Europe and the break-up of the best of both worlds. Thatcherism As the decades passed, the rolative success of the EEC and the relative decline of LIS im- perialism in relation to its main competitors in Burupe and Japan, have left the British ruling class and the Tory Party increasingly divided FEATURES pointed to the political differences Europe, and their consequences, dividing the capitalist class on Socialist Outlook has often also for the Labour Party. some of these issues again not only for the parties of DAVE PACKER looks at the bourgeoisie, the Con- Liberal Democrats, but servative Party and the Thatcher's resignation, In the aftermath of
Japan and the Pacific rim economies policy has acted as a drag on this har worked doggedly for more than two decades for a joint Franco-German ly for their plans and for bourgeois up. like Socialist Parry member and sion, Jacques Delors, the FRG has cconomy, Since German unification. the likelihood of an equal partnership on the other, Thatcher's "Atlanticist" hegemony of the EC. But unfortunate- politicians who currently front them President of tic European Commis- consistently outperfonned the French bourgenixic French development. The The resignation of Marganet vote gained by Michael Hesel. line had a number of causes: ment, the failing cconomy, but has brought once again into public view the profound confliets that tear at the beart of the Tory Party. Thatcher after the substantial the unpopularity of the govem- Heseltine's long awaited chal- not least the row over Europe. and evaluates the stakes leadership for: the involved. lenge
or shared hegemony becomes even But while the majority of the French ruling class has long rejected "Europeanism", despite its problems. the situation has been much less clear in Britain. The choices are far more difficult to make, as British im perialism attempts to square the circle. vigorously delended and clearly nurtured the "special relationship with US im- perialism. Even with the impending war in the Gulf, Thatcher boldly asserted Britain's world Thatcher But while the "Atlanticism' more remote. Margaret and looking awkwardly in two directions at The Thatcher goverment evnlved a policy once. perialism, rather than simply a Europcan power. Its weakness at the end of the last hut nonetheless, glohal im- conflicts which have led to the demise of Thatcher herself and is leading to the break-up of the whole Thatcherite political bioc Since the second world war, Britain, has been a secondary. contradictions reflect the avoidahle choices that face British Thatcher - defender of and Atlanticism fundamental imperialism itself. declining. difficult These
role as first lieutenant and adviser to president Within the general policy framework out- lined above, Thatcher's aim was to promote the financial and banking operations of the within Europe. In this respect her medium term objective, along with John Major, was to establish London as the finan- But, increasingly, British imperialism is being forced to make a choice about its long ter future. That choice has been causing fis- Page 11 cial centre of Europe, over Frankfurt or Paris. Forced to choose. Bush. towards Europe which attempted to make the hest of this historical reality, This involved a vigorous pursuit of a free market Europe within the existing Treaty of Rome, at the same time opposing protectionist measures directed against the USA or Japan, or the development of federal state institutions. The later was an attempt to maintain Britain's capacity for global manoeuvre (British sovereignty") and to block West German Thatcher's bogeyman became the very idea of a federal Europe. Her policy, as well domination of the EC. SOCIALIST OUTLOOK no 29. December/January 1990/91 the City of London's financial and banking More and more, Britai came to rely on the American military umbrella and the "pax operations. Even the 1982 Malvinas War could not have been effectively prosecuted At the same lime British Imperialism could not afford to be excluded from the EEC and world war forced it to accept a post-war scttl Americana'. Only this could secure its propor- tionately huge overseas assets, together with the big market that it guaranteed in Europe without US logistical and political support. ment imposed by US imperialism.
