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p Uneven economic and political development is one of the fundamental laws of monopoly capitalism.

p In his study of the uneven development of imperialism in 1916, Lenin wrote: “. . .The only conceivable basis under capitalism for the division of spheres of influence, interests, colonies, etc., is the calculation of the strength of those participating, their general economic, financial, military strength, etc. And the strength of these participants in the division does not change to an equal degree, for the even development of different undertakings, trusts, branches of industry, or countries is impossible under capitalism. Half a century ago Germany was a miserable, insignificant country, if her capitalist strength is compared with that of the Britain of that time; Japan compared with Russia in the same way. Is it ‘conceivable’ that in ten or twenty years’ time the relative strength of the imperialist powers will have remained unchanged? It is out of the question."  [98•1 

p Since capitalism is motivated by the principle of brute force, the rapid changes in the balance of forces create situations loaded with extremely acute conflicts and clashes.

p Britain’s loss of her monopoly position as “workshop of the world" at the end of the last century and the world-wide scramble for colonies and markets opened up an era of imperialist rivalry for a territorial and economic redivision of 99 the world. This has led to two world wars and a series of fierce international conflicts pushing mankind to the brink of full-scale war.

p The law of uneven economic and political development has never operated in isolation from other social laws, from the sum total of international relationships as they have formed in the era when the contradiction and struggle between the socialist and capitalist systems constitute the basic content of the historical process. Shifts in the balance of levels in economic progress within the capitalist world are the economic basis for the contradictions and conflicts that weaken the imperialist camp.

The years immediately following upon the Second World War witnessed the rapid growth of the U.S. share in the world economy. But already by the early 1950s, with all nations back at their pre-war economic levels, the countries of Western Europe and Japan overtook the U.S.A. in economic growth rates over a definite period. As a result, the share of nations in world capitalist production altered as follows.

Table 21 Industrial League in the Capitalist World (per cent) 1938 1948 1955 1960 1965 1967 1969 U.S.A. 36.6 55.8 50.5 45.8 45.1 45.2 43.4 Western Europe . . 45.0 30.4 33.4 35.4 34.1 33.0 32.8 including: West Germany . . — 4.2 8.5 9.6 9.4 8.7 9.4 Britain 15.6 11.9 10.2 9.3 8.2 7.5 7.1 France ...... 6.2 4.5 4.4 4.7 4.5 4.5 4.6 Italy 3.2 2.2 2.7 3.4 3.5 3.8 3.6 Common Market . . 24.2 13.0 18.0 20.0 19.6 18.4 19.8 Japan ....... 4.7 1.3 2.5 4.4 5.7 7.0 8.5 Source: The Economic Standing of Capitalist and Developing Countries. Review of 1969 and the Beginning of 1970 (Supplement to the journal World Economy and International Relations No. 7. 1970). (Russ. ed.)

Together with the growth in the share of other countries, apart from the U.S.A., the standing of the respective monopolies has also improved.

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p It is true that the standing of the imperialist powers is by no means determined solely by their share in industrial production; numerous other factors—political, military, geographical and so on—have to be considered. At times the significance of these factors temporarily outweighs that of economic power. And the standing of individual nations cannot be judged solely by whether their share, or that of a group of them, in world industrial production has more or less markedly improved or deteriorated. Irrespective of their industrial standing, it is an important fact to record that in the two post-war decades the nations of Western Europe and Japan not only restored but even surpassed their pre-war levels of economic development. These changes have undermined the monopoly positions of the U.S.A. within the capitalist world which it had held in the immediate postwar years.

After a short period of U.S. hegemony, the operation of the law of uneven development since the last war produced, by the end of the 1950s, four centres of imperialism: the U.S.A., the European Economic Community (Common Market), Great Britain (at the head of the British Commonwealth and the European Free Trade Association—E.F.T.A.) and Japan.

