Eurosceptic position.

Ever-increasing concentration

The Euro project is just the latest (but by no means the last) phase of European capitalism’s attempts to compete as an effective unit on the world stage (especially against the US and Japan). This is not just a political project, as the capitalist media likes to make out, but is rooted in the ever-increasing concentration, centralisation and integration of European capital. Indeed, the prelude to the launch of the Euro was littered with take-over activity. This process itself is part of capitalism’s attempt to restructure itself to the needs of the modern globalised economy.

Perhaps, not surprisingly, we find that the most powerful section of the capitalist class (big manufacturing and finance) are generally the ones pushing for Britain’s entry into the Euro. There are the capitalists who have a big stake in Europe either via importing/exporting or providing finance for take-overs.

It does not follow that businesses with extensive European interests who have supported the development of Europe vis-à-vis the EEC and single market EU, necessarily believe the Euro is a good idea in itself. The CBI, which represents big manufacturing capital, is actually quite divided on this issue despite its leadership being in favour. For many members, it’s not the principle of the Euro which is the problem—it is the economics of it. However, some pro-European capitalists take the view that although the single currency is not perfect, they cannot be left out of it. In fact some argue that early membership would have allowed the British government to influence the shape of the Euro project in their favour.

Bearing in mind that the majority of the British public are not Euro enthusiasts, we should expect to see a big propaganda drive over the next year or two from the powerful pro-Euro lobby (which is likely to involve the government). The most popular argument trotted out by the Europhiles is that an integrated Europe will reduce the risk of another European war because Germany will be kept in check. This is a feeble argument which totally misunderstands the causes of war. The fact that superficially Europe’s capitalists are coming together does not alter the fact that they remain competitors and this is only a marriage of convenience. If, due to capitalist logic, the arrangement should break down, no amount of political organisation at a supra-national level will prevent a war. The example of the United Nations demonstrates this.

Following on from this, we are told that from this position of political stability there will be increased economic growth via increased trade and low interest rates and inflation. The logical corollary of this would be a Europe reasserting itself on the world stage, whilst capable of dealing with its own internal balance-of-power. As pro-Euro economist Christopher Johnson argues in his book In With The Euro, Out With The Pound:

“The Euro, with the UK inside it will become a world currency alongside the dollar and the yen. Britain can thus retain, or even regain, some of its status as a world economic and financial power without giving up its national identity.”

Moreover:

“Britain can avoid German domination of Europe only by joining France, Germany and other European countries as partners in an integrated Europe” (p.197).

Quite where Johnson find the facts to support such optimistic economic reasoning is anybody’s guess. It’s certainly not supported by the first five months of the Euro, which has highlighted many of its contradictions. Firstly, there has been the constant bickering between the politicians and the bankers of the European Central Bank (see January Socialist Standard) which resulted in the resignation of “Red” Oskar Lafontaine, the German Finance Minister, and of course the corruption scandal at the heart of the EU Commission which demonstrates the lack of even basic democratic accountability. And as for the Euro becoming a world reserve currency to threaten the dollar—well it hasn’t happened yet. 

Eurosceptics

However, the capitalist class is multi-faceted and some sections are openly hostile to Britain joining the Euro. These capitalists (generally small and medium size concerns) grouped around organisations such as the Institute of Directors and the Federation of Small Businesses see joining the Euro as a costly adventure. The EU “social market” model is derided as an economic anachronism which will not be able to compete against the low cost, dynamic “free market” US and that Britain’s entry into the single currency will effectively spell the end of the Thatcherite revolution.

There is a certain amount of truth in this position. It is clear that if Britain did join the Euro there would be moves to harmonise taxes and costs since British capital would have an unfair advantage over its European rivals. However, it is also true to say that European capitalists have been trying to restructure their own economies for sometime now with attacks on welfare provision and working conditions. The results of this have been violent protests and demonstrations by French and German workers. In reality, Euro capital will try to restructure at home whilst demanding concessions from a British entry.

The Eurosceptics often claim that a single currency with a “one-size-fits-all” monetary policy would inevitably require a single fiscal policy. John Redwood, the Tory arch Eurosceptic, articulated this view in his 1997 book Our Currency, Our Country:

“You cannot have a single currency without a single interest rate, a single banking policy, a single budget and a single finance minister or central bank governor. You are inevitably led to a single taxation policy and a single economic policy. You are close to creating a single government” (Preface).

Although Redwood’s arguments may be more cogent and honest than Christopher Johnson’s, his views are ultimately based upon populist nationalism. Britain would cease to be an independent nation and parliament would resemble little more than a glorified county council under the jackboot of French and German bankers.

This may or may not be true. The question is what difference would this make to the working class? When people like John Redwood start talking about democracy it’s difficult not to laugh.

The main strengths of the “Eurosceptic” position rests on their critique of single currency economics. Firstly, they argue that Europe is not an “optimal currency area” which is a prerequisite for the Euro to be a long-term success. Britain’s trade cycle is synchronised more closely with that of the US and this could cause problems with a common interest rate policy (i.e. German growth may be slowing and Britain’s picking up). This could mean that the currency area was more susceptible to “asymmetric shocks” that could threaten the stability of the entire continent.

