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Chapter 8
The Meridian of Atlanticism
1.
The Consolidation of Corporate Liberalism
The
Kennedy offensive was the last episode of Atlantic unil context of Atlantic
integration. The Marshall Plan had mobilized the European liberals and
terminated the experiment with national reconstruction based on a broad class
truce. In the subsequent the period, contraction of American involvement in
Europe produced a contradictory array of policies which in one way or another
European independence. Behind the essentially transition restructuration of the
vestiges of the state-monopoly tendency, like protectionism and nationalism,
this independence, however, served to mobilize the forces of modernization,
especially after the reactionary imperialist option had to be abandoned after
Suez. When the Kennedy administration launched its Atlantic offensive, the
restructuration of class relations had been reached at which, the for both
American and the Western European bourgeoisie, a concept of Atlantic
Partnership, striking a balance between American money and European aspirations,
represented an adequate expressions of their combined interests.
Lerner
and Gorden, who between 1955 and 1965 conducted five opinion surveys among
business and bureaucratic elite panels in Britain, France, and West Germany on
the issue of Atlantic relations found 1961 to be the watershed year in terms of
European acceptance of American hegemony and of the mode of accumulation onwhich
it was based. 'Europe moved from a phase of anxiety in the first postwar decade,
under the impact of "Americanization' into a phase of accelerated growth. .
. Our survey shows that by 1961, as the visible benefits became apparent midway
through the second decade, the European elites entered a phase of acceptance
appreciation of American practices was consolidated which unprecedented
acceptance of American policies among the opinion leaders and decision makers of
postwar Europe.' 1 The conversion of the mainstream Western European bourgeoisie
to Fordism, neo-colonialism, and other' American practices' at this juncture,
however - and this was crucial with respect to overall Atlantic relations -
'reposed upon a solid basis of confidence in America's power and purpose in
world affairs.'2
At
a subsequent stage, 'America's power and purpose' became a liability to the
corporate-liberal bourgeoisie in Europe, and a series of rival international
concepts, like the Ostpolitik and the New International Economic Order,
would be developed instead, reciprocated by Trilateralism emanating from the
United States. In 1960-1965, however, the thrust towards the consolidation of
corporate liberalism in Europe, accelerated by the renewed American offensive,
was still respectful of American hegemony and remained with the coordinates of
Atlantic integration, both at the working class and the bourgeois levels.
Social
Democracy and the 'New Working Class'
In
the course of the 1950s there was a considerable waning of American influence in
European trade-union affairs. As anti- Communism lost its immediate urgency to
the European trade- union leadership, AFL-CIO influence within the ICFTU
decreased proportionately. 3 Moreover, the commitment of effort on the part of
the American unions themselves faltered in the context of a general contraction
of US involvement abroad. In January 1954 Senator Hubert Humphrey, in a
discussion of Communist influence in the Western European labour movement,
complained that not enough was being done by the US unions. Citing France and
Italy (and India) as cases in point, Humphrey told Secretary Dulles that he 'happen(ed)
to know that the CIO and AFL put hundreds of thousands of dollars in that
effort' but that today, they seemed to have 'run out of energy'. Dulles could
only confirm Humphrey's observation.4 Similarly, foreign unions dependent on
American funds, like the French Force Ouvrier declined in national influence
during this period.'
At
the same time, however, that US trade-union influence was contracting, the
adoption of American production techniques and forms of work organization was
producing new differentiations within the European working class - a trend that
was accelerated during the Kennedy offensive. The notion of a 'new working
class' became the standard label for describing this process of the
restructuration of the European working class as a consequence of
Americanization and Fordism. The idea was given a paradigmatic formulation in
Serge Mallet's well-known book, Nouvelle classe ouvriere (1963) - a
collection of case studies of which the first, on the French Caltex refinery,
was dated 1958.6 In production processes of this type, characterized by a high
organic composition of capital, specifically Western European restructuring of
the occupation; hierarchy took place, resulting in an unusually large category
of middle-level technicians. In the United States in the late 1960s,
professional engineers substantially outnumbered middle-level technicians, but
in Western Europe, 2 to 4 technicians worked alongside every professional. This
was reflected in the fact that the discussion of the 'new working class' was a
specifically European concern; in the United States (aside from a small
intellectual current in the student movement), the theoretical discussion of
modern forms of labour aristocracies remained centred on skilled craftsmen.
Capital
reacted to the rise of technical labour by introducing management techniques
benefiting the level of education and training of the new workers. Since neither
traditional authoritarianism nor Fordist paternalism were adequate for dealing
with self-conscious workers handling advanced production processes, a degree of
app- rently autonomous socialization of production was allowed to develop. In
reality, workshop autonomy, job rotation, and other devices tended to
subordinate workers to capital anew, under the conditions of fully automated
production (most widespread in th chemical and electrical-machinery industries).
Neo-fordism, - as Palloix has called this further stage of subordination
(which he moreover associates with a specific international division of labour
therefore represented both an apparent leap forward for the 'new workers'
autonomy and a renewed appropriation by capital of the informal relations among
these workers. 8
In
the United States, where the number of new worker-technicians was limited and
the mobility between social classes was relatively high, the recomposition of
the working class did not significantly affect working-class politics in the
1960s. In Western Europe, on the other hand, the proportion of new workers was
greater, and had a more salient impact on the more sharply defined class
structures. The rise of the new labour processes and the spread of technocratic
ideology nurtured a new current within the workers movements, Social Democracy
in particular. (Even in West German) engineers and technicians, unlike the
United States, were overwhelmingly oriented to the left-liberal and
social-democratic part (the political spectrum. 9) Ideologically this new
tendency represented an amalgam of state-socialist tradition with the
productive-capital concept of control in the context of the ascendancy of
international finance capital. It resulted in the organizational breakthrough of
a distinctly corporate-liberal element in European Social Democracy, most
prominently represented by Willy Brandt and François Mitterrand.
In
Germany, the rise of Brandt coincided with a rapprochement with German capital.
As the future President Heinemann noted in 1954, the SOP in 1918 had made peace
with the Western political system; next, the party would have to make peace with
the Western economic system. 10 The 1959 Godesberg Programme did just that. It
allowed a further penetration of capitalist ideology and actual capitalists into
the SPD. Whereas before, only some firms in the food and retail industry had
entertained relations with the party, in the early 1960s prominent capitalists
like Deist of the Bochum steel-workers and Moller, the insurance director,
declared themselves socialists or close to socialism. 11
As
Braunmmuhl has shown in her biographical sketch of Brandt 12, his technocratic
internationalism and, hence, loyalty to the offensive configuration of Atlantic
capitalism, had been a constant theme in his politics. While Brandt's star rose
through the various incidents at the Cold War frontline at Berlin, it was
Kennedy himself who perceptively understood the meaning of Brandt's attitude for
his eventual strategy of Atlantic Partnership. In his seminal 1957 article in Foreign
Affairs, Kennedy wrote that' American policy (had) let itself be lashed too
tightly to a single German government and party'. Declaring, somewhat
prematurely, that 'the age of Adenauer is over', Kennedy argued that 'the
fidelity to the West of the Socialist opposition is unquestionable, and yet
sometimes our statements and actions seem almost to equate them with the puppet
regime in East Germany.' Significantly, Kennedy traced the rise of the Brandt
tendency in the SPD to more fundamental changes in European society, warning
that 'in all of Europe a new generation is coming to power, and it is dangerous
to become alienated from them'. 13
These
changes also affected Atlantic trade-union relations. From 1960 on, when the SPD
overtly attuned its policy to the NATO line, there was a marked improvement of
relations between the AFL-CIO and the SPD which extended to relations with the
DGB. This amelioration of the Atlantic climate at the labour level was further
enhanced by the erection of the Berlin Wall in August 1961.14 In 1961, however,
Brandt, then Mayor of West Berlin and SPD candidate for the Chancellorship, made
clear that his Atlantic allegiance long-term stability of a humanized capitalist
order. 'A Weste weakness is revealed in the fact that the highest degree of
integration was achieved by a large number of nations is in the field of defence”
(Brandt wrote). 'An elementary striving for security provisions stronger than
the recognition that effective union is necessary in the economic and political
fields. . . (the North Atlantic Alliance) might be strengthened as a means of
cooperation and integration'. 15
As
we shall see below, however, the actual partners of the United States in Germany
during the Kennedy offensive were the liberal elements: Erhard, Friedrich, and
others. Only during the second half of the 1960s were the German Socialists
admitted into the government. Brandt, as Minister of Foreign Affairs, in this
function was able to take up the Stresemann policy of expansion into the East,
which dovetailed with the interests of German capital and represented a
reemergence of the Mitteleuropa strategy of interwar vintage.