UP YOURS exclusive DELORS TA San readers are urged CA are to stuff his ECU At midday tomorrow to tell the French feel FEATURES British imperialism's: than any other, 15 Thatcher's alliances nor the crass and un- popular free market dogmas which her plied viciously in the social sphere: it is also because of the Thin issue, more Thatcherism and the Thatcher herself are therefore not caused simply hy the failure govemment has ap resulting in the frag under portensance, problem of Europe. Cracks and political demise present divisions as betwen federalists and anti-Europeans. Michacl Heseltine also cinims: His differences arc in being more positive and tion which would give British imperiahsm greater influence in Brussels in developing fu- sures and ruptures within its ranks for pear in their majority to have shifted towards union: The multinational corporations, despite their global interests, need large secure home Even the big corporate raiders who gohhic sets nutside of Europe still have their national The City, of course looks towards the possibilities of becoming the finance capital of Europe. The stability of the tion suggests that it prefers greater Mexibility and finesse in its dealings with the Europeans! These shifts find their reflections inside the Tory Party, but also in the Lahour Party. However, it would be an error lo see the flexible about economic and financial integra- up companies over there" and hold huge as- several years. The decisive sectors - the Cily grater Fumpean financial and economic London stock market after Thatcher's resigna- to he against a federal European superstate. and the hig multinational corporations - ap markets and hases of operation. ruptures hases lover here' sures and
SOCIALIST OUTLOOK no 29. December/January 1990/91 in Vietnam and the find oil crisis of 1973-74. Kinnock'k Lubour Party now aligns itself ruling class in the city and industry, and lays Could it be a glimmer of comprehension of what misery it could mean for the working less advocate of European union? Alas it Heseltine's large share of the vote in the Tory Teadership election only demonstrates even more clearly the fallacy that the Lahou leadership represents any interests other than that of the ruling class and leaves it even Read the Sun for a popular rendering of the nationalist right's 'manifesto' Labour's stance, Sorialist Outlook has always maintained that as a bureaucratic workers party to use Lenin's famous variably correspond to the interests of one or ardently nedy), and anti-FRC. The combination of a decline of US hegemony after the US deleat Thatcherism, has resulted in an opportunist with the most Buropeanist sections of the claim to represent this sector against. the str class which makes Neil Kinnock such a use- more miscrably exposed as a sub-Tory op In this respect it is importuit to evaluate with a bourgeois leadership (a bour formula). Labour's main policy stances in- In the fifties, sixties and pout of the seven "Atlanticist". (it just loved President Ken with the victory dent obstructionism of Thatcherism: and unseemly about tum. on Europe. another wing of the capitalist class, ties the Lahour leadership combined larer scems unlikely. geois workers" Europe. towards monetary union (EME), are exoces sumed al the power of organised labour acroas but this may change as he Falls into line with Neither wing of the bourgeoisie and their political representatives have mything to offer the working cinss escept capitalist rationalisation and unemployment. The Single Furopean Act and 1992, specially the drive Atlanticist" right, represented by Thatcher tensilies. This same process has begun fo peel off the more pro Europe, possibly even But the new Tarzan of Europcanism has, unlike Heath before him, only by degrees dif- ferentiated himself from the Thatcher project: Major as Thatcher's successor, along with Hurd, represent, in relation to Europe a large degree of continuity with Thatcher's policy. tional-chauvinist, Anti-European Tory right, Tebbit in different ways may represent the na- (read the Sun for a popular rendering of their "manifesto") Edward Heath, and to a lesser have championed the Europeanist wing of the party: a wing which "interventionist, one nation'. Tones of the Until recently the nationalist right have (and this continued thronghout the Tory leadership hattle). But this unity has heen fragmenting as the pressure from Europe in- Federalist wing of the Thatcher bloc, most sig Unseemly Labour Party dominant sectors of the bourgeoisie. alliance with the nificantly, Michael |leseltine. class and the Tury gence of Germany an the driving force and leader within Europe which has set off the course hehind the doors of No. 10: How to likely at present, particularly in the light of British economy is too weak. It is Chancellor decisive in determining the course towards union. The crucial moment in the run-in to the recent Rome summit was when Kohl decided a firm date for "stage rwo" and for the Ecu as a number of other countries Tell into line, either their cconomics were already dominated hy the West German economie powerhouse, or becuuse they reasoned that only good could come of linking their Despite all the rhetoric, it is this emer- alams in No. 10, Nicholas Ridley was a vic- tim of his own big mouth in this respect. He embarrassingly blew the gaff on the real dis