‘The Political Economy of the EU: an imperialist project in crisis’

Stavros D. MavroudeasDept. of Economics

University of Macedoniae-mail: smavro@uom.edu.gr

International Initiative for Promoting Political Economy7th Annual Conference in Political Economy‘Political Economy: International Trends and National Differences’School of Economics & Management, University of Lisbon, PortugalSeptember 7-9, 2016

Main arguments & structure

Main arguments: European integration is an imperialist project Exploitation of weaker economies through a

mechanism of value transfers that operates, in a differentiated manner, both within and outside the EU

Thus, EU is basically divided in two groups of countries: a dominant euro-centre and a dominated euro-periphery

The Left should struggle to dismantle this imperialist project instead of trying futilely to reform it.

Structure:A Survey of the Mainstream and Radical

analyses of the European integration process

A periodisation of the european integration’s evolution

Conclusions: A Marxist value-theoretic analysis of the European integration process and a Left strategy for dismantling EU altogether (LEXITs)

I. Mainstream & Radical analyses of the european integration process

The current EU crisis (increasing econ. disequilibria, internal conflicts, authoritarianism, popular abhorrence etc.) revealed the failure of both Mainstream and Radical theories to grasp the essence of the European integration process

From the end of the 1980s European studies are dominated by explicitly or implicitly pro-EU analyses, either Mainstream or Radical. Neither of them can grasp and/or express particularly the growing popular abhorrence for the EU

Several phases of their development: from the initial enthusiasm to the europessimism of the beginning of the 1980s to the new triumphalism from the mid-1980s till the eruption of the EU crisis (2010).

Mainstream theoriesΤhe origins of European integration theory can be traced back to

American International Relations literature. It subsequently evolved as a distinct area.

Two dominant European Studies approaches (stemming from broader theories of integration):

1) Institutionalism (also as neofunctionalism and intergovernmentalism): integration s the result of a structural necessity (once an institution has been formed, its effects spill over to other areas of integration; Newer versions abandon the automatism implied in the spill over effect and recognise the possibility of set backs. (e.g. Haas (1958); Sandholtz & Zysman (1989), Sandholtz & Stone Sweet (1998)

2) Intergovermentalism (coming from the neorealist school): the interests of the different participating states dictate the course of the integration (e.g. Moravcsik, 1991, 1998).

American analyses are theory-oriented American , European ones more case study-oriented (Verdun 2005: 11). Explanation: imperialist conflicts between the US and the EU. US emphasis on theory conceals critiques of European integration. EU emphasis on case studies has behind it the attempt – usually funded by the EU – to hide or rectify critical problems.

A critique of the Mainstream theories

Mainstream approaches take existing class and economic structures as given and unquestionable.

European integration as a ‘political project’: schemes, policies, important people (e.g. Schuman) drive this project.

No structural elements particularly at the level of the mode of production.

Concomitantly, class analysis is absent and economic analysis is restricted to policies and aims of the main systemic agents of the project.

Their economic emphasis on:(a) the benefits to growth from liberalisation and integration (a well contested hypothesis)(b) whether the Eurozone is an OCA [optimal currency area] (with most US analyses alignining behind the positive answer and most EU analyses trying to either negate it or rectify it

Radical theoriesTill the mid-1980s Radical analyses of the EU were:

dominated by Marxism (e.g. Mandel (1970), Cocks (1980))value-theoretic and class perspectivemainly against the European integration characterizing it

as an imperialist project (e.g. British Left)From the mid-1980s (beginning of EU triumphalism,

collapse of the Eastern bloc, neoliberal hegemony etc.) there was a marked change by discarding almost all the previous features. The new main points are:emphasis on political projects and ideologies (rather than

deep systemic structural factors (e.g. EU neoliberal policies)

questioning who is benefiting from the concrete course of the European integration and attempting to transform it

Marxism per se is sidelined by other perspectivesThe issue of imperialism has been dropped

Α characteristic precursor of this retreat is the position of the NLR in the beginning of the 1980s (beginning with Nairn’s (1972) ‘The Left against Europe?’ [still dressed in Marxist jargon] and culminating in Anderson’s (2009) admiration for Mainstream neofunctionalism)

Today Radical analyses of the European integration appear as ‘Critical Approaches’ and can be classified as follows:Social constructivism (coming from the Frankfurt

school tradition) – e.g. Diez (1997), Marcussen (2000)Post-modernist analyses – e.g. Jorgensen (1997),

Walker (1989)The neo-Gramscian or Historical Materialist

perspective – e.g. Cox (1985)The so-called Critical Political Economy (CPE)

current

Social constructivism (coming from the Frankfurt school tradition) and bifurcated to (a) a more traditional, more critical to the EU and with more emphasis on systemic features current and (b) Habermas’ more ideology-theoretic and pro-EU perspective. This current questions the social foundations of the European integration and argues for alternative policies. However, even its more radical versions do not question the European integration per se.