In
the Netherlands, the Socialist Party (PvdA) likewise in 1959 adopted a new party
programme. This programme converted the anti-capitalism of the previous
programme (dating from 1947) to a corporate-liberal approach, in which
capitalism was treated as a residue from an earlier era and the 'new workers'
were expressingly catered to. The Socialists only briefly participated in a
Centre-Left coalition in 1965-66. The modernizing generation within Social
Democracy in this period emerged in the form of a 'New Left” tendency,
combining elements of detente policy with technocratic tenets. The Socialist
Party leadership had suspended party subsidies to its student organization,
considered too far to the left, but soon found itself challenged by a host of
new groups from the membership. From the broad array of student and
democratization movements, a technocratic tendency eventually was able to take
over the PvdA.16
In
Belgium the combination of Atlanticism and technocracy became hegemonic within
Social Democracy during the Kennedy offensive. It was embodied by Spaak and
Spinoy respectively. . combination of the two policy lines provided the key
ingredient in the government of the Christian Democrat Lefevre which entered the
stage in 1961 after the belated reorientation to metropolitan Fordism and the
Atlantic circuit of capital which the loss of the Congo finally imposed on the
Belgian economy. Spaak, who had just left his post as Secretary-General of NATO,
'was the political exponent of Atlanticism in Belgian politics'. 17 Spinoy, on
the other hand, 'could boast unconditional support of the Flemish Socialists in
parliament and of the Flemish trade-union leadership. In fact, Spinoy was a
functional complement to the ruling duo Lefevre- Spaak. Spinoy represented the
hold on the Ministry of Economic Affairs by the technocratic and pragmatically
thinking generation in the Belgian Socialist Party.' 18 Although this was not
the first time the Belgian Socialists participated in the government, at no
earlier occasion had the Atlantic dimension combined so clearly with the
simultaneous penetration of the technocracy associated with the new industries
prominent in recently industrialized Flanders.
As
far as the British Labour movement was concerned, the adoption of perspectives
associated with corporate liberalism likewise was accompanied by the rise of a
new generation in the leadership headed by Hugh Gaitskell. The permeability of
the Labour Party to the policies espoused by Gaitskell derived from a perennial
susceptibility of the Labour Party to modernization and to the idealism of the
American offensives. Labour policy, Nairn notes, had been shaped in the course
of a gradual transition from the Empire to the Commonwealth, and the Grand
Design of the Kennedy offensive with respect to the newly emerging nations
fitted well into the set of concepts developed by Labour in this process. 19
The
impact of the Fordist mode of accumulation on class consciousness among British
workers was corroborated by the influential work of Anthony Crosland, The
Future of Socialism (1956). Inspired by his discussions with the red-baiting
American journalist Daniel Bell, whom he knew from the CIA-sponsored Congress
for Cultural Freedom (CCF) and the New Leader, Crosland adopted Bell's
ideas on the irrelevance of class struggle ideology to the modem living
conditions of the working class. Crosland's ideas, in turn, were adopted by
Gaitskell, who also had close links with the New Leader and the CCF, and
who actually had been a participant (with Crosland, Bell, Denis Healey, and Rita
Hinden) in the 1955 CCF Conference in Milan at which the 'end of ideology'
thesis was extensively debated.20
The
conflict between the old generation of reformist socialists and the new one of
corporate liberals in the Labour Party came to a head in 1959. The day after
Labour's election defeat, Crosland, Roy Jenkins, and Douglas Jay met at
Gaitskell's house and agreed that a break with the socialist heritage of the
Party had become mandatory. Within a week Jay wrote an article demanding the
abandonment of the clause referring to 'common ownership of the means of production'
in the Labour Party programme. Socialist
Commentary in early 1960 commissioned
a public opinion survey (which the Labour Party had not been able to pay for
itself) to show that the nationalization demand indeed was a liability to the
Party. However, at the Party conference of 1960, Gaitskell's attempt to delete
the nationalization plank ('clause four') met with unexpected resistance from
the trade unions; on another issue, that of defence policy, the Campaign for
Nuclear Disarmament succeeded in having its demands adopted by the conference.
With Gaitskell challenged on all sides, the Labour right wing went over to the
attack. In October 1960, 25,000 copies of a pro-Gaitskell pamphlet were
distributed by a committee chaired by Fabian General Secretary William Rodgers.
Generous support from anonymous sources allowed Rodgers to set up office and
establish the Campaign for Democratic Socialism, which" challenged the
Labour Party majority and the unions with an unprecedented and successful
propaganda campaign. Anti-nuclear senti- ment was channelled into opposition
against an independent British deterrent, thus underwriting Kennedy's
interpretation of an MLF.21
With
loyalty to NATO restored, the relation to the EEC remained a source of
contention within the right wing itself. When Gaitskell in 1962 united the Party
in opposition to Britain's application for EEC membership by mobilizing
nationalist sentiment, he alienated the Rodgers group, and the pro-Marketeers
turned to Roy Jenkins instead.22 In October 1964, the general election brought
Labour to power. Its election manifesto had pledged renegotiation of the
Nassau/Polaris agreement and reiterated the Party's opposition to independent
nuclear deterrents or a Norstad MLF. Embarking on a policy of tripartite
corporatism, formalized in the National Economic Development Council of 1961 and
accepted by the TUC in 1962-63, the Atlanticist Labour leadership of Gaitskell,
Callaghan, George Brown and notably, Harold Wilson, yet failed to mobilize the
working class behind corporate liberalism. As Middlemas writes, 'The compromise
embodied in Harold Wilson's attempt to break out of the vicious old circle of
debate about socialism into the new painless world of technology and
intervention via industrial regeneration was not completed'.23 The NATO
allegiance of the Wilson government was embodied by Denis Healey as Secretary of
Defence. Besides other activities referred to already, Healey in 1958 following
a Bilderberg discussion with Shepard Stone of the Ford Foundation participated
in setting up the Institute of Strategic Studies in London as a NATO think tank.
In
Italy, the Kennedy offensive likewise coincided with the entry into the
government of the (majority) Socialists of Nenni, who had formerly been
excluded. The opening to the left was motivated by a wish to secure the
allegiance of the non-Communist trade unions to a policy of consolidation of the
'miraculously' developed economy. A pro-Atlantic position on the part of the
Socialists was made a sine qua non of government participation.24 The
existence of a Socialist minority party which was the product of the Marshall
offensive (the PSDI) put this party in the better position in the 1963 elections
and its gains compared favourably to a slight percentage loss of the PSI. The
real breakthrough of a new generation in the Italian Socialist Party rejecting
Marxism and oriented to corporate liberalism was of a later date.