Table 22 Major Economic Indexes for Hie U.S.A., E.E.C., E.F.T.A. and Japan U.S.A. K.K.C. E.F.T.A. Japan Share in world capitalist in- dustrial production (per cent), 1969 43.4 19.8 10. 1 8.5 Population (mln), 1909 203.2 185.0 95.4 102.3 G.N.P. ($1,000 mlu), 19G8 801.0 320.3 172.7 147.0 G.N.P. per head (I), 19G8 4,380 2,040 1,920 1,400 Exports (11,000 mln), 1969 37.4 75.5 41.3 10.0 Imports (11,000 mln), 19C9 35.9 75.4 35.7 15.0 Gold and foreign currency re- serves ($1,000 mln), Dec. 19G9 17.0 20.9 11.4 3.7 Sources: OECD Main Economic Indicators, Paris, February 1970, pp. l,’)G-37; U.N. Monthly Bulletin of Statistics. New York, July 1970, pp. 1-4, 110-14; The Economic, Standing of Capitalist and Developing Countries. Review of 1969 and the Beginning ot 1070 (Supplement to the Journal World Economy and International Relations No. 7, 1970, pp. lit, 70). (Russ. ed.) 101

p Each of these four centres has been operating independently within the orbit of world imperialist rivalry and competition; each has its own interests and commands substantial economic and political forces against competitors.

p A comparison of industrial production and other key economic indexes gives the following picture (see Table 22).

p It is evident from these figures that the U.S.A. today still accounts for virtually one-half of world capitalist production. As the most formidable economic and military power of the capitalist world, the U.S.A. continues to act as world gendarme, being the chief instigator of aggression against the socialist countries and the organiser of subversive activity against the independence of the less developed countries. Nonetheless, the myth of a Pax Americana has been dispelled.

p The continental countries of Western Europe have a rather special standing within the imperialist system. For a long time, these nations have had a high level of accumulation and a high degree of state-monopoly development, so that in the 1950s and early 1960s they far outstripped the U.S.A. in economic growth rates. This, together with the establishment of the European Economic Community, has enabled some of these countries (notably France), while remaining within imperialist blocs, gradually to shake off the U.S. diktat and pursue a more independent policy.

p Britain, despite her comparatively low economic growth rate, has a highly sophisticated industry and relies on two high-powered blocs: the British Commonwealth—the successor to the British Empire—and E.F.T.A. This has enabled Britain to remain a prominent exporter of goods and capital and a leader in neocolonialism.

p Japan holds a special place in the present arrangement of imperialist forces. In mid-1969, Japan forged ahead of West Germany to second place in terms of G.N.P. She has, first, the highest rate of capital accumulation and economic growth in the whole capitalist world; second, in population she is second only to the U.S.A.; and third, for historical reasons the structure of the Japanese economy and her strong competitive power make her the most formidable rival among the imperialist powers on the world market, particularly in the markets of the developing nations. All this qualifies her as one of the autonomous centres of present-day imperialism.

p As seen from the figures in Table 22, although the 102 United States has vast superiority in G.N.P. per head of population and industrial production over all the other capitalist countries and the two strongest economic blocs, it does not match the blocs in volume of foreign trade. Moreover, its standing in reserves of gold and foreign currency no longer corresponds to its standing in world capitalist production.

p To understand the reasons and consequences of these market discrepancies, consideration must be given to the place of foreign economic ties in the economy of modern imperialism and of each individual country.

p An analysis of the value structure of sales indicates that the domestic market is of prime importance for every country, without exception. According to 1963 figures, the value of exports from West European countries made up some 15 per cent of the value of their G.N.P., and the domestic market accounted for the other 85 per cent.  [102•1  For Japan, the corresponding figures were 11-12 per cent and 88-89 per cent, respectively, and for the U.S.A. 5-6 per cent and 94-95 per cent.  [102•2  By far the main part of the social product is marketed at home. Therefore, the protectionist policy of present-day state-monopoly capitalism is primarily intended to sustain the dominance of the national monopolies on the home market.

p These figures indicate the all-important role played by the domestic market, but do not truly reflect the actual part played by foreign economic ties. To understand their importance, we must supplement the value analysis of the sales structure with a study of the material structure of production and consumption of the social product in the monopoly capitalist countries. Such a study shows that foreign trade is a vital part of the economy of all, or virtually all, the imperialist countries. For most of the strongest monopolies everywhere foreign trade and capital exports are a significant, sometimes decisive, element of their business, and the greatest source of monopoly super-profit—irrespective of the role of 103 the country’s foreign economic ties. These ties have become a major sphere of competition and an area of persistent state intervention in support of the national monopolies.

