The Third International after Lenin

Thursday, January 30, 2014

Capitalist trade pacts

U.S. imperialism’s
protectionist trade assault  

(The following excerpts from Capitalism’s World Disorder by Jack Barnes discuss the growing competition and rivalries that mark relations among the imperialist ruling classes, including France, Germany, and the other imperialist powers that make up the European Union. The first piece is from a talk by Barnes in November 1992 entitled, "The Vote for Ross Perot and Patrick Buchanan’s ‘Culture War’: What the 1992 Elections Revealed." The second is from "So Far from God, So Close to Orange County: The Deflationary Drag of Finance Capital," a presentation at a regional socialist educational conference held in Los Angeles over the 1994-95 New Year’s weekend. Barnes is the national secretary of the Socialist Workers Party. Copyright © 1999 by Pathfinder Press, reprinted by permission. Subheadings are by the Militant.)


The prospect of a breakdown in world trade is slowly but surely increasing as interimperialist conflict sharpens today. During this year’s election campaign, Clinton competed with Perot and Buchanan to be the most aggressive-sounding candidate on questions of international trade. Clinton expressed doubts about signing the so-called North American Free Trade Agreement, at least before doing some arm-twisting and renegotiating with the Mexican and Canadian governments "to level the playing field." And Clinton’s backers in the trade union officialdom, and among bourgeois political figures who are Black, such as Jesse Jackson, were among the most vociferous in opposing what they called a "fast track" of "American jobs" to Mexico.1
At the same time, U.S. imperialism’s protectionist assaults against its trade rivals have bipartisan support. Just this month, for example, the Bush administration threatened to levy a 200 percent import tax on white wine and other European Community products in order to force the EC, especially the capitalists in France, to back off subsidies on soybeans and other agricultural products. These are aggressive, unilateral acts by Washington. They will be repeated in one form or another over and over again. The U.S. rulers’ European rivals may well back off this time, but crises like this will recur in the deflationary, depression conditions the capitalist world has entered. The stability and the patterns of world trade will be threatened. No one is in control of the pressures that erupt in these conflicts. Unilateral acts are taken in reaction to the perceived national interests of powerful capitalist classes that come into conflict with the national interests of competing capitalist classes. No one plans these clashes, and no one can ultimately prevent them.

No one plotted six months ago, for example, that a dispute over soybean oil would pose a threat to patterns of world trade that have been built up by the capitalist powers through negotiations since the end of World War II. But the conflict shaping up between Washington and Paris and other European imperialist powers is no joke. Carla Hills, the chief U.S. trade representative, is standing in front of TV cameras and saying, in essence, "Cheat us on soybeans and we’ll zap your white wine!"

Why is all this happening? The big-business media offers an explanation. From reading the papers and watching TV, you would think the dispute is about farmers. The problem is that farmers are being voraciously greedy--especially dirt farmers in France, who are portrayed as having more power than any social force on earth. They have supposedly pushed the entire French government to the wall. They have the European Community on the run. Working farmers in France, some of whom can barely eke out a living, are threatening to bring world trade to its knees!  
Big stakes in agricultural trade conflicts
But this is all demagogic camouflage. The dispute over soybeans and white wine is a direct conflict between some of the most powerful interests of rival national capitals--not a clash between debt-burdened independent commodity producers on opposite sides of the Atlantic Ocean. France is today the number-two exporter of farm products in the world, following the United States. The profits are raked in by giant French commercial trusts that monopolize trade and banking both--not by working farmers. U.S. capitalists are the world’s largest traders of soybeans, accounting for close to 63 of the 86 million tons produced worldwide. So, there are big stakes for some of the largest monopolies in both countries.2

Moreover, the threatened tax on imported wine is less an assault on the French ruling class than it is a broadside by both Washington and London against the German ruling class, Paris’s partner in the conflict. We should not forget what Bonn did a month or so ago. In September, the world’s financiers, including those in Germany, decided to treat the pound sterling like a two-bit overvalued currency and crammed it down the Tory government’s throat. That was after finance capital had squeezed the pound for years, helping to precipitate the deepest and most prolonged recession in Britain since the Great Depression of the 1930s, one it is just now beginning to come out of. The German government and banks, however, teamed up with the French rulers to prevent the same thing from happening to the French franc. So, when Wall Street and Washington take aim at Paris over trade and financial policy, they often have locked Bonn in the cross hair as well.

These conflicts between rival national capitalist classes and governments are blowing apart the myth of a "united Europe" at an accelerating pace. Since the end of the so-called Cold War, bourgeois politicians and commentators have had trouble coming up with phrases to describe the world balance of power. They talked about a New World Order for awhile, but that did not seem to fit so well in light of the outcome of the Gulf War, the permanent crises in Eastern Europe and the former USSR, and the onset of depression conditions. So some of them began talking about "the tripolar world"--the United States, Europe, and Japan were the three poles. But that description of power relationships in today’s world has already bumped up against a big problem--there is no Europe pole.