This
was also the case in France, where the equivalent of the Godesberg Programme was
adopted by the new Parti Socialiste (PS) in 1972. Although the new working class
had politically manifested itself before - in the CFDT and in the radical left
party PSUC of which significantly, Mendes-France had become a member as well) -
it failed to live up to the vanguard role it had been prophesized to perform in
the May 1968 revolt.25
As
Farhi writes, the alliance between the big bourgeoisie and small capital in
Southern Europe as a consequence of a relatively undeveloped capitalism
postponed the rapprochement between finance capital and the new workers along
American and Northern European lines. This prevented the crystallization of a
modem Social Democratic party capable of developing a partnership with finance
capital, and left the mass of the workers to strong Communist parties.26
Mitterrand in France, and to some extent, Craxi in Italy, (like Papandreou in
Greece, Gonzales in Spain, or Soares in Portugal) are in the process of both
modernizing Social Democracy in the Godesberg sense and breaking the hold of the
Communists over the workers in their respective countries. Although this process
no longer can be directly associated with the American Atlantic offensives, it
still represents an instance of the international extra- polation of the
original New Deal synthesis. Its immediate centre, however, is Northwestern
Europe; its Roosevelt is Willy Brandt and the Socialist International; and its
universalist concept is the New International Economic Order.
European
Liberals and the Perils of Partnership
The
Kennedy offensive also created the conditions in which the liberals and Liberal
parries in Europe were able to recover lost ground in national politics. This
renewed prominence was a function of the reassertion of Atlanticism and the
corollary decline of ‘Euronational’ options, but also reflected the
underlying changes class formation. In some aspects, the new liberalism
was rather clc to its former self, as it expressed a resurgence of the money-capi
concept elicited by the specific opportunities American industrial expansion
held out to internationally-oriented European commercial and bank capital. But
then, the Liberal parties and tendency were also subject to the restructuring
towards corporate liberalism spurred on by the American offensive. To the extent
this was the case, their Atlanticism tended to be attuned much more to the
Partnership arrangement.
In
Italy, the Liberal Party (PLI)
profited from the Centre-Left coalition inspired by the Kennedy offensive only
in a negative way. The PLI, because of its association with Fascism, had lost
the bulk of its electoral support to the DC after the war. As far as specific
fractions of the capitalist class were concerned, the PLI in the 1950s organized
the private and private-family capitalists sticking to an orthodox liberal
concept. When a Centre-Left solution of the blocked political situation in Italy
began being contemplated in the DC, Confindustria, the employers' organization,
took its distance from the party and supported the PLI. In 1963, this
support contributed to the electoral success of the PLI, which was able to
mobilize conservative voters disaffected by the Centre-Left strategy PLI by the
DC under Fanfani; the party scored a post-war high of7%. 27
The
Fanfani policy aimed at securing the hegemony of the corporate-liberal fraction
in Italy and was congruent in key respects with the Atlantic Partnership
concept. Its main bulwark in the capitalist class was the advanced Torino group
of Fiat and Olivetti. In
the 1950s, FIAT concentrated upon developing the domestic market, in
which it enjoyed a virtual monopoly. As Valletta, FIAT head in this period and
chairman of CEPES, testified, the basic market is the domestic market'. By the
early 1960s, however, FIAT was realigning its strategy to combine domestic
accumulation, internationalization (the linchpin of adopting the Atlantic
Partnership perspective). According to Sampson, it was Kennedy himself who
suggested to Valletta the idea of cooperation with the Soviet Union that
ultimately resulted in the construction of the Togliattgrad car works.
Valletta's successor, Agnelli, was prominent in the neo-liberal party PRI and
favoured a conciliatory, offensive approach to the working class (the
corporation had a tradition of accommodating its skilled workers). For his part,
Olivetti, who died in 1960, even claimed to have built a 'new kind of enterprise
going beyond socialism and capitalism.' His attempt in 1959 to establish an
American foothold by acquiring Underwood, however, proved too ambitious.28 In
1964, Aurelio Peccei of FIAT, who later became known as the founder of the Club
of Rome and sponsor of the New International Economic Order concept, was put at
the head of Olivetti. 29
Through
its support for Fanfani and the dynamic state sector seeking to replace the
sterile and defensive rightwing bloc of the 1950s, the Torino group collided
with a reactionary industry coalition composed of Pirelli, Falck, Pesenti (Italcementi)
, Confindustria, and the electricity holdings fearing nationalization. Scorning
the PLI, therefore, the corporate-liberals of the Torino group supported the
small PRI. The Secretary-General of the PRI, La Malfa, became Minister of the
Budget in the Centre-Left coalition and introduced the economic planning
legislation intended to consolidate the rapid capital accumulation of the
previous 'miracle' period. The inclusion of the Socialists was also meant to
serve this purpose, but when La Malfa decided on a sharp deflationary turn of
economic policy in 1964, the PSL considerably harmed its relations with the
trade unions. 30
In
France, the situation was much complicated by the rise of Gaullism and the
further strengthening of presidential powers in 1962. The policy of compromise
with small capital initially had reinforced the right-wing liberals of Premier
Pinay's Independent Party, CNIP. De Gaulle's policy of rejecting American
hegemony and the emphasis on the French nuclear strike force led to Pinay's
dismissal as Premier in January 1960, but this was not the last crisis caused by
the President's apparently anti-American policy. When in May 1962, de Gaulle
again lashed out against the United States in his press conference on the French
nuclear force, the CNIP members in the one-month old Pompidou government were
instructed to vacate their government posts. Unlike the MRP ministers, the
Independents refused to follow the instruction of their party however. Giscard
d'Estaing, De Broglie, and Jacquinon representing the upper layer of the
bourgeoisie and, more generally, the most international fraction of French big
capital by their decision to stay, broke with the fraction of small capital
organized in the CNIP.31
This
episode marked a crucial development in class and party formation in France,
reflecting the underlying shift towards the hegemony of the corporate-liberal
synthesis. Pinay's Independents, representing small capital and the middle
classes were associated with 'the
discredited Fourth Republic and with the values of what was rapidly becoming an
obsolete, rurally oriented society'.32 Giscard's
Independents on the other hand represented the fraction of French capital keyed
to the liberalization of the international economy spurred on by the American
offensive and domestically were
able to mobilize the younger and more urban bourgeoisie. 33
As Minister of Finance in a cabinet led by another banker
(Rothschild director, Georges Pompidou), Giscard was in a key position to take
the necessary measures for reinforcing the French franc at the expense of French
industrial capital. Domestically, a liberal deflationary policy was launched in
September 1963. Next, in 1964 Giscard proposed a plan for creating extra
monetary liquidity to deal with Atlantic currency problems, to be distributed in
proportion to the gold holdings of the various participating countries. This
plan was undermined both by the
opposition of the United States and by de Gaulle's hard line on a return to the
gold standard. The latter’s concern, highlighted by the President's February
1965 press conference on the subject, shows that Giscard's policy was tied to
the specific circumstances characterized by the American offensive, to which the
liberal Giscard was much more responsive than the nationalist entourage of de
Gaulle.
When
the American offensive subsided and the climate for working out Atlantic
arrangements deteriorated due to American policy in Vietnam, Giscard in January
1966 was removed from his post; 'partly', according to Davidson and Weil,
'because of the apparent failure of his domestic anti-inflation program, but
part was also because of his suspected readiness to work for an agreement with
the United States'. His successor, Debre, geared French monetary policy back to
the gold standard doctrine favoured by the Gaullists.34
Still
in the period of Atlantic unity, Giscard's group participated in an attempt to
create a single liberal party out of the various scattered factions. In this
moment 'vital to their class' in Gramsci's sense, the Radical Socalists of
Servan-Schreiber, lecanuet's Centre, and Giscard's Republicains Independents
between 1963 and 1965 tried to form a unified liberal party capable of attaining
itself to the changed circumstances of the new presidential system, economic
rationalization, and decolonization. Conflicts within the constituent parties, a
well as the results of the elections in the late 1960s, terminated the
undertaking. Only in 1972, did the Centre and the Radical Socialist join forces
as a new party, the Rejonnateurs. Servan-Schreiber' party, which carried
on the tradition of Mendes-France's modernizing Radical Party, in its following
resembled the adherents of Giscard's Independents, but the big capitalists
supporting it (notably the Schlumberger group), like Mendes-France and Servan-Schreiber
themselves, traditionally had preferred a partnership policy to the all-out
liberalism of the Atlantic Union tendency. The Centre, finally, inherited a
corporatist tendency from the Christian Democrat MRP. Its president, Lecanuet,
who had been the last president of the MRP before it was dissolved in 1966, was
a pronounced Atlanticist. 35
At
the organizational level, therefore, the unified Liberal party did not
materialize, and neither did the Liberal parties attain a good election result
in 1962. The impact of the Kennedy offensive in the relatively insulated
political system of Gaullist France remained limited to the temporary prominence
of GIS card following his break with Pinay. But because of his apparent loyalty
to de Gaulle - which in Giscard's case rested upon an appreciation of the strong
executive established in 1962 rather than on his support for the policy of
national independence - Giscard lost the support of the outright Atlanticists
and liberal Europeanists, who turned to Pinay instead.
