Europe History History & Theory

Capitalist Common Market – No! For a Socialist United States of Europe

By Ted Grant
Written in May 1975

The campaign on the Common Market underlines the need for the Labour movement to take a clear class, anti-capitalist attitude on the problem of the Referendum. At the same time fitting policy to the strategy and tactics of the struggle to change society on socialist lines.

All enemies of the Labour movement and the working class are vociferously and hysterically striving to ensure a ‘Yes’ vote. The Confederation of British Industry, mouthpiece of Big Business and the monopoly employers, the City of London, representative of the financial sharks, the big Insurance leeches and property millionaire swindlers, have put millions of pounds behind the campaign.

The millionaire press, the radio and TV have unanimously come out in favour of staying in. Slanting the news in such a way as to panic the middle class and the uncritical and inactive sections of the workers in favour.

The serious representatives of the capitalist parties, Liberals and Conservatives, always fighting for the interests of capital, have come out in favour. And many of the Tory and Liberal infiltrators in attitude—the right wing of the Labour Party—are overwhelmingly in favour.

Prentice, Jenkins, Crosland, Healey and others who have always opposed socialist polices and accepted the status quo, or the class relations as they exist now, have been and are the principal supporters of entry and staying in, within the Parliamentary Labour Party and Labour movement.

The picture of Jenkins, Heath and Thorpe on the same platform was symbolic of the situation. All these gentlemen are calling for “sacrifices” by the workers, lowered living standards and a tightening of belts, speed up and an acceptance of unemployment in order to increase the profitability of capital.

British Imperialism

The collapse of the power of British imperialism, the end of direct control of colonial peoples, means that the former surplus extracted from the super-exploitation of colonial workers, must now come from the labour of the British workers.

At the same time the economic, diplomatic and military power of British imperialism, second in the world before World War Two has been reduced to a third rate level. From wielding the balance of power in Europe for 300 years, capitalist Britain has been reduced to islands of second-rate importance off the mainland of Western Europe.

It is this economic, political, military and diplomatic disaster which has made the decisive sections of the ruling class change from a position of furious opposition to the formation and existence of the Common Market to tame acceptance, of allowing it to creep in on humiliating terms. They want to huddle together with their rivals in Western Europe in the vain illusion of collectively gathering economic, political and diplomatic strength on the world scene against the super powers of America and the Soviet Union and collectively they hope to dominate and exploit economically rather than directly by military means, the peoples of the former empires and the economically ‘underdeveloped’ regions of Asia Africa and Latin America.

Apart from the weakening of world economic and political power which meant that singly Britain, France, Italy and West Germany had smaller economic, diplomatic and military powers as against the giants, these smaller capitalist powers were faced with an insoluble contradiction. Their own home markets were too small for the enormous productive powers created by the labour of the working class on the basis of private ownership. America has a home market of 210 million, Russia 250 million, China 800 million and Japan 110 million.

This is shown in the figures of steel production in 1974: 142 million in Russia, 156 million in USA, 119 million in Japan, 53 million in West Germany, France 27 million, Italy 23 million and Britain only 22 million. Steel is a rough index of industrial strength and capacity. For engineering, motor and other manufacturers including steel costs can be reflected by the size of the run. Bigger plant and runs would mean that goods would be sold cheaper. The limited home market is one of the reasons why British capitalists failed to invest. Consequently they are beaten, in the former cradle of industry even on the home market.

But the illusion that the problems of British capitalist industry (or of any of the big market powers) could be solved in the Common Market is shown by the fate of British Leyland which enthusiastically supported entry. What they had overlooked was that each antagonistic section of capitalists in the Market, British, French, Italian and German all had their eyes on the Market of 250 million— consequently over a period would cancel each other out. In the case of Britain, lack of investment [far less than their European rivals] by the capitalists made her even more vulnerable—that is why they are even worse off in the present capitalist recession than the West European capitalists.

Reactionary dream

In addition, the reactionary dream of a single European capitalist super power composed of Britain, France, W. Germany and the other market countries will remain a Utopia. The vested interests of big business in all these countries are expressed by separate armies, civil service, governments. They can never succeed in overcoming these contradictions. The Common Market remains a customs union—and a very partial customs union at that. The moment that any of the Market powers find themselves in serious difficulties they flout and defy the rules. Thus the Common Market can never succeed in its nominal aims. The British ruling class and its parties, to mix metaphors, has hung its hat on a chimera. Especially for capitalist Britain the Common Market has proved and will further prove to be disastrous. One of the big advantages that British capitalism possessed was the import of cheap food from world markets, which gave them an advantage in costs and wages. They have lost this and the era of cheap food is over.

Despite the shattering of their illusions the serious capitalists and their serious representatives in the Liberal and Tory Parties, and their echo in the Labour Party are in favour of staying in the Market because there is no real alternative on a capitalist basis.

That is why Wilson and Callaghan came out in favour of the renegotiated terms, despite the fact that nothing fundamentally was changed. This may tip the balance in favour of a ‘Yes’ vote. The majority of the voters were probably opposed in the past. But unless a real alternative policy is offered, the mass of people tend to cling to the situation as it is for fear of the unknown.