Left-wing Eurosceptics with their desire to reform British capitalism have also used “loss of control” arguments. The Campaign for an Independent Britain write in a recent pamphlet:

” . . . opting for economic self governance, rapid growth and full employment means opting out of a single currency” (Burkitt, Bainbridge and Whyman—There is An Alternative, p.65).

It is a supreme irony that left-reformists such as the aforementioned authors and Tony Benn can be on the same side as the Thatcherites, whilst denouncing the Maastricht “Convergence Criteria” and Amsterdam “Stability Pact” for being “monetarist” and “deflationary”. For these people are still labouring under the delusion that capitalist governments can control and influence the economy by using monetary and fiscal policies. They have learned nothing from history.

Clearly, the Tory Eurosceptics (currently under the leadership of William Hague) nominally support the notion of an independent Britain, but in reality represent the pro-US section of the British capitalist class. It is precisely this division between the pro-European and pro-US sections of the capitalist class that will fuel the single currency debate in the coming months.

Indeed, the EU and US seem to be in a perpetual trade war at the moment and such tensions are likely to increase rather than diminish. This makes Britain’s future role even more interesting. If Tony Blair does take Britain further into Europe, how will this affect Anglo-US relations? Perhaps Blair’s strategy will be to play one bloc off against the other?

We have seen the poverty of all the capitalist arguments for and against the Euro and located this debate in its true context. From the petty nationalists to the more “sophisticated” pro-Europeans this is not a debate for the working class. To be “pro-European” or “anti-European” is to fall for capitalist trickery. We should create our own agenda rather than just responding to our masters’ in-fighting. Is the Pound worth saving? A better question would be: Is capitalism worth saving?

Dave Flynn

The Myth of Maastricht (1997)

From the September 1997 issue of the Socialist Standard

Pity the poor inhabitants of Maastricht. Six years ago no one outside of Holland and the neighbouring areas in Belgium and Germany had heard of the name of their town. Now, throughout Europe, it is a by-word for austerity, budget cuts and social regression.

It all goes back to February 1992 and the choice by the Dutch government, whose turn it then was to hold the presidency of the European Council of Ministers, to have Maastricht as the site for the final round of negotiations and the signing of a treaty to further integrate the economies of the Common Market countries. These countries aimed to move from a single European market without customs and other barriers to trade to an “Economic and Monetary Union” (EMU) in which there would be a single European currency to be controlled by a single European central bank.

Despite the various rather less sordid economic names it has gone under—and the Treaty of Maastricht changed the official name from European Community to European Union—the Common Market has always been essentially that: a project to bring about one unified barrier-free market in Europe. In other words, a purely capitalist project of no concern to ordinary people. That was why, in the referendum in 1975 on whether Britain should stay in or pull out of the Common Market, Socialists wrote “Socialism” across the ballot paper rather than voting either “yes” or “no”. That remains our policy for any future referendum on the subject.

The project itself goes back to the immediate post-war period when the capitalists of France, Germany, Italy and the Benelux countries realised that they would be handicapped if they tried to compete with America on their own and decided on the long-term goal of merging their economies into a single European economy.

This has been a long, slow process which has been going on for over 45 years now. First, the coal and steel industries were made subject to common rules. Then this was extended to all other industries and, at France’s insistence, to agriculture. A common external tariff was erected, then all internal customs and tariffs between the member states were abolished, then non-tariff barriers to trade (different technical and other standards which had to be harmonised) were tackled.

To the leaders of Europe at least one barrier to a fully integrated common market still remained: currency fluctuations. These distort trade by the effect they have on prices. If a country’s currency is devaluing this makes its exports cheaper and so gives its exporting capitalists a competitive advantage over those from other countries. As this advantage does not arise from employing more efficient productive methods it is seen as unfair by the other member states.

Ignominious exit

The Common Market has tried to get round this problem with various schemes to fix limits to the extent to which member state’s currencies are allowed to fluctuate in relation to each other. This hasn’t worked all that well, as shown by the devaluations over the years of the French franc, the Italian lira, the Spanish peseta and the British pound (which ignominiously left the European Exchange Rate Mechanism one famous Wednesday in September 1992).

The Treaty of Maastricht adopted the ambitious aim of establishing a single European currency as the solution to this problem. The first step is due to be taken on 1 January 1999 when the exchange rates between the currencies of those Common Market states which join will be fixed, in theory for ever. For instance, the French franc would from then on always exchange for, say 3.4 Deutschmarks. If this works, then “franc” and “mark” will in effect be different names in different countries of what is essentially, from an economic point of view, already the same currency. The plan is that in 2002 these different names should be dropped and the same name “euro” be adopted everywhere.

