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From Notes of the Month, International Socialism, No.77, April 1975, pp.7-11.
Transcribed & marked up by by Einde O’Callaghan for ETOL.
THE END of the second world war saw the economies of most European countries in ruins. Massive physical damage, especially in Germany, the disruption of trade patterns (already transformed by Hitler’s ‘New Order’), chronic shortages of all manner of industrial and consumer goods, hyperinflation in a number of cases (cigarettes were the most acceptable form of currency in a large part of central Europe in 1945-46), flourishing black markets and drastically reduced living standards were the typical pattern.
As late as 1947 German industrial output was only 27 per cent of the 1938 level, a catastrophic fall, far exceeding the worst effects of the great slump of the thirties. And in all the states that originally formed the EEC output was well down on pre-war.
Then, according to legend, the benevolent rulers of the USA came to the rescue, out of the goodness of their hearts, with a scheme of massive economic aid – the Marshall Plan. ‘The most unsordid act in history’, the British Labour Chancellor of the Exchequer, Sir Stafford Cripps, called it. In reality the Marshall Plan was a direct consequence of the ‘Cold War’ between the USA and the USSR and a weapon, a very powerful weapon, in that struggle.
In the immediate period after the war, the victors occupying defeated Germany (the US, the USSR, the UK and France) were concerned, above all, to prevent German recovery – either economic or military. The German state machine was totally destroyed and replaced by direct foreign military rule, each power having its own ‘Zone’. And the German economy – already heavily damaged – was subject to ‘dismantling’ to reduce its future military potential.
The most ferocious formulation of this policy – the American Morganthau Plan – had envisaged the reduction of Germany to a ‘pastoral economy’, that is to say, the total destruction of German heavy industry. It is worth recalling this in view of the subsequent slobbering about US ‘generosity’. In practice this plan was never seriously attempted – if it had been the majority of the 80 million Germans would have either starved or become permanently dependent on US charity.
But the dismantling programme was savage enough. The USSR was its most enthusiastic practitioner in practice; it partially ‘de-industrialised’ its Zone (the future DDR) and transported the booty back home. The French dismantled 110 major plants in their Zone and re-erected 22 of them in France, the remainder going to scrap. The British shipped out very little, their dismantling was purely destructive, but as late as 1949 they were insisting on the destruction of the Salzgitter Stahlwerke as ‘essential’ to ‘denazification’!
However, the US government, the originators of the policy, abandoned it almost at once. Although at the Potsdam conference of the ‘big three’ (1945) they had agreed that ‘removals of industrial capital equipment shall begin as soon as possible’ and their experts had drawn up a list of 200 key factories as top priority targets for demolition, they were soon arguing for allowing a measure of German economic recovery.
‘Germany must be given a chance to export goods in order to import enough to make her economy self sustaining,’ declared US Secretary of State Byrnes in 1946. The reasons for the about-face were partly economic, but, above all, they were a response to the tightening Russian hold on Eastern Europe and the realisation that the USSR, not Germany (or Japan; at that time under US military occupation), was now the effective challenge to US world dominance. The Cold War was beginning.
The Marshall Plan, formally proposed in June 1947, was a scheme of economic aid to revive a united West European capitalism so as to provide the basis for its military re-armament under US hegemony. Operative from 1948, it was quickly followed by the North Atlantic Treaty Organisation (1949), the formal military alliance directed against the USSR and its satellites.
From the beginning the Marshall Plan was based on the assumption of the economic integration of the recipient states. An organisation to promote this, the Organisation of European Economic Co-operation, was set up in 1948 and membership made a condition of aid. The subsequent complexities of ‘European’ politics stem largely from the difficulties in the way of achieving this integration, of reconciling the conflicting interests of the different capitalist classes and of ‘solving’ on a capitalist basis, the ‘problems’ of Germany and of Britain.
It is essential to realise that the military and economic aims of the US government were simply aspects of an integrated policy, that NATO and the OEEC were part and parcel of the same strategy, the ‘rolling back’ of Russian influence.
But the USA was not omnipotent and one effect of the economic revival that did indeed come with Marshall aid was to weaken its leverage on its European allies.
FIRST THE German problem. In essence it was simple. Though shorn of a great deal of territory, occupied and partitioned between the powers (the three ‘Western’ Zones were ultimately united), Germany remained potentially the greatest power in Europe apart from the USSR. Its economic revival and, still more, any consequent military revival, was feared by the ruling classes of all its neighbours, most of which had very recently been under German military occupation. But US policy required the creation of a new German army supported by a powerful economy. How could this be reconciled with the interests of the rulers of France and the other US allies?
One obvious solution appeared to be the creation of a real West European super-state, a United (Western) Europe with unified armed forces, bureaucracy, police, laws, institutions and a single ‘Europeanised’ ruling class.
That influential ideologist of the Cold War, Winston Churchill, declared in 1946,
‘We must build a kind of United States of Europe ... The first step in the re-creation of the European family must be a partnership between France and Germany ... the first practical step is to form a Council of Europe ...’
