The rising tensions between Western Europe and the United States are increasingly affecting West European politics. In a talk given to an International school in March, John Ross examines the theoretical problem of the long term development of relations between the capitalist states.
The most basic fact about the international capitalist order is that it consists of a hierarchy of states, organised in a highly structured world system. At the top is the US; then there is a second tier of capitalist powers — Japan, West Germany, France and Britain; then there are a series of lower tiers, with most of the semi-colonial countries at the bottom. The five chief imperialist states by themselves account for something like 70 per cent of world capitalist production, for 80 per cent of foreign investment. Developments in the US economy alone determine trends throughout the entire world capitalist economy.
This pattern is a feature not only of contemporary capitalism but of the entire history of capitalism. International capitalism has always involved relationships of international dominance and subordination among states. There has always been a dialectical link between two conditions of capitalist stability: competition between capitals and the international dominance of one capitalist power which sets the conditions of accumulation and economic relations throughout the international system.
At the same time, these relations of dominance and subordination are not static and in the history of capitalism there have been three great periods in the development of the international capitalist order: first, with the birth of capitalism, Holland was the dominant force, attaining this position through its bourgeois revolution and war of independence from Spain at the end of the 16th century; in the second phase England achieved dominance through a series of wars against the Dutch waged by Cromwell and his successors between the 1650s and 1680. This transition to English dominance culminated in the curious take-over bid by which the Dutch king, William of Orange became king of England while the English ruling class simultaneously assumed hegemony in Holland since the latter could not militarily defend itself against feudal France. During the 18th century, England consolidated its supremacy through a series of wars with France (under the leadership of Churchill's great ancestor the Duke of Marlborough).
England's supremacy was finally shaken by the great shock of 1914 that opened a thirty year bloody interregnum, until the end of the second world war inaugurated the third great period of the world capitalist order under US supremacy. In historical terms, the function of the two world wars and the many wars in between was to settle the issue of dominance, so necessary for the stable functioning of international capitalism.
This brief historical sketch underlines the second basic fact about the international capitalist order: that wars and militarism are normal, necessary elements in its functioning, not external interruptions of its stability. It is bizarre that an historian of such great ability as EP Thompson can be so blinded by political prejudice as to seek to obscure this historical truth with his notion that modern militarism is external to the capitalist economic order with an autonomous exterminist logic of its own. At every step in its drive to establish a world market capital has used military violence. And the biggest, most ferocious wars are those fought between capitalist states over how regional or global accumulation should be organised.
From the standpoint of humanity's most elementary interests, the killing of 100m people in two world wars and their aftermath was criminal lunacy. But from the angle of the most elementary logic of capitalism the wars of the 20th century, just as much as those of the 17th or 18th centuries, were neither random nor superfluous. They were fought to achieve real, rational goals by the various national capitalist classes.
And we must bear this in mind when discussing nuclear war. All those who refuse to recognise the overriding logic of capitalism make an elementary error when they say that nuclear war could never deliberately occur because it is unthinkably irrational. It is indeed madness from a human point of view, yet it has precisely been the job of the establishment in capitalist America to debate periodically and cold-bloodedly whether launching a nuclear war against the USSR would be valuable and productive. This was badly disputed in the late 1940s/early 1950s when a serious faction led by General MacArthur pressed the case for a nuclear strike against the USSR. There was a similar debate in 1961/62 over Cuba, and this same debate has now been revived in American ruling circles.
But to return to changing patterns of dominance within capitalism, we find one threat running through the 3 great historical periods: the political transition from one dominant power to the next, corresponds, curiously enough, to a transition of economic dominance in agriculture. Modern agriculture first emerged in Holland. The English then borrowed Dutch agricultural techniques, applied them to capitalist farming and achieved huge surpluses for capitalist accumulation. (One interesting cultural reflection of English agricultural strength in the 18th century is shown in the cartoons of the period which portray the English as extremely fat and the French as extremely thin!) The US used the strength of the capitalist agricultural system imported from England to provide a surplus for capital accumulation in industry — its base for its rise to supreme power. (The Spanish exported a feudal agricultural system to Latin America with the result we know).
