British Government Disrupts the European Union (in 1991)

The Real Stake in Europe

Editorial from January 1992

The Maastricht summit, as far as Britain was concerned, was an incident in the domestic political manoeuvring leading up to the next general election. Major had to try to stay sufficiently in touch with Europe to keep the pro-European wing of the Tory Party quiet and sufficiently distanced from it to pacify the Thatcher remnant and allow it to keep on withering. The Labour leadership had to hope that Major would fail to do this either by having to sign everything, which would stimulate the Thatcherites to independent activity as saviours of the nation, or by refusing to sign and causing a breach with Europe which would anger the business interest.

Major did his work so well that there is unlikely to be any electoral advantage for Labour in the European issue.

Of course the Government was isolated at the Conference. That might be a serious matter if Labour was a European party with a considered European policy. But since Labour is not a European party all that matters is that Major got the result he wanted for domestic purposes.

Britain – the British body politic – is isolated in Europe by reason of the continuing consequences of a policy towards Europe which it followed for about 300 years. Twenty years ago the Heath Tories tried to break with the traditional British attitude towards Europe but were vigorously opposed by the Labour Party

The reason given then for opposition to the EEC was that it was a club of capitalists which would try to halt the forward march of socialism in Britain, but the old British nationalist attitude to Europe could always be found not far below the surface. It was no more true then than it is now that the EEC was a club of capitalists.

The Labour attitude towards Europe lacks political weight. It was adopted too suddenly and for reasons that were too obviously opportunistic to be weighty.

Whatever national faults the British electorate might have, frivolity is not one of them. It does not change its mind lightly, and is not impressed by those who do.

The present leaders of the Labour Party led the agitation against the Common Market fifteen years ago, and they made a great issue of national sovereignty. It was implicit in their campaign that Britain was about take a great leap forward into socialism. They then proceeded by their domestic policy to prepare the ground for Thatcherism. They shot down the Bullock proposals for industrial democracy, and championed a kind of trade unionism that was so powerful that it prevented the capitalists from managing their enterprises effectively while itself refusing to get involved in management. That is why Thatcher won three elections in a row. Now these same leaders are legitimately open to the suspicion of becoming pro-European because they see no hope of any further socialist advance within the context of UK politics, and hope to return to something like the conditions of the seventies under the influence of the European social contract. Thus the capitalist club of the seventies has come to be seen as the only hope of social advance in the nineties by a Labour leadership whose own polices have been responsible for bankrupting socialism in the context of the ‘sovereignty’ which it held so dear sixteen years ago – and indeed much more recently than that.

The Labour leadership has been systematically adapting itself to Thatcherism domestically while projecting whatever socialist aspirations remain in them onto the European scene. But is is Thatcherism they have adapted to, not industrial capitalism. Thatcher’s great confidence trick was to get herself accepted as the champion of industrial capitalism. If the new-found Europeanism of the Labour leaders was more than skin deep they would have been exposing Thatcherism as a fraud instead of adapting to it.

Thatcher faced down a trade-union movement whose refusal to undertake responsibilities proportionate to its power had made it ripe for a fall. That was her only service to capitalist industry. Apart from that, she was the representative of the spivs and racketeers of capitalism – the money men who make money out of money and who wouldn’t recognise a factory if they saw one.

Thatcher came to power with a ‘monetarist’ ideology. If monetarism meant anything useful, it meant establishing a stable monetary medium for the capitalist entrepreneur to do business in, and that in tum meant reducing Government tampering with money as a short-term economic measure. But now the Thatcherites declare that the lynch-pin of national sovereignty is the power of the Government to cause currency fluctuations as a measure of economic policy. No productive capitalist doubts that a single European currency with the stability of the Deutschmark would be the best monetary medium for business. But the establishment of such a currency would abolish a whole sphere of money-making from Britain – the sphere of currency speculation. And it is in currency speculation that money has been most easily made in the Thatcher era.

Thatcher was anything but a hard-headed realist. In many ways she responded to the ‘socialist’ nonsense of the Michael Foot variety with a kind of capitalist nonsense. Reading von Mises, von Hayek, or even Ota Sik, about what a marvellous stimulus to, and indicator of, efficiency profit made in the market was, she believed that money made by currency speculation somehow created industry. And four or five years ago she criticised European countries from what she thought was a capitalist viewpoint because their company law did not facilitate takeovers in the way British and American law did. She assumed that takeovers made companies more competitive and more productive. And even when takeovers, through asset stripping, destroyed enterprises before one’s eyes, she assumed that this was a mere incident in some complex process by which industry was expanded.