There is not the slightest trace of genuine idealism in the platform of staying in the Market. It is dictated by cool and naked class calculations by the representatives of the trusts and monopolies that dominate Britain and Europe. The Parliamentary right wing of the Labour Party are tamely following the whistle of the big business overlords and their immediate representatives in the Conservative and Liberal Parties. Their support of the EEC is the consummation of a policy of class collaboration. It is the crowning of decades of jumping obediently to the commands and needs of capital.

The instinctive rejection of the capitalist Common Market by all the basic forces of the Labour movement was an enormous step forward. The overwhelming majority of the active rank and file of the trade unions, Co-ops, and Constituency Labour Parties are against for class reasons. Most of the shop stewards, the activists in the trade union branches and ward Labour Parties are decisively against. They distrust a policy endorsed by the bosses and their stooges.

But unfortunately, apart from the Labour Party Young Socialists they have not been mobilised and armed with a socialist alternative on a campaign which if put forward by the trade union and Labour leaders, could guarantee overwhelming victory in the Referendum.

Tribune policies

The Tribunite tendency bear the main responsibility for this. If, as Ian Mikado correctly said, Harold Wilson leads a “motley crew” in favour of the EEC, the ‘Get Britain Out Campaign’ is if anything as weird. Paisley, Frere-Smith, Powell, Neil Marten and other reactionaries are all screaming for a ‘No’ vote.

The Belfast Telegraph, organ of Orange Protestantism, ranted in its issue of 18/5/75, “We want the UK out of the Roman Catholic superstate.”

They represent the jingoistic position of the past attitude of British capitalism, in its period of power and strength. The capitalists have had to come to terms with the real relationship of forces on a world scale, and in desperation have slunk into the EEC to try and retrieve some remnants of their power and majesty.

But the real situation is shown by their weak organisation. Apart from a few spinsters of both sexes and a few oddballs, the brunt of the campaign, in so far as there has been a campaign, has been waged by the organisations of the Labour movement.

Money, organisational means and forces have overwhelmingly been channelled by the capitalists into the pro-Market campaign.

But though the openly capitalist forces in the anti-Market campaign have been few and their means tiny, and the bulk of money and people has been contributed by the Labour movement, in effect their ideas—yesterday’s position of capitalism—have dominated the campaign.

The tone of the campaign was shown by the Tribunite leaflet decorated in the colours of the Union Jack! What has been even worse has been the campaign speeches and articles of the Tribune supporters. This has been toned down by some Tribunites owing to the pressure of the LPYS and some Constituency Parties.

But the real tone is indicated by the speeches of Tony Benn and the article by Brian Sedgemore (not the least serious MP in the Tribune tendency) in the Tribune of 14th May 1975.

They argue that entry into the Common Market has meant the loss of 450,000 to 500,000 jobs. As if these jobs, or others given reprisals by the EEC powers, could have been maintained outside the EEC!

It is the world recession of capitalism at the present time, and the feebleness and lack of investment by British manufacturing industry which is responsible for British capitalism’s plight. In or out of the Market would not have made a fundamental difference on a capitalist basis!

Tony Benn has spoken of “de-industrialisation” in the last 4 years which has meant the loss of 500,000 jobs. This took place in the 2 years before entry into the EEC as well as the two years after, 120,000 jobs a year.

British investment per annum in the last 4 years has been below the level of 1961! British capitalism has fallen further and further behind her rivals in reequipping and modernising machinery and plant. Thus she has been outclassed in production and cost of goods.

Investment in 1973 was £1350 million in manufacturing industry, £1500 million abroad. The figures of 1974 are worse.

The Labour Government has this year bailed out the property speculators by lifting in February the freeze on business rents. This was because of the pressure of the banks and insurance companies who had lent out £7,000 million to the property sharks.

Profit system

Where more profits can be gained by property swindlers out of speculation, or currency speculation, or investment abroad rather than investment in industry, naturally the capitalists will always opt for the latter. Even if for the benefit of their individual interests or company they undermine the collective or ‘national’ interests of the capitalist class as a whole. Hence the foaming at the mouth by the prostitute press and mass media, and the haemorraging of the CBI and the banks and insurance companies at the temerity of Tony Benn in suggesting the partial and compulsory direction of investment funds from the banks and insurance companies to the manufacturing industry.

More than 100 years ago Karl Marx, the founder of scientific socialism explained that the working class could not support either tariffs or free trade, neither of which would serve their interests. They must fight for and explain the case for socialism.

Now decades after the capitalists have largely abandoned tariffs as a solution to the problems of British industry, again yesterday’s position, doomed to failure, is adopted by the Labour left wing. Some maintain (like Peter Shore) that Britain could adopt the position of a free trade agreement with the Common Market. Apart from the fact that this would mean the same situation as far as industry is concerned, and in the last 2 years would have had the same results, it would mean that the British capitalist class would have no say and could not block any measures against their interests undertaken by their rivals in the Market. On balance the results would be no better.

