The Tories are deeply split over Maastricht, and the process of European capitalist unification is in trouble throughout Europe. To dig deeper into the crisis we spoke to PETER GOWAN, founder of Labour Focus on Eastern Europe and a member of the New Left Review editorial board. Why are the Tories tearing themselves apart over Europe? The critical and most explosive factor is the deep attachment of sectors of British capital and the British state to the Anglo-American 'Atlanticist option of capitalist development.
This is deeply explosive. The Atlanticist lobby is out to 'get Major. This is not because of petty revenge against Major for his part in ditching Thatcher, but because Maior and Heseltine are programmatically committed to British participation in what will be a Franco-German led European unification 7 NoV, 1992 No. 31 process.
The 'Europe versus America' split is still a major fault line in bourgeois politics. The pro-Americans are engaged in dirty tricks. For example The Times is engaged in a hysterical campaign to topple Major. Sectors of capital linked to US investment are involved. Elements in the military and security elite are implicated in this campaign, because they are intoxicated with the link with the US military and security establishment.
This division is vital because in a situation where a 1930s-style slump is possible, fundamental choices over economic, strategic and military allianwill reverberate for decades.
Then there is straightforward nationalism and opposition to the submergence of 'British' identity in Europe. This may seem an objectively unimportant consideration, but nationalist symbols are very, very important for ideologically cementing the Tory party The overall background is of course the catastrophic slump of the British economy, which shows the utter failure of Thatcherism to strengthen British capitalism.
During the recent crisis there was an urgent need for manufacturing capital to see interest rates cut and the pound devalued - both of which were obstructed by ERM membership. So this was an immediate issue fuelling the 'Eurosceptics'. British manufacturing capital needs access to European markets, especially Germany - the biggest single export market. But British capital is uniquely international in its world-wide investments. Why can't it survive the collapse of its manufacturing sector, and base itself on international investments and the financial profits of the City? This is very important. While the British domestic economy is in crisis, the core of the British ruling class is immensely wealthy, because of its financial, rentier operations.
But this situation cannot last for ever. Until the collapse of the pound and the ERM, the financial, rentier element of the powerful factor in ruling class debates about the Europeanist option" valued pound discriminated against export of manufactures, but benefitted the financial sectors of the bourgeoisie and corporations involved in foreign investment.
But a successful rentier capitalism depends on maintaining open international financial markets, and keeping the City as a major international financial centre. In a period of gigantic capitalist crisis it is far from clear that this will continue to be the situation indefinitely.
When you have the world breaking up into major rival trading blocs and the threat of growing protectionism, it will be all too easy for Britain's competitors to smash up British financial operations - unless Britain has a solid domestic manufacturing base to sustain the value of the pound.
You can discuss theoretical models until you are blue in the face, but all the historical experience is that without a powerful domestic economy, the base for international financial operations eventually disappears.
We should note in this context the rise of Frankfurt as a financial centre to rival London, based precisely on the immense strength of German industry and the strength of the Deutschmark.
So in the long term the parasitic, rentier-capital concept of British capitalism in unworkable. And this of course is a powerful factor in ruling class debates about the Europeanist option. What is the way out of this crisis for British capitalism? It is very difficult to say that either a Europeanist or Atlanticist option
will get British capitalism out of crisis. The fundamental thing the capitalist class coula do would be to go for industrial growth - but this is fantastically difficult to achieve.
It would require protectionist measures to defend British industries, which would strike hard at the interests of the rentier financial capitalists. It would require not just a fundamental turnaround of economic strategy, it would require reconstructing the ruling social bloc - for example by attempting a new 'corporatist alliance with the trade It is not something that Major or any successors could easily pull off. It would mean exterminating the Thatcherite heritage, fundamentally changing the tax regime to the disadvantage of the wealthy and and it would mean state-led investment.
You could only get this kind of turnaround through a political upheaval of giant proportions - a split in the Tory party, a national government, or a Labour The inability of the ruling class to make this kind of choice only prolongs and deepens this terrible and catastrophic crisis. Why is Maastricht stalling Europe-wide? If the treaty including monetary union is carried through this is a