But the ‘federalist’ solution rapidly proved utopian. A ‘Council of Europe’ was indeed duly established in 1949 (Belgium, Britain, France, Netherlands and Luxembourg being the initial members) with a Council of Ministers and a (non-elected) Consultative Assembly (the forerunner of the so-called ‘European Parliament’). But it was immediately apparent that neither the British nor the French governments would allow it to be more than a purely decorative body. As the nucleus of a federal union it was a non-starter.
But in 1949, on US insistence, a West German state (the Federal Republic) was established, soon to be followed by the establishment of its East German rival (the DDR). Neither was allowed armed forces at first but the ‘German problem’ was now acute and the US government made no secret of its intention, ultimately, to arm West Germany and bring it into NATO.
The French responded with two limited ‘supranational’ schemes. The Schuman Plan for a ‘Europeanised’ coal and steel industry and the Pleven Plan for a European army. These, the European Coal and Steel Community and the European Defence Community, were to be created in advance of any scheme of federation.
‘Europe will not be built all at once, or through a single comprehensive plan. It will be built through concrete achievements, which will first create a de facto solidarity,’ said Schuman. ‘These proposals will build the first solid foundations of the European Federation which is indispensable to the preservation of peace.’
The EDC never got off the ground but the ECSC did, and, in its period of independent existence, (1952-1967) it represented the high point of ‘Europeanisation’.
The German steel industry, which had been ‘de-cartelised’ – broken up into smallish units –, as well as partially dismantled, was yoked to the French industry but not under any simple French domination. An ‘independent’ bureaucracy, the High Authority, was given extensive powers of bureaucratic regulation. The industries remained under existing (capitalist or state capitalist) ownership but were subject to detailed directives from the High Authority. Coal was included because French steelworks were heavily dependent on Ruhr coking coal.
The essence of the matter was that the revival of German steel production – backbone of an armaments industry – was to take place on a capitalist basis but without reviving the independent power of the ‘Ruhr Barons’. Italy and the three lesser members of the future EEC ratified the arrangement but the key was Franco-German agreement.
THUS FAR it may appear that the whole ‘European’ trend depended simply on the attitudes and schemes of the various ruling classes, that the working classes were not a political force. They were a force, and a powerful one. The overthrow of Hitler’s ‘New Order’ resulted in a big resurgence of the traditional working class organisations – unions and parties – that had been smashed by fascism. But the revival took place under the auspices of the pre-war leaderships – social democratic and Stalinist.
Reformist Parties in the EEC |
It was a tremendous revival. For example, in the immediate post-war period, elections gave an absolute majority, in votes and in parliamentary seats, to the combined forces of the French Communist and Socialist Parties. But these parties, and their equivalents elsewhere, were firmly wedded to ‘reconstruction’ on a capitalist basis. The role of the Communist Parties, the then recognised ‘left’, was decisive. To take the French example again, die Communist Party with five million votes and 161 deputies in the French parliament, entered a coalition government headed by General de Gaulle. It backed the policies of that government – including wage restraint and the attempt to re-conquer Indo-China (Vietnam, Laos, Cambodia) – to the hilt.
‘The key to the success of the plan [the Monnet Plan for the reconstruction of French capitalism – Ed.], which has been considerable, is the enthusiastic collaboration of the French Communist Party,’ wrote the American journalist and commentator Joseph Alsop.
‘The Communists control the most important unions of the CGT, the French confederation of labour unions. Communist leadership has been responsible for such surprising steps as acceptance by the key French unions of a kind of piece-work system by which high output per worker is duly rewarded.’
In all the ‘six’ the Communist Parties participated in governments in this period and pursued similar class-collaborationist policies. Due to their efforts, and those of the social-democrats, capitalist regimes were re-established and revived in the years immediately after the war.
Of course, once the immediate threat of revolution had passed – and it had been a very real threat – the ruling classes of France, Italy, Belgium, Netherlands etc got rid of their embarrassing ‘Communist’ allies.
The Communist Parties were thrown out of the various governments in the autumn of 1947. The war-weakened and shaken capitalists of Western Europe were ready to accept, at first, an American-inspired and dominated ‘United (West) Europe’. Hence the OEEC, hence NATO.
The Communist Party (and left social-democratic) opposition to this ‘Europe’ was channelled into almost wholly nationalist directions. Anti-German feeling was exploited to the limit in France, Italy and Britain. And it was not unsuccessful in those terms. The vital issue was the European army, i.e., the new German army in ‘European’ disguise. The EDC was opposed by the German social democrats as well as all the Communist Parties and even the British Labour Party was deeply split on the issue. In spite of the outbreak of the Korean war in 1950 and the widespread expectation that this was the first step to a new world war – or perhaps, in part, because of this – it proved impossible to secure enough popular acceptance of the EDC and its final rejection by the French National Assembly in the summer of 1954 was its death blow.