p The period of capitalism’s general crisis, especially its second and third stages, is notable for the growing acuteness of struggles among the imperialists for market outlets for their goods and capital. With the onset of the 1929-33 crash, the last vestiges of free trade vanished and there commenced a long period of trade and currency war. That was when the capitalist world was split up into the dollar, the sterling, the franc and the yen areas. After the last war and on the basis of its consequences, the dollar and, to a lesser extent, the pound, temporarily (until the early 1960s) dominated monetary relations claiming to play the part of the world currency—gold.

p Right up to the beginning of the 1930s, except for the war periods, tariffs were the chief instrument of protectionism. In the years that followed a whole spectrum of state-monopoly protectionist measures came into being which, in the trade wars of the imperialists, attained at least as much importance as protectionist tariffs. Among these new measures were:

p (i) direct quantitative restrictions through quotas set for some imports;

p (ii) indirect quantitative restrictions through concentration of all foreign exchange resources in the hands and under the control of the state;

p (iii) monetary measures such as devaluation, which, with stable prices at home, serves to boost commodity exports, or overvaluation, to boost imports and capital exports;

p (iv) subsidies and other financial incentives (taxation and credit) to industries working for export;

p (v) a similar policy intended to expand home production of goods so as to reduce their imports (for instance, subsidies and other incentives to agriculture);

p (vi) state social policy (encouragement or restriction of labour migration to influence the level of wages and, consequently, the costs of production) ;

p (vii) direct or indirect state support for efforts by the monopolies to cut real wages as a means of improving their competitiveness on foreign markets, etc.;

p (viii) formation of cartels and government cartel policy (cartels and monopoly agreements to fix prices at a high or 104 low level can effectively undermine the implementation of any measures under government tariff or monetary and payments agreements, while the direction and power of state cartel policy have become salient factors affecting the character of international economic relations);

p (ix) “economic diplomacy"—the special state apparatus employed to conquer foreign markets (commercial attaches, exhibitions, trade and monetary agreements), etc.

p After the Second World War, all these elements became even more important than in the inter-war years. Government measures to bolster external economic positions were tied in with all the other measures of state-monopoly control and became an integral part of the whole system. All this further upset the balance of power among the imperialist countries and made development even more uneven.

p In spite of the military-political blocs that embraced most imperialist powers in the first ten years after the war, the capitalist world as a whole was more “disintegrated” than in any previous period (with the obvious exception of world war periods). Each power commanded a powerful system of state-monopoly protectionism which it wielded in the trade war on home and foreign markets against alien monopolies.

p There was also the opposite trend towards greater international division of labour, particularly among the industrial powers, which is based on the process of individual economies outgrowing their national boundaries, internationalisation of economic life, and the growing role of trade and the world market of goods and capital as a result of greater national specialisation and international co-operation in production. The heightened significance of this trend since the war is all too evident if we compare the growth in capitalist production and in world trade.

p Taking 1929 as base year (100), we find that by 1938 the production of all commodities in the capitalist world constituted 110, and international trade 89. These figures reflect, on the one hand, the consequences of the world economic crises in 1929-33 and 1937-38 and the resultant disintegration, and, on the other, the growing complexity of the international situation and the formation of hostile military coalitions, which led to even further economic isolation for various parts of the bourgeois world.

p International trade was slow to pick up in the first 7 or 105 8 years after the Second World War and lagged behind growth in production, largely due to the domination of U.S. imperialism. But then the situation altered as the trend towards international division of labour gathered momentum. Yet this trend has been very uneven. The most rapid increase of exports over production has occurred in manufacturing and in the manufactured products trade. On the other hand, the fastest rate of increase of exports (and imports as well) has taken place in countries with the highest rate of industrial growth, particularly the continental countries of Western Europe and Japan (see Table 23).