This American strength in agriculture has remained up to the present and the hierarchy that we mentioned at the start of this article is reproduced in the field of agricultural productivity. Thus American agriculture is about 4 times more efficient than West German agriculture, about 8 times more efficient than Japanese agriculture, and about twenty to thirty times more efficient than the agriculture of the semi-colonial world. Indeed one of the most fundamental problems of the semi-colonial world is the gulf between an advanced, 20th century sector in some branches of industry and an agricultural sector back in the 16th century.
There is, finally, one more feature that we must stress: the capacity of the capitalist states to engage in colonial wars and wars of plunder in Africa, Asia and Latin America.
Let us return to the contemporary situation in international capitalism and to the relations between the US and other capitalist states. There is a tendency for people to examine only the industrial side of the picture. It is true that historically the US has had a much higher level of industrial productivity than other imperialist countries. And it is also true that it is in this sphere that American productivity has been most strongly challenged. In the 1930s American industry was at least twice as productive as German industry while today it is only about 20 per cent more productive. But the capacity of a single economy to dominate the world economy is not determined only by its industrial performance; in fact, dominance in the short term is probably not determined by industry at all.
The dominance of a capitalist state depends upon its capacity to set the framework within which all other capitalisms are free to operate. Historically, Holland was able to do this because it controlled world commerce through controlling world shipping and through Amsterdam, the most powerful bank in the world, being able to control the international monetary order. This, of course, corresponded to the age of commercial capitalism. Britain's industrial capacity was overtaken by the US in the 1870s, yet Britain continued to dominate the world economy long after its industrial supremacy disappeared. It did so through maintaining the supremacy of the pound sterling and through its parallel capacity, through political and military means, to maintain the imperial system as an economic entity.
Today also, the US has been able to maintain its hegemony not simply through its industrial strength but through its control over the world monetary system — the fact that nobody can challenge the dollar. To this must be added the following other levers of power: its agricultural supremacy; its level of control over world raw materials, especially oil; and, of course, in the military field, where is has complete supremacy. It is only by incorporating all these levers of power into the analysis that we can establish the relations between the US and the other imperialist powers.
So far we have outlined the hierarchical pattern of powers within the international capitalist state system. But before analysing the current relations between the capitalist powers we must place them within the world capitalist economy. This economy must not be seen as the sum total of various separate national capitalist economies — the USA plus West Germany, plus France, plus Britain and so on. On the contrary we must grasp the reality of a world economy that governs the operations of every single national capitalist economy — an international division of labour from which none can withdraw. Even the US capitalists remain subordinated to the forces of the world economy.
This world economy is plunged into crisis by the declining rate of profit, and the sharpening capitalist competition is the outcome of this decline. The spontaneous tendency of individual national capitalist classes is to turn this reality on its head, to see the decline in their rate of profit as the outcome of competition from other capitalist classes. They therefore tell their domestic working classes that they must work harder because of the threat from the hard work of German workers, or the Japanese workers, and so on.
But it is not competition that creates the crisis of profitability, but the declining rate of profit that creates ferocious competition. As Marx insists, very correctly, when there is a high rate of profit and capitalism is expanding, there is a lessening of the competitive struggle between capitals. As Marx says, there is a large and expanding cake so the struggle over dividing it up can be softened by compromise by means of which everybody gets a larger mass of profits even if their share of the total declines. But when the cake is shrinking, the capitalists cannot compromise: they must attack the share of the others in order to survive at all.