But it is not as simple as that. Devaluation is a downward adjustment of the external value of a state’s currency reflecting a deteriorating relative economic performance or the fact that its currency’s internal value has declined faster than that of other states due to its government pursuing a more inflationary monetary policy. So at least one condition for lasting fixed exchange rates is that each state should pursue the same monetary policy. As governments generally inflate their currencies to pay for their spending including on the National Debt, the Maastricht Treaty placed restrictions on the level of both government spending and government borrowing.

These are the famous “Maastricht criteria” which all governments hoping to be in the first wave of countries adopting the Single European Currency are striving to meet. Those who blame the resulting austerity on the Common Market overlook the fact that at the moment world competitive pressures are forcing governments everywhere, not just Common Market governments, to cut back on government spending and impose austerity.

It is global capitalism that is to blame not the Treaty of Maastricht as such. Maastricht only comes into it because it was when and where the member states of the Common Market decided to coordinate and harmonise the austerity measures that capitalism currently dictates should be taken.

It is an illusion to imagine that, if there had been no Maastricht Treaty, there would be no austerity measures, or that Britain or France or Sweden or wherever could avoid them by withdrawing from the Common Market. Maastricht is merely one way of applying capitalist austerity, not its cause. Austerity is capitalism’s current order of the day and no country can escape from it.

That’s why you don’t find Socialists standing on the White Cliffs of Dover alongside British ‘Euro sceptics’ such as Tony Benn, John Tyndall, Arthur Scargill, Lord McAlpine and the others waving Union Jacks and chanting “Maastricht, Out, Out, Out”. We are fair to the people of the Dutch town and place the blame for austerity where it really lies: on global capitalism.

Socialists are not among those sad individuals who feel their identity threatened by the disappearance of the pound. What does it matter what name a capitalist state’s currency goes under? If anything, while capitalism lasts a single European currency (if ever it comes) would bring a slight advantage to workers as, when we go abroad to work or on holiday, we would no longer have to pay a tribute to the money-changers as we do today. But Socialists don’t want capitalism to last. We want it and all its currencies to go.

Adam Buick

A single currency – the magic wand? (2004)

From the July 2004 issue of the Socialist Standard

One basic feature of the present stage of the capitalist system is that it takes desperate measures to confront the problems that it created in the first place. Such measures are mere reforms, which, even if they appear to work, only do so for short periods and in the interests of only a section of the capitalist class. Society therefore has the appearance of moving but in actual fact it at best, stands still and at worst, moves backwards. Following is an example of one such desperate attempt which is currently plaguing European capitalists but which, ironically, is being blindly contemplated by West African leaders.

An impossible task?

When the Economic Community of West African States (ECOWAS) was created in 1975, the establishment of a single currency was high on its agenda. However, the implementation of the idea has been dogged by delays and inconsistencies one of which is the absence a second monetary zone. At the December 1999 summit in Lome, Togo the ECOWAS decided that the non-CFA Anglophone countries – Gambia, Ghana, Liberia, Nigeria, and Sierra Leone – together with Cape Verde and Guinea (Conakry) should come up with a second unitary currency. This second currency (the Eco) was to be launched by 1st January 2003 as a first step towards the creation of the single West African money.

As a fast-track route to the attainment of this second common currency, the West African Monetary Institute (WAMI) was set up in 2001 with headquarters in Ghana. The WAMI put forward certain economic conditions for the five countries (Cape Verde and Liberia not being fully committed to the project) to meet before further action could be taken. These criteria included reducing budget deficit to not more than four per cent by 2002; limiting inflation to five per cent by 2003; keeping central bank financing of budget deficit at under ten percent of the previous year’s revenue; and maintaining foreign reserves equivalent to at least six months’ imports by 2003.

However, and this was not unexpected, in November 2002 at the end of another summit in the Guinean capital, Conakry, the ECOWAS issued a statement postponing the launch of the Eco from 1 January 2003 to 1 July 2005. They had just realised their inability to meet the unrealistic conditions they had set themselves.

False hopes

The founding fathers of the ECOWAS and their current successors saw the need to create a single currency because in their ignorance of the operation of the capitalist system they hoped such a venture would wipe out all the woes of their people. In the words of the current vice president of Ghana, Alhaj Alieu Mahamam, it “will provide the sub-region with the economies of scale to be derived from a bigger market (and it) underpins all our aspirations of unity captured by the slogan ‘a common currency in a common market in a common country’ ”. These proponents of the single monetary zone also think that it will attract foreign direct investment through a stable macro-economic environment and a larger single market; facilitate free movement of goods, services and labour; and lead to reduced transaction costs. These would, in their view, enhance economic growth and eventually reduce poverty. They also believe that a monetary union will naturally foster unity in their balkanised people who now see themselves in the colonialist terms of Anglophones, Francophones and Lusophones.  