Conferences (ICGs) to be held in Rome in a tended to take crucial and binding decisions The two ICGs have a year in which to produce proposed changes to the Treaty of mously agreed - a prospect which secms un- The proposed changes then have to he ratified Unfortunately for the Tories, Thatcher was not the key player despite her posturing. The Kohl and the Bunderhank who will he Immediately a legration will he the two Inter-Governmental few weeks time. These Conferences we in Rome. Bot, these changes have to be unani- Major's victory in the leadership challenge, The next hattle ground over European in econonues mete closely to the Deutschmark. that may lend to econonne and monetary and beyoud that political - union. Battleground single: European currency. by all twelve parliaments! stop the Hun! Page 12
ever-deepening crisis, has been strong on Gorbachev has announced his intention to push through the formation of a normal full-blooded market" and a "controlled transition to half-measures have simply exacerbated and market relations", will the USSR follow capitalist restoration? results, "And when they got there, the shelves were all bare"; the Soviet crisis is one of under-production SUPPLEMENT Perestroika or situation. Now weak but rhetoric the President transition to a market economy is of historic significance. The ground appears during the Russian federation President Boris Yeltsin on the to have shifted decisively away from the perestroika - or restructuring - of the and Soviet THE AGREEMENT reached Gorbachev between summer Mikhail
collectivisation of "Forced agriculture drastically damaged the Soviet Union's agricultural base was, moreover, highly centralised and bureaucratic. Plan targets had the force of low and the continual exhor- and Hungary, or are the processes at the more advanced examples of Poland and more complex RICK SIMON reports. unpredictable? rather country, the small working class was a bureaucratic stratum urund Stalin, increasingly pushed out of power by nationalised property relations and their replacement by capitalist of the Perestroika, brought in to resolve an to a dismantling replacement bureaucratic planning The problems of REVOLUTIONARY ownership. increasing economy
vast resources, industrial otherwise have been utilised for and demanded which could development" tation to overfulfill the plan created Nevertheless. In overall tenns the astonishing pace and continued to do so in the period of reconstruction after the Sccond World War. But this was extensive growth based on the mobilisation af ever greater inputs - shortages and bottlenecks. which arose on the foundations of Stalin hamessed the potential of the nationalised property relations in the rapid transformation of the Sovict economy in the 1930s, bot did se to a very contradictory and solf- destructive way. Forced collectivisa. tion of agriculture did not provide the new workers" state. have traditionally emphasised First. the capitalists were climinated as a class through the process begun by the October 1917 • Second. the nationalisation of the means of production created the certain features of Soviet society.
Page 13 more factories, more workers. Once the potential for extensive growth began to diminish in the 1950c, the more far-sighted Sovict economists realised that future economic growth would only be socured on the basis of increasing the prodoctivity of the coutnuy, it drastically damaged and demanded vart tesources, which the means for industristication: on the Soviet Union's agricultural base could otherwise have been otilised for industrial development The plan- ning niechanism created hy Stalin SOCIALIST OUTLOOK no 29. December/January 1990/91 potential, but only the potential, lor the development of a planned tion caused by the Civil War and the inlation suffered hy the revolution in a comparatively backward • Third, because of the devasta-
against corruption and the abuse of transition from extensive to intensive bureaucracy's privileges and power intact. However, instead of drastic measures. All of the major economic reform measures enacted in the past five years have been chatacterised by their intemal contradictions, which tween different sections of the ruling bureaucracy pursuing radically dif- Gorbachev's initial reforms in the shape of traditional centralised cam- paigns for greater discipline and surgery there have been only half- are the result of compromises he- Sccondly, it has been a crisis The Soviel economic crisis has assumed a completely different character from that of capitalist economic crics, It has, firstly, been steadily declining productivity - the result of the inability of the hureaucracy to accomplish the tran- sition from extensive to intensive coonomic growth and, in the 1970s, the enormous volume of resources poured into building up the Soviet prodachon, particularly of basic con- sumer goods, rather than the over- a cumulative crisis resulting characterised by chronic SUPPLEMENT military capability. market elements into the economy, A reform was introduced in 1965 which sought to give enterprises but bureaucratic opposition reduced the reform to nought, Tinkering with the economy became such a constant feature of Brezhnev's regime that the mill of reforms. Debates over how best to change the Soviet planning have therefore been going on for the past thirty years and American Sovictologist, as a tread- The major shortcomings process was described characterised by underproduction, "It has been a chronic crisis
