[Militant No. 570, 25 September 1981, p. 12 and 14, as part of a feature dedicated to the Labour Party Conference 1981]
By Lynn Walsh
With the help of an almost unprecedented press and propaganda campaign, British big business managed to secure a ‚yes‘ vote for EEC entry in the 1975 referendum.
But how many people, especially working people, now favour the Common Market? All the promises from big business and their right-wing supporters in the labour movement that EEC entry would produce a miracle recovery for the British economy have been exposed as a hollow fraud.
Workers particularly blame the EEC for the enormous rise in food prices. The cost of living has soared to French or German heights, while British workers are being paid some of the lowest wages in the industrialised west.
British capitalism left entry too late to share fully all the advantages of an integrated European market. The Tories entered when the post-war boom was already on the wane, and Britain had already entered into an „irreversible decline“ vis-a-vis its main rivals.
The claims from Labour’s right, and now being made by the present Tory government, that the EEC can be „reformed from within“ are also empty. Negotiating strength is ultimately decided by economic power, and Britain has slipped to the bottom of the Euro-league.
Thatcher, for instance. trumpeted her victory in gaining a reduction of the UKs EEC budget contribution. But this is being more than paid for by the rises her agriculture minister accepted for EEC food prices.
There can be no solution to the problems of British capitalism within the EEC. But it will find no solutions outside, either.
The NEC’s statement itself accepts that „withdrawal from the EEC will not solve all of Britain’s economic and industrial problems.“ But we must go further.
Over 40% of Britain’s trade is with EEC countries. The location of industry, transport, finance and commerce have all been increasingly geared towards the EEC.
For British capitalism withdrawal now would have devastating consequences. This, in turn, would have enormous repercussions for a Labour government. Labour would be attempting to implement the radical reforms outlined still in „the socialist alternative“, but would be trying to work within the framework of a diseased capitalism.
Today a majority of workers would almost certainly favour withdrawal from the EEC, the course forcefully advocated by the NEC statement. The labour movement, however, must carefully examine the consequences of withdrawal.
What is the argument of the statement?
The NEC document argues that the EEC has not only worsened Britain’s economic position, burdening the British economy with enormous budget contributions (£3,000 m net over 5 years) in return for limited advantages, but that the EEC is also a major obstacle to the implementation of socialist policies in Britain.
The document seems to attribute an enormous weight and solidity to EEC laws and institutions: the NEC apparently takes them much more seriously than the national capitalists, who have little veneration for „supranational“ bodies.
The EEC is essentially a glorified customs union or free trade zone. It was established on the basis of a post-war boom, with its unprecedented expansion of production and especially trade.
But whenever there have been serious differences over trade, production, or the money system, the member states have invariably reverted to their own national capitalist interests. This has particularly been so over agriculture, from French objections to cheap Italian wines to the current British objections to cheap French poultry.
A „siege economy“
The long post-war boom has now exhausted itself. In the period of general decline and crisis which we have now entered, the international rivalry and trend towards protectionism will also reveal itself in „beggar thy neighbour“ policies within the Common Market.
In the event of new, deeper slumps, and even periods of limited upswing, in which rival states compete for markets, the EEC will be shattered.
The document rejects „both … the philosophy of the free market economy and of the supra-national state that is so central to the Treaty of Rome“. But the very fact that it is based on the „free market economy“, which means essentially on rival national states, rules out the development of a „supranational state“.
In relation to this, the statement’s scrupulous regard for the legality of withdrawal shows an exaggerated concern for formalities, to say the least. Incidentally, the „de-entry“ steps proposed would embroil a Labour government in months. if not years, of complex, obscure legislation.
The statement also argues that withdrawal is necessary because of the EEC’s „restraint on determining our own economic policy, the loss of sovereignty, the undermining of our democratic processes … “
The EEC, it is true, has spawned an enormously expensive, cumbersome, and parasitic bureaucracy, which appals ordinary people. But are the main obstacles to socialist policies really located in Brussels, Strasbourg, and other EEC centres?
The ranks of the labour movement have not lost sight of the fact that the real opposition to radical reforms, let alone thorough going socialist policies, will come from much nearer at home: from the banks and financial institutions in the City of London, from the millionaires who run the big monopolies – in short, from Britain’s own ruling class, which also controls the apparatus. of the civil service, the army, the judiciary, and the police.
The capitalists would, of course, combine with their European cohorts, using among other things the EEC bodies to try to block and undermine a Labour government. But the main enemy is at home.
Throughout, the statement hammers away at the idea that it is the EEC which is the main limitation to the implementation of socialist policies. In doing so, it loses sight of the real issue: it is the confines of this rotten capitalist framework which are the fundamental limitation as far as radical reforms and socialist policies are concerned.
The policies proposed in the document, in line with „the Socialist Alternative“, would not break through these limitations.
The measures mentioned – price controls, selected aid to industry, control of capital investment and overseas investment – make it clear that the majority of the banks, finance institutions, and the big monopolies would remain in the hands of big business.
