Proceso de enseñanza - aprendizaje

So far, from a more or less positivist standpoint, we tried to identify the relations between different principles by looking at the legal texts (even though the ultimate connection between these principles found in legal texts and the fundamental social contradiction between capital and labour was alluded to). We looked at the intricate relations that exist between ‘budgetary efficiency’, ‘growth’, ‘investment’, ‘labour reforms’, ‘flexibility’. We examined this totality of principles and saw how they relate to each other. What is missing from the above analysis is their inner connection: why and how do they relate to each other as part of a system? This can be provided by a Marxist analysis, which examines the functioning of these principles embedded in a system of contradictory social-class relations. This is what this section explores.

This analysis takes into account the uneven development of EU economies; the capitalist competition between capital fractions within the EU and between the EU and international competitors; the intra-EU contradictions and the division between ‘technological leaders’ and

‘technological laggards’; the restrictions imposed by the Economic and Monetary Union; the role of technological innovation in the creation of capitalist crises; the need for absolute surplus value extraction and intensified exploitation as the only way out of the crisis. On this basis, that EU law is a principled totality, where specific principles (such as the freedom of establishment), which reflect political conceptions about how an economy should develop, far outweigh other goals and principles (such the protection of workers), is explained by the fact that the EU was a capitalist project since its inception. Similarly, that freedom of establishment is such a principle which far outweighs all other can be understood in the context of capitalist unevenness and competition within the EU, where capitals seek the most favourable conditions to maximise their profits.

Profitability is the reason why capitals move across national frontiers: ‘in their constant quest for the highest rates of profit, the most dynamic capitals seek access to (a) foreign inputs, labour power and financial capital, (b) foreign commodity markets and (c) foreign direct and indirect investment opportunities’ (Carchedi, 2001, p. 60).

Capitals need to trade, that is, exchange, simply because they need to realise the value contained in their products at the highest possible (rate of) profit. [...] They thus engage in a relentless fight for the world’s purchasing power, that is, for the world’s (surplus) value.

International trade and capital movements are thus the manifestation of this fight. The outcome of this conflict is far from being mutually advantageous for all parties involved.

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[...] Those capital units, and by extension those nations, which gain the most from all this are basically those which are already ahead of the others, usually the oligopolies in the so-called ‘developed’ countries. [...] Economic integration makes this greater freedom permanent. But it is neither an automatic nor a necessarily favourable outcome for everybody. Resistance to integration, far from being an irrational economic policy, simply expresses the interests of those who stand to lose from it (Carchedi, 2001, pp. 60-61).

It is, therefore, the clash of economic interests in the process of capitalist unevenness that determines the process of European economic integration. This has been the case from the origins of this process. It has been argued that the origins of the EU cannot be properly conceptualised without understanding the uneven and combined developmental terrain that it inherits and is constituted by, and further, that this terrain forms the very ground for the mutual but contradictory articulation of national and transnational conditions of capitalist accumulation (Sandbeck & Schneider, 2014, p. 859). Similarly, it is here argued that the latest developments (institutional shifts of the EU juridico-political framework and labour reforms introduced in all Member States) can be explained on the basis of unevenness and contradiction between national and transnational conditions of capitalist accumulation. Let us begin by looking at the historical roots of unevenness.

The argument has been made that the revival of European integration in the 1980s ‘reflected the attempt by dominant capital fractions to force through comprehensive deregulation policies in the face of the crisis of Fordist accumulation strategies and to limit the scope of national Keynesian economic policies’ (Sandbeck & Schneider, 2014, p. 850). Of course this process was not without contradiction, since other major European capitals had aimed to establish a defensive neo-mercantilist strategy to shelter European markets in the face of increasing global competition.

However, the industrial and financial fractions that had organised themselves as the European Round Table (ERT) of Industrialists were ultimately able to set the agenda for a neoliberal integration project, seeking to respond to the external pressure of American and Japanese competitors and a perceived European decline (Sandbeck & Schneider, 2014, p. 850).

We see then that contradictions and competition between different fractions of capital within the EU, as well as between European capitalists and their American and Japanese competitors, were vital in shaping the post-1980s EU integration project. To be exact, then, and from a Marxist standpoint, the EU can be characterised as a capitalist project, and an imperialist one for that matter. Given the imperialist past and nature of the countries which had founded the European Economic Community, the body emerging from their integration could not but ‘contain the same

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seeds and develop into the same weed’: ‘It is hard to believe that colonial (imperialist) nations could join into a supranational body of a different nature’ (Carchedi, 2001, p. 9).

