For Another Europe {Page:1}
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For Another Europe A Class Analysis of European Economic Integration GUGLIELMO CARCHEDI verso London New York {Page:3}
First published by Verso 2001 Guglielmo Carchedi 2001 All rights reserved The moral rights of the author have been asserted Verso UK: 6 Meard Street, London W1F 0EG USA: 180 Varick Street, New York, NY 10014 4606 Verso is the imprint of New Left Books www.versobooks.com ISBN 1 85984 610 6 (hbk) ISBN 1 85984 319 0 (pbk) British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Carchedi, Guglielmo. For another Europe: a class analysis of European economic integration / Guglielmo Carchedi. p. cm. Includes bibliographical references and index. ISBN 1-85984-319-0 (pbk.) ISBN 1-85984-610-6 (cloth) 1. Europe Economic integration. 2. Social classes Europe. 3. Capitalism Europe. 4. Europe Economic conditions 1945 Regional disparities. 5. European Union countries Economic policy. 6. European Union countries Social policy. 7. European federation. 8. Marxian economics. I. Title. HC241.C366 2001 337.1 42 dc21 00-069676 Typeset in 9 1 2/11pt ITC New Baskerville by SetSystems Ltd, Saffron Walden, Essex Printed by Biddles Ltd, Guildford and King s Lynn {Page:4}
Contents List of Tables and Figures Introduction 1 ix 1 History, Institutions and Enlargements 7 1.1 Three Perspectives on European Integration 7 1.1.1 The European Economic Community 10 1.1.2 The European Community 12 1.1.3 The European Union 13 1.1.4 The Enlargements 17 1.1.4.1 The Accession of the UK 17 1.1.4.2 The Enlargements to the East 18 1.2 The Main Bodies of the European Union 20 1.3 Decision Making within the European Union 25 1.3.1 The Proposal or Consultative Procedure 25 1.3.2 The Cooperation Procedure 26 1.3.3 The Co-decision Procedure 27 1.4 The Question of Democracy 29 2 The Ideology of Economic Integration 36 2.1 Trade and Specialization 36 2.1.1 Ricardian Comparative Advantages 36 2.1.2 The Theory of Opportunity Costs 39 2.1.3 The Heckscher Ohlin Theorem 41 2.2 Tariffs and Trade 44 2.3 The Fallacies of Equilibrium 49 2.3.1 Partial Equilibrium Theory 49 2.3.1.1 Empirical Evidence 49 2.3.1.2 Theoretical Indeterminacy 50 2.3.1.3 Verification 53 2.3.1.4 Ideology 54 2.3.2 General Equilibrium Theory 56 {Page:5}
vi CONTENTS 3 A Value Theory of European Economic Integration 60 3.1 Profits, Trade and Integration 60 3.2 The Illusions of the EC Treaty 78 3.3 From International Prices to Monetary Crises 92 3.3.1 International Prices 93 3.3.2 A Value Theory of Exchange Rates 100 3.3.3 Monetary Crises, the Euro and the Dominated Bloc 104 4 The Economic and Monetary Union 114 4.1 Old and New Imperialism 114 4.2 The Competitiveness of the European Union 117 4.2.1 The EU and International Competitiveness 118 4.2.2 The European Union s Competition Policy 124 4.3 The Economic and Monetary Union and the Euro 129 5 The Geo-politics of the Euro 144 5.1 Introduction 144 5.2 Dollarization and Seigniorage 145 5.3 Dollarization and Social Classes 152 5.4 The Euro and Dollarization 157 6 Trade, Development and Wars 161 6.1 The European Union and World Trade 161 6.1.1 GATT 161 6.1.2 The Kennedy Round (1963 67) 164 6.1.3 The Tokyo Round (1974 79) 165 6.1.4 The Uruguay Round (1986 93) 168 6.1.5 The World Trade Organization (1995) 171 6.1.6 The Place of the EU in World Trade 178 6.2 The European Union and Dependent Development 180 6.3 The European Union and the Common Defence Policy 190 7 The Common Agricultural Policy 199 7.1 Main Landmarks: Green Rates and Appropriation of Value 199 7.1.1 The Original System: 1962 68 201 7.1.2 The Agrimonetary System, 1969 71 203 7.1.3 The Agrimonetary System, 1971 79 206 7.1.4 The EMS, the ECU and the MCAs (1979 84) 207 {Page:6}
