Lens on Labour: Capitalism or the Euro – where is the problem?

by Len Arthur

After the pasting that the Tories (both bits of the coalition) received in the local elections and the stumbling incompetence that they have demonstrated in the last few months – lol ! – it was only a matter of time that Cameron would drop his faux and panic stricken PR initiatives and start to try to grasp at the high ground. And a bit like Oceania in Orwell’s 1984, the threat of a foreign land might be enough to keep the masses in line. Only instead of Eurasia it is the Eurozone: not very inventive are they, these Tories.

As we all known from our own political experience and discussion on the door step Europe is currently an easy target and plays well to very deep wells of nationalism, particularly when union jacks are going to appear around the place. So it is just as well to take this new version of ‘not me guv, it’s them’ seriously.

Time and again the argument comes up that we would be better out of Europe. ‘We were before and we can do it’ is the refrain, reflecting back to the Dunkirk spirit and all that; neatly forgetting the rest of the war experience that required the support of America and the USSR to finally beat Nazi Germany. Similarly the current argument ignores our historical integration with the rest of Europe – something which has hardly left any of our families are unscathed –  and that in around of 80% of our current account (international trading revenues) are generated within the EU. Unfortunately that type of riposte does not win the argument. There is clearly a very serious financial and wider economic crisis throughout Europe and we are all experiencing the consequences, so the argument about the cause and the answers are critical and that is the dangerous bit that Cameron is playing into.

It is important to be clear that the EU reflects the tensions of the post war settlement. It is was a compromise between state welfare – the social chapter of workers’ rights – protective national support for weaker parts of the economy such as agriculture, building a strong home market and achieving international competitiveness with the rest of world. As the competitive pressure from the rest of world has increased the internal social and economic protections have been slowly dismantled in favour of market deregulation supported by the economics of neo-liberalism. The Thatcherite Maastricht Treaty of 1992 severely limited state support and the bankers control of the Eurozone is an embodiment of the same theme: we will save capitalism and solve the bankers’ problems by reducing the role of state and squeezing the workers. Moreover, even in classic economic terms the settlement of the rates that currencies would enter the Euro in 2000 was very advantageous to Germany.

What we are experiencing is a crisis in the workings of capitalism as a system which have inter alia increased and exposed the tensions that already existed, not the other way around. The issue we should start to consider is how we can deal with the root failure of how capitalism works not just the symptoms of this problem as revealed in the banking and debt crisis and the current tensions within the Eurozone. I’ve mentioned in the past many writers who in their various ways have explained the crisis in this way such as Richard Wolff from the US and Chris Harman, Stewart Lansley and Michael Roberts from the UK. There are many others but the essential argument is that without tackling the huge inequalities of wealth ownership and income together directing investment on the basis of social need and not simply on the rate of profit, the crisis will not have a sustainably answer. This is where our historical integration in Europe comes back in: we cannot do it alone the EU is at least the basic unit where this can start to be successful.

Well, come on, I hear you say, you are not just talking about being radical in Pontyclun, Wales and perhaps the UK – you are talking about being radical across Europe. Well, er, yes, actually. That is where the election results across Europe, especially those in Greece together with vast demonstrations come in. Working class voters, trade unions and other organisations are saying loud and clear we will not and are not going to pay for the banker’s crisis and if it means re-negotiating the European treaties so that the state works for all the people and not just the rich, so be it. Here is an insightful article on the situation in Greece. It seems to me Syriza may well win the next general election and that will put this radical project on the table for all of us in Europe. Are we prepared to go with it or do we consider that Ed Balls and Peter Mandelson have a sufficient alternative?