That is what is happening at the moment, and what is producing the intense struggle between the USA and its main imperialist competitors. With this change in the economic conditions of capital has come a profound change in the relationship between capital and the international state system. During the boom years there was a softening of inter-capitalist competition and a readiness to use purely economic methods to compete. As a result some renowned Marxists thought that capital had freed itself from the national states and had become one single, supra-state international imperialist bloc. But in the 1970s and even more in the 1980s, as the rate of profit has declined and competition between capitals sharpened, the individual capitalists must increasingly turn to non-economic levers and weapons for carrying on their economic wars with their rivals. This has meant turning to state machines, above all the state machine of the home base, and seeking to re-shape that state machine to make it a useful weapon for carrying on the war.
This involves two things: using the state against international rivals in sharply new ways; and using the state against the domestic working class also in new ways in order to jack up the rate of profit. We must be very clear what we mean when we say that big capital turns back to the various state machines, tries to grab them by the collar and thrust them into battle on these two fronts. This involves what, in historical terms, are very sudden, sharp and extremely far-reaching changes in politics, both in domestic and international politics, convulsive upheavals that tend to take the labour movement (and especially the Social Democrats) totally by surprise, utterly bewildering and disorienting people.
During the long boom years, such as up to the first world war or after the second world war, when there is a clearly dominant capitalist power able to provide a framework for international capitalist expansion in suitable world conditions politics moves very slowly, in a seemingly evolutionary way, according to seemingly natural and immutable rulers. Then, when this framework exhausts itself and there is a crisis of profits, a gigantic, shuddering earthquake shakes up the entire foundations of the international state system and the domestic political systems of the imperialist powers. Just such a world crisis tormented the peoples of the world between 1914 and 1945. And a similar crisis is upon us now.
But if the basic workings of the capitalist system have not changed, as between, say, the period before the first world war, the 1930s, the 1950s and today, the basic social and political balance of forces in the world has changed greatly since the 1930s. First, there is now a whole system of workers' states and the Soviet Union is immeasurably stronger than it was in the 1930s; secondly, the peoples of the third world have entered world politics in a massive way; and thirdly, the working classes of Western Europe have become enormously stronger, acquiring a range of political and social rights that they nowhere approached before the war in the capitalist world. These changes in the international balance of forces are a huge obstacle to the use of the normal mechanism for resolving international capitalist crises — namely war. The struggle between the imperialist powers is once again at the top of the agenda, but the form that this struggle may ultimately take is far more problematic.
Let us turn to this balance of power amongst the main imperialist powers we mentioned at the start of this article. First, we will look at the changing quantitative balance over the last century:
Percentages of World Industrial Production [table figures illegible: USA, Germany, Britain, France for 1870, 1913 and 1926-29]
By 1945 more was produced in the United States than in the rest of the world put together. What lay behind these figures was, of course, the exhaustion of a world capitalist system structured and dominated by European imperialisms, a system that plunged into a death agony as the various European imperialist powers savaged each other to the point of mutual collapse during the second world war. (Britain's victory in the war was largely formal and pyrrhic — by 1945 it was entirely dependent on American life-support). The revival of European capitalism, materially and ideologically, came not in 1945 or 1946 but in the summer of 1947 with the massive injection of Marshall aid. Production in the first quarter of 1947 in Western Europe was actually undergoing an absolute decline, and it did not recover its pre-war levels until 1948 — thanks to thousands of millions of dollars from the USA which realised Western Europe would go under in a socialist revolution without such assistance. (As a matter of fact, after the first world war, the revival of European capitalism had also been a matter not only of the political defeat of the German and Central Europe revolutions, but of injections of US capital, notably through the Dawes and Young plan. And the withdrawal of short-term US funds from Europe following the Wall Street collapse in 1929 also was the key factor plunging Europe into the depression and onto the road of imperialist war in the 1930s.) After Marshall aid the USA continued to subsidise Western Europe in many ways: it provided cheap world oil prices in the 1950s and 1960s, and it also pumped huge quantities of US capital into Western Europe, reviving its economies throughout this period.