The
most prominent representative of the Atlantic Partnership or Euramerican concept
in France was Jean Monnet. 1962 was Monnet's year of triumph, in which he
thought the partnership of equals between the United States and the EEC, by
which the Soviet Union could be effectively checked, was actually materializing.
In Monnet's view, this would entail European military autonomy as well. 'Equal
partnership must also apply to the responsibilities of .. common defence', he
wrote in an Italian newspaper in April 1963. 'It requires, amongst other
things, the organization of a European atomic force including Britain and in
partnership with the United States.'36
Monnet's
concern over a European defence role fitted narrowly into his concern for the
modernization of French industry, but also reflected his concept of making the
Americans support French initiatives towards channelling West German ambitions
into supra-national arrangements, a tradition established by Briand. The
establishment of a corporate-liberal synthesis in Western Europe as a bulwark
against socialism was Monnet's ultimate ambition, setting him apart from his
former associate, Pleven, who tended to shrink from upsetting traditional
economic arrangements in France. 37
The
web of economic interests in which Monnet and his associates were active is
particularly revealing. Himself associated in the late 1920s with Blair and the
Bank of America, Monnet's eventual network in private finance comprised the
Lazard Freres, Lehman, and Goldmann, Sachs groups in New York, which after the
war increasingly gravitated to the Rockefeller orbit. Pierre Uri, Monnet's
right-hand man, was European director of Lehman Bros. Lehman partner George
Ball, the architect of the Partnership policy, had close relations with Monnet
due to his activities as legal counsel of the ECSC and the French delegation to
the Schuman Plan negotiations. Robert Marjolin, one of Monnet's assistants in
the First Modernization Plan, a proponent of Keynesian ism and a member 01 the
Socialist Party, subsequently joined the Chase Manhattan board. 38
The
views espoused by Monnet and the corporate-liberal bourgeoisie increasingly
challenged the Gaullist Euronational concept that they so far had travelled
along with. Lerner and Gorden found that the French elite panels they
interviewed showed a rising appreciation of Atlantic integration, to the point
of becoming opposed the Gaullist policy in the post-1965 period. In 1965, Pinay
was offered enormous sums of money if he was willing to run against de Gaull as
a Europeanist and liberal candidate. French capitalists, according to a poll
held at the time by the magazine La Vie Franfaise among the presidents of
the top-100 major French companies, were almost evenly split between de Gaulle
and Lecanuet, who eventual accepted the offer Pinay turned down. 39
All
along, the Americans were attempting to intervene directly in French politics.
In a conversation in December 1960, recorded by Alphand,' Couve de Murville
complained that 'it was indecent of the Americans to pay French politicans and
parties', of which he claimed to have proof. Alphand suggested that Couve see
Allen Dulles, the head of the CIA, to discuss the matter. But, as Couve told
him, it was Dulles who made the payments.40
It
would take until the 1968 crisis, and the further maturation corporate
liberalism and the accumulation pattern on which reposed, before the majority of
the French big bourgeoisie came toaccept the need for a more flexible political
system, capable of digesting serious social challenges more smoothly than Gaull
one-party rule. In June 1968, family outsider Edmond de Rothschild in Le
Monde argued for the need of a third force between Right and Left in France.
His support for Poher's candidacy against Pompidou the confidant of the main
Rothschild branch at the Rue Laffitte, in the Presidential elections of 1969 did
not bring the desired result however .41
In
West Germany, the resurgence of Atlantic liberalism contributed to a reentry of
the liberal Free Democrats into the government. In the spring of1961, some time before the elections,
newspapers under the influence of industry began to stress the need to draw the
FOP back into government, even if the Christian Democrats secured an absolute
majority in the upcoming elections. This was motivated by the need to balance
the labour wing of the COU.42
The
1961 elections were a victory for the renewed FOP. After the decline in the
1950s, the party, in which the corporate liberals meanwhile had secured
hegemony, won 12.8% of the vote: its best performance before and since. One of
the leaders of the modernists who now dominated the party, future Federal
President and eventual chairman of the Bilderberg Conference, Walter Scheel,
became Minister of Economic Cooperation, a post which significantly had been
left vacant after FOP Chairman Blucher had vacated it in 1956.
In
the course of its re-entry into the
government, a significant episode took place which brought out the shift from
small capital to the big bourgeoisie within the FOP, and in this respect may be
compared to developments leading to the split between Pinay's and Giscard's
Independents in France. In the
new government, the post of Minister of Finance went to H.. Starke, the general
manager of the Chamber of Commerce in Bayreuth, a small town in Bavaria. Starke
represented the tendency in the small and medium bourgeoisie that tended to
interpret the anti-cartel and liberal line pursued by the Minister of Economic
Affairs, Ludwig Erhard, as an anti-monopolistic policy.
The
real thrust of capital accumulation in this period, however, was towards
concentration and internationalization of the strongest capitals, in spite of
such apparently 'populist' instances of liberalism as the lowering of property
taxes or the re-privatization of Volkswagen in 1961. The freedom of the big
banks was consolidated by the new bank law in 1961, and within the corporate
structure, the smaller owners' interests were seriously prejudiced. Under the
Nazi law which remained valid until 1956, changing the legal status of companies
and special tax provisions encouraged the majority owners to proceed with
consolidating their hold on the companies in their orbit. A court decision in
1962 terminated resistance of the small shareholders.43
Starke's
appointment at the key Ministry of Finance, therefore, was intolerable to the
upper layer of the bourgeoisie, who in the prevailing circumstances were
reinforcing their position and who were led by Otto Friedrich, the informal
leader of the Atlantic Union tendency in the German bourgeoisie. Friedrich
instead favoured the appointment of R.Dahlghln, the president of the Economic
Affairs Committee in the Bundestag and a fellow director of his in the Phoenix
rubber company, partly owned by the American Fireston concern. Friedrich's
preferences prevailed and in December 1962 troublesome Starke was removed from
his post and succeeded by Bahlgrun.44 Blessed with the prominence of the
liberals and the hegemony of the big owner's point of view, bank capital and
retail interests fared particularly well in the profit-distribution process from
1963 on.