Then, having come to power praising the qualities of the prudent housewife, she encouraged people to be spendthrifts. At one and the same time she curbed the ‘money supply’ by better Government housekeeping and expanded it by encouraging the banks to expand credit to millions of consumers. Market activity was increasingly based on credit, which is another word for debt. Largely because of her insistence on maintaining an absolutely independent national currency as the lynch-pin of sovereignty, the massive increase in interest rates turned debts into bankruptcies. And now, because of the sharp experience of the past couple of years, people have finally re-acquired the Victorian virtue of good-housekeeping. They have become savers, and therefore the recession persists.

If the Labour leaders, when changing their policy on Europe, had found out about Europe and taken its experience to heart, they might have been very acute critics of Tory policy during the past few years without leaving themselves open to any suspicion of wanting to get back to the seventies. (But that’s easy for us to say. We supported the Common Market and the Bullock proposals in the seventies, and have not needed to tum any somersaults.)


The international context of European union has changed fundamentally during the past year. And this change of context necessarily changes the dynamic and the character of European development.

The success of the EEC on the basis of the French/German/Italian axis was one of the factors which helped to precipitate the collapse of the Soviet Empire. But the EEC was not in origin a Cold War operation, nor did it ever become a mere Cold War united front. If it had been what it was taken to be by most of the British Left it would never have become what it now is.

The Left and the Right of British politics have been in essential agreement about the nature of the Common Market, and both were equally mistaken. The Right supported it as a Cold War operation while the Left opposed it for the same reason. The Right has for some years been apprehensive that the EC was exceeding its brief. Now, with the Cold War ended and the EC still developing, the Right is in desperation. It is casting about for allies, but because of its success in destroying the British Left as an effective political force it can find no allies of any consequence.

When the Common Market was set up Britain still had an Empire and America was the dominant industrial, financial and military power in the world. Today Britain has no Empire, barring the Crown Colony of Hong Kong which it is preserving in a fit condition to be handed over to totalitarian China in a few years time. And America has lost its industrial and financial dominance of the free world and is beginning to resent the freedom of the world. And although it is still the dominant military power, it has come to rely increasingly on the technological side of military affairs and has therefore become militarily dependent on Japan in that respect.

The shape of the world revealed by the ending of the Cold War is very different from the shape of the world when the Cold War began. The world has not been frozen for forty years. While the allied enemies of 1945 have been preoccupied with their own intimate disputes over which of them should be master of the world, the world itself has moved on unbeknownst to them.

The decision of the Japanese Parliament not to apologise for Pearl Harbour unless the United States apologises for Hiroshima shows how much things have changed. Half a century after Pearl Harbour America and Japan have in effect agreed to call it quits in the sphere of moral conflict.

This remarkable change has not happened just because the Cold War ended. It has happened because of the two events which occurred in the year following the end of the Cold War – the American invasion of Panama and the Gulf War – the United Nations war against Iraq. The combined effects of these events has been to dispel any illusion there may have been that an international order based on law would take the place of the Cold War.

Japan and Germany had concentrated on peaceful pursuits for 45 years, and had overtaken their masters of 1945 in those pursuits. They were front-line states in the Cold War. Being themselves creations of ‘the West’, (that is, of America and Britain), they provided bases for the West in the great conflict between the bosses. Indeed they had no choice in the matter, being occupied countries. They did not envisage an active military role for themselves, nor did their master encourage them to. They became the model capitalist economies of the world and by their behaviour they lent credibility to the capitalist ideological precept that industrious activity in the market generates peace in the world.

But then, a year ago, they suddenly found themselves berated as pacifists. They were told it just wasn’t good enough to be honest and peaceful producers and traders. They were told that war was a necessary activity and that they must do their share of it.

Neither Germany nor Japan approved of what America, Britain and France in the guise of the United Nations did to Iraq. They had themselves lost the habit of making war, and they saw no need to reacquire that habit in order to restore Kuwait, especially as the particular circumstances of the matter became clear.

Iraq moved against Kuwait after the American ambassador had indicated to Saddam Hussein that Washington would not object if he handled his dispute with the al-Sabah Government as Bush had handled his conflict with the Noriega Government in Panama. The Ambassador later said she had not expected Saddam to take all of Kuwait. It seems likely that Saddam had not expected to take all of Kuwait either. But unexpected things happen in war, and what happened in Kuwait was unprecedented in human history. The moment the Iraqi Army crossed the frontier of Kuwait the Army and Government of Kuwait emigrated.