This co-operative international relationship between the American state and the Western European capitalist states went hand in hand with big changes in the internal political systems of Western Europe and within the West European working class movements. Above all, this period saw the development of pro-Americanism within the working class movement, expressed through the social democratic parties. We must grasp this historical reality, and it is not easy for us, in 1984, to do so. For us, when a US President arrives in Western Europe nothing seems more natural than for the Left to go out and demonstrate against him. When Reagan comes in June it would be inconceivable that anyone would stage a demonstration in his favour. But this is something that has applied only during the last 15 years, since the Vietnam war. History before Vietnam was, on the contrary, a story of US presidents receiving mass support when they arrived in Western Europe, and support not least from the Left. Some of the largest demonstrations in human history greeted Woodrow Wilson when he landed in Western Europe for the Versailles Peace Conference after the first world war. In France two to three million people participated in demonstrations in his support, demonstrations including the labour movement. And in recent times, when Kennedy was assassinated in 1963, this was experienced in Western Europe as a great historical trauma. Those old enough can confirm this from their own experience. Roy Jenkins pointed out — but he was speaking the truth — that every person can remember exactly what they were doing on the 22nd of November 1963 when they heard the news of Kennedy's assassination. It had a numbing, traumatic impact. That was still a period when American presidents were seen by the peoples of Western Europe as the symbols of Democracy, Liberty, Freedom and Hope. And Kennedy is still a myth because he is the last American president before the US became openly embroiled in Vietnam and we have a litany of US Presidents with a very different resonance in Western Europe: Johnson, Nixon, Ford, Carter, Reagan — politicians objectively no different from Kennedy himself.
These pro-American attitudes within the West European labour movements were partly induced by the classic social democratic attitude of seeking to link itself with the most dynamic capitalists, the capitalists able to afford to give the most, and therefore the forces able to give the best prospects to pseudo-socialists seeking to tie the labour movement into the capitalist system. But it was also based on hostility to the old, bankrupt imperialist bourgeois leaderships of Western Europe, played out in the gargantuan butchery of two world wars. Both these factors, along with millions upon millions of dollars, were used to pull the West European labour movements under the hegemony of the US bourgeoisie after the war; splitting the Italian Socialist party, creating Force Ouvriere in France, creating the International Confederation of Free Trade Unions (ICFTU), reviving the Socialist International through the good offices of the Labour Party's Atlanticist bureaucrats like Denis Healey, and so on. From 1945 to 1968 we saw not only a physical division of Europe but a political division of the West European labour movements between the pro-Moscow Communist Parties and the pro-American social democratic parties: the Atlanticists, the pro-NATO social-democrats.
Now, in the context of the new crisis of the imperialist system and the new rivalry between the West European states and the US we see the huge transformations in the working class movements in Western Europe. These transformations have taken the form not of the victory of the pro-Moscow CPs over the pro-American social democrats, nor the form of the rise of a revolutionary Marxist, anti-Stalinist and anti-capitalist mass current within the West European labour movements, but rather the form of a rise of 'Euro-Socialism': the currents that first arose in 1968 in Western Europe against American imperialism have today been largely hegemonised by the mass social democratic movements of Western Europe seeking to build up a supra-national West European capitalism against the United States. Nobody symbolises this more clearly than Denis Healey, with his metamorphosis from being the arch-atlanticist of the late 1940s, the 1950s and the 1960s into being an opponent of the strategy of the US and supporter of European capitalism in the 1980s.
Returning to relations between the West European capitalist states and the USA, we must see how these relations become transformed from relations involving US subsidies of Western Europe into an increasingly sharp rivalry. At the political level, Vietnam was the turning point. Coincidentally, at the economic level, the first generalised economic downturn of 1969 in the world capitalist economy inaugurated the beginnings of the economic struggles. Since that time, the world capitalist economy has been plunged into increasingly severe economic crisis and inter-imperialist rivalry. The USA had sought to replace its earlier policy of subsidising West European capitalism with policies designed to weaken its West European capitalist rivals.