     

The snag

This mission of creating a single currency will be hard to accomplish owning to the near-impossibility of the five countries meeting the ambitious conditions necessary for the creation of the second monetary zone. Then there are other more serious hurdles, which may adversely impede the project. Foremost among these is the local capitalists and their, mostly Western, masters who control the various central banks through their control of the various governments. They may see their petty profit interests being threatened by the creation of a single West African central bank. It is arguably not unrelated to this fear that some individuals with vested interests have openly voiced concern over the issue. The chairman of Guardian Express Bank Plc, Moses O. Ihonde, for instance gave a banking conference at Enugu,Nigeria a frightening talk on how banks will have to battle with increased operational costs at the introduction of the proposed West African common currency (West Africa magazine, 11 – 17 November 2002).

The reality   

But even if the West African leaders are able to stem the tide of these and other unforeseen impediments and are able to create this single currency, the problem of poverty, hunger, disunity, illiteracy, disease, etc will still be the lot of the masses. The reason is that the international economic game, in which West Africa is but a mere pawn, does not work in the interests of the masses. The people here are mostly engaged in farming. They produce raw materials – cocoa, coffee, timber, minerals, etc to feed the factories in the West.  Then they buy their food requirements – maize, rice wheat flour, etc from the West. But the system operates such that these West African producers of primary products do not determine the prices of their products just as the prices of what they import are beyond their control. Therefore they sell their exports cheaply and pay through their nose for their imports. But that is the way of capitalism. It ensures that the capitalists take all profits accruing to the economic transactions away from the masses. And that is the cause of the poverty, hunger, disease and all the ills afflicting the masses. This being the case, there is no way that the creation of a single currency can successfully address such problems. This fact can even be gleaned from the situation of the people of the CFA zone that spread over West and Central Africa. Their countries have very little trade links amongst themselves. And in spite of the fact that they use a common currency, the economic situation of the masses is neither better nor worse than their counterparts in the multi-currency non-CFA zone.

Central to the capitalist relations of production is the element of money. Production is organised such that people work to produce goods and services not for the purpose of consumption, but they produce them to sell at a profit. In other words, goods and services are commodities to be sold and bought. But since the means of producing these commodities are owned and controlled by a few individuals, it is they who own the products. They sell them and keep the proceeds. On the other hand, the producers – the working class – who are excluded from the ownership of the means of production are left with little or no money at all to buy what they produce and need! And herein lies the prime source of all the problems of present day society.

The introduction of a common currency will therefore be, to the masses, as irrelevant as was the switch from the British and French money to the present currencies at independence. The fact is that the ordinary person, the working class person will still not have enough of it to buy the necessities of life.

Society can only turn things round when the means of production and distribution of wealth are commonly and democratically owned. When that happens, production of goods and services will be conducted through a harmonious co-operation of all humanity. Under such an arrangement, the products of mankind’s collective effort will be freely accessible to all and thus money, as a medium of exchange in all its forms, will completely disappear.

Suhuyini

Editorial: “Each Against All” dashes “United Europe" (1997)

Editorial from the July 1997 issue of the Socialist Standard

In recent weeks the great capitalist Euro project has looked in dire straits. Last month it suffered two massive body blows with the election of the relatively Eurosceptical French “Socialist Party” and Germany’s attempt to revalue its gold reserves in order to meet the strict Maastricht convergence criteria.

Each EU member state attempting to “converge” their economies and economic performance has proved tantamount to demanding the impossible. Wide structural differences between the Euro economies, ranging from differing import/export requirements, tensions between industrial and finance capital, and a less than synchronised trade cycle have meant that real progress on convergence since 1992 has been minimal.

But what lies behind the persistent talk of European federalism and a single currency? In actuality, what we have been witnessing has been the movement of the most dominant section of the capitalist class in Europe— generally based in Germany—to create the most powerful economic, political and military bloc on the planet, a bloc capable of challenging the dominance of the United States. What really worries other sections of the Euro capitalist class is that such a federal bloc will be dominated by German interests to the exclusion of their own. Hence the strategics of states like Britain and France which have centred on how best to contain German dominance—France by encouraging the cohesiveness of the other major European states and Britain by its obviously Eurosceptical and nationalistic posturing. All this being further proof, if any more is needed, that “unity” between capitalist nation states can be nothing more than a temporary charade, a mask for the economic manoeuvring and power posturing that is increasingly setting each nation state against all since the demise of the post-war bloc line-up.

For socialists the “European question” can only be a capitalist question and nothing for the working class to take sides about, despite all the efforts of the differing sections of the capitalist class to enlist the support of the workers, not least of all on the latest Amsterdam Treaty. A single currency in Europe is neither an economic panacea (as Germany and some neo-liberals argue) nor the real cause of the austerity and economic restructuring taking place across much of the continent, a product of capitalisms still lingering world economic crisis. In this respect, the single currency and the Maastricht convergence criteria provide the perfect pretext for attacking working-class living standards while, behind the scenes, remaining an object of intense disagreement among the rulers and owners of Europe.