When Saddam realised that he had either misunderstood the American Ambassador or had been deceived by her, he indicated a willingness to negotiate a withdrawal from Kuwait, requiring only a measure of compromise in the matters which had been in dispute and on which the Emir had refused to negotiate.

It is not surprising that in those circumstances neither Germany nor Japan saw any need to become bellicose. Warmongering had ceased to be an element in their national life. They were doing very well without it. And the magical way the American and British Governments transformed Saddam overnight from a minor ally into a major ogre was unlikely to convince them that a new Hitler was menacing the peace of the world. They allowed themselves to be morally browbeaten into paying some of the cost of the war but they refused to fight.

They refused to fight in a war which was needless, senseless and finally obscene. But they were taught a sharp lesson about the facts of life in the world after the ending of the Cold War. It must be assumed that ruling circles in Germany and Japan have concluded from the events of the past two years that their states must reacquire the ability to wage war.

An international order based on law might have been established since 1989 if American and Britain had been willing to relinquish their own absolute sovereignty to some functional system of law in the United Nations framework. A system of international law requires that no state shall be both within the system and above it, and that every state which is within the system shall be able to invoke the law against any other member state.

The United Nations was not intended to be or to become, a system of international law. It was designed by America, Britain and the Soviet Union in 1945 to be a structure through which they would dominate the world. The Veto which they gave themselves placed them above what the United Nations called law. And since the Veto also applies to amendment of the UN Charter, the Charter was clearly designed to make the world dominance of the Veto powers perpetual.

This rigid United Nations structure was bound to come into conflict with world development unless world development was curbed by close policing by the Veto states. The eruption of the Cold War among the Veto states ensured that the United Nations did not function as the Great Power world police state as envisaged by President Roosevelt. Whether that is seen as a good or a bad thing depend on the assumptions one makes about human destiny.

Anyhow things did not work out that way. The structure of the United Nations is now absurdly out of alignment with the structure of the world. One of the Veto states no longer exists as an actual state. Another has retired from world affairs. A third is closely involved in the development of a European state. And a fourth is desperately trying to get off the ‘slippery slope’ into a European state.

At decisive junctures in world affairs things happen fast and new structures take shape which last for generations. What has happened during this past year is that the United Nations might have been made an effective political framework of world affairs by being amended into a framework of international law, but since that was not done it has lost what little effectiveness it previously had as a world institution. The ease with which the new Secretary General – Whatsisname – was appointed and the low degree of newsworthiness which the appointment generated give an accurate indication of the present status of the United Nations.

It was Britain and America which had the opportunity to reform the United Nations into a framework of international law. Therefore it was Britain and America which decided the next phase of human history should proceed through anarchy.

In August 1990 the Indian Government suggested that the UN be reformed so as to make it more representative of the present state of the world. The British Ambassador to the UN (Sir Cervantes Whatsisname) shot down the suggestion, and said that the UN as it stood was the highest possible product of the wisdom of the ages.

If Britain and America had been prepared to relinquish their Vetos they could have exerted an immense influence for the better on world affairs and could have made it virtually impossible for the other Vetoists not to follow suit. But it is Britain and America who are the chief obstacles in the matter.

They are the only major states in which war is still a normal part of national life – not war arising out of conflict with a neighbouring state, but war waged in distant parts of the earth as one of the options of foreign policy. They are also states in relative economic decline and with diminishing moral influence in world affairs. They are more important when there is war than when there is peace.

The Spectator is the ideological magazine of the ruling class. Insofar as suburbanite Toryism has constituted a ruling class, The Spectator is the magazine in which it has tried to think. On March 9, 1991, happy at having been in a war again, Tory ideology blurted out its view of the crude facts of world affairs. The article is entitled: Time For Them To Grow Up. It is subtitled: “The armies of Japan and Germany must no longer hide behind their constitution”. It is headed with a quote from Frederick the Great (who was once the great ogre of British war propaganda): “Diplomacy without arms is like music without instruments.”