Furthermore, the point has been made that this process of integration has been shaped by a further fundamental contradiction captured in the schema of ‘core and periphery’. As we saw above, the very establishment of an EU project needs to be linked to the developmental goals and imperatives of certain dominant nation-state formations and their dominant class fractions, in terms of their attempt to forge competitive advantages over and above neighbouring European states (Sandbeck & Schneider, 2014, p. 860). These dominant class fractions among the dominant nations within the ‘core’ took the initiative of shaping the EU project in order to enhance their profitability through engaging in transnational forms of capitalist accumulation by reducing transaction costs, eliminating tariffs, promoting capital mobility and placing pressure on rising labour costs (Sandbeck & Schneider, 2014, p. 860). Moreover, and at different historical stages of this process, Member States from the so-called periphery decided to join the EU. This decision has to be assessed on the basis of the advantages afforded to domestic ruling classes both in terms of international competition and in terms of domestic reproduction. It has been argued that the decision of peripheral Member States to join the EU has to be seen as dominant capital fractions in these states ‘engaging in a process of ‘catch-up’ and as an attempt of these fractions ‘to employ the EU as a leveraging point for advancing their own economic goals, whether successfully or not’ (Sandbeck & Schneider, 2014, p. 860).

Another related point has been made, namely that in the EU context, capitalist unevenness is reflected in a specific intra-EU division of labour, which dates back to the beginning of the -then- European Community. This intra-EU division of labour has been one of the strategic choices in EU’s response to the competition with the USA, Japan, and more recently China and the other developing economies. The choice of this intra-EU division of labour was based on the judgment that the traditional sectors of European industry are going through a crisis, while other cutting-edge sectors (microelectronics, telecommunications, biotechnologies, etc.) can guarantee constant and growing international demand, satisfactory rates of profit and a monopolised structure of productive technology (Papadopoulos, 1994, pp. 30-31). Hence the powerful Member States chose to follow a methodically co-ordinated process of expanding the production of these sectors.

In parallel, the least developed countries acquired the role of providing the rest of the Community with the surplus of agricultural and traditional (low-technology) industrial products, as well as that of trading-transhipping centres (Papadopoulos, 1994, pp. 30-31).

The community, in that manner, prioritised the economic goal of international competitiveness, while downgrading the goal of intra-European convergence of economies. The international

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competitiveness of the EU, as well as the intra-EU competition, is translated into a series of class-oriented policies, which worsen the condition of Labour compared to Capital. It is necessary then that these policies are introduced on the basis of this intra-EU division of labour, albeit with differences as to the time and manner of their implementation, owing precisely to the unevenness of development of EU. For the EU and the Euro may facilitate the convergence of capitalist economies through the freedom of movement of capital, goods, services and labour-power, but each capitalist economy follows its own economic cycle, and the competition between them co-exists with their collaboration and is exacerbated in situations of crisis, despite their interdependence.

This intra-EU division of labour, and more specifically the division between ‘technological leaders’ and ‘technological laggards’ (rather than the one between core and periphery), will be useful for our analysis of the reasons why the capitalist-imperialist structure of the EU necessitates the measures for intensified exploitation of labour, which are introduced in the post-crisis context. It is pertinent here to elaborate briefly on a Marxist theory of capitalist crises, in order to set the context for the development of socio-economic contradictions. Marxist theory identifies technological development within capitalist relations of production as a fundamental cause of crises (Carchedi, 2001, p. 79). This means that crises are not due to under-consumption (overproduction) of use values, but to underproduction of (surplus) value due to technological innovations embedded in capitalist production relations (Carchedi, 2001, p. 81).

This phenomenon is intrinsically linked to the growth of the organic composition of capital. The latter refers to the relation of variable to constant capital. According to the Marxist theory of value, variable capital (the capital applied to the purchase of labour power) is where profit derives from, since only labour can create value and only surplus labour can create surplus value, therefore profit, for the capitalist. However, the fact that technological innovations are the major way for capitalists to compete within sectors -since technological innovations reduce the socially necessary labour time for the creation of a use-value (product)- means that the tendency is for constant capital to increase at the expense of variable capital. It can, thus, be argued that technological innovations adversely affect the rate of profit.

There are, therefore, sound reasons for accepting the thesis that technological innovations reduce the average rate of profit and are a major contributing factor to the eruption of crises, which are then manifested as: destruction of capital, i.e. bankruptcies, closures, unemployment;

devalorisation of capital; destruction of capital as finished commodities; difficulties of realisation; financial, monetary and budgetary crisis as well as inflationary processes (Carchedi, 2001, p. 85). However, this is not an absolute law because capital tries to check this tendential fall

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in the rate of profit, either through its inner working or through conscious policies (Carchedi, 2001, p. 85). Central among these tendencies (which may include fiscal and monetary policies among others) is the tendency to increase the rate of absolute surplus value, that is, greater intensity of labour and longer working days. This is a point of major importance as it explains the socio-economic content of the notion of ‘flexibility’, as well as the nature of the labour reforms introduced throughout the EU.