Decimalisation (1971)

From the February 1971 issue of the Socialist Standard

Towards a European Money System
Whatever difficulties people may meet with in handling the metric currency changes on 15 February the changes themselves will have no effect at all on the main operations of the British monetary system or its standing in world currencies. New names will be given to some old coins, and three new ‘coppers’ will appear, the new 2p, 1p, and ½p but the total amount of ‘copper’ coins, about £200 million, will not be altered on D day, nor will the notes in circulation, about £3,660 Million. One change has however already been introduced which distorts somewhat the Bank of England’s weekly figures of note circulation. This was in November 1970 when £96 Million of ten shilling notes ceased to be legal tender, thus dropping out of the Bank of England’s note figures, having been replaced by the same quantity of the ten shilling (50p) ‘silver’ coins.

After D day, as before, the Pound will still have the same exchange rate with the dollar (about $2.40), and with the rest of the currencies inside and outside the European Economic Community.

This does not mean that the changes have no great significance; this will only become apparent some years ahead if Britain joins the European Six and if the Six themselves succeed in setting their, at present deadlocked, negotiations about moving towards a single European currency.

The D day changes are a first step aimed at an eventual situation in which there will be only one currency covering the whole of Europe, just as the dollar covers the whole of the USA and the rouble the whole of Russia.

The 1957 Treaty of Rome which established the European Economic Community (Belgium, France, Western Germany, Italy, Luxembourg and Holland) did not itself provide for a single European currency but only for the co-ordination of financial policies. Since then efforts have been made towards unifying the currencies, culminating in a conference of the Six at the end of 1970 to consider a report drawn up by a committee under the chairmanship of the Prime Minister of Luxembourg (The Werner Report). The conference ended in disagreement but the negotiations will go on.

The Werner Report aimed at achieving a unified currency in 1980, to be preceded by an immediate agreement to re-direct to narrow limits the freedom of the six governments to change the exchange rates of their currencies. The breakdown of the conference took place over seemingly unimportant differences of opinion about the speed of progress to unification (the French government wanted it to be regarded as “a desirable object to be achieved in the long run”); about whether agreement on currency should come before or after agreement on other economic questions; and whether a central institution should be set up to handle the currency; but behind this are deep conflicts of interest of the dominant capitalist groups in different countries.

One basic cause of disagreement concerns the nature of the EEC. It was stated as long ago as 1958 by Professor Hallstein, former West German Foreign Secretary and President of the Common Market Commission:

  We are not in business to provide tariff preferences or to establish a discriminatory club to form a larger market to make us richer, or a trading block to further our commercial interests. We are not in business at all, we are in politics.

What Hallstein meant was that the aim was the creation of a Europe governed by a European government, an aim to which the French government has all along been opposed. Its relevance to the question of a single European currency is that it is impossible to have a single currency without a central government to control it. As Samuel Brittan put it in the Financial Times (16 November 1970):

  Monetary union and a common currency imply a common Budget, political union and some form of European Government.

This is not just a disagreement about some abstract question of “National sovereignty”: underlying it is the conflict of interests between the trading position of high cost French industry. In the past ten years prices in France have been rising half as fast again as prices in Germany—enough to make many French products uncompetitive in European and world markets. The remedy was to devalue the franc by 11 per cent in 1969, equivalent to a reduction of price of that amount to foreign buyers of French goods. German exports were booming to such an extent that in the same year the German government was able to raise the exchange rate of the German mark by 9 per cent and still hold most of their markets.

The fear of French capitalists is that a centrally controlled unified European currency would be dominated by German interests with their much stronger industrial and financial resources. Even the interim scheme proposed by the Werner Report, with its restriction of changes of exchange rates to 1.2 per cent up or down, would rule out any further effective devaluation of the franc.

The position of British exporters as regards the abnormally rapid rise of costs and the need to resort to devaluation of the pound (the devaluation in 1967 was 14 per cent) is similar to that of the French. Yet the Chancellor of the Exchequer has pledged the Heath government to accept whatever currency arrangements the Six accept before the entry of Britain into the EEC. Hence the determination of the Heath government to curb the rise in prices, and cut costs of production through the campaign against “excessive” wage increases.

It remains to be seen what sort of compromise the Six will reach about immediate currency arrangements and about the date of an eventual unified currency system for Europe.

Edgar Hardcastle

Contradictions in Euroland (1999)

From the January 1999 issue of the Socialist Standard

Only a few weeks before the launch of the single currency in Europe and just when things should have been coming together, a public row broke out between the monetarist European central bankers of Frankfurt and the French and German governments.

Put simply, the politicians (especially the new German government under Gerhard Schröder and his Finance Minister Oscar Lafontaine, the Sun’s latest bugbear) are talking of reflating Euroland—the 11 member states who adopted the euro as their common currency on 1 January—with extra government borrowing and spending in order to deal with structural unemployment. Of course, this attempt to revive discredited Keynesianism has not gone down well with the “orthodox” central bankers who think this will threaten the strength and stability of the euro. Such a clash of opinions is highly significant, with Wim Duisenberg, the President of the new European Central Bank (ECB), publicly condemning such economic “recklessness”.

