Ernest Mandel

The Common Market – at a snail's pace

(February 1976)

Written: February 1976.
Source: Inprecor no. 44. February 19, 1976, pp 16-17.
Transcription/Markup: Martin Fahlgren in 2016 for the Marxists Internet Archive.
Copyright: This work is in the Public Domain under the Creative Commons Common Deed. You can freely copy, distribute and display this work; as well as make derivative and commercial works. Please credit the Marxists Internet Archive as your source, include the url to this work, and note any of the transcribers, editors & proofreaders above.

Ever since its creation, it has been clear that the Common Market represented a transitional stage in the development of West European imperialism. Previously, three successive attempts at “European union” under the hegemony of a single imperialist power — Germany during the period 1900-1918; France on the basis of the Treaty of Versailles during the 1920s, and Germany again during the period 1938-1944 — had ended in failure. West European capital then tried to bring this union about no longer on the basis of the military-political domination of a single power, but instead through an alliance of the most important powers.

The objective necessity for this union derives from the growing internationalization of the productive forces, that is, the growing contradiction between the maintenance of the national bourgeois state on the one hand and the degree of development of the productive forces, the productive capacity of the large enterprises, the market for their production, and the objective socialization (technical interdependence) of the life of these enterprises beyond national frontiers on the other hand.

The objective difficulty in overcoming this contradiction within the framework of the capitalist mode of production during its imperialist stage lies in the fact that private property and competition do not permit the essential particular interests of certain groups of capitalists to be sacrificed to the “common interests” of the bourgeois class. As long as the means of production remain the private property of German, French, British, Italian, Belgian, or Dutch bourgeoisies, the “European bourgeoisie” and “European interests” will remain abstractions lacking the slightest real content.

The objective possibility of European union on a capitalist basis thus lies precisely in the level of the international interpenetration of capital. To the extent that European multinational corporations emerge, corporations that are no longer the exclusive property of capitalists of a particular nationality but are rather the common property of Dutch and German, Italian and British, French and Belgian capitalists (provided capitalists of other nationalities are not excessively involved), to that extent the weight of the common interest grows in comparison with that of the particular interest within the European bourgeoisie. Then the concepts of “European capital” and “European bourgeoisie” take on a concrete content.

The EEC appeared when the “European multinationals” were still not very numerous and when their importance was still limited. Since then, their number and weight have increased, but much more slowly than had been predicted by the advocates of a West European federal state. Hence, on the eve of the general economic recession of 1974-75, the EEC had still not gone beyond this intermediary stage.

Federation of states or federal state?

Nevertheless, during the stage of late capitalism, the state plays an increasingly important role in capitalist economic life. The illusion that the great monopolies, including the multinationals, “no longer need the state” has validity only during periods of rapid economic growth and boom. During an acute economic depression these gentlemen hold out their hands for state subsidies and orders just like the less important firms. (Examples: AKZO, ACEC/Empain and ACEC/Westinghouse in Belgium, British Leyland and Chrysler in Britain, Rhône-Poulenc in France.) Deciding which state will come to the aid of which monopolies in what forms and with what consequences is and will remain a decisive question in the context of the international competition that reigns among big capital.

This is also true of the inherent tendency of late capitalism to orient itself toward greater economic cooperation and more active programming between the state and the monopolies. The multinational monopolies have no interest in national economic planning. They could suffer from national protectionism. Rather, what they want is programming and protectionism applied over a broader geographical range.

Thus, for several years now the EEC has found itself midway between an economically strong “national” state and an economically strong sovereign federal state.

But such a weak and loose federation is not very effective economically and is not in position to intervene on a grand scale. Hence the alternative: Either there is a return to national protectionism in time of crisis or else there is forward motion toward a European federal state.

The present recession has thrown light on this dilemma. But it has not resolved it. The Tindemans report (requested of the Belgian prime minister in 1974 by his eight European colleagues of the EEC) is more a confession of impotence than a clear choice between growing disintegration or definitive consolidation of the EEC.

Originally, the EEC was a customs union, that is, a region of free circulation of commodities. This led to a shift in the location of factories (from which Belgian capitalism profited extensively during the 1960s), which gave rise to the desire for monetary and economic union.