The article begins:

“Not long ago – less than a year in fact – people spoke as though Germany and Japan had won the war after all. America was the empire in decline, Japan and Germany were the new economic super-powers, models of the new order, where military force no longer counted. People were actually rather afraid of these formidable new powers. Some in the British Government thought wistfully that they were easier to fight in the trenches. Then came the Gulf War, and suddenly these very same countries, these old Axis enemies and new economic super-powers, had become the lands of cowards, who refused to go to the front where our boys were spilling blood for their oil…”

It is only two years since the notorious Chequers Conference on the national character of Germans. When the minutes of that Conference were leaked all but Thatcher’s inner coterie squirmed with embarrassment. Most Tories had begun to accept that that sort of thing was over and done with. But then on August 1990 Thatcher got her trump card – another war, in which the sterling qualities of the British pit bull terrier would be unloosed and the nation would once again swell up with military pride. And the Germans, instead of being hated as militarists would be despised as wimps.

But all of that is now only a distant memory. The war did not lead on to any tangible ‘new world order’ in which Britain would have a new world role as the second military power. Nor did it disrupt the European development. And since it did not disrupt the European development it accelerated it.

“The most violent twenty-four hours in the history of the world”, which is how American and Britain advertised their opening bombardment of Iraq, is likely to have far-reaching consequences in world affairs. It taught the world a lesson which the world is likely to learn all too well – and would have learned it even without the guidance of The Spectator. Japan now realises that it must regenerate a militaristic attitude to insure itself against American economic decline. Germany knows that it must in the near future either become a powerful military state in central Europe or a component part of a powerful European state. And the sheer scope and ferocity of the bombardment of Iraq shocked the Soviet military and ended their patience with the ineffectual democratic demagogy of Gorbachev and Shevardnadze.

America won the Cold War. But it is by its own nature unfit to exert an imperial overlordship over the world and is unwilling to submit its own sovereignty to any degree of international law. It is therefore setting an example of anarchy to the world.

While the Cold War persisted there was a kind of order in the world, and European union might have progressed at a snail’s pace. With the ending of the Cold War structure and the onset of anarchy the formation of new structures has become a pressing matter. European union can no longer progress at a snail’s pace. If the EC does not take on the characteristics of a state it will dissolve into its component parts.

There is a will in France and Germany to form a European state and that will is carrying the other continental members of the EC along with it. There is no will in Britain – either in Government or Opposition – to form a European state. British resistance has so far probably helped France and Germany to unite the others in support of a European state.

The Tory opponents of the EC do not merely want Britain to remain a sovereign state, they also want to break up the EC into its component nation states. The Government wants the same thing. The difference is that the Government is in there negotiating and being thwarted by a united front of the Europeans while the dissident Tories can give free expression to their wishes.

Tebbit says that the EC development is against the grain of world events, that this is the era of nationalism and that the EC is bound to break up and Europe will revert to its late 19th century condition. And that is certainly possible. But if it happens Germany will again be the state in the ascendant as it was a hundred years ago. Amidst all the destruction and disintegration of the past couple of years, Germany is the only state which has done something constructive. The incorporation of East Germany into the Federal Republic is the only piece of actual statecraft accomplished in this period, and it has boosted German self-confidence.

Shortly after the Gulf War the German Government asserted sovereign jurisdiction over American and other bases on its territory and America was in no position to argue the point. The Second World War is over. And if Europe reverts to a system of sovereign nation states it seems likely that Germany will enjoy a pre-eminence far greater than it did a hundred years ago.

There are many in the Labour Party who see things as Tebbit does. And there are many others who have declared themselves pro-European on other grounds without having given this aspect of the matter any real thought, and who make pro-European statements that are not in essential conflict with anti-European policy. The first Left Labour converts to the EC said it was such a good thing that it should not be confined to the twelve, and that has now become the general line. In the debate on Maastricht Tony Banks said he wanted a Europe from the Atlantic to the Urals.

Unless Siberia obliges by separating itself from Russia, a Europe from the Atlantic to the Urals is not possible. The Urals do not mark a state boundary. They run down through western Russia. To be meaningful in state terms the phrase should be ‘from the Atlantic to the Pacific’.

There is no practical possibility of an EC encompassing Portugal in the west and Russia in the east acquiring the characteristics of a state. Indeed such a region could only be seen as a ‘common market’ in the sense in which Victorian political economists saw the whole world as a free trade area. Advocacy of an indefinitely extended EC is, when all the grand phrases are discounted, no more than advocacy of a world market, and its function is to counter the practical political project which France and Germany have brought to the verge of accomplishment with the active consent of nine other states.



This article appeared in January 1992, in Issue 27 of Labour and Trade Union Review, now Labour Affairs.  You can find more from the era at