Indeed, for those who remember the Maastricht “convergence criteria” and the Amsterdam “stability pact”, the politicians would seem to be wanting a major U-turn, but a closer inspection reveals the “Euro-fudge” which has always been there.

The process of closer integration in Europe has been driven in recent years by the Franco-German axis. In monetary terms this has been characterised by the “franc fort” (strong franc) policy whereby France pegged the franc to the German mark and its satellite currencies. France has always wanted Germany to cede more on the politics of economic and monetary union and not least on the idea of an “economic government” for Europe.

Germany used to favour a “strong” euro to replace the mark. France has been less orthodox and sought to weaken monetary policy with references to growth and employment targets. With the coming to power in Bonn of the new Red-Green coalition, it would appear that Germany is coming round to the French view.

Such a policy mess does not bode well for Euroland. There is also the plan to expand the EU eastwards, which must mean structural adjustments to the Common Agricultural Policy and fiscal transfers from the richer and “Club Med” states to the new entrants. Quite how such a plan is designed to sit with the single currency is anybody’s guess.

Further, the EU and the US have locked into yet another trade row, this time about banana imports which some commentators see as one of the first moves towards protectionism as the world economy faces recession. Indeed, this is the real context—the world crisis of capitalism. Faced with ever-increasing concentration of capital, the EU plan is to forge together in order to take on the big boys, the US and Japan.

Where does this leave Blair? After nailing his colours to the European mast is it any wonder he is so worried about the new direction for Europe proposed by Lafontaine and the others? It is, after all, a bit Old Labour and Mr Murdoch will be even less pleased with New Labour for getting caught up with such corporatism.

Dave Flynn

Look to the Future (1998)

Editorial from the June 1998 issue of the Socialist Standard

What are we to make of New Labour’s first year? Have we really noticed any real differences from the last administration other than the fact that the Conservatives were “old and stale”? A dispassionate analysis must answer “no”.

What we have witnessed in the last 12 months is the victory of “Style over Substance”—this in itself now a hackneyed cliché. Indeed, the government’s main programme now appears to be aimed at drumming up support for cosmetic changes like devolution and regional authorities around the country. Ironically, this has been met with a less than enthusiastic response from workers in Scotland, Wales and London.

But New Labour’s problems run deep. As the world recoils from the Asian “Sell-out” we will once again see the impotence of any government when faced with an economic crisis. Britain’s industrial sector is now officially in recession—what will be Mr Blair’s response? The otherwise slick New Labour machine also appears to be on a collision course with an unpopular and probably unworkable European Single Currency. The Tory eurosceptic right must be licking their lips in anticipation! That this superficial, intellectually-challenged government will eventually unravel is only a matter of time.

The working class must learn from this. Are we going to waste the 21st Century as we wasted the 20th? Are we going to continue to make excuses for the slick con-men who exploit us? With current production levels and modern technology do we need the restrictions of the market and money? No we do not. The alternative is global Socialism but this can only come about when a majority of the workers organise for it. Socialism is not just a “nice idea”, it is a material necessity.

Which way is the “Third Way”? (1998)

Editorial from the September 1998 issue of the Socialist Standard

According to figures released last month, Britain’s economy is moving away from its EU “partners” and towards the US. The Guardian, reporting on the figures provided by Eurostat—the official statistical arm of the EU—pointed out that the US in 1997 invested twice as much in Britain as in the rest of the EU and that two-thirds of all EU investment in the US came from Britain. As a result “it is more integrated into the global economy than the rest of Europe” (5 August).

Indeed, as the pro and anti factions of the capitalist class declare their hands, this can only give succour to the “Eurosceptics'” case that Britain’s future lies outside any further European integration and particularly the single European currency.

So where does this leave the Blair administration? Although Britain is definitely out of the first wave of entrants, New Labour has been clearly indicating an intention to join the Euro “when it is prudent to do so”. This is a subtle yet significant shift from the “wait-and-see” policy followed by John Major. This could be a dangerous strategy bearing in mind the popular prejudice against the Euro and the possibility of the Sun newspaper turning against the government. Couple this with the looming recession and Blair’s toothy smile may start to fade.

Of all the EU states, the capitalist class in Britain is the most divided on this crucial question. Broadly speaking, the Confederation of British Industry (CBI), British Chambers of Commerce and much of the City are in the “YES” camp, whilst the Institute of Directors and the Federation of Small Businesses are in the “NO” camp. One may conclude from this that the bulk of big export manufacturers plus high finance see the “Euro Zone” as something they cannot afford to miss out on.

Commentators are however pointing out that Britain is the “odd man out” in Europe when it comes to economic policy. Whereas most of the other EU states see no possible alternatives than allying themselves with any Franco-German axis, the same is not the case for Britain. For two decades at least Britain’s free market supply-side approach has been nearer to that of the US than the corporatist “social model” that has been built up in the EU . Of course, Blair’s latest contribution to economy theory is the “third way”-between the US and EU approaches. That this is meaningless drivel and demonstrates Britain’s confusion is obvious.