Post-modernist analyses are nowadays completely ‘lost in the translation’ without any serious critical content

The neo-Gramscian or Historical Materialist perspective focuses on issues of ideology and politics. relations. They question the hegemonic nature of the European integration project (Bieler & Morton (2001), Van Apeldoorn et al. (2003). They call for strengthening EU’s democratic processes. They represent a deformation of A.Gramsci’s thought from that of a communist leader to that of a perplexed reformist. Total lack of any significant economic analysis.

Three CPE sub-currents: (1) classical Regulation Approach, (2) York school of global political economy, (3) Amsterdam school of international political economy. All of them stem from the newer non-orthodox middle-range theories (Mavroudeas (1999, 2011)) – of which Regulation was the prime representative – and they share almost all the methodological and analytical problems of their precursors (lack of general theory, empiricism, indeterminacy and post-structuralism etc.). They offer a rather weak economic analysis emphasising economic policies (neoliberalism etc.) and neglecting deeper class and economic structures. They do not question the European integration per se but simply preach its social and democratic transformation.

A critique of the Radical theories

The Radical approaches to European integration do not question the economic and class basis of this process – despite setting this as one of their tasks.

They usually clamour about the derailment of the initial Keynesian and corporatist European integration scheme (that supposedly left space for some pro-working class reforms) and the increasing Anglo-Saxon neoliberal dominance (as distinguished from other more continental European perspectives [e.g. German ordo-liberalism]).

They aspire to a return to some form of social liberalism since they also accept that a return to traditional Keynesianism is unfeasible.

The notion of imperialism is completely absent from their analyses. Concomitantly they do not question the European integration as such but only its contemporary dominant neoliberal versions.

II. A periodisation of the European integration

European integration began after the 2nd WW as an attempt to reconstruct and stabilise capitalism in Western Europe under the US auspices and against the threat from the Eastern block (1950s – 1974): The Marshall Plan and the Bretton Woods system provided the

framework of its launching. US multinationals played a crucial role. The initial integration project was shaped by the corporatist institutions

and Keynesian policies characteristic of the post-war period. Another crucial aspect was the containment of the traditional Franco-

German antagonism under the vigilant eyes of the UK (as the faithful ally of the US). West Europe was reconstituted as a regional imperialist pole exploiting less developed economies.

Its initial core was comprised of developed capitalist economies. The basic economic structures, after several deliberations, were the

common market (trade liberalisation) plus the common agricultural policy [CAP] (administrative system).

Some initial forms of political co-ordination along national lines

The 1974 global capitalist crisis and the subsequent dismantling of the Bretton Woods system affected radically the initial conditions and ushered a period of uncertainty, euro-pessimism and failed attempts towards monetary integration (1974-1985): The 1974 profitability crisis marked the end of the post-war period

of strong growth. Beginning of a series of inconclusive waves of capitalist restructuring (conservative Keynesianism, Neoliberalism of the closed economy [Monetarism])

It also aggravated intra-imperialist rivalries: US unilateralism became even more pronounced (as evidenced by US’ ‘forcible’ imposition of flexible exchange rates).

The major European capitalisms attempted to alleviate some of the US pressure by moving towards monetary integration (as a support for the common market). Several failed attempts each one followed by an even bolder move ((snake in the channel, EMS etc.).

The first enlargement batch with less developed economies (Greece, Spain, Portugal) for both economic and geopolitical reasons and the introduction of a limited fiscal transfer mechanism (aid programmes).

However, pessimism and augmented internal differences along national lines prevailed.

The end of the 1980s and the advent of neoliberalism, the collapse of the Eastern block and the resurgence of integration and of aims to surpass US hegemony (1985-2008): Capitalist restructuring culminates in neoliberalism of the

open economy (‘globalisation’) as a means to restore profitability and solve the structural problems. Particular emphasis on strengthening international trade and capital liberalisation as a counteracting force to low profitability and as a lever for structural reforms.

As a result, renewed efforts for increased European integration reinforced by the process of collapse of the Eastern block (1989 and the so-called European anno mirabilis) ) which ‘liberated’ further European capitals from US patronage and augmented their initial shy aspirations to challenging US global supremacy.