How long ago was it that many ruling-class figures in Europe (especially in Bonn, and to a lesser degree Paris) were insisting that the European imperialist powers--whatever their problems and frictions--were on the road toward political unity? Members of the European Community would pool their funds--so the story went--and give some money to Ireland, to Portugal, to Greece, and even a little bit to Spain, so these countries could catch up and narrow the economic and social gap with the rest of capitalist Europe. They would adopt common social welfare rules, labor standards, and pollution controls. Eventually they would converge toward a common foreign and military policy. They would smooth out differences in productivity and eventually all agree to use the same tokens as a common currency. And then, this new and united Europe--with class differences slowly but surely disappearing for all practical purposes--would emerge big, powerful, and competitive with the United States and Japan.

The opposite has actually happened over the last decade, however. Despite all the talk about unity, the evolution of world capitalism has increased uneven development across Europe and made its character more explosive. And not just between the weakest capitalist powers in southern Europe and the rest. The gap has also widened, for example, between rates of capital accumulation and economic development in Britain and other, more powerful capitalist countries in Europe.3

With official unemployment at around 12 percent in France, the same kind of anti-immigrant scapegoating is on the rise there that we hear from Patrick Buchanan here in the United States. "Save American jobs!" "Save French jobs!" Just as in the United States, such nationalist demagogy is on the increase in France, including in the officialdom of the social democratic- and Stalinist-led parties and unions.

The French rulers are also continuing to press their defense of the franc fort--that is, keeping interest rates high in order to keep the franc strong, pegged to the German mark. That deflationary policy puts the squeeze on anybody who works for a living in France or who needs a job, whatever their national origin. But it serves the class interests of most of those who own and control wealth, and all of those who own bonds and hold debt.  
Borders more valued than ever

National boundaries are more important to the bourgeoisie today than at any time in history, just as they are becoming more porous than ever before. Forget the hoopla about European unity, the North American Free Trade Agreement, the World Trade Organization, and the United Nations. To the most powerful ruling families of world finance capital, borders are becoming more important, not less.

Why? Because national boundaries mark off two things the capitalist rulers need in order to maximize their wealth and protect it in face of rising competition.

One, boundaries define currencies. The borders of France define the area in which the franc is legal tender, backed by the full faith and credit of the state. The French bourgeoisie’s effort to keep the franc strong is important if they are to keep capital flowing into their coffers, not out.

Second, boundaries define the home base of the bourgeoisies’ armed forces. The French army stands behind the franc; that is the power that makes the franc more than a piece of paper when push comes to shove. French bankers do not want a devalued franc when it comes time to collect on their loans; the bourgeois state and its armed forces are the ultimate collection agency. It defends French finance capital against its rivals around the world and against the effrontery of working people from Paris to Rwanda, from Lyons to Martinique and Guadeloupe, and from New Caledonia to Marseilles.

The greatest single contradiction in world politics is the internationalization of both capital and labor, on the one hand, and, on the other, the growing conflicts among the most powerfully armed nation-states as a result of intensifying competition for profits. Marx and Engels explained this fundamental contradiction of capitalism many years ago, and Lenin and the Bolsheviks taught us why these conflicts are much more explosive and much more devastating for working people in the imperialist epoch.

We might look at the wars that have been fought in recent years and initially think: well, these all seem to be conflicts between imperialist powers and colonial countries, as in the Gulf War; or between big powers and oppressed peoples, as in Moscow’s assault against Chechnya; or civil wars between rival ruling groups in colonial countries or weaker workers states, as in Angola or in Yugoslavia. If we look a little more carefully, however, we can also see the mounting social tensions in world politics that lead to growing nationalist demagogy and rightist movements in the imperialist countries. We can see the class polarization that can and will fuel the war party--the nonpartisan bourgeois war party--in all the centers of finance capital. And we can recognize the threat of interimperialist armed conflicts and wars that can set humanity on the path toward a world conflagration.


1After wresting further concessions from Ottawa and Mexico City, Clinton did put NAFTA on the "fast track" for ratification by Congress, which did so in a bipartisan vote in November 1993; the trade agreement took effect in January 1994. Opposition to NAFTA also cut across bourgeois party lines, involving forces on the far right of the Republican party such as Buchanan; much of the so-called labor-liberal-civil rights coalition in the Democratic Party; and Perot and his supporters.

2The U.S. government withdrew its threatened import tax later in November 1992, when Washington wrested a concession from the European Community--over protests by Paris--on cuts in EC agricultural subsidies. In mid-1995 Washington threatened to impose a 100 percent import tax on thirteen models of Japanese-made automobiles until Tokyo agreed to "voluntary" quotas increasing the purchase of U.S.-made auto parts.

3According to a study reported in the May 14, 1996, issue of the London Financial Times, total manufacturing output in the United Kingdom between 1973 and 1992 grew by only 1.3 percent, compared to 16.5 percent in France, 32.1 percent in West Germany, and 68.6 percent in Italy. Over the same period, industrial output expanded by 68.9 percent in Japan and 55.2 percent in the United States, according to the same study.

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