But what of the working class? We have no interest in taking sides on this capitalist question. Whether or not Britain signs up to the Euro is an irrelevancy. Our interest lies in pursuing the class struggle and forging our own class agenda. Neither Washington nor Brussels but global socialism.

Change the Record (1995)

TV Review from the March 1995 issue of the Socialist Standard

Political programmes on TV are generally as brainless as the major political parties themselves. However, it must be an unenviable task to create a watchable and interesting TV experience with such a paucity of raw material. There are only so many times you can run items about Tony Blair and the Labour modernisation or the Euro-rift within the Conservative Party.

Despite this, TV producers seem to have been queuing up recently to make the politicians look interesting. One such attempt, House to House, Channel Four’s weekday lunchtime effort, is set in a large restaurant in London's Millbank to give it that extra air of seriousness (luncheon is, after all, where all the great political fixes are concocted and where gossip is fermented). The producers of this programme have got it sussed — it is always going to be much easier to entice MPs to the familiar surroundings of an eating-house round the corner from Westminster than it is to a sweaty studio on the other side of London.

As its title suggest, House to House concentrates on Parliamentary affairs and the legislative programme, and does so solidly and without imagination. It is serious stuff, though still slightly more exhilarating than watching Alan Titchmarsh on Pebble Mill at the same time on BBC I.

Rather more interesting, at least at first sight, is BBC2’s The Midnight Hour, an end-of-day political bun-fight which often gives the impression of being a rather ill-tempered editorial conference on one of the broadsheets. This is partly because its hosts tend to be rather bad-tempered journalists and press people (notably Bernard Ingham and Andrew Neil) and partly because the guests are required to take their jackets off before being seated at the debating table. Roy Hattersley has commented after his first appearance that this boded ill from the start, and has since claimed that The Midnight Hour is the worst political TV programme he's ever had the misfortune to appear on. He is probably being rather harsh. Regular viewers of this programme — if it has any — will have noticed a splendid back-projection of a marine fish tank in one corner of the room. The fish tank might not be quite as colourful as Bernard Ingham's braces, but one suspects that the fish perform a rather more useful function at this time of the day than the braces' owner has at any stage in his particular career.

A load of ecus

One of the longest-running political programmes is BBCI’s Sunday On the Record, now hosted by John Humphreys. Its former host, Jonathan Dimbleby, hot-foot from his successful toadying to Prince Charles, has swopped sides to take over from Brian Walden for ITV. On 29 January On the Record decided to hit back at Dimbleby with an action-packed, hyper-charged edition on the European Single Currency. Well, at least they made a better fist of it than they normally do.

The theme was that it was 1996 and some of the European Union states had decided to go ahead with a single currency. Britain was to have a referendum, with two opposing cross-party campaigns vying for the attention and support of the populace. In the Yes camp were those two intellectual giants of the TV age, Roy Hattersley (again) and Edwina Currie. Opposing them were the Tory Euro- sceptic Iain Duncan-Smith — a protege of the Chingford skinhead Norman Tebbitt — and veteran Labour Keynesian Peter Shore. Their objective, pursued via Party political-style broadcasts made with the help of advertising agencies and then via some cross-questioning of the teams, was to convince an evenly-split audience of the efficacy of their case. Not surprisingly, the No campaign won handsomely. This was not principally because of the latent nationalistic tendencies of the audience, though this may have played a small part, but because of the total and transparent economic illiteracy of Hattersley and Currie.

The entire exercise demonstrated something socialists have known for years — it is far easier to knock down proposals for running capitalism than build up new ones. Without doubt, the Euro-sceptics were able to effectively demolish the argument that a single European currency — if it is possible — would be an economic panacea. The Yes camp responded with an appeal to transcend narrow nationalism, their most positive argument of all, but with an electorate that largely votes with its wallet in mind, this cut little ice next to woeful tales of the ERM disaster, impossible convergence criteria and the enormously wasteful Common Agricultural Policy. It was simply a case of one group of reformists being outmanoeuvred by another set, largely because the proposals of the Euro-sceptics themselves were not under any real scrutiny.

So On the Record has done something useful at last, short of having socialists on. The latest reformist panacea for capitalism, when put to the test, was found wanting. Hattersley. Currie and their ilk were debunked.

Of more than passing interest was that the programme also showed up the deep division between the capitalist class and its representatives on such a central political issue. All the major newspapers produced a dummy-run edition for the programme with their views on a single currency, and they were divided too. The Sun and the Times were against, the Daily Mirror and the Independent for. The Guardian, under its forward-looking new editorial team, couldn’t make its mind up. So the capitalist class and its leading thinkers continue to dither when faced with the non-alternatives, and well they might.

Having convinced an audience that genuine political and economic unity is a pipe-dream so long as we are stuck with the anarchic and class-riven capitalist economy, perhaps On the Record can go one step further next time and demonstrate the absurdities propounded by the Euro-sceptic supporters of capitalism too. The nonsense emanating from both sides will then have cancelled itself out. preparing the way for socialists to put the genuine alternative. Now that really would be worth watching, and might even stir the fish on BBC2.