Production cannot be planned while the „commanding heights“ remain in private hands. Nor can trade be planned.
The document talks of „planned trade“ and „managed trade“. It argues that an expansion of the British economy, through the alternative economic strategy, would provide an increased market. This, it says, would create favourable conditions for re-negotiating trade patterns with the present EEC states and establishing new trade with non-EEC countries, including under-developed countries.
The document, however, does not really come to grips with the catastrophic scale of Britain’s industrial decline. The EEC has meant „the development of a massive deficit in our balance of trade in manufactured goods with the EEC, which has inflicted, and is inflicting, immense and lasting damage on British industry“ (p.64).
This deficit is indeed a burning indictment of British capitalism’s failure to invest and modernise.
Britain’s external deficits, however, cannot be blamed entirely on the EEC. In 1979/80 the UK’s biggest trading deficit was with North America, £1,700 million. The UK also had a small trade deficit with the non-EEC countries of Western Europe.
On the other hand, while the UK has a deficit in manufactured goods with the EEC, last year it managed to turn the previous year’s overall deficit of £26,000 million into a surplus of £700 million, largely through the net export (worth £2,651 million) of petroleum and petroleum products.
In some key industries, moreover, the UK had significant trade surplus; for instance, £175 million in chemicals and related products, and a £50 million surplus in textiles.
Without tariff-free access to the EEC market, such surpluses would undoubtedly change into deficits. Would markets in the EEC be replaced by equivalent or even larger markets elsewhere, as the document suggests?
On the basis of big business, with an extremely poor rate of profit and consequently chronic underinvestment in new processes and techniques, this is ruled out.
If a Labour government were to erect a tariff wall around the UK economy, whether by general import controls or selective import controls in various forms, there would be inevitably retaliation, both from Britain’s former EEC partners and from capitalist rivals throughout the world.
The idea that Britain’s rivals on the world market would temporarily tolerate British tariffs for the sake of expansion, with the promise of British markets for them at a later stage – even assuming that the policies proposed would produce this expansion – is utopian thinking.
In reality, the document is proposing that with EEC withdrawal Britain should be transformed into a „siege economy“. British capitalism would be managed and revived by a Labour government behind protective walls. Such a strategy, however, would rebound on the working class. Far from reviving British capitalism and stimulating massive new investment, protectionism would feather-bed the backwardness of British big business. A Labour government, by raising tariff walls, would be giving the backward British capitalists a free hand to exploit the working class of Britain, pushing up domestic prices, pushing down wages, allowing them to reap the maximum profit from clapped-out and antiquated plant and machinery.
This is a completely nationalistic approach, which conflicts with the internationalist outlook of the working class. The NEC statement makes several attempts to refute this criticism, claiming that the policies proposed are internationalist, not „Little England“ solutions.
But what in practice does the document propose? It says a Labour government would work for expansionist policies, in line with their domestic strategy, through bodies such as the OECD (Organisation of Economic Co-operation and Development), EFTA (the EEC’s rival European trading zone), and the United Nations Commission on Europe, which supposedly involves policy planning between both Western and Eastern Europe.
It also suggests that there would be more trade with the under-developed countries of the „Third World“.
These institutions are all based on existing capitalist states, or in the UN case capitalist and Stalinist states. Inevitably, they reflect the approach and also the rivalries and conflicts of the different national states.
How can it be possible to develop „socialist“ policies through bodies set up by the capitalist class for their own purposes? How could trade be developed with the underdeveloped countries, when the Third World is more than ever exploited and dominated by the Imperialist powers and their multi-national corporations?
Such an approach is not genuine internationalism based on the common class interests of the working class and exploited peasantry throughout the world.
When British big business, the Tories and their shadows within the labour movement proposed entry into the EEC, the „Militant“ warned that the Common Market was a bosses‘ club which would not solve the problems of British capitalism and would place additional burdens on the working class.
But our opposition had nothing in common with the nationalistic approach adopted by some on the left, like the Communist Party and some of the „Tribune“ left who found themselves sharing platforms with right-wing Tories and other Little Englanders.
Socialist United States of Europe
We opposed EEC entry on the basis of a call for the European labour movement to come together to discuss a campaign for a Socialist United States of Europe. Only such a federation, based on socialist democracy and planned production in Britain and the other European states, with the perspective of world socialist planning, could provide an internationalist way forward for the working class.
As a first step towards realising this, the next Labour government should mobilise the working class behind a programme for the socialist transformation of Britain.
The NEC statement rightly points out that international co-operation with the labour movement of other countries does not depend on the EEC or any other capitalist institutions. The links should be forged between the workers‘ organisations themselves, on a class basis.
Ultimately effective international unity must be forged on the basis of a clear socialist programme.
The workers of Germany, France, Italy, Belgium, and other countries of Europe all face similar problems. The relative pace of events in different countries cannot be predicted accurately.
But it is clear that the workers of all the European states all have a common interest in the socialist transformation of society.
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