These figures also show the connection between the growth in world trade and the scientific and technological revolution, which has had a tremendous impact on Western Europe and Japan during the 1950s and 1960s, has induced greater specialisation in the manufacture of machinery and other

Table 23 Average Annual Growth of Industrial Production and Export in the Capitalist World (per cent) 1313-50 1950-68 Industrial Export . production ....... 2.1 1.2 5.5 0.9 Source: World Economy and International Relations, September 1970, p. 64 (Uuss. ed.).
•
finished products and has slightly lessened reliance on the import of raw materials and foodstuffs.

p The growing international division of labour and the internationalisation of economic life, against a background of highly uneven economic development, have served as a basis for new international forms of state-monopoly protectionism. After the war, national protectionist systems were supplemented by far-reaching inter-state agencies in foreign trade and monetary relations. Their organisational principles, structure and activity reflected the correlation of forces prevailing within the imperialist camp immediately after the war, i.e., at a time when the U.S.A. ruled the roast. The General Agreement on Tariffs and Trade (GATT) was signed in 1947 by 23 nations—by 1963 it had 53 signatories, including 106 the U.S.A., Canada, Japan and all the West European nations except Spain, Portugal and Ireland. GATT proclaimed the principle of most-favoured-nation treatment in trade and the need to abolish preferences, to reduce tariffs, abolish import restrictions, and so on. But the agreement allows signatories to depart from the most-favoured-nation principle, to set up customs unions and introduce import restrictions when their balance of trade worsens; it accords recognition to preferences already operating for a number of countries.

p In practice, GATT is a supremely amorphous body and bargaining place for nations on the terms of the state regulation of trade. Its sphere of operation extends only to customs tariffs and quota restrictions, but does not affect the other aspects of state-monopoly protectionism listed above. Yet, even in this sphere, GATT has served the interests of the economically strongest signatories, the U.S.A. above all.

p Prior to 1964 the U.S.A. had succeeded in securing tariff reductions for more than two-thirds of the U.S. exports to GATT member-states, while not making any substantial reductions itself. On the evidence of the State Department, a slight reduction in tariffs was made only for one-eleventh of U.S. imports and was largely confined to strategic raw materials.

p The International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) are two other international state-monopoly agencies of special importance. They came into being to cope with the increasing complexity of international monetary relations. Over a long period, from the mid-1930s to the end of the 1950s, the following situation developed. First, the level of international liquidity (i.e., the ratio of gold and currency reserves as a percentage of annual commodity imports of the whole capitalist world) diminished from 113 in 1938 to 85 in 1950 and down to 51 in 1960. Furthermore, the share of gold reserves fell and that of currency reserves sharply rose (from 3.9 per cent in 1938 to 38 per cent in I960).  [106•1  Second, the U.S. dollar took precedence among the foreign currency reserves. Until the early 1950s, the consolidation of the U.S. economic and political positions in the capitalist world was accompanied by increasing concentration of gold in U.S. vaults. In that 107 period the dollar became the most important medium of international payments, a “reserve currency" equivalent to gold. At a time when the currencies of the continental West European countries and Japan were depreciating and in the absence of free convertibility, the shortage of liquidity was expressed as a “dollar shortage”, and this U.S. ruling circles did not hesitate to exploit to reinforce their own monopoly over the world commodity and capital markets. This was precisely the purpose of such international monetary institutions as the IMF and IBRD.

p The International Monetary Fund was established in 1944 to provide short-term financial aid for member-countries in balance of payments difficulties and help them stabilise their currency. It was also to eliminate discriminatory monetary practices and promote co-operation between members in the monetary sphere. Actually, the U.S.A. was assured of a dominant position in the Fund from the start. Because of its large quota contributions to the Fund the U.S.A. commands 27 per cent of the votes; when to these are added the votes of member-states financially dependent on the U.S.A., it can always command an absolute majority. The U.S.A. exploits the Fund for maintaining the artificially low price of gold at $35 an ounce, and this gives the U.S. monopolies an advantage in exporting capital.

p However, as the U.S. positions in world capitalist production and world trade deteriorated, no international credit institutions were able to counteract the decline in U.S. monetary positions. U.S. balance of payments difficulties, caused by fiercer competition from Western Europe and Japan, and vast military expenditure abroad, brought about a gradual outflow of gold reserves from the U.S.A. to Western Europe, notably West Germany and France. This, in turn, led to a gradual restoration of gold as a world currency and to the convertibility of most national currencies in Western Europe.

p Clearly, none of this implies that the restoration of gold has gone as far as the free convertibility of these currencies into gold. Moreover, by the late 1960s the operation of the law of uneven economic development had improved the currency standing of the West European continent and had brought about a fresh aggravation of monetary contradictions, producing new hotbeds of the “currency war”.

