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Money and the primacy of politics

The Euro as the Agenda of Capitalist Elites and the Political Consequences

27. August 2014
by Albert F. Reiterer

Speech held by Albert F. Reiterer at the European Forum "Beyond the Euro - there is an alternative", 20-24 August 2014, Assisi, Italy.

Since the start of E(E)C / EU the monetary union was a paramount goal in this political project of Western European industrial and financial capitalists. However, after the Treaty of Rome was established, there were more primary short-run targets to long for, and the idea of a common currency remained a rather abstract or a rhetorical notion for some time. But even in those times it figured as a darling of conservative ideologues, and of some ambitious politicians, too. Anyway, the Werner- and the Tindemans-report remained dead letter. Helmut Schmidt and V. Giscard d’Estaing personally tried to draft a scheme for a European Monetary System in 1978, but it failed miserably.

To use the terms of an old debate in the left movement, we have to revisit imperialism as the nec plus ultra of capitalism. The EU has succeeded to constitute the – until now – single instance of a supra-imperialist entity. It is successful, because it has built up a supra-national state. The monetary union was and is a key element in this process. Only by the organisation of a state, the establishment of a semi-autonomous bureaucracy as the executive of general class interests of the oligarchy this was made possible. That is: We are speaking of the EU in general when we are criticizing the Euro and his damaging effects. If we want to combat the destructions brought about by the Euro we have to combat EU.

It was the end of history, the end of the Soviet system and its nomenclatura in 1989 which made possible the break-through of this policy. The oligarchy and the political classes in Western Europe did not hesitate to seize this opportunity. Germany’s fate and especially its come-back as a great power was one of the central stakes in this game. Mitterand wanted to realize the draft of his pupil Delors at any price.

Imperialism – Supra-Imperialism – Ultra-Imperialism?

I use the term supra-imperialism and do avoid ultra-imperialism. It was Karl Kautsky (1914) who framed the latter term in 1914. Lenin (1916) rejected it violently. And not by chance. Kautsky dreamed of a harmonious development of world capitalism. Nevertheless, he perceived some real tendencies of monopoly capitalism. In a rather vulgar manner he tried to explain them. In Marxist tradition the term vulgar economy is often used to brand a superficial version of explanation for economic processes. Especially the neoclassic theory is categorized in this manner. Unfortunately, we can see the same phenomenon in socialist debates, too. Kautsky is a paradigmatic example of vulgar marxism in a fashion which only later came to prevail, mostly in the Soviet marxism.

Is cooperation possible between national capitals at the global level? Kautsky did affirm it, and he did it by neglecting the political system and the political apparatus. It is significant, how often he uses the phrase: “In a purely economic perspective…” He did not grasp that a “purely economic perspective” is a contradiction per se in our system. However, this was the stance of the socialdemocratic Second International, and Stalin made it the stance also of the Third International. The fundamental link between economy and politics was neglected, while at the same time the different roles of capitalist entrepreneurs and the bureaucracy was not recognized. We have to insist: Bureaucracy is the corporation which is to look at the general and more comprehensive interests of the dominant social forces. In former times this was sometimes framed: “the ideal total capitalist”. Be this as it is, the state and its bureaucracy has some degree of autonomy, and this fact is paramount. He can and will discipline recalcitrant individual capitalists.

Lenin in his usual intransigent style could easily ridicule Kautsky in 1914 as war broke out a few weeks after his text on imperialism. However, he himself did not grasp the difference between short-run interests of greedy capitalists and managers, and long-run concerns of the bureaucratic personal of the state. He lacked obviously a more dialectic approach to the differences of the institutions and their motive forces. Not to recognize the semi-autonomy of the state is a key element of Leninism. In this sense he is really the author of the concept of STAMOKAP with his deficiencies.

The fallacy of the state as a completely dependent agency of monopoly capitalism is of utmost current importance. While EU may be a committee of financial oligarchy, the political classes at the national level are bound by their concern for the results of national elections. And even at the level of EU central bureaucracy there are differences between those parts which are really the puppets of big business and special interests, and those who often take on the role of controllers and of the bearers of more general interests, sometimes even of the weaker ones. Thus, this debate is more than a long passed-by episode of the history of the labour movement. It has its saliency in everyday politics. This is valid all the more as exactly at this point depart the dangerous illusions about EU as a potentially progressive agent in the course of history. And unfortunately this applies not only to social-democratic deception, but to a considerable part of the Left.

Kautsky furthermore tried to explicate imperialism as a problem in the relations of industry to agriculture. In this section, he argues in a really astonishing fashion, in a revival of physiocratic ideas. He failed completely to apprehend that he was discussing what is called the double nature of the commodity. However, this is not a problem of capitalist production alone; It is the very condition of human existence: Producing one’s subsistence is always a matter of starting in Nature and proceeding to social production.