One anti-Market commentator said:

“…industry greeted the opportunity of this large domestic market by failing to invest on the scale required and by failing to make the same sort of preparations that were made on the other side of the channel for breaking into the British market.”

Who is “industry?” Why not say bluntly in class terms that with the capitalists as individuals, and with capitalists controlled nations, they invest where they can get the biggest profits. They are too short sighted to see the results for tomorrow. It is each man, company or country for itself.


Brian Sedgemore, the chief ‘economist’ of the Tribune tendency wrote in the Tribune of 16/5/75:

“…and yet by leaving the Common Market and protecting and building up our essential manufacturing industries with public and private investment we could certainly avoid mass unemployment although we might have to hold back on increases in living standards.”

“And it is mass unemployment that we are talking about. The latest medium term forecasts of a distinguished group of Cambridge economists (who have access to the Chancellor) is that unemployment will rise rapidly to over 1 million and continue to rise more slowly to 1,500,000 plus by 1978 (election year?) in spite of the expected upturn in world trade.”

“This upturn is not expected to help dramatically,…”

“That being so, and given the restriction on devaluation imposed by the existence of Arab balances in Britain, the Chancellor, in the absence of selective import controls and other protective measures forbidden by the Common Market, will be forced to pursue a ruthless policy of unemployment. An extra 500,000 to 750,000 on the dole seems a bitter price to pay for continued Common Market membership.”

“The Common Market trade deficit, the outflow of direct investment and an analysis of what is happening in the motor industry, shipbuilding, steel and others show only too clearly the tragedy that lies ahead if Britain continues its membership.”

“…Britain as an offshore island supplying cheap, skilled, itinerant labour for the industrial heartland of Belgium, France and Germany.”

“…Competition from France, Germany and Japan threatens to overwhelm the car industry and it is no wonder that the demand for import controls—which would almost certainly mean leaving the Common Market—is growing.”

“…Motor industry…unfettered competition from W. Germany is to be feared.”

Thus the whole standpoint of the Tribune tendency, as evidenced by one of its most articulate spokesmen accepts the continued existence of capitalism with Britain outside of the EEC.

His arguments for what will happen inside is correct, but his delusion about a capitalist Britain outside the EEC is neatly punctured by the argument of Roy Jenkins in a speech on 14th May 1975:

“Our industry would grow even less competitive and efficient as it sheltered behind high tariff walls, while jobs and investment in our export industries would vanish like drops of water in the desert.”

Capitalism sick

Both arguments are correct given the sickness of British capitalism. That Britain could now erect new tariffs would mean economic disaster and big falls in living standards as Brian Sedgmore reluctantly admits. It would not solve capitalism’s problems nor its decline—but only make it worse.

In any event the argument that there is mass unemployment in the Common Market is feeble in the extreme. There is mass unemployment outside the Market also. In America over 8,250,000 are unemployed— officially 8.9% of the working population. In reality more like 10 million and 10-12% unemployed.

The arguments, supported by right and left Labour MP’s that Keynesian methods could solve the problem of full employment have been shattered inside and outside of the Common Market.

Now Denis Healey threatens to “cure” inflation by slashing state expenditure. He tries to blame the workers and high wage increases—in reality after tax in most cases not as high as the increases in the cost of living.

Thus lefts and rights accept falls in living standards—one section inside, the other outside the Common Market; in reality this acceptance falls on a capitalist basis in both.

But in the same issue in which Brian Sedgemore writes, Neil Kinnock writing on America says:

“The need to pay for a stable currency with other peoples’ jobs is a central canon of capitalism.” (16/5/75).

What is true for American capitalism is true for British and any other capitalism as well. The same dilemma exists . The refusal to invest by the British capitalists has doomed Britain to a secondary world role.

Capitalist Britain is sick. Inside or outside the EEC there is no cure. Marxists in the Labour movement have lined up together with their comrades in the Labour and trade union movement against the Big Business Club. But we do not align ourselves with the ‘anti-foreign’ ranters like Powell and Frere-Smith.

The Labour movement must break away from the strait jacket of capitalist policies. The entire history of the Labour movement shows that this invariably results in disaster. For an independent class battle against the monopolies and Big Business!

Class approach

Had this class approach been adopted and the Labour and trade union movement mobilised and enthused on a socialist programme there could be only one result of the Referendum—a crushing anti-vote.

Even at worst the level of understanding of the mass of the working class would have been raised and the task of the struggle for socialism made easier.

On capitalist policies and methods there can only be suffering and privation for the working class. ‘No to the EEC’ must be linked with the struggle for a socialist plan of production in Britain. The taking over of the 250 monopolies, banks and insurance companies, with compensation on the basis of need only would be the first step. Then a monopoly of foreign trade would be established. On this basis the road would be cleared for an appeal to the workers of Europe and the world. A continental plan of production, with a democratic socialist Britain, ending the scarecrow of Stalinist Totalitarianism would open the road to the underdeveloped world. A Socialist United States of Europe would be the first step to a Socialist World.