In
Belgium, the fate of the liberal Party in the Kennedy offensive resembled that
of the Italian PLI. Here, too, the modernizir elements in the bourgeoisie acted
through the Christian Democr and Socialist parties to capitalize upon the
opportunities offered I the combined effects of the penetration of American
methods production and actual American investment. The left ovre-Spa government,
which ruled from 1961 to 1965, and the short-lived Harmel-Spinoy cabinet which
held power until February 1966, were the vehicles for this strategy. They
launched a full-scale attack on the backward, rentier-dominated structure of the
Belgian economy. The tax system was radically altered and a system of advance
payments was introduced facilitating tax control of rentier incomes, while at
the same time diminishing the dependence of the Belgian state on the traditional
financial interests. Also due to the loss of the Congo, rentier incomes declined
in the Kennedy offensive period in Belgium. 45
The
liberal Party by default was pushed to the right, but its electoral success in
the 1965 and 1968 elections (after which it declined again) was primarily based
on its ability to capitalize upon processes of rationalization and
deconfessionalization characteristic of the period, notably in Flanders. Its
success in penetrating formally Christian and working-class sanctuaries in this
region (to which end the party abandoned its anti-clerical posture and renamed
itself the Progress Party (PVV/PLP) in 1961), did not extend to Wallonia.The
conservative element in the party here was dominant. Still in 1974, the Walloon
and Brussels liberals drew 75 to 80% of their votes from the small bourgeoisie;
whereas in Flanders, almost half of Liberal voters were workers. 46
In
Britain, the marginal position of the liberal Party prevented it from adequately
expressing the modalities of class formation. Yet the liberal effect of the
Kennedy offensive was again noticeable, as it had been in 1950. The 1959 general
election went to Macmillan, but 'what was more surprising was the spectacle of a
modest Liberal revival'.47 The Liberals put up the greatest number of candidates
since 1950, and on the average increased their vote in the districts where a
Liberal candidate stood, resulting in an increase of their seats in Parliament
from six to nine. The Macmillan cabinet meanwhile resorted to deflation again in
1960. Rentier interests still were strong, and 1961 brought renewed measures to
defend their cherished pound against impingement by expansive policies. By now,
such expansion immediately threatened the balance of payments, since the failure
to modernize British industrial capacity translated rising demand straight into
growing imports for which no competitive exports compensated. When an expansive
policy was tried again by the new Chancellor of the Exchequer, Maudling, in
1962, it led to a new balance of payments crisis, forcing the Wilson government
to make a deflationary turn again soon after its assumption of power in 1964.48
The
Dutch Liberals, finally, had already entered the government in 1959, but the De
Quay cabinet was of a marked conservative and narrowly Europeanist orientation
except for the Atlanticist Ministry of Foreign Affairs. Still in 1960 and 1961,
the government resorted to credit restrictions to put a brake on industrial
expansion; the corporatist mechanisms of collective bargaining were abandoned
from 1959 on. In the Defence Ministry, which was held by the Liberal Party VVD,
the two tendencies, Atlantic and European, confronted one another, and following
a serious conflict the Europeanist sphere- of-interest line triumphed. The
initial minister, Unilever director Sydney van den Bergh, in the struggle over
the choice of a new fighter plane then in progress seemed willing to contemplate
the Northrop Freedom Fighter on the basis of a direct transaction with the
Americans. Others in the Defence Department, however, were more responsive to
the plan of the German Minister of Defence Strauss to produce Lockheed
Starfighters through a German- Belgian-Dutch consortium. Strauss estimated that
the Lockheed deal would allow German industry to develop a modern arms
manufacturing capacity which fitted into his strategy for a European nuclear
force. Rumoured contributions to the CSU party treasury in this case may have
helped to underscore this preference, since a choice for the likewise available
Dassault Mirage was attractive to Strauss from this very vantage point, too. 49
After Van den Bergh had sent the Dutch air force chief Schaper to California to
find out about the Northrop plane, a scandal involving the Minister's private
life was sensationalized in the French and German press which led to his fall.
His successor Visser, the secretary of the Dutch employers organization, had
worked with the Germans during World War Two and was more inclined to yield to
West German pressures. Following discussions with Strauss in December, 1959, the
De Quay cabinet decided to buy the Starfighter. 50
With
the formation of the Marijnen cabinet in 1963, based on the same parties,
liberalism was reinforced, with the Atlantic aspect particularly prominent. At
the Defence Ministry, Visser was replaced by the Catholic navy officer and
former state secretary " P .J. S. de Jong, who subscribed to the
Atlanticist tradition of the Dutch Navy. The MLF plan, which hitherto had been
rejected, now was endorsed by the
Dutch government as a means to strengthen Atlantic integration and prevent other
countries from achieving nuclear independence. 51 The Atlanticist turn in the
Netherlands in 1963 was in part relayed through Germany; the formation of the
Erhard government notably 'raised the hopes of the free-traders'.52 When in
1965, a conflict over the liberalization of the media brought down the
government, the Liberal Party did not return in the next cabinet.
In
all European countries, the Liberal parties were directly affected by the
Kennedy offensive and the processes of class formation which it sought to guide
by its Atlantic Partnership policy. In Germany an France, the growth of the FDP
and RI both expressed the rise of modernizing technocracy and the predominance
of the Atlantic fraction of the bourgeoisie. In Belgian Flanders, the Liberal
Part also showed signs of developing in this direction, but in Wallonia, its
middle-class constituency made for a conservative orientation of the party. The
corporate-liberal impulses developing in the class structure accordingly were
translated into actual policy by a Christian Democrat/Socialist coalition. In
Italy, a similar pattern occurred, while the Liberal party PLI was forced into
the conservative position demanded by a constituency of the lesser bourgeoisie,
a Centre-Left coalition undertook to modernize the country's economic
structures. The PRI, which in some respects approximated the profile, the
renewed FDP in Germany or the British Liberals, had a negligible: following in
the country, however (about 1 %). In the Netherlands the Liberal Party VVD was a
conservative party, comparable to the PLI.
The
Christian Democrat Response
Within
Christian Democracy, the liberal tendency again won the upper hand in this
period. In Germany, NATO allegiance was the major factor, and the renewed
adherence to American leadership was of importance also for the shift in the
position of Dutch Christian Democracy. In Italy, the restructuration of class
relations to fit the Fordist accumulation pattern was the major factor, and this
dimension was also decisive in Belgian Christian Democracy. Hence, the course of
events in the two trendsetting countries of Germany and Italy can illustrate the
larger pattern of events.
In
Germany, Erhard's position within the CDU was reinforced again from 1960 on.
Having lost considerable prestige as direct American intervention in German
affairs dimpled, Erhard at the close of the 1950s had several serious clashes
with Adenauer on economic policy. His effectiveness was prejudiced by the fact
that Berg, the conservative leader of the organization of German industry, had
privileged access to the Chancellor in these matters. Only in March 1961, did
Erhard, the then Minister of Finance Etzel, and the President of the Bundesbank
(and Schacht's former collaborator) Blessing, succeed in convincing Adenauer of
the im- mediate necessity to embark on a policy of deflation and revaluation of
the Deutschmark. After this success for the Liberals, on which Berg was not
consulted in advance, the Atlantic turn within the CDU was accomplished in
several steps.
In
November, the Christian Democrat Schroder, the director of Klockner steelworks,
at the insistence of the FDP became the new Foreign Minister in the coalition
government. Schroder's Atlanticism not only had been reinforced by the record
sales of his company in the United States, but also because of his conciliatory
policy towards Eastern Europe and the Soviet Union, which dovetailed with
Kennedy's offensive approach. Within the CDU, it was Schroder who, together with
Erhard and Thyssen director Birrenbach led the opposition against the Paris
treaty with France.s3
In
December 1962 the Der Spiegel case against Strauss, which arose out of a
confrontation between the new American and the existing West German strategic
doctrines, led to the dismissal of the Bavarian advocate of German nuclear
capability. Polls held immediately afterward showed that Strauss's fall was
strongly approved of by Left and Liberal voters, but CDU/CSU voters, and notably
the Catholics among them, were still divided and confused. Der Spiegel role
in the reaffirmation of the Atlantic alliance and liberal democracy, moreover,
cost it the advertising accounts of the traditional.ly continentalist Hoechst
chemical concern and of the Boscb Ail electrical engeneering company. 54
In
the course of 1963, Kennedy's appearance at the Berlin Wall, which underlined
the American guarantee, reinforced the Atlanticists' position. In October,
Erhard succeeded Adenauer as Chancellor. Although Adenauer as chairmain of the
CDU continued to attack the liberal Atlantic turn, and Schroder in particular
(whom he reproached for spoiling the relation with France by dropping thc demand
for a reorganization ofNATO);55 the trend towards renewed acceptance of Atlantic
integration was not reversed.