Dave Perrin

Editors' note: The fish, as well as the viewers, remained unstirred by The Midnight Hour and it has since been axed.

A Eurogamble for the casino economy (1997)

Editorial from the December 1997 issue of the Socialist Standard

It seemed that Chancellor Brown had come up with the perfect fudge: Britain will not join the Euro Single Currency for at least the duration of this parliament and then only if it is “viable”. Whilst the government attained the luxury of “waiting and seeing” the Tories could continue to tear themselves apart.

The logical corollary of such a policy has meant the government telling the capitalists to prepare for eventual EMU entry, which apparently will occur “when the time is right”. The party battle lines are now clearly drawn. The question is: will the Euro be New Labour's undoing?

The Euro is the EU's answer to a world becoming increasingly divided into regional trade blocs and spheres of influence. The idea is that a strong EU will give European capital its best chance of competing against the USA and Japan.That this bloc is likely to be dominated by Germany is a gamble some supporters of British capitalism are prepared to take.

Of course, many commentators talk of globalization and the efforts of the World Trade Organisation to reduce trade barriers but this only masks the fact that global capitalism is having a hard time of it. Yes, the world economy is globalized by virtue of the unprecedented capital flows flying around the world. But herein lies the problem. The vast bulk of these capital flows concern mainly unproductive “investment” in equities, government bonds and in currency speculation. Hence the recent situation of stock markets starting to crash around the world in order to “correct” what has been a massive overvaluation in comparison to real growth in the productive economy. The Euro is no solution to this.

With the capitalist class in Britain seemingly divided on the Single Currency and broader public opinion, sceptical to say the least, it currently seems that it would be a brave move for the government to advocate membership of something which is more of a political gamble than an economic panacea.

For the productive majority—the working class— whatever we are paid in we will still be exploited. With or without the Euro, capitalism will still mean economic crises, austerity and financial insecurity for the majority.

Editorial: The euro, an unimportant issue (2003)

Editorial from the July 2003 issue of the Socialist Standard

Enormous publicity has been given recently to the question of whether Britain should join those countries in the European union which have decided to accept one single currency – the euro. No less than eighteen volumes were produced by the Treasury, containing many hundreds of jargon-laden pages for the cabinet members to digest. But it is all pointless from the point of view of the working class. What we should be striving for is a moneyless society. It is immaterial whether the coinage is called sterling or European, pound or euro. You are never going to be allowed to have enough of it, whatever you call it. Money is simply a device to separate the workers from what they produce. The workers must aim to abolish it, not change its name.

There could finally be a referendum, so the voters can state their preference – pound or euro? But such a vote would be almost meaningless. It may be that some groups of workers would find their position slightly improved with currency union; some groups might think their position would be slightly worsened; but the over-riding fact is that, whether the money the workers are short of is called the pound or the euro, they will remain with no stake in the great wealth-producing agencies of what the papers call “their” country. A referendum would be like an assassin giving his victim the choice of being strangled or drowned.

All the media – the newspapers, television, radio, and so on – are getting intensely excited about the sterling/euro question. But like all the other political questions we are told to worry about, all this noise merely reflects disagreements among the owning class. It may be that larger companies think there will be more chances of profit with the euro, resulting from a closer engagement with the markets across Europe. It may be that smaller companies think that their lesser resources won't let them compete if the big conglomerations are cleaning up all the profits – if the bigger predators are doing better, perhaps they will do worse. And that would certainly explain why Tony Blair and his Labour government are getting friendlier towards the euro. Tony has always liked being on the side of the big battalions, at home or abroad.

In due course it will be obvious that all this ferment has nothing to do with the basic propertyless position of workers in society. Eighty years ago, after the First World War of 1914-18 had slaughtered millions of workers who were fighting for the interests of their masters, and had plunged many of the survivors not even into a dull job and a weekly pay-packet, but into unemployment, a Socialist Party speaker on a London street-corner was addressing a crowd of workers, many of them ragged and ill-shod. He explained the class-divided nature of society, and how only Socialism could offer them any future worth having. At the end of this clear and careful exposition, one of his audience raised his hand. All he had heard sounded very good, he admitted, but he wanted to hear more about the important day-to-day issues confronting the working class. What could the speaker say about the most urgent topic then before the public? “What is the position of the Socialist Party on the disestablishment of the Anglican Church in Wales?”

Most of the people reading this probably never knew there was an Anglican Church in Wales, established or disestablished. (For the record, after a tremendous public debate, equal to the present commotion over the euro, the Church in Wales was disestablished in 1919.) It makes you wonder if the questioner at that Socialist Party meeting ever realized that it made no difference to him.

All this furore, the endless discussions in press, pub and Parliament, will make no more difference to the mass of propertyless people than the disestablishment of the Welsh Church. If the workers could devote a tenth of the effort to their own interests that they spend debating the interests of the various sections of the master class, we would have Socialism in double-quick time.