Nevertheless, even in this breath-taking passages – because of its simple-mindedness – returning to the 18th century there is a grain of an insight. We must only remember on the everyday phrase that USA and EU are waging their wars for oil. As we know, this is not completely wrong. But there is a strong element of vulgar marxism. However, in a world of 7,2 bn. of human beings, great powers must look for the material provision and the supply of raw materials for their production. This is another aspect of the primacy of politics at the global level. We must not ignore, f. i., the politics of China in Africa and Latin America to secure the alimentation of its economy and society.

The European Single Act, Maastricht and the failed constitution of Rome

In Germany, neither the population nor the greater part of the political class were very enthusiastic about a single European money and about abolishing the mark. Ardent supporters of this goal, on their turn, were the entrepreneurs in the export sector, and of course, the bankers. They were supported by a minority of vociferous economists. The majority of German economists, on the other side, were inassertive. As conservative and dogmatic ideologues they feared political intervention by national governments and the new ECB on behalf of the new currency. It seems that also a majority of politicians were not convinced of the virtues of the money. It was not very attractive to them to share a currency and a central bank with France, Italy and Spain. Furthermore, as neoliberal dogmatists, they thought of money as a purely economist item. In the long run, of course, there should come a common currency. But this must be the high point of the process, and not the start. First, there should be convergence and a common state.

For the others, the more sanguine minority, the common currency would further integration and bring the golden age of the new capitalism (cf. Le Monde 1996). It would exact and compel fiscal discipline and wage restraint. The new currency would open the door to the paradise of the new economy and the European state. We can read all these paeans of praise in a lot of articles in journals all over Europe.

European politics and especially Mitterand’s stance to German unity short-circuited the debate. Helmut Kohl, hesitant himself about the common currency, wanted the new German national state which was offered to him by the majority of Eastern Germans. Mitterand, it is said, framed the alternative for Kohl: Either the Euro and German unity – or nothing. Surely, it is by no means clear whether Mitterand had had enough power to carry his point, if there was conflict. Nevertheless, it was a tiny bit risky, and H. Kohl would not risk anything, but reap the fruits of the new situation as soon as possible. So he ceased to demur and accepted the common currency, with some precautions (Maastricht criteria). Classical nationalism prevailed over neoliberal dogmatism.

In fact, this conflict within the Western German elite was really elucidating. It was a conflict about the primacy of politics. However, for both sides the argument was not strait forwards. Both sides coincided in the final goal:

(1) Europe as a continent and region, was to be structured with a centre in the highly developed Northwest, with Germany as the centre of the centre. Southern Europe, and especially Eastern Europe was seen as periphery, in two or three layers: A third layer would emerge beyond the future boundaries of an enlarged European Union, outside the territory of EU, in Turkey, Ukraine, the Caucasus, and so on.

(2) Within this northwestern core, income and fortunes would be concentrated more than ever with the upper classes, the elite, the oligarchy, and to some extant also with the upper strata of the middle classes. All the other strata of the population should and would be an internal periphery.

However, the way to this commonly accepted goal was in dispute. The successful, the victorious party reasoned:

(1) We must establish a structural force, an inherent necessity (in German this is called “Sachzwang”) for the policies we wish to enforce. We cannot expect to be always the stronger ones politically. There surely will be resistance. To overcome such a resistance, we cannot rely on everyday politics in the national context. We have to care for, f. i., electoral backlash. The continuity of the policies must be assured against the risks of general elections.

(2) To attain this, we must secure that any aberration of the policies we designed must be very costly. The potential insubordination of politicians of the political opposition as well as of the population must be punished severely. Only this way we can get irreversibility.

This is the key term: irreversibility. The bureaucracy and the political class did not conceal this. On the contrary, since many years this notion is most prominent in all documents of the EC / EU, and is repeated again and again. And Helmut Kohl greeted the cash version of the Euro in 2002 joyfully with the declaration (Spiegel 1/2002, 24): “this is really fantastic … European unity is now irreversible.” As a politician he personally failed in 1997. But his policies were not affected by the change in the personal of the German government. SPD and Green Party continued and sharpened conservative politics with a brutality the CDU had not dared and will not dare again in later years.

To work in this way, the common currency must be perceived by the population as a dominant structure which cannot be altered except with the risk of an economic and political crash. Political intervention is admissible, but only to smoothen the path of economic mainstream-processes, and to enforce compliance with the policies of the bureaucratic centre. Thus, politics is not meant to correct undesirable results. Its role is to hedge the “freedoms”, the freedom of speculation in the first instance. Basically, it is assumed that the above mentioned inherent constraints, the Sachzwang, will spontaneously do all which is necessary. It is exactly what happened in the years until the financial and the Euro-crisis. Since then politics has regained the stage.