The six initial members of the EEC (France, West Germany, Italy, Belgium, the Netherlands, Luxembourg) wanted to bring this union about by 1980. A common currency (which would serve as the basis of the international monetary system alongside or even in place of the dollar), a common European budget, and a common credit policy would inevitably lead to a common rate of inflation, a common incomes system, and a common policy on investment, employment, and public works. This would thus lead to a common government and a federal state. That was the road that was and still is recommended by the bourgeois federalists and the reformists of the workers movement.

The major precondition for realizing such a project is the increasing homogenization of economic development: the growth rates of production, the rates of inflation, and the increases in incomes would have to be comparable in the various countries. During the 1960s this seemed to be increasingly the case. Today, however, it is not at all true of the “nine” (the original six plus Britain, Ireland, Denmark).

Britain and Italy are experiencing much higher rates of inflation, a growing decline in real wages and living standards, and a much lower growth in productivity and industrial production than West Germany, France, and the Benelux countries. Denmark and Ireland are also more fragile economically. This has eliminated the possibility of short- or medium-term monetary union, unless Germany, and to a lesser extent France and the Benelux countries, were prepared to finance the balance of payments deficit of Britain and Italy on a grand scale (among other ways through the creation of a common reserve of gold and money for a common West European currency) .

The possibility of a West European monetary union disappeared with the nyet of Helmut Schmidt, with the lack of audacity of the West German bourgeoisie in this domain; this bourgeoisie did not dare to propose common gold and currency reserves in exchange for the French, British, and Italian capitalists' giving up their financial and economic sovereignty.

As of 1974 the only remaining solution was a combination of a customs union for the “nine” and an increasingly tight monetary union of the “five rich members” (West Germany, France, the Benelux countries). This intermediary “solution” — semi-disintegration and semi-consolidation — was advocated by Willy Brandt in Paris.

Since then, it experienced a beginning of realization when the French franc was again added to the monetary “snake,” in which the various currencies fluctuate together around the German mark. The Tindemans report translates this pragmatic intermediary “solution” into practical language. As was pointed out by the January 15 issue of the German Social Democratic newspaper Vorwärts, this report could just as well have been written by Helmut Schmidt himself.

All the rest is just ideological camouflage. Granted, there are passages in the report favoring monetary and general economic union (but the when and how remains vague). In addition, the British bourgeoisie is furious. Granted, there is still an allusion to a European parliament that would have the right of initiative, which disturbs the Gaullists. Granted, there is also a plea for a common foreign policy by the “nine,” which soothes these same Gaullists. But all this is just window-dressing. What is fundamental is that there is no move toward an economic union. Nor is there any desire to regress to the stage of national protectionism. Thus, things retrain in mid-stream, with the addition of attempts to limit the damages caused by this immobilism. That is the deeper significance of the Tindemans report.

A real dilemma

This is a real dilemma and not a matter of misunderstanding or indecision on the part of the West European bourgeoisie. The crisis in Britain and Italy is too serious for the German and French bourgeoisies to pay the price of a short-term monetary and economic integration. And this crisis threatens to infect France and Belgium at any moment, which would make the position of the German bourgeoisie, Europe's “rich uncle,” untenable. On the other hand, a breakup of the EEC would be a real catastrophe for the West German and Benelux economies. If only because of the loss of markets, which would throw these economies into a crisis similar to that of Britain. Thus, the bourgeoisie cannot return to the policy of the 1930s. They therefore cling to pragmatic intermediary “solutions”; they try to hold onto what they've got and to prevent the “positive” results of the first phase of the EEC from being lost (which is a very real danger if the coming social and political crisis or the economic recession in Italy, Britain, and France proves to be more serious than those of 1968-69 and 1974-75) . No more than that can be done. “Après nous, le déluge,” or, as Keynes said even more clearly, “In the long run, we're all dead.”

The working class must have no illusions in the results of this pragmatism. We will vanquish these remnants of the nationalism of the European states, which maintain private property in the means of production and an economy rooted in the monopolies' search for profits.

The United States of Europe will mean full employment and will eliminate exploitation and oppression, for they will be the Socialist United States of Europe