There have been three big US counter-thrusts against European capitalism. The first was a direct consequence of the Vietnam war itself. The United States decided to fund this war through a huge balance of payments deficit. And it used its overwhelming economic hegemony within the world economy to ensure that it could avoid paying for this deficit in gold or in non-dollar currencies. The second move by the US was the huge oil price increase in 1973 which was a massive redistribution of world surplus value towards the USA. The oil price rise hit the USA very little because it imports very little oil from the Middle East, but it hits the West European massively because they have been importing 70 or more per cent of their oil from the Middle East. Furthermore all this oil has been sold in dollars and the oil price rise did not hit a US economy that could pay in its own domestic currency for the oil.
Thirdly, there are the economic policies of Reagan associated with high interest rates and the Federal budget deficit — policies which have the effect of sucking huge quantities of West European capital into the United States and funding rapid expansion of the US economy at the expense of West European capitalism.
The ramifications of this process for West European bourgeois and working class politics are, literally, fundamental. Western Europe is in no sense a natural creation produced by its own internal forces and equilibrium. It is above all a creation of the alliance of West European capitalist powers with the United States. Outside that contest it has no shape and no coherence. Least of all does 'West Germany', a capitalism in two thirds of a nation, have any coherence outside this relation with the United States. The rise of conflicts with the United States therefore necessarily undermines the entire political stability of Western Europe which was so carefully created after World War II.
It is pointless to speculate on the outcome of these struggles. They will be determined also by forces which are outside Western Europe altogether — the class struggle on an international terrain, the advance or defeats of the colonial revolution, the development of protectionist and isolationist trends in the United States, the situation in Eastern Europe and so on. But what matters is the attitude and position which the working class movement takes on the fundamental trends and issues involved in this development.
There is no project for a break of European capital with the United States which has anything other than the most reactionary implications for the European working class, French or German capital would not break with the United States to establish 'one, two, many Finlands' in Europe. It would break with the United States only if it had a European nuclear bomb. European austerity, European militarism. It would be a Europe of Chirac and Franz Joseph Strauss and forces far to their right, not a Europe of Michaelangelo, Leonardo da Vinci, and 'European culture'.
Secondly, there are massive obstacles to any break of European capital with the United States. It is almost impossible for European capital to create adequate military forces to defend itself. It has no way of creating an adequate international currency system. It has no centralised state. European capital today is seeking to renegotiate its relations with the United States, to avoid the worst blows directed by the US against it. Western Europe is not seeking today to break the alliance with the USA. Far from European capital carrying out a thoroughgoing struggle with the United States it is on the contrary refusing to break with it despite very sharp blows dealt against Western Europe.
At the level of policy this has serious implications. West European capitalism refuses to break with NATO, refuses to get United States nuclear weapons and bases out of Europe. It is subservient to the US military build up. It is the West European labour movement, not European capital, which is today waging a serious struggle with US imperialism and with its own bourgeoisie, over questions such as the missiles or US policy in Central America. The entire world working class has an interest in this struggle of the West European labour movement with US and European capital.
The labour movement must not forget that its own strategy can never simply consist of putting a tick where its own bourgeoisie places a cross, and placing a minus where its own capitalist class puts a plus. The labour movement, in Trotsky's words, must 'learn to think'. The banner of defence of 'European values' against the United States, or draping the labour movement in the tricolour or the Union Jack against 'America' is a reactionary struggle with which European labour must have no truck. Indeed such demagogy will provide cover for some of the most vicious opponents of the labour movement, as Chirac and Powell have taught us.
But the struggle against US bases, US nuclear weapons, the US army of occupation in West Germany, is a deeply progressive struggle which the labour movement has every interest in pursuing. Furthermore the working class is the only class which will carry that struggle through to its end. Finally, in any clash with the United States the European labour movement necessarily encounters the struggle with its own countries' imperialism, and its own European states' militarism.