This is the conservative version of the primacy of politics. This primacy presumably works by objective constraints. To disturb them means endanger economy and society, it is said. It is interesting that the social democrats in Germany were more prone to subscribe to such a world view than the conservatives. They consider themselves technocrats and globalists and are in this way the most eager supporters of big business and financial capital. This applies to the political personal as well as to their intellectual voices (Bofinger). And this was not exclusively a matter of the 1990s. Even today, the German socialdemocrats are the real janissaries of monopoly capital. Christian Democrats or at least a part of them do often hesitate. On the one side, they are encumbered by their ordo-liberal legacy and the doctrine of economic automatism. On the other side they have to be considerate of their petty bourgeois clientele which is rather sceptical of the Euro. – Later on, we will consider the Party The Left, and also the consequent Left in Germany which sometimes tries to dwell at the fringes of The Left.

In Austria, the situation is a bit different. The socialdemocrats (SPÖ), which had and edge in the share in the last elections above the conservatives, are monolithic in their support of the Euro and its politics at the level of the leadership. However, at its grassroots there are fissures. We must not forget that in 1994, at the referendum concerning the access of Austria to EU, the last few persons regarding themselves as left wing, has left the party or was forced to leave.

Since then, there is continuing erosion of the grassroots, because the FPÖ, former the Haider-party, is nibbling steadily the Euro-sceptic electorate of the SPÖ. It is doing so with increasing success, for the FPÖ has also adopted a programme in social policies which is very similar to socialdemocratic positions decades ago. We have not to take it very seriously, because at the same time, the FPÖ has some radical neo-liberal points (flat tax) in its programme.

The Austrian conservatives (ÖVP) have an unconditional pro-Euro-stance. We can even say that this has become a matter of political identity for this former Christian democrat party. They are supporting most strongly the policies of EU and ECB shaped since 2008, for this is exactly what the want to do in Austria, and what they are not really strong enough to do alone.

The Austrian Communist Party is not a political force at all. At the central level, in Vienna, the party may be see with a lot of justification as an insignificant of the Green party which is a categorical supporter of EU’s ultra-liberalist stances. However, their most successful provincial branch we find in Styria. And the Styrian communists are the opposite of all the cewntral party stands for. But unfortunately, although successful in terms of elections in the province and its capital, the population looks at them as a charitable organisation, not a political one. Thus, they do not succeed their local success into political gains.


In the short run real constraints are difficult to discern from pseudo-constraints. But this is not important. “Interior devaluation”, that is: abatement of the well-fare level of the lower and the middle classes is the goal. Pseudo-constraints and illusions are the pretext for actions in the same vein. “Too big to fail” has become the password for spending and squandering public money to the profit of the financial oligarchy and other groups of the elite.

However, there was one pre-requisite for this policy to work. The population is expected to have a “Baltic attitude”, that is: to accept everything the elite decides, and to say “thank you” even if slapped into the face. And maybe, this will turn out as the major problem of European policies and politics. Meanwhile, especially in the countries of the South, opposition is growing. And in some countries this opposition is turning into resistance. Lower classes and increasingly middle classes, too, start to call into question this system. This resistance is shaped in most different forms. While the Left organizes in Podemos and in SYRIZA, Catalan separatism frightens Castillian conservatives and socialdemocrats; the plebeian rebellion in Italy does not cease to startle also the fossils of the classical left, f. i. the commentators in “”Il manifesto”; even the socialdemocratic left organized in SYRIZA is terrifying not only the national conservatives, but the European bureaucracy and their political puppets in Germany. And not by chance: Even if they fail, they are threatening the elites in a way quite unusual in Europe since decades. The oligarchy is right in considering those national groups as a vital menace to their interests.

Money, devaluation and “Internal devaluation”

We must have a look on the more technical problems of money and the currencies. Why has the establishment of a wider currency area such vicious consequences for the population?

The common currency is the most apt device for the elites to come to their goals. Money, as we know, is the regulating mechanism in the economic system. Regional and national currencies are established to clear and to adjust differences in the productivity between national societies. Such differences are unavoidable as are unavoidable cycles and crisis in an unplanned economy. In fact, these differences are nothing else than the consequences of an unplanned economic system at the level of societies. A devaluation means, however, quite a different outcome in this process of balancing out regarding distribution, than the process which is called “interior devaluation”. A devaluation is always a worsening of the terms of trades from the perspective of the devaluating economy. The consequence is a loss of purchasing power for this country. However