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p The decline of Britain in world commerce and the chronic deficit of her balance of payments have eaten into her currency reserves and in November 1967 caused the British Government to devalue the pound—a reduction in its gold content by 14.3 per cent. This step was taken by the Labour Government to enhance the competitiveness of British goods on foreign markets, by reducing the real income of the British workingman. But instead of the anticipated stability, devaluation caused increased speculation in gold and an acute currency crisis. In France, with social contradictions and the class struggle rising to a new level after the events of May 1968, the French monopolies resorted to economic sabotage by transferring French capital abroad, mainly to West Germany. In a period of six months, from May to November 1968, French gold and currency reserves fell from $7,000 million to $4,300 million, while those of West Germany showed a corresponding increase. This was an even greater jolt to the already unstable position and brought France to the verge of devaluation, although only a short time before France had boasted about her strong gold position. With the aid of several urgent measures, devaluation was staved off for a time, but had to be put through—by 12.5 per cent—in August 1969.

p Ever since 1952, when the European Coal and Steel Community (ECSC) was formed, integration has come to occupy an important place in imperialist economic and political affairs as a process of formation and operation of international state-monopoly associations. The new Community was based on national specialisation and international division of labour and the growing internationalisation of economic affairs. Yet the connection between these processes and integration is as complex as that between development of the social character of production and state-monopoly capitalism within national boundaries. The international division of labour has enabled the national forms of statemonopoly capitalism to grow into international forms not only and not so much directly as in close interaction with every aspect of international relations at the present stage of capitalism’s general crisis.

p West European integration is an attempt by monopoly capital to “reconcile” the private capitalist form of economy with the productive forces which have outgrown their 109 national boundaries. Imperialism is endeavouring to retain the productive forces, which are powerfully dictating the transition to socialism, within state-monopoly bounds.

p Integration springs from the clash in the capitalist world between centripetal and centrifugal tendencies: on the one hand, there is the progressive tendency to economic internationalisation, and on the other, the tendency to economic isolationism and autarky, to the monopolisation of markets by individual countries or groups of nations. Furthermore, the specific forms of integration, its structure and development are indissolubly linked with the historical conditions of development of each individual country, with its geographical situation, the degree and forms of progress of statemonopoly capitalism, the political situation in each country and its standing in contemporary international relations.

p There is good reason for the drive for integration in the western half of the European continent. First, politically, it is an attempt to resurrect the old idea of a “United States of Europe" and counterpose some form of “Europeanism” to the growing ideological impact of socialism. Second, the disintegration of the colonial system has had a strong effect on the position of the countries of Western Europe. One of the aims of integration was, therefore, to create some inter-state setup to enable the former metropolitan centres to retain their iniluence over the liberated territories. Accordingly, the European Economic Community is prepared to admit “associated” members alongside full-fledged members. Within this associated category are Turkey, Greece and several African states, including Mali, Mauritania, Senegal, Upper Volta, Niger, Ivory Coast, Dahomey, the Congo (Brazzaville), Congo (Kinshasa), Central African Republic, Gabon, Burundi, Chad and Madagascar. A special fund for overseas territories, made up of contributions from EEC members, is in existence to “help” the African states. Third, the post-war relations between Western Europe and the U.S.A. have had a special part to play. As the countries of Western Europe overcame the legacy of the war and made economic headway, their contradictions with U.S. imperialism have sharpened.

p With the advantage of their immense home market, the U.S. monopolies have been able to set up firms and monopolies of such optimum size that, all other conditions being equal, their very high specialisation yields relatively low 110 costs of production and, consequently, high competitiveness.