CONTENTS vii 7.1.5 The Switch-over Mechanism, 1984 92 207 7.1.6 The 1992 (MacSharry) Reform 209 7.1.7 The Single Market and the New Monetary Turbulences, 1992 93 209 7.1.8 The Present System 210 7.2 Agricultural Prices, Protectionism and World Hunger 212 7.2.1 International Prices and Food Appropriation 212 7.2.2 Losers and Winners 216 7.2.3 A Value Theory of Europe s Agricultural Protectionism 218 7.3 The Common Agricultural Policy and the Environment 222 7.3.1 The Declarations of Intent 222 7.3.2 The Cohesion Fund 225 7.3.3 Towards the Greening of the Common Agricultural Policy? 227 8 Social Policies 235 8.1 Destitution Amidst Wealth 235 8.2 The Union s Social Policy 239 8.3 The Poverty of Redistribution 242 8.4 Employment Policies 245 8.5 Regional Policies 247 8.6 Immigration Policies 251 9 Epilogue 258 Notes 266 Bibliography 292 Index 302 {Page:7}
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List of Tables and Figures Tables 2.1 Ricardo s comparative advantages (hours of labour) 36 2.2 Opportunity costs 39 3.1 Productivity increase in the wage goods sector: initial situation 73 3.2 Productivity increase in the wage goods sector: results 74 3.3 Productivity increase in the capital goods sector: initial situation 75 3.4 Productivity increase in the capital goods sector: results 76 3.5 The tendential equalization of profit rates 93 3.6 Prices of production before technological change 95 3.7 Prices of production after technological change 97 3.8 Value tendentially realized (VTR) after the application of the distributional ratio 97 3.9 International prices of production 99 4.1 Major world traders in HTPs, 1997 118 4.2 Absolute values (ECU) and percentage shares of HTP imports by EU, US and Japan, 1997 119 4.3 Absolute values (ECU) and percentage shares of HTP exports by EU, US and Japan, 1997 119 4.4 EU imports and exports by main HTP, 1997 120 4.5 Trade in HTPs by major member states, 1997 (ECU bn) 120 4.6 Employment in high-technology sectors, major countries 122 4.7 Patent applications as a percentage of total EU applications, 1996 123 4.8 Equivalents in national currencies of ECU 1 and weightings 136 6.1 Percentage share of world trade, 1996 178 6.2 Intra-EU and extra-eu trade, 1996 (ECU bn) 179 6.3 Extra-EU trade in goods by sector, 1996 (ECU bn) 179 6.4 Extra-EU trade by trading partners, 1996 (ECU bn) 180 6.5 EU trade with CEECs in food, beverages and tobacco (ECU bn) 183 6.6 EU trade with CEECs in crude materials, including mineral fuels (ECU bn) 184 6.7 EU trade with CEECs in manufactured products (ECU bn) 184 6.8 EU trade with CEECs in manufactured goods by sectors (ECU bn) 184 6.9 EU trade balance in services with CEECs (ECU bn) 185 6.10 ME, ME/GNP and ME/CGE, 1995 198 {Page:9}
x LIST OF TABLES AND FIGURES 7.1 EAGGF (ECU bn) 199 7.2 Green and market rates: initial situation, 1962 201 7.3 Green and market rates: devaluation of the franc 203 7.4 Green and market rates: revaluation of the mark 204 7.5 Revaluation of the mark with unchanged green rates 205 7.6 Devaluation of the franc with unchanged green rates 205 7.7 Loss of food by B due to the equalization of A s and B s profit rates 214 7.8 Loss of food by B due to A s increased productivity in the capital goods sector 214 7.9 Loss of food by B due to A s greater productivity in the consumption goods sector 214 7.10 Number of holdings by size (in 1,000s) 217 7.11 US acreage reductions 220 7.12 Land use in the EU, 1990 (%) 227 7.13 Degrees of degradation of agricultural land, 1991 227 7.14 Causes of soil degradation (%) 229 8.1 Estimated expenditures, 1998 (ECU m) and 1999 (Euro m) 242 8.2 Estimated revenues, 1998 (ECU m) and 1999 (Euro m) 244 8.3 Structural funds by objective, 1999 (Euro m) 246 8.4 Regional unemployment, 1990 (%) 247 8.1a Estimated expenditures, 1998 (ECUm) and 1999 (Euro m) 290 Figures 1.1 The European Community 12 1.2 The European Union 14 1.3 The consultation procedure 25 1.4 The cooperation procedure 26 1.5 The co-decision procedure 28 2.1 Welfare effects of tariffs 44 2.2 Trade creation 47 2.3 Trade diversion 48 2.4 Equilibrium between country 1 and country 2 57 3.1 United States rate of profit and capital stock in terms of labour time, 1870 1992 82 3.2 Money and labour-time profit rates compared 83 3.3 Capital stock and profit rate in money terms 84 7.1 The original price support system for cereals, barley and maize 202 {Page:10}