leadership introduced three major tion in favour of reform against the more entrenched elements of the bureaucracy. This has led to a damental questions of who holds political power, and the crimes, and by extension the methods, of former Party leaderships have been sub- The extent of corruption and the necessitated the introduction of glas- nost as a means of building a coali- deepening of the crisis. Major con- cessions have been made on the fun- alcohol did little to relieve jected to ruthless examination. 1987-88, the the economic economic situation. estimates, only 50 out of 1200 basic consumer goods are readily available crease of 6.4% in consumer goodn production in the first quarter of 1990. Overall production in the same period registered a fall of 1.2%. crease - up by 10 billion roubles in 1989 to 51 billion - and the bodget deficit has increased from 18 billion There has also been some defaulting on debt repayments for the first time The crisis has now been exacer- production typical of capitalist cconomic crises. According to CIA in the shops and this despite an in- Soviet indebtedness is also on the in- roubles in 1986 to 92 billion in 1989: on the part of enterprises to provide accurate information about their productive capacity, because gaining the lowest possible plan target is the Third, all inputs and outputs leads to poor supply, inefficiency as enterprises have to develop their own tin-house" production for vital com- enterprise managers do virtually any- bureaucratic planning can be sum fers as the prime target is the quan- • Second, there is no incentive are bureaucratically allocated, which • First, the quality of goods suf marised as follows: main poonty, economic crises" basic consumer overproduction particularly of goods, rather typical of capitalist than the
Enterprises, strove to increase enterprise autonomy, introduce a profit motive and create an interest among the workforce in enterprise efficiency by extending their rights to elect management at all levels and however, immediately nullified by other provisions of the Law which Other measures, the Law on In- dividual Economic Activity and the Law on Co-operatives, helped to economic reforms. The most impor tant of these, the Law on the State participate in workplace decision- reinforced centralised planning making. These measures the power of the ministries. ces than it provided - it robs the periments in loosening centralised force the Soviet economy more (CMEA) or Comecon. Although this benefit to the Soviet Union - Fastern control of the economy from which it had gathered uselul information and, more crucially, threatens to abruptly onto the world market as it is deprived of the buffer of relations While that is not going to happen bated by the collapse of the Council for Mutual Ecoomic Awareness be of long-tem cconomic Europe absorbed more Soviet resour- Soviet leadership of a variety of ex- with Comecon countries. Of prime importance, however. is held together by its mooopoly of on a grand scale, from its control of position in the production proccas or the bureaucracy's position in the production process. The bureaucracy is not a class, but a social stratum privileges, which amount to pilfering the nationalised means of produc- tion. It does not occupy a common an organic interest in its continual thing to obtain vitally-nceded inputs. The Soviet economic power. It derives rationalisation.
SOCIALIST OUTLOOK no 29, December/January 1990/91 of the economy. In 1989, the number 78,000 to 133,000 with a turnover of 0.5% of industrial output. Their operations have also been affected the costs of which have been passed on to the consumer, resulting in prices much higher than in the state sector: This has made them un- market rclations in the service sector of co-operatives expanded from 30 billion roubles but with only quent need to resort to illegal means, by lack of supplies and the conse- perestroika has been to reverse long- sociated with the transition fom a Eastem Europe - the key problems term Soviet economic decline hy a and genuine enterprise ovemight - hecause 50% of Soviet trade is still with CMEA countries, and there are many problems as- nabonalised economy to one dominated by private capital in pricing, convertibility of the Gorbachev's reforms autonomy are brought to the fore. fundamental a desire to maintain the source of its cconomy - and to systematise those means of production, ie, by retum- nical, of the nationalised property relations. It arose on the basis of paratus and on the entrepreneurial created by the New Economic Policy, and is therefore tom between privileges through ownership of the been simply a defender, albeit tyran- both the burgeoning Party/state ap elements and wcalthy peasantry Nor has the bureaucracy ing to capitalism. Pace 14
SUPPLEMENT reform by more radical economists. Price cform is only a corollary of denationalisation of state enterprises. operatives run by non-indigenous target of inflamed nationalist feel natinnalities have often become the republics, co
The star of formerly prominent refom cconomists, such as Abel Aganbegyan, the architect of the first phase of perestroika, is on the wane. more forthright knowledged that