p Because of their smaller population and lower standard of living, the domestic market of each European country is incomparably smaller than that of the U.S.A. So the attainment of a high level of effectiveness and competitiveness for many burgeoning industries in Western Europe is only feasible with guaranteed markets abroad. The absence of these guarantees has been one of the main causes of the great difference in size of companies and enterprises on either side of the Atlantic.

p In metallurgical plants, the optimum limit of steel smelting is estimated at 7-8 million tons annually (with the low optimum parameter at 1 million tons). Several U.S. corporations are up to these specifications. In Western Europe, only TissenPhoenix Rheinrohr of West Germany has this capacity. France and other West European countries do not yet have such powerful plants. In the manufacture of refrigerators, the optimum corporation in the U.S.A. has a capacity of 500,000 a year, while the best West European firm can only manage 110,000 a year. In the production of synthetic fibres, the normal capacity of U.S. corporations is 20,000- 30,000 tons annually, whereas Holland’s total fibre output is only 33,000 tons a year, and that of Belgium 8,000 tons (1964). In engineering, the average firm’s output in Western Europe is one-fourth or one-fifth of the U.S. level.  [110•1 

p The West German economist Diether Stolze writes on this score that “the Americans have long enjoyed the economic advantage of mass production. In Europe, on the other hand, the manufacture of major industrial goods is to this day distributed among an extremely large number of firms which produce considerably less efficiently (and therefore more expensively) than the well-organised large enterprise. In this respect the European market is to effect a change.... The emergent big market in Europe will force these countries to establish a modern economic structure and thus make it possible to match America. ...

p “It is hardly possible to predict today to what extent this ’compulsion to productivity’, which will heighten competition within a large market, will expand the capabilities and welfare of Europe...."  [110•2 

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p West European capitalism finds itself in a vicious circle: mass production and optimum firm size on a given technical level are essential if firms are to establish themselves in foreign markets; yet they can only achieve this capacity if they become established in foreign markets. This is the situation in which West European monopolies have found themselves and from which they are now desperately trying to break out. They are employing a variety of tactics, including the integration of markets.

p In international relations, West European imperialism has had to contend with a situation where the more powerful U.S. imperialism has vigorously wielded its economic and military superiority to further its aims within the aggressive military-political blocs, particularly against the interests of its West European competitor-allies. In these circumstances, the West European monopoly bourgeoisie (or at least a section of it) has looked to integration as a means of escaping U.S. “tutelage”.

p Naturally enough, the ruling circles of the various West European nations were not united in the struggle to achieve the above-mentioned aims. Between 1955 and 1957, at the very beginning of talks on integration, two sharply divergent concepts were disputed. One was the British concept of free trade area, i.e., a pure customs union, agreement on a gradual lifting of duties on mutual trade between member-states and co-ordination of their foreign trade policies in relation to third countries. The other was Bonn’s concept of a European economic community, an organisation which would commence with the gradual establishment of a common market and culminate with the integration of the economies of membercountries with the prospect of some form of political federation (political integration).

p The break-down of negotiations on a free trade area embracing all West European countries (including Britain) at once indicated the contradiction between the objective basis of integration and the specific possibilities and paths of its development. The objective basis of integration, that is, the world-wide character of the capitalist market, unquestionably required an end to all forms of discrimination in economic relations between countries. But given the acute inter-imperialist contradictions, integration at once ran on the lines of “collective autarky”, the formation of exclusive and 112 opposed economic blocs as new forms of struggle for the division and redivision of markets.

p Two years after the formation of the European Economic Community (the Six), in 1959, EFTA was set up under the aegis of Great Britain; the original Seven consisted of Britain, Sweden, Norway, Denmark, Switzerland, Austria and Portugal.

p On both sides of the Channel and even more so inside the U.S.A., the authorities were well aware that the split in Europe not only ran counter to their economic interests— extensive economic ties between the countries of the Seven and the Six—but also to overall imperialist interests in forming a united front against the world socialist system. All attempts at healing the split and getting Britain into the EEC, and gradually merging the two blocs, have come up against insuperable difficulties.

p Besides the economic contradictions (over a common EEC agriculture policy, Britain’s maintenance of her imperial preferences with the Commonwealth countries, and so on), a big stumbling block to Britain’s entry into the Common Market at the beginning of the 1960s was the foreign policy problems dividing France and Britain.