In
Italy, during the 1950s, the combined weight of the small middle class, and
notably, the small farmers' organization, Coldiretti, had provided the
conservative capitalists organized in the Confindustria and the landed interests
in the Confagricultura allied with them with a sufficient following to keep the
DC to the Right once the liberalizing impulses of the Marshall offensive had
subsided. 56 Parallel to the split in the employers' front, however, which led
to a separate organization (Intersind) regrouping the dynamic public industries
in 1957, a modernizing tendency developed in the DC. This tendency, represented
by Gronchi, Matte, Vanoni and Fanfani, sought to put into practice a concept of
control based on the reconciliation of big capital and the organized working
class. In contrast to the German situation, modernization of social relations in
Italy required an opening to the Left, and the traditionally 'Mediterranean' and
'Third Worldist' outlook of the Fanfarani group gave it excellent credentials
among Social Democrats in particular. Among the Italian Communists, who began
taking the distance from the Soviet Union from 1956 on, this strategy eventually
evoked a certain sympathy as well, although for the time being, Fanfani's aim,
as he publicly confirmed, was still to 'woo the Socialists away from the
Communists'. 57
Rather
than taking the Atlantic dimension as their point of departure, the Italian
Christian Democrats gave priority to consideration of domestic stability during
the transition to the new phase policital development necessary for controlling
the restructuration of existing class alliances. At the DC Congress of January
1962, which the decision to attempt an opening to the Left was made guarantees
as to the maintenance of capitalist relations of production and imperialist
allegiance had to be explicitly added so as not create the impression that a
transition to socialism was being prepared. 58 The forces supporting the Centre-Left
solution had been mentioned already. Confindustria, sticking to the undiluted
capitalist viewpoint and close at the time to the PLI, opposed the arrangement,
which contributed to the sharp decline of the organization's influence in the
1960s.59 Contrary to the markedly Atlantic Union orientation which prevailed in
Germany and the Netherlands during the Kennedy offensive, the Italian episode
had a distinct Atlantic Partnership, and even 'Gaullist' quality, which was
brought out by such instances as FIAT's Togliattigrad project, and by agreements
with France in which the Italians supported French industrial innovations (like
SECAM colour television) and military prototypes (notably the Mirage fighter
plane and the AMX 30 tank).60
2.
The Emergence of Atlantic Fordism
The
American offensive was in full swing when Kennedy was assassinated in late 1963.
For at least two more years, American policy remained geared to the offensive
configuration of social imperialism and the internationalization of finance
capital. Until his own election in November 1964, Lyndon Johnson, who took
Kennedy's place, 'was. . . thought of, and was acting, as the care-taker of the
Kennedy Administration'.61 Johnson was inherently more willing to follow a
moderate foreign policy, but he was propelled by the forces set in motion during
the previous two years and felt obliged, among other things, to escalate the US
military presence in Vietnam which the Kennedy cabinet had decided just before
the President's fatal visit to Dallas.
Domestic
reform still was being framed in the expanding context of economic growth and
commitment abroad, and Barry Goldwater's conservative alternative was
particularly inopportune in 1964, the year of the Civil Rights Act. In the
course of the election campaign, Johnson obtained a congressional mandate 'to
take all necessary steps, including the use of armed force' in South-East Asia
in the Tonkin resolution of August 1964. Once again, a 'peace' candidate drawing
on a legitimacy won by social reform obtained a mandate for entering a foreign
war. The Tonkin resolution was 'signed by Congress in an atmosphere of urgency
that seemed at the time to preclude debate', Senator Fulbright, who accomplished
the feat, wrote in retrospect.62
Popular
consensus was only consolidated when, following his landslide victory, the
architect of Tonkin announced his Great Society Program in the State of the
Union address of January 1965.
Promising
further measures in line with the anti-poverty program promulgated one year
earlier, the President thus rewarded the working-class and black voters who had
turned out massively to vote for the Democratic ticket. A limited medical
insurance programme, educational and regional measures, as well as a softening
of immigration laws meant to accommodate ‘ethnic’ groups, was duly enacted.
63
These
measures were not just calculated tricks to obtain a free hand in Vietnam. They
were designed to satisfy rising popular aspirations, and were made possible by
continued economic expansion. But whatever the degree of honest compassion with
the poor and underprivileged on the part of those who devised and administered
the new social legislation, its function was to reinforce the legitimacy of the
Executive in serving the interests of American capitalism, and these in turn
could only be served in a context of international expansion. Vietnam was seen
as the test of US willingness to support its interests in the periphery at
large, apart from the importance of South-East Asia proper as a source of tin,
tungsten and rubber.
The
social-imperialist mechanism connecting domestic reform with self-righteous
expansion was always in one way or another consciously articulated by the top
leadership. In the case of Lyndon Johnson, the basic idea was presented to him
when he sought expert advice on a grand conception befitting his new
responsibilities. The historian and later special consultant to the President,
Eric Goldman in a private meeting on 4 December 1963, explained to Johnson that
mounting social tensions were threatening the effectiveness of both domestic
and foreign policy. Encouraged by the President, Goldman went on to point out
that 'faced with such situations, past Presidents had drawn the country together
by calling upon the doctrine of national interest. . . and (emphasizing) the
Office oft Presidency as "the steward" of the needs and aspirations of
the general population.' Referring to Theodore Roosevelt as a proponent of this
strategy, Goldman stressed that 'it was important to do this. . . because a too
sharply divided nation was an immobilized nation, incapable of carrying out a
coherent foreign policy or meeting the demands of the domestic scene. A
President who effectively identified himself with the national interest was in a
position to lead away from the stale, obstructive emotions associated with past
divisions. . . towards the kind of attitudes that met changed circumstances'.64
Historical
awareness of the social-imperialist mechanism, of course, could not by itself
control the objective processes it sought to grasp, which were operative
irrespective of the degree of consciousness on the part of the actors in them.
By 1965-66, both the optimism and economic boom had spent themselves, and the
contradictions of the attempt to overcome domestic class struggle by a mixture
of reform and expansionary policies came to the surface. The emancipation
struggle of the black population, in particular, threatened to push beyond the
limits envisaged by liberal reform. With Black Power rising behind the peaceful
figure of Reverend King, 'white backlash took on a new meaning as well'.65 The
countermobilization of the white middle class also affected the attitude towards
the war in Vietnam. Support for American intervention there shifted from the
optimistic idealism of the New Mandarins to a more vitriolic and reactionary
nationalism.
As
long as domestic economic expansion lasted, the corporatist truce dictated by
near-full employment remained intact. The guide- posts programme reached a
high-water mark in 1964, the year of the Tonkin resolution, when it was given a
more prominent place in the economic policy of the Johnson Administration. 'The
year 1964 was perhaps the heyday of the guideposts', Mills writes, 'in which
they experienced an unusual degree of overt presidential support'.66 Union
support for the Vietnam war developed in line with the general expansion of the
American economy. As unemployment went down and war orders began pouring in, the
unions in this respect probably spoke for a majority of American workers. 'The
war was far away and jobs were a reality’. 67
American
economic policy with respect to the profit distribution process in the Kennedy
offensive at first seemed to stick very much to the balanced budget philosophy
of the 1950s. The emphasis was on incremental tax measures rather than on
stimulating industrial production by expansive budget policy, incidental
injections apart. Under Johnson, a major tax revision was enacted. By that time,
the profit share of manufacturing, industrial share prices, and overall
corporate income were already moving upwards, so that the mean- ing of the tax
cut lay primarily in the profit-distribution sphere rather than in making
Kennedy’s campaign pledge to ‘get the nation moving again’ come true.68
The 1964 tax cut reduced effective corporate tax by introducing new depreciation
schedules and a 7% investment tax credit. This contributed to sustaining the
current rate of investment, and in terms of profit distribution the benefits
accrued particularly to corporations. Dividends, on the other hand, profited
from the 1964 tax cut only with considerable delay.69
The
expansion of the American economy interacting with the Kennedy offensive
simultaneously was extrapolated to the Atlantic level through foreign
investment. In the
Marshall offensive, the export of 'public' capital, i.e., the US
government-to-government loans and assistance programmes, had accounted for a
negative balance for the USA in the Atlantic economy; now, various forms of
investment in Europe produced a comparable negative balance.
