The euro and the sovereignty myth

In terms of capitalism, it will be a historic event. As many people for years (more in fact) have used dollars and cents in a single area will now be using a single currency in another area. And that, of course, is what it is all about from a capitalist point of view. The capitalists of Europe have decided they have a better chance of winning out in the competitive battle on world markets if they get together as a single economic bloc. To do this, they have already created—some time ago now—first, a customs union, then a single market and, now, a single currency. They are still divided on whether to take the next step, a single economic policy which would require a single “economic government”. But some are determined to go down this road and envisage, at the end, a single, federal United States of Europe as a powerful state to rival the USA for world hegemony.

As far as us ordinary workers are concerned, it’s going to have no effect on our wages nor on our standard of living generally. The introduction of the euro will be as neutral—and as irrelevant—in this respect as was the introduction of decimal currency in Britain in 1971. So, there’s no cause to get worked up either way over the issue.

Having said this, it is clear that being able to use the same money throughout the greater part of Europe will remove one of the minor inconveniences that has existed up till now: having to change your coins and notes every time you cross a frontier (and having to pay the money-changers a commission for the privilege). Of course the major inconvenience of having to use money at all to have access to things which should be ours as of right will remain but, as long as the money system continues, it can’t be worse to have fewer currencies than more.

Divided capitalist class
So, joining or not joining the euro is nothing to get upset about. But there are people who do, especially in Britain. You can’t open a local paper there these days without reading a letter from someone complaining about “our loss of sovereignty” or about the disappearance of the queen’s head from “our” money (actually, it could still appear on the coins, but who cares?).

This reflects the fact that the capitalist class in Britain is split on the issue. A section, with capital investments mainly in North America, would prefer Britain to join the North American Free Trade Area (NAFTA) rather than become irrevocably tied to the European Union. They include the newspaper tycoons, Rupert Murdoch of the Times, Sunday Times and Sun and Conrad Black of the Telegraph, who have not hesitated to use their control of these papers to beat the anti-euro drum to defend their own personal capitalist interests. The Tory Party, too, has also decided to throw in its lot with this section of the capitalist class, perhaps unwisely since this section is only a minority.

The dominant section of the capitalist class in Britain want to join the euro, but they have a political problem. Their representatives, in the Labour and Liberal parties, have for some reason committed themselves to holding a referendum on the question. This was unwise, from their point of view, as this is to subdelegate a decision of vital interest to them to a population of workers that is largely uninformed on the issue and whose heads have been filled over the years with patriotic nonsense for other purposes. It is by no means certain that they would win a referendum, though they might be if they time it right and craft the question carefully and put the media organs they control into top gear. But that’s Blair’s problem.

The main argument put forward by the anti-euro section of the capitalist class is that joining the euro would involve a loss of “our” sovereignty. It may well involve a loss of their sovereignty but the rest of us have no “sovereignty” to lose. Certainly, we have the vote and we can use it to elect politicians to Westminister. But neither Parliament nor the government can control the way the economy works. They can try but if they go against the profit logic of the system they just make things worse. The most they can successfully do is go along with this logic.

What is sovereignty?
Old-fashioned radical liberals like Tony Benn (who, as he said of the Labour Party, is not and never has been socialist) who use the same argument concentrate only on the formal side of things. They emphasise Parliament’s “constitutional right” to control the economy, completely ignoring the fact that experience has shown this to be a purely paper right. The capitalist economy works according to certain economic laws which no government or legislative body can over-ride.

So the argument about sovereignty is not really about what the constitution may or may not say. It’s about the effective power that a capitalist state can exercise within the capitalist economy. Capitalism has always existed within a framework of competing states, none of which is strong enough to impose its will on all the others. States, as weapons in the hands of rival groups of capitalists, intervene to further the interests of the capitalists that control them. They do this by using state power to set up protected markets, raw materials sources, trade routes and investment outlets. In normal times their weapons are tariffs, taxes, quotas, export rebates and other economic measures. When they judge that their vital interest is at stake their weapons are . . . weapons. They go to war.

The extent to which a capitalist state can distort the world market in favour of its capitalists depends both on its industrial strength and on the amount of armed force at its disposal. This is why all states are under pressure to acquire the most up-to-date and destructive armaments that they can afford. In the jungle world of capitalism might is right. “Sovereignty”—the margin of independent decision-making that a state has—also depends on might.

Over the years capitalism has become more and more international, more and more globalised. This has tended to reduce the margin of manoeuvre open to states, i.e. has reduced their “sovereignty”. Fifty years ago, six West European states—France, Germany, Italy and the Benelux countries—realised this and decided to pool some of their economic decision-making powers in order to increase their total sovereignty. In the capitalist world, just as much as for workers bargaining over wages, “unity is strength”. Certainly, this involved the individual states concerned giving up some of their sovereignty but the objective was to increase the collective sovereignty of the members of the Common Market as a whole. Thirty years ago the majority section of the capitalist class in Britain, too, decided that this made sense and joined along with Ireland and Denmark. Since then Spain, Portugal, Greece, Austria, Sweden and Finland have also signed up.

Not our concern
The sovereignty argument is really an argument within the capitalist class as to whether they should give up some of the might of their state to be able to benefit from the greater might of a larger grouping. Tony Benn, the UK Independence Party and the BNP really seem to believe that a capitalist Britain would be better off going it alone. Murdoch, Black and the less stupid Tories are more circumspect. They realise that Britain can’t really go it alone, but has to be associated with some larger grouping. Their argument is about which this should be: North America rather than Western Europe.

The Trotskyists, who feel that they must have a “line” on everything, too, join in the argument, predictably alongside Benn and the Green Party, but also the UKIP and the BNP. They want a capitalist British state to have the full, paper power to pass the reformist programme they dangle before workers.

As socialists, we don’t take sides in this inter-capitalist argument. We don’t support one section of the capitalist class or the other, and we don’t have any illusions about the “sovereign power” of Parliament to pass reformist legislation that can make capitalism work in the interest of the exploited class of wage and salary earners. Capitalism just cannot be reformed to work in this way; so transferring some of the powers of the House of Commons to a European Parliament in Brussels or Strasbourg makes no difference.