p In this context, the changing attitudes of U.S. imperialism to European integration are of great interest. Immediately after the last war, U.S. diplomacy vigorously supported plans for West European integration, seeing these plans only as being anti-socialist, and being confident that it could subordinate European integration to its own strategic and military designs. Blinded by illusions of its own grandeur, U.S. imperialism failed to see what Lenin had foreseen as far back as the First World War: that the trend towards a “United States of Europe" had an anti-American as well as an antisocialist edge to it.

p The U.S. monopolies had used the formation of the Common Market to step up their exports of capital to Western Europe. Long-term direct U.S. investments in Western Europe alone increased from $1,700 million in 1950 to $19,400 million in 1968, or from 14 to 29.8 per cent of all U.S. foreign investments; furthermore, about a half ($9,000 million) of all U.S. investments in Europe goes to the Common Market countries.  [112•1 

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p The influx of American capital into Western Europe has been a mixed blessing: on the one side, it has enabled the U.S. monopolies to dig in on the European continent, but, on the other, the European monopolies have employed U.S. capital to build up their own strength, and to speed up reconstruction and cut production costs.

p The U.S.A. responded with persistent attempts to engage the Common Market in wider associations, like the General Agreement on Tariffs and Trade, through which the U.S.A. has tried to wring tariff concessions from the Common Market.

p The first ten years of European integration demonstrated that contradictions between the two concepts (free trade area and economic union) reflect not simply the different interests and positions of the various states, but also the internal contradictory character of the very principles of integration as a form of international economic bloc.

p The Treaty of Rome was framed on the assumption of farreaching liberalisation of economic relations between EEC member-states. The term “economic union" did not imply the establishment of common agencies administering the economies of several countries. It envisaged the removal of all forms of national discrimination in regard to partner states and the establishment thereby of favourable conditions for the national monopolies to operate within the scope of the whole Community and for their expansion beyond its boundaries. The sponsors of the EEC treaty had to face the fact that now that there is an immense variety of effective means of state protectionism induced by wars and crises over the last 60 years the lifting of tariffs by itself is not enough unless it is accompanied by repudiation of the other types of discrimination in foreign economic policy reviewed above.

p They also realised that no country would accept a common policy in any one sphere so long as its partners possessed substantial advantages in other spheres. Therefore, the principle of gradual unification of state economic policy at a later stage, alongside that of a gradual lifting of tariffs, was written into the treaty. Twelve years (up to January 1, 1970) were proposed for completion of the establishment of the economic community.

p In spite of the bold terminology of the Treaty of Rome, the aim of the EEC is not to weaken state intervention in 114 economic affairs, but to attempt to transform it by combining national and supernational methods of economic control. The EEC’s monopoly bourgeoisie has set up in Brussels bureaucratic inter-state machinery far removed from the principal centres and theatres of the class struggle. Though it was formed by the governments of the Six, it is primarily dependent on West Germany and France. The Treaty of Rome envisaged the gradual delegation to this body by member-states of part of their sovereign rights in some economic sectors, notably foreign trade, agriculture, energetics, taxation and transport.

p In fact, realisation of the Treaty came up against such contradictions and obstacles that by the mid-1960s it was obviously impossible to implement the programme of measures within the time allotted—by 1970.

p Where the EEC was able to mark up considerable success was in the reduction and gradual elimination of customs tariffs and the establishment of a common external tariff, which discriminated against third countries. As a result of this process, the goods and capital markets of the EEC monopolies have expanded and these monopolies have improved their positions in the struggle against outsiders. This success has to some extent been due to the boost given by integration to mergers and take-overs and creation of cartels on both a national and international level within the Six. The 200-odd inter-state monopolies occupy a position of paramount importance within the system of state-monopoly capitalism of the EEC.

p As time passes, however, the other consequences of integration are being brought out. The dialectics of this whole process is such that the more powerful the monopoly capital of member-states becomes, the more frequently it resorts to the aid of its national state apparatus not merely against the monopolies of countries outside the Community, but also against its own partners.

