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From Labor Action, Vol. 13 No. 46, 14 November 1949, pp. 1 & 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The Marshall Plan “integration” of Western Europe urged by Paul G. Hoffman, administrator of the Economic Cooperation Administration, on the European Council last week has tossed new terms, new problems and new contradictions into the arena of world politics.
Hoffman cited the 150 million American consumers who, in forming one mass market, have been indispensable for the building of the American economy. Remove the barriers in Europe, he reasoned, and you have a freely trading area of 270 million consumers who can furnish the large-scale market which will be the impetus to low-cost mass-production methods. This should help to close the “dollar gap” and raise the standard of living of the Europeans.
The reactions of the Europeans begin to indicate some of the difficulties in this plan. Reaction was immediate, but timid and tentative where it was not hostile.
The Steering Committee of the European Council decided to recommend that the quantitative restrictions on one half of the imports in private trade of the Marshall Plan countries be removed by December 15. Then it immediately withdrew this recommendation for reworking because of differences. The recommendation would also require that those countries that do not remove their restrictions need merely explain their reasons to the council.
The British representative, Sir Stafford Cripps, said that Britain was all for the integration of the continental countries, to be sure – partially, trilaterally, “Fritalux,” “nuclearly” or total unionization – but that Britain could not integrate “in any manner that would prejudice the full discharge” of her responsibilities as leader of the British Commonwealth and sterling area.
Even while Britain agreed to the removal of quotas on imports, the French complained that she was hypocritical; inasmuch as the British government controls one-third of Britain’s imports and Britain has already excluded Switzerland, Belgium and Western Germany from the benefits of the removal of quotas because of the competitive nature of the products from the latter countries.
What is the connection between the “integration” scheme and the Marshall Plan? The Marshall Plan countries point out that no such scheme was originally attached to the receipt of Marshall Plan aid. But Hoffman said: “It was to this that Secretary Marshall pointed in the speech which sparked Europe to new hope and endeavor.”
He said further: “A European program to this end – one which should show real promise of taking this great forward step successfully – would, I strongly believe, give new impetus to American support for carrying through into 1952 our joint effort toward lasting European recovery.”
This latter statement showed the big stick: If you don’t integrate, Congress will not pass the third Marshall Plan appropriation.
What is the “dollar gap” which Hoffman refers to as one of the two problems for solution? The “Report of the ECA – Commerce Mission” which he issued prior to his trip to Europe and message on “integration” contained the important data on the fundamental imbalance which exists in world trade.
Briefly, fr6m July, 1914, through 1948 the United States exported goods and services to a value of $101 billion more than was imported. Of this amount, $68 billion was provided by the U.S. government, $49 billion in the form of outright grants.
In the words of the ECA report: “The $49 billion supplied to foreign countries between 1914 and the end of 1948 as grants from the U. S. Treasury came out of taxes or out of increases in our own national debt ... The government’s grants and loans to foreign countries have in effect been unconscious subsidies to American export industries” (our emphasis). The American taxpayer may have been “unconscious” of the subsidy, but we are certain the exporters were not.
To close the dollar gap, the report maintains that a continuation of subsidies or a reduction of U.S. exports would be bad solutions. It rather recommends expansion of foreign investment, which could not close it entirely, and proposes first of all the expansion of U.S. imports. Here, of course, is the rub.
It is impossible to detail all of the barriers raised by the U.S. to the import of foreign commodities. One can cite export quotas, import quotas (on essential raw materials), export fee and taxes, excessive documentation, the high American tariff, antiquated and inequitable customs procedure and delays, “Buy American” restrictions on federal, state and local government procurement, overvaluation of the currency of the foreign exporting country, inadequate credit facilities – to name a few. The report itemizes in six-point type seven pages of imports subject to tariff duties of 25 per cent or more in 1948.
But while Hoffman and the ECA propose the elimination of the barriers in the U.S. for the free flow of European goods, there are no signs that the U.S. is doing any thing about that. So, as the next best thing, Hoffman proposes that the Europeans let down the barriers among themselves and restore free trade and free competition. “Don’t do as I do – do as I say,” orders Uncle Sam.
A positive indication that the United States means to go its own way is its opposition to and expected defeat of the proposal by the United Nations Food and Agriculture Organization (FAC) for an “international commodity clearihg house” the transference of farm surpluses to shortage areas. Says the N.Y. Times, November 3: “Bilateral trade is the policy put forward chiefly by the State Department today.” Bilateral trade on the part of European countries is one of the barriers Hoffman proposes they scrap.
The magic formula which is supposed to make a European “Western Union” work is “free competition,” words heavily underscored in the ECA report and Hoffman’s speeches. But it seems that the U.S. is more interested, in its “freely competitive” way, in the expanded European market that would be achieved than in opening its own market to its European rival.
What Hoffman would like to attain then, is not the Independent Western Union which Labor Action has advocated, but the type of union, imposed from above, about which we have warned. It is possible that a reactionary form of Western Union under American hegemony can be achieved. But if it is to be a “free-enterprising,” i.e., old-fashioned, monopoly-capitalist union, it will be shaken by all the conflicts of old and the more sensitive to shocks the more closely it is integrated with the U.S.
What is absent above all in the ECA proposal for “integration” and antithetical to it, and yet at the same time demanded by the economic and political situation of Europe, is PLANNING. Omitted in all the. talk of closing the dollar gap, expanding the economy, putting Europe on a competitive footing with the U.S., is the conception of starting with human needs and desires – the needs and desires of the bulk of the people. Integration a la Hoffman springs from the desires of the top dogs in society, the industrialists and financiers.
All-round planning requires the push from below. It must be based on the wants of the people for food, clothing, housing, and not on dollar balances and export markets, j It means, as explained in the ISL resolution on Independent Western Union (Labor Action, Dec. 20, 1948), “the renunciation by all participants of any imperialist ‘rights’ to dominate colonies and possessions now under their rule. It means, at the same time, the most extreme democratic reforms in the political structure of every one of the countries in question.”
It is the competitive fears of political and business leaders of both the U.S. and Western Europe which make their unionization plans so partial, timid and uncertain. The French fear their displacement by revived German industry; the British fear letting anyone into their colonial preserves, etc. It is only by pooling the resources of Europe and ending the competition between branches, of industry, between country and country, that real union, real planning and real production for use can take place.
The achievement of a genuinely Independent Western Union is of grave, if not decisive, importance so far as the next war is concerned. Western Europe stands between two power blocs which are drifting inevitably towards the abyss. Independent and united, with a democratically planned integration of its economy, it could attract those Eastern satellites whose Russian domination depends in part on their disgust with “free enterprise” bankrupts and those Western forces who want none of totalitarian methods.
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