New batches of enlargement Deepening of political integration (revision of initial treaties,

expansion of EU’s jurisdiction to many new areas) More aggressive monetary integration (EMU) supplemented with

broader economic rules (Maastricht Treaty provisions) affecting – mainly indirectly - fiscal policy.

Overall, in the 1980s-2008 period the dominant capitalisms of the EU (the developed core around Germany in an uneasy alliance with France) augmented European integration (through, among others, transnational structures which however expressed the dominance of particular national economies) and strived to challenge US global supremacy.

The EMU and the creation of the euro as an alternative international reserve currency plays a crucial role in this drive.

However, the expansion and the deepening of the European integration aggravated the existing problems of uneven development and placed a time bomb at the foundations of European integration. In particular, the initiated by the common market division between euro-core and euro-periphery was enhanced.

The attempt to contain the frictions caused by uneven development by imposing wider economic restrictions (Maastricht treaty provisions) was partially affordable in periods of even low growth but proved to be disastrous in periods of crisis.

The US-EU rivalries were fomented further.

The 2007-8 global capitalist crisis and the concomitant EU crisis: The eruption of the 2007-8 global crisis – a profitability cum

structural crisis (i.e an a-la-Marx and not an a-la-financialisation crisis) changed abruptly the whole framework.

Initial hopes for ‘de-coupling’ (i.e. that the crisis concerns only the US) were quickly rebutted and the crisis erupted in EU as well.

EU’s failed ‘slay of hands’: As all major capitalisms abandoned hastily neoliberal policies in favour of conservative Keynesian policies (anti-cyclical lax monetary and fiscal policies), the EU followed at a slower pace and to a more limited extent and reversed earlier. Underlying belief: as the US and the Emerging Economies (EE) were creating ‘bubbles’ of overaccumulation the EU would put its house in order while at the same time profiting from these ‘bubbles’. When the latter would inevitably burst, then the EU would be in a good position to claim for global supremacy. A supplement to this plan was the transformation of the euro-periphery into some kind of ‘special economic zone’ (cheap wages and assets, increased exploitation rates etc.). Its antagonists sabotaged this plan which had also serious problems of its own (a very fast and austere adjustment causing huge popular resistance [passive or energetic]).

As a result of EU’s inferior position in the international imperialist system and the barbaric restructuring required to sustain its global imperial aspirations the EU has become the ‘big sick man’ of the aftermath of the 2007-8 global crisis.

The choice of (a) limited anti-cyclical policies followed with a fast reversal and (b) deep anti-popular restructuring (with austerity policies) and © transforming the euro-periphery to a ‘special economic zone’ is a one-way course for the euro-core in order to conserve its global imperial ambitions.

However, at the same time it foments internal tensions in the form of both increased popular abhorrence towards the EU and grievances by several of euro-periphery’s capitalisms under demotion.

The recent resurgence of anti-EU movements (e.g. Brexit) is indicative.

By way of ConclusionsThe necessity of a Marxist and Left

opposition to the European integration – express the growing popular abhorrence towards the European integration and not leaving it to the mercy of the resurging extreme Right.

This requires the relaunching of a Marxist value-theoretic analysis of the European integration process that should guide a Left strategy for dismantling EU altogether (LEXITs)

A Marxist value-theoretic analysis of the European integration process (e.g. Carchedi in several works) should be based on: A deeper understanding of capitalism’s oscillation

between periods of augmented internationalisation and periods of return to its national roots. That is a negation of the fallacy of ‘globalisation’.

A refined analysis of the economic mechanism of imperialist exploitation (contra to both theories of the end of imperialism and of the ‘new imperialism’ extractivist fallacy). International transfers of value on the basis of ‘broad unequal exchange’ (based on different organic compositions of capital) and trade and iternational investment on the basis of absolute advantage. The notion of the imperialist system as a complex pyramid involving several instances and the existence of sub-imperialisms (i.e. capitalisms exploited by stronger ones and exploiting weaker ones0.

Such a framework can explain both the ebbs and flows of European integration and its essentially reactionary and exploitative nature.

A Left strategy for dismantling EU altogether (LEXITs):Should break from the ‘social Europe’ fallacy (that is

the futile expectation that the inherently reactionary project of the European integration can be gradually transformed).

Should also break from (the following from the previous one) belated shy euro-scepticism of dismantling – temporarily or permanently – the EMU. The basic exploitative mechanism of the EU is the common market structure, of which EMU is a supplement.

‘From the standpoint of the economic conditions of imperialism … a United States of Europe, under capitalism, is either impossible or reactionary’ (Lenin (1915)).

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