Let us further this analysis by returning to the terrain of unevenness and competition, and the main contradiction between more developed, technologically advanced, countries (i.e. their dominant capitalist fractions) and those less developed, technological laggards. For Guglielmo Carchedi, a country can be defined as a technological leader: where only one sector is considered, if its average productivity in that sector is higher than in other countries; where more than one sector is considered, if that country leads technologically in the major high-technology and innovative sectors (Carchedi, 2001, p. 102). According to the laws of capitalist development, the technologically innovative country (innovative exporters and through them all exporters and importers) is ‘rewarded’ for its increased productivity through the appropriation of more international value, that is, by shifting abroad its profitability difficulties (Carchedi, 2001, p. 102).

However, the counter-tendency of this is a revaluation and appreciation of its currency. On the contrary, the country lagging behind is punished through a loss of value and thus by importing profitability crises (Carchedi, 2001, p. 102). The countertendency, here, would be a devaluation and depreciation of its currency. These counter-tendencies affect the leaders by the slowing down of their exports, whereas the laggards could see a similar increase in their exports, because of their depreciated currency.

What follows from the above is that in the antagonism between technologically advanced and less-advanced countries, the depreciation of currency may be a useful tool for the latter in order to appropriate that international value which cannot be appropriated through superior technologies.

If the choice of currency depreciation is precluded, then ‘the technological laggards can resort to forcing their labourers to work longer and/or more intensively, thus achieving a higher production both of (surplus value) and of use values’ (Carchedi, 2001, p. 102). As is well known the Economic and Monetary Union (EMU) precludes currency depreciation as a measure that individual Member States can resort to. In fact this measure has been precluded even before the institution of the EMU, with the previous model of the European Exchange Rates Mechanism (ERM).

Carchedi argues that the fixed exchange rates served to solidify the dominance of the more developed, technologically advanced countries, and their leading fractions. The bloc of

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technologically leading countries ‘appropriates value from the dominated bloc through the international prices system, in a systematic and permanent way, thus being able to accumulate capital and invest it in technological innovations and further reinforcing its technological lead’

(Carchedi, 2001, p. 122). This point has major consequences for Europe’s labouring classes. The EMU (as much as its predecessor, the ERM) forces technological laggards to extract more (absolute) surplus value at the point of production, instead of using redistribution mechanisms (inflation) (Carchedi, 2001, p. 138).

Since technological laggards had to renounce inflation and devaluation, their capitals had to compete through longer working days (or weeks) and higher intensity of labour, that is, by imposing higher rates of absolute surplus value at the point of production. This is achieved by the dismantling of social security systems and the increased legal possibility of arbitrarily dismissing labourers, nowadays called labour flexibility (Carchedi, 2001, p.

138).

These contradictions are exacerbated following the crisis. The effect of the EMU, apart from solidifying the interests of the technologically advanced countries and their most dominant capital fractions, is that the prescribed policies to deal with the capitalist crisis and counter the fall in the rate of profit are restricted to the extraction of absolute surplus value, through policies of intensified exploitation. European capital, in order to reproduce the conditions of its existence and dominance has to resort to policies of internal devaluation and intensified exploitation, i.e. the policies of deregulation of the labour market through the introduction of ‘flexibility’ that we examined in the previous section.

Of course this orientation towards intensified exploitation does not come without advantages to the technological laggards, too. There are certain advantages deriving to capital from the renouncement of inflation and devaluation for the purposes of monetary integration. First of all, absolute surplus value and intensified exploitation are to be preferred over inflationary measures, since ‘inflation corrodes not only labour’s income but also that of all other classes, including those which are traditional allies of capital, thus being a possible cause of generalised discontent’

(Carchedi, 2001, p. 139). Moreover, higher rates of absolute surplus value at the point of production ‘increase both the average rate of profit and the economic base (the production of value and of commodities) instead of just the former as is the case with inflationary measures’

(Carchedi, 2001, p. 139). Last but certainly not least, high rates of absolute surplus value at the point of production ‘foster an increased direct control on labour within the labour process itself and the (ideological, political and organisational) weakening of labour’s organisations’ (Carchedi, 2001, p. 139).

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We can, thus, conclude that the extraction of absolute surplus value through intensified exploitation promotes not just the interests of the technological leaders or the most dominant fractions of capital. Intensified exploitation has direct benefits for the reproduction of capital in general, not only in economic terms, but also in social terms of weakening labour’s organisations.

It is the capitalist-imperialist structure of the EU and the capitalist contradictions, in which the process of EU integration is embedded, which explains the intricate link between monetary policies, budgetary efficiency and labour reforms focusing on ‘flexibility’. Despite the uneven development of capitalist national economies, the Euro, and thus German leadership, is accepted by other European countries because the bill is paid by labour (Carchedi, 2001, p. 14). Of course this process of intensified exploitation, necessitated by capitalist contradictions as it is, does not come without effects on the form of exercise of public power. But before we analyse these, let us look at the particular labour reforms introduced in specific Member States according to ‘best practice’ for the benefit of capital.