The
wave of American investment in Europe causing the negative balance was composed
of several elements. First, there was a jump in portfolio investments, from $1.8
billion in 1957 to $5.4 billion in 1964, at which level they remained, roughly
speaking, for the rest of the decade.70 US direct manufacturing investment in
Western Europe grew from $2.1 billion to $6.5 in the same years, but in 1969 had
reached $12.2 billion already.7! In the initial phase of the Kennedy offensive,
American capital moved mainly to 'other Europe’ which may be roughly equated
with the EFT countries (with a strong over-representation of Britain), whereas
by 1963-64, the continental EEC share in incoming US direct investment was
relatively enlarged. In terms of capital fractions, the rise of US direct
investment in Europe in this period notably concerned productive capital. As far
as European investment was concerned, a comparable movement towards the
internationalization of productive capital to the United States became visible
only from 1968 onwards. It took until 1973 before Western European productive
investment in the United States reached the level of the hitherto predominant
European direct investment in American bank, insurance and oil ventures.72
The
Kennedy and Johnson administrations attempted to stem the outward flow of
capital in order to prevent the deterioration of the US balance of payments and
protect the integrity of the American domestic economy and the
social-imperialist compromise worked out in its context, but their measures only
served to accelerate the internationalization process. The Interest Equalization
Tax of 1963, meant to prevent US money capital being used for
internationalization of production, led to the creation of the 'Euro-capital'
market; the 'voluntary balance of payments program' launched in 1%5 and,
notably, its conversion to an obligatory programme in 1968 further swelled the
Euro-capital (and Euro-money) markets.73 Together with US bankers' concern to
prop up their domestic competitive position as 'world-wide' institutions,
internationalization of bank capital in response to these developments led to a
synchronization of the international circuits of money and productive capital as
international finance capital. By then, a truly Atlantic capital seemed
imminent, not only involving an intra-company division of labour in the context
of a reintegration at the Atlantic level of the circuits of commodity, money,
and productive capital, but also engendering a commensurate format of labour
relations and profit distribution.
An
Atlantic Format of Labour Relations
In
the same period, a form of 'company feudalism' specifically associated with the
international spread of American industry, but restricted in its positive
effects to the better-off workers, developed in the context of the ICFTU. In
November 1964, at the Automotive Department meeting of the International
Metalworkers Federation in Frankfurt, a decision was taken to establish World
Corporation Councils. This form of organization represented an extension of the
corporatism practiced by the International Trade Secretariats, and was an
initiative of Walter Reuther of the UAW.74 From 1966 on, WCCs were formed in the
automobile, chemical and, rubber industries, practically all in the North
Atlantic area. The WCC's tend to push up the wage level in the European
affiliates of US companies and accordingly caused frictions between American and
European trade unionists as long as the latter stuck to their national
bargaining strategy.7S
The
WCC's fostered the crystallization of a privileged fraction of workers. The
Michelin wcc stated the purpose of its organization was protecting the interests
of the 'long serving workers' in prosperous parts of the world'. 76 The flow of
benefits increasingly became a two-way affair, benefiting American employees of
internationalized firms as well, but all the same remained confined to
privileged workers in the Atlantic area. 'By holding out the posibility of
international trade unionism', a trade-union leader wrote 'the ITSs and WCCs
have simultaneously held back the development of stronger forms of working-class
organisation and smoothed the way for the further growth of the Transnational
Corporations.’77 Pointing out the selective solidarity of the WCC's, Etty and
Tudyka in their study quote a UAW pamphlet stating that the WCC's at insurance
for the strong and at the same time the best hope of strength for the weak'. 78
However,
the Kennedy offensive stopped far short of the full internationalization of US
industrial relations, and by the late' Atlantic unity at the late 1960s level of
the comprehensive international union organizations was breaking down. As we
shall see in the next chapter, in line with the brief hegemony of an
independent-spirited corporate-liberal bourgeoisie in Europe, the Fordist
compromise would be recast in a European framework, in which the German
co-determination tradition would become the frame of reference European
trade-union organization.
The
Flow of Portfolio Capital
The
acceleration of the internationalization of American capital after the
establishment of the EEC affected the various segments of the bourgeoisie
associated with it differently. Interacting with different forms of foreign
investment and national differences in profitability the prominence of either
rentier or real capital in the American economy may be tentatively associated
with particular concepts of Atlantic unity through the profit-distribution
process.
The
rate of profit realized by American capital in Europe was the rate of profit of
European capital or slightly above it. This r profit was well above the rate
attained by American firms operating in the United States during the 1950s.
Under these circumstances, the internationalizing manufacturing ventures tended
to gravitate to the critical mass of interests clamouring for a strong dollar,
like banks, oil companies, owners of savings, and portfolio investors with
interests abroad.
In
the early 1960s, domestic operations became more important again as a
consequence of expansion under the Kennedy offensive. The rate of profit of
American manufacturing at home rose above the profit rate on all US foreign
direct investment, and approximated the rate attained by American capital in
Europe. Although direct investment in Europe kept on increasing, US industrial
capital gained a new interest in domestic production and internationalization
through commodity exports. The expansion of the military budget, and the Vietnam
War, all played their part in this respect.
After
the European recession of 1966-67, rates of return on American capital in the
area improved significantly, and restored, in terms of economic policy
coalitions, the situation of the late 1950s. 79 This time, however, American
direct investors in Europe represented a much more important fraction of
aggregate US foreign investment. Whereas, in the 1950s European holdings only
accounted for about 5% of all profits made through foreign direct investment; by
1970 it had risen to almost 15% .80 In contrast to the general rate of profit in
the United States, profit rates of major American multinationals, which had
fallen from their war levels except for the late 1950s, after 1965 again
stabilized or even, in the case of General Motors, increased.81
For
American portfolio investors in Europe, the rate of return varied greatly for
different countries. During the period 1951-69, the mean rate of return on
common stock owned by US investors was 17.1% for investments made in Germany,
10.6% in Italy, 9.7% in the Netherlands, 8.6% in France, 6.2% in Britain, and
3.6% in Belgium (portfolio investments in US companies brought a mean rate of
return of 11.5% to American investors).82 As to the actual firms invested in,
chemical companies were most important as far as Germany was concerned. 25% of
the capital of the successor companies of the IG Farben combine
(BASF-Bayer-Hoechst) at the beginning of the 1950s was owned by foreigners,
notably Swiss and American investors (who also owned 12% of Bayer). 87 The most
important investment object in Italy was Montecatini, a renowned 'blue chip' on
the New York Stock Exchange. Philips, KLM, Royal Dutch/Shell (one of the first
major European concerns to be introduced at the New York Stock Exchange in 1954)
were the favourite shares as far as Dutch capital was concerned. For France, it
was Péchiney, while Unilever and British Motors were favourites in Britain.84
Significantly, in the early 1960s a restructuration of American portfolio
investment in Europe began, corresponding to the level of development reached by
European capital in terms of Americanization and the growth of finance capital.
As Fortune reported in 1962, 'the more sophisticated investors in Western
Europe have recently been turning their attention to banks, insurance companies,
and companies that serve the consumer market."85 German and Dutch insurance
companies, German banks, and Dutch Robeco investment company, Belgian Gevaert,
and French Perrier were prominent in the new wave.
