Chris Harman

Thinking it through

No logical conclusion

(December 1991)

From Socialist Review, No.148, November, p.7.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

I don’t think I’m alone on the left in getting intensely bored by the arguments over European unity. I simply cannot get that worked up over whether it is the dung palace in Westminster or a glass palace in Strasbourg that presides over welfare cuts, rising unemployment, a worsening housing situation and the persecution of refugees.

But the sight of our rulers rowing with each other does excite me. The arguments over European unity do matter to them. The issue was one of the factors behind the anti-Thatcher coup of a year ago, and it could still be the final blow to Major’s hopes of hanging on to power.

Their problem is this. Capitalism has become an increasingly international system over the last four decades. Not only is a huge amount of trade across national frontiers – after all, that was true for British capitalism 70 years ago – but so too, increasingly, is production. And that makes it more difficult for the old executive committees of national ruling classes – the old states – to manage things.

There are some who say this does not matter. The more capitalism operates independently of states, they argue, the better things must be, since the state is an unwelcome intrusion on the workings of the market.

The people who run giant companies tend to have a rather different attitude. They know that it is influence over state power that will open up huge markets for them in sectors like aerospace, communications, mainframe computers. They know that it is the state which will have to step in if they or their banks make serious miscalculations and look like going bust. They know it is the state which is going to have to guarantee them a skilled workforce. And they know that only a state of their own can protect them from other states which might trample over bits of their property.

So at the same time as resisting interference by the state in their own affairs, they want a state strong enough to push their interests against those of their rivals.

This presents particular problems for the West European capitalisms. The national economies on which each is based are much smaller than not only the US, but also Japan.

The US still accounts for 41.2 percent of total G6 output – the output of the six largest Western economies. And Japan accounts for 22.5 percent.

By contrast, Britain accounts for only 7.4 percent and France for 9.1 percent. Even Germany has only 11.4 percent – half the Japanese figure. All these figures are down on those of ten years ago.

The pressure on the European capitalisms is likely to grow greater, not less, over the next decade.

Figures for investment, and therefore for future competitiveness, are even worse than for output. Japanese gross capital investment in 1990 was slightly higher than US investment, and both were three times the German level and five times that of Britain.

Productivity is generally higher, union organisation weaker, welfare benefits and holidays smaller in both Japan and the US than in most European countries. So their rulers can look forward to a rate of exploitation of their workers which is, on average, higher.

It is not surprising that some of the more far sighted supporters of European capitalism long ago concluded that if they did not fight together they would be crucified separately.

This logic pushes Delors and, spasmodically, the German and French governments, to try to transform the common market into a single economy, a single currency and a single central government for the whole community.

However, it is a logic which is resisted by some of the very capitalists it is meant to assist. Competitive pressures are pushing all the big companies to expand their operations by taking over other companies. But some of these takeovers are of other domestic companies – as with GEC’s takeover of Plessey or the absorption of much of the German engineering industry by Mercedes Benz. These increase dependence on national governments.

There are a growing number of cross border takeovers, and an even greater number of alliances between companies in different countries to exploit technological advance and divide markets. But these are nearly as likely to be between European and American or Japanese companies – the link between Honda and Rover, or the takeover of the US tyre firm Uniroyal-Goodrich by the French firm Michelin – as firms in different European countries.

This means all the big European companies are pulled three ways – by their ties with their national states, by their desire for a larger state to protect themselves against American and Japanese giants, and by their ties with some of these giants.

Nowhere is this more true than in Britain. British firms own a tidy bit of the American economy, American firms dominate certain British industries, and what growth there is in manufacturing is concentrated in the small Japanese owned sector.

The result is a ruling class which cannot provide a single answer to one of the most important questions facing it.

Those who have a clear position – the Thatcher-Tebbit-Ridley little Englanders on the one hand, and the pro-European ‘visionaries’ on the other – are small minorities.

The majority want to be in Europe but out of it – to get any of the benefits that accrue from growing European unity but not to pay any of the cost. As a result, they are likely to fall between the two.

In any case, the political divisions within the ruling class and the Tory party over the question are not going to go away. And so we can expect the incessant, boring discussion over the issue to be punctuated by further sudden political crises like that which finally sank Thatcher a year ago.

Last updated on 11 June 2010