[illegible] class — the [illegible] pure and simple capitulation to the United States has no chance of success. The first strategy is that of alliance with European capital 'against' the United States — a policy which is today that of the most powerful sections of the right wing social democrats, and is given a left ideological colouring by writers such as Gunder Frank, Coates, Thompson and Hobsbawm. Such a policy of 'alliance with European capital is a policy for disaster. It would mean the slow erosion and grinding down of the European labour movement by austerity, militarism and the restriction of its democratic rights. A policy which finally would end in an historical catastrophe comparable only to, or even surpassing, that of the 1930s and the rise of fascism in Europe.
Ironically, it would not even be a real struggle against United States imperialism! For a break with the US under the [illegible] capital feels itself far too weak in relation to its own working class to risk destroying the entire world capitalist order so laboriously built-up and stabilised since 1945. Furthermore a break with the United States, in the given relationship of forces, would [illegible] Western Europe with the USSR, involving both greatly increased economic ties and political agreements on military non-aggression and other issues. Finally, given the economic tensions within Europe itself, the European states would not be able to maintain a coherent united policy. Inevitably a series of weaker European states would undergo a process of attraction into the orbit of the USSR — a real process of 'Finlandisation' or perhaps 'Austrification'. Others would be pulled sharply and directly back to the United States. Under the present relation of class forces there will be no break of European capital with the United States. Only if European capital could first deliver a crushing blow to the European working class would it be prepared to risk a break with the US.
The sole progressive way for European labour out of the present crisis of the capitalist system is a struggle not simply against the United States but also against the British, French, German and the other European imperialist states. Such an orientation does not at all mean playing down demands against the United States, but on the contrary being prepared to carry them through to their conclusion — for a complete break with NATO, for the removal of all US nuclear weapons and military bases, for the withdrawal of US troops from Germany. But it also means a struggle against the institutions and policies of the European imperialist states themselves; against British and French nuclear weapons, against the EEC, against the austerity policies, and for a nuclear free Europe from Poland to Portugal.
Such a strategy entails a precise and definite series of international alliances: with the colonial revolution against US, European and Japanese imperialism; for economic trade and co-operation with Eastern Europe; support for the political revolution in Eastern Europe. This is the framework which is being adopted objectively by sections of the left wing of the workers' movement in Europe. Within this framework a whole series of questions which have been ticking away under the surface of European politics are going to be re-raised — above all the question of German reunification.
For the division of Europe in 1945, a division created by and based on the alliance of European capital with the United States, created irreconcilable contradictions. While it is correct to reject any idea of 'socialism in one country', there is no real 'capitalism in half a continent'. The continuation of an alliance with the United States on a long term basis means the progressive weakening of European capital compared to its rival. But West European capital has no way out of that alliance which does not involve a violent confrontation with the West European working class, which finds itself driven into conflict not simply with the alliance of European capital with the United States, but also with any real measures to increase the independence of European capital from the United States. In that dilemma lies the germ of much of the future reshaping of European politics.
Behind this development lies an even more fundamental historical reality. For seventy years Western Europe has had no independent history. In August 1914 not merely the imperialist system as a whole began its decline, but that decline was in a sense the most spectacular of all in the centres of European capitalism. From the pinnacle of world power West Europe capital was reduced to a situation where its fate was determined by forces outside its control and even outside its boundaries. In 1914-18 the centre of the world capitalist economy passed for ever across the Atlantic — and the relative recovery of European capital after World War I does not hide that fact. Today the most dynamic centre of world capitalism lies in California, the [illegible] and Japan.
Within two months in 1917 two events occurred which between them have shaped the entire subsequent history of Europe. In February 1917 the process begun in Russia which culminated in the first overthrow of capitalism in the world. In April in direct response to the February revolution, the United States entered the First World War. That clash between the beginning of the European revolution spreading westwards, and the power of the United States and its capitalist allies and opponents attempting to prevent that spread, determined through two world wars, and innumerable crises, the fate of the European continent and a considerable part of the fate of [illegible] the socialist solution to its crisis, not in the inter-imperialist clashes which wrench its politics, lies the sole realistic outcome of the contradictions which continue to grip the European continent.
John Ross is a member of the International Editorial Board.