Russian foreign policy – and its echo, the policy of the western Communist Parties – had been overwhelmingly pre-occupied with this issue. In 1952 Stalin had offered, in effect, to abandon the ‘Soviet’ zone of Germany in exchange for the permanent disarmament and neutralisation of the whole country. The rejection of this offer by the USA led to a frenzy of nationalistic drum-beating by the Communist Parties and the subsequent admission of the Federal Republic into NATO – and the beginnings of a West German army. The Communist Party-dominated left was aligned, on foreign policy issues, with the ultra-nationalist right (e.g., with de Gaulle in France) and offered no internationalist perspective at all. The initiative was handed to the bourgeois ‘European Movement’.
But by 1952 both Churchillian federalism and Gaullist nationalism were losing their appeal in influential ruling class circles. The ‘little Europe’ of the ECSC, with its more modest aims, was gaining ground. The initial success of the ECSC owed a great deal to special and unrepeatable circumstances. Above all, the massive rearmament boom that got underway with the Korean war created an almost unlimited demand for steel and so enormously eased the ‘national’ conflicts that otherwise might have wrecked the theoretically independent High Authority in its early stages.
Then the permanent arms economy got into its stride and the ECSC was swept forward on a tide of steadily increasing industrial output in all the six, rapidly increasing world trade and a general easing of social and national conflicts. The illusion that this was a permanent state of affairs gained ground and, as it did, the original military aims, nationalist fears and US dominance, all faded into the background. ‘Europeanism’ had a demonstrable success, modestly reinforced by Euratom – the corresponding arrangement for atomic energy.
This was the economic and political climate which led to the Treaty of Rome in 1957 and the Declaration of Bonn (1961). That was the high tide mark. The beginnings of the return of economic difficulties in the 1960s and the increasingly nationalistic policy of Gaullist France prevented further effective moves towards fusion of the West European ruling classes. But meanwhile Britain’s rulers had changed their minds about ‘Europe’.
NOW THE British problem. In essence it too was simple. In 1945 the union jack still ‘waved over a quarter of the world’. In reality big sections of the British Empire were already independent for all practical purposes (Australia, Canada, South Africa etc.) and soon the Indian empire was to be abandoned (Burma, Ceylon, India, Pakistan). But, as late as 1951, half all British exports went to empire or ex-empire countries, that remained part of the ‘sterling area’ – the economic successor of the empire (by comparison only 10 per cent of exports went to the ‘six’).
These proportions had altered, with the relative decline of ‘empire’ trade, by 1957 but not so dramatically as to induce British big-business to shift its political emphasis towards ‘little Europe’.
‘The UK could not join the Common Market,’ said the FBI (forerunner of the CBI) in 1957, ‘for it also involved a common external tariff, and to adopt this would mean for the UK the end of the imperial preference system.’
The political ‘federationism’ of Churchill in this period was simply a Cold War manoeuvre. Neither the Labour government of 1945-51 nor its Tory successor (headed by that same Churchill) had any intention that the UK should actually enter a Eurostate.
With the establishment of the EEC, the OEEC lost its original function, added the USA and Japan to its members, and became the OECD (Organisation for Economic Co-operation and Development); essentially it is now a statistical office and very loose ‘club’ of the major monopoly capitalist powers.
The immediate reaction of the British government to these developments was to work to set up a rival to the EEC, the European Free Trade Association (EFTA). Established in 1960, with Austria, Britain, Denmark, Norway, Portugal, Sweden and Switzerland as members, EFTA was a much looser arrangement than the EEC.
It had no common agricultural policy, no common external tariff, no equivalent to the Brussels Commission and no aspirations to a political union. The object of this operation, from the British point of view, was to get some leverage to bargain with the EEC on their tariffs and at the same time preserve the imperial preference system of tariffs so as to make it possible to continue the traditional ‘cheap food’ (and low wage) policy of British capitalism.
But the break-up of the British Empire was speeding up. ‘The wind of change is blowing through the continent,’ said Tory premier Macmillan of Africa in 1960. And Asia too. And with the dynamic growth of the German economy – once again becoming the real core of the European economy – British trade was increasingly sucked towards the EEC.
British capitalism’s rulers responded with a spectacular U-turn. Little more than a year after the signing of the EFTA treaty, Macmillan announced that the UK would apply to join the EEC (July 1961).
The first attempt at British entry coincided with increasing French hostility to ‘supra-nationalism’ and the pretensions of the EEC Commission. De Gaulle, back in power since 1958, aimed to orientate the EEC towards a simple Franco-German agreement, depending on frequent direct meetings between himself and the German Chancellor. The UK would not fit at all easily into such a scheme. Hence the famous veto. Hence the opposition to the High Authority of the ECSC. ‘The High Authority, conceived in the romantic period, was an organisation theoretically independent from the governments. Experience has shown the fallacy of such a system,’ said de Gaulle’s foreign minister.
The substantial success of French policy – including the merger of the ECSC and Euratom with the original Commission into a unified bureaucracy, very subject to pressure from (big) constituent governments, created the conditions which made UK entry acceptable. And the loss of confidence by Britain’s rulers in the independent viability of British capitalism, the relative decline in ‘Commonwealth’ trade and the onset of the crisis of the permanent arms economy, made them determined to get in. Their perspective now is that capitalism is safer on a ‘European’ basis and, in spite of the manifest weaknesses of the EEC, they are probably right.
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