The
list of high-return countries for portfolio investors was quite different from
the list of high-return countries for direct investors. Taking two years, 1957
and 1963, as examples (one at the outset an one at the high tide of American
direct investment in Europe), the picture for non-distributed profits on
American direct investment yields almost the opposite result in rank-order. For
1957, Belgium heads the list with 30.4%, followed by Britain, France, West
Germany, the Netherlands, and Italy. For 1963, the percentages have fallen, but
the rank order was only changed for Germany, now third instead of France, which
is fourth. 86 With due caution, then, it can be argued that in periods of
prominence of rentier capital in the United States, the portfolio investors in
Europe were part of the critical mass of interests willing to accommodate German
ambitions and tendencies towards continental European unification and autarky.
In the offensive periods characterized by corporate and industrial reinforcement
in the United States, on the other hand, the activist perspective of the direct
investors contributed to the orientation towards Great Britain and towards
offensive Atlantic unity in American foreign policy. Although evidently not
sufficient to e plain these orientations, the international dimension of the
profit distribution process of American capitalism does identify sources
interest supporting one or the other orientation.
Among
the European countries with important portfolio investment in the United States,
Great Britain and the Netherlands WI the most prominent. During the war, foreign
ownership of American stock declined at least relatively. From the 5% to 7% of
American corporate stock owned by foreigners in 1937, only 2% remained in
1954.87 From the late 1950s on, portfolio investment in the United States
increased again. The United States and Great Britain in the period 1960--1975
were the main portfolio capital importers; Switzerland, Belgium and Luxemburg,
and Italy were the main portfolio exporters. For West Germany and the
Netherlands, the export and import of this form of capital were roughly in
balance.88
The
actual flow of portfolio capital from Western Europe to the United States cannot
be identified for the individual countries, since much of it went through
intermediaries in Switzerland, Luxemburg, or London. Confining ourselves to the
countries under review, a 1967 IMF study trying to locate the domicile of
foreign stock and bond owners in the Atlantic area found that, relative to
population, Belgium and the Netherlands were the largest foreign portfolio
investors; in terms of portfolio capital export in the period 1962- 1974, also
divided per head of the population, Belgium/Luxemburg and the Netherlands again
headed the list. In both cases, Italy followed at a distance, while Switzerland
was on top when all European countries are taken into account.89 These results
should not come as a surprise since the share of national income accruing to
rentiers (dividends, rent and interest) in 1967 for the Netherlands was 16.4%,
for Belgium 10.9%, and for Italy 9.0%. French and German rentier incomes, on the
other hand, accounted for only 4.3% and 2.8%. The British percentage was in
between: 7.5%.
To
the degree that rentier incomes in Europe were related to American corporate
expansion, rentiers in these countries were part of the critical mass of
interests supporting Atlantic unity policies in their respective countries. In
the late 1950s and again from 1962 to 1965, European investors made large
investments in dollar bonds (floated, incidentally, by European public
authorities), showing their preference for dollar holdings.90 A straight-forward
coincidence between the actual increase of European rentier incomes and American
corporate expansion can be noted only in the case of Germany, but this does not
by itself invalidate the hypothesis of the different profit preferences
underlying different orientations to Atlantic unity.
3.
Vietnam and de Gaulle
While
the processes of internationalization and equalization of accumulation
conditions for international capital were still developing, their original
driving forces in the American class structure showed signs of slackening. By
mid 1965, the combined effects of war expenditure and Great Society programmes
began having an inflationary impact. The corporatist guideposts, having bee
renewed by the Johnson administration for 1965, were now undermined by
industrial expansion and an exhaustion of the labour supply. Wage increases in
excess of the guide-posts were wrested from the employers, and by 1967-68, the
guide-posts for all practical purposes were abandoned.91
Support
for American activism abroad correspondingly suffered At the AFL-CIO convention
in December 1965, a clause on the peaceful ending of the Vietnam War was adopted
to accommodate union opposition against the war, of which Walter Reuther and
Emil Mazey of the VA W had made themselves the spokesmen. Meany and the rest of
the leadership rejected the clause, but it was included nevertheless at the
request of Vice-President Humphrey. Humphrey intimated that the Johnson
administration would not like to see an open controversy on the convention floor
destroy the image of solid trade-union support for its Indo-China policy. In
1966, a conflict related to foreign policy erupted within the AFL-CIO when
Reuther publicly accused the organization of working with the CIA.92 Although it
would take several more years before a distinct trade-union opposition to the
war developed, the class truce underlying the Kennedy offensive and enforced by
the corporatist guidposts programme was broken. As before, the effectiveness of
the controls in terms of labour peace lasted as long as the offensive remained
more or less proportionally intertwined with domestic reform, but greatly
diminished when the self-confident optimism underlying both gave way to
reactionary countertendencies.
As
far as the relations between fractions of capital were concerned productive
capital started losing ground to money capital from 1966 on. In due course, the
liberal format of trade policy was abandoned. By 1967 protectionist pressures were stronger than in the
1950s: the Johnson administration's 1968 effort to extend the Trade Agreements
Act met with a host of protectionist bills. In the ensuing legislative battle,
most of these were defeated, but the extension proposal went down as well. 93
Meanwhile, friction with Europe was increasing as a result of divergent
interests in the sphere of international monetary relations, dramatized by the
growth of American investment and the application of extraterritorial
jurisdiction by the United States. As the President of the International Chamber
of Commerce, IBM chief Thomas Watson, observed in 1967, 'the great international
wave that created the Kennedy Round and raised us to where we are is beginning
to break itself on the rocks of s quarrels.'94
European
unwillingness to follow the dictates of American policy in the economic sphere
was bolstered by growing popular revulsion against the war in Vietnam. From the
vantage-point of the Western European corporate-liberal bourgeoisie, the
Atlantic Partnership concept was becoming detrimental to long-term interests of
im- perialism by tying the Europeans too closely to an American policy rejected
at home as well as in the Third World. Henry Kissinger, in a 1965 book,
recognized the element of revenge in the recalcitrance of Western Europe with
respect to American leadership. 'Some European leaders', he wrote, 'are now
repeating the American argument of the fifties: that the larger interests of the
free world are sometimes served by allowing for differing, occasionally even
competing, Western approaches to the emerging nations. '95
In
this perspective, it was not surprising to discover France in the front row of
the restive European allies. Having been duped and replaced by the Americans in
Vietnam when still entrapped in its colonial past, de Gaulle's Fifth Republic
now was part of a Western Europe reconquering a world position on a modern
industrial basis. Moreover, in that context, France was the only continental
power of consequence able to freely express its ambitions to playa military role
of adequate dimensions. The existing structure ofNA TO, which the French
President himself had tried in vain to change in 1958, was a serious obstacle in
this respect. As one of the General's generals noted in 1966, 'the military
organization of NATO has become vir- tually a body without a head. . . because
the major subordinate commands, entrusted to American generals and admirals,
have tended to become independent of the inter-Allied hierarchy while depending
directly on the Pentagon in their capacity as commanders of American forces.'96
In May 1966, de Gaulle cancelled French military obligations under the NATO
Treaty. In a letter to President Johnson, he reassured the American leader that
France would renew the signature to the Treaty when it expired in 1969. The
basic allegiance to the capitalist world accordingly was not in doubt; the
disagreement was on the actual use of military force by the partners of the
alliance, and hence, French non-cooperation remained con- fined to concrete
command arrangements established in 1949-50.97
Reacting
to de Gaulle's letter in October 1966, President Johnson made it understood, if
we accept Finletter's rendition, 'that the hopes for a "big alliance"
which would concern itself with worldwide matters would have to wait for the day
when the crisis in Southeast Asia was settled'. 98 The contrast with the
Atlantic and universalist euphoria of 1961-62 could not have been more explicit.