p The contradictions existing between the national and the integrational interests of monopoly capital of the Six crop up in various economic spheres. As a typical example, let us examine the situation in the fuel and power industry. Here the European Coal and Steel Community, formed in 1952 and now an integral part of West European integration, has for a number of years tried to work out an agreed programme for member-countries to promote the various types of fuel 115 and power resources. Up to the present time, however, it has failed to do so.

p The reasons lie in the contradiction of interests of the various countries and various monopoly groups. West Germany, France and Belgium—countries with a thriving coal industry and coal export resources—are endeavouring to construct an all-European programme by setting up monopoly positions for their coal industry in the fuel and power markets of Italy and the Netherlands, which are importers of coal and oil. The latter two nations, however, are not well disposed to this course of action since they are more interested in keeping their hands free to purchase coal and oil in any part of the world that suits them. Another formidable obstacle in the way of fuel and power integration is the big international oil companies: Esso, Shell, Mobile Oil and British Petroleum, which rightly see a potential threat to their own West European positions in the EEC integration and plans for common European oil pipelines, with accent on Saharan oil. No success has yet been achieved, however, in adopting such a programme.

p Similar contradictions and conflicts exist in other fields: in elaborating a common agricultural policy and a common taxation and monetary policy. Since national monopoly interests frequently conflict with the programme for economic integration, the EEC becomes from time to time the scene of renewed debates on plans for political integration. Yet, even in the heyday of the Common Market—1960-62—the negotiations soon showed that there was no foundation for agreement on forming any type of common political bodies whose decisions would be binding on all member-states.

It is quite evident, therefore, that since the war the same features, laws and contradictions which have always existed in the monopoly capitalism of individual countries have now arisen in a specific form in international economic relations. On the one hand, the increasing trend towards the internationalisation of economic affairs militates in the direction of various inter-state foreign trade, credit and monetary associations and, finally, of quite new economic associations (integration). These have made some headway in weakening the systems of state-monopoly protectionism established in the 1930s and 1940s, and have encouraged the expansion of international economic ties. On the other hand, 116 this type of association, operating at a time when economic development has become even more acutely uneven, itself becomes an arena of clashes between the interests of national imperialisms and a weapon of struggle between individual imperialist states and blocs.

p An analysis of capitalism during the period of its general crisis confirms that monopoly capitalism, “. . . so to speak, drags the capitalists, against their will and consciousness, into some sort of a new social order, a transitional one from complete free competition to complete socialisation".  [116•1  The union of contradictory notions—competition and monopolies—which Lenin once described as a factor preparing the socialist revolution, occurs in ever increasingly complex and contradictory forms. The basic contradiction is that the objective need for state economic control constantly surpasses the possibilities of state-monopoly capitalism.

p State-monopoly capitalism first appeared as a weapon of monopoly capital, which it wielded in its struggle to establish the best conditions for exploitation and reproduction. It is now building up the material prerequisites for socialism, while increasingly displaying its archaism and the uselessness of capitalist private property in the means of production.

p Meanwhile, state-monopoly capitalism is extending the front of the class struggle. As the state vigorously intervenes in the process of reproduction, workers’ defence of their class interests is unthinkable without recourse to political action.

p There is much history to show that state-monopoly capitalism has been developing under political forms of domination by the bourgeois classes, ranging from Roosevelt’s New Deal to Hitler’s nazism, from the domination of monarchist militarism in Japan to the Centre-Left Government in Italy.

p The working class is not in any way indifferent to the various political forms in which state-monopoly capitalism develops.

p Since government participation in the economy has become a necessary element in the reproduction process, the success 117 of the working class and their revolutionary parties in forming a broad anti-monopoly front, combining parliamentary and non-parliamentary forms of struggle, winning influential positions in state administrative bodies and so democratising them, all facilitate measures with which state control can be used in the interests of the working people for gaining real reforms, breaking the monopoly of finance capital and opening the way to socialism.

The socialist system is exerting an increasing influence on history. Its imprint is clear on the internal processes developing within the world of capitalism, processes which are objectively accelerating the inevitable downfall of the social system based on social inequality. And it is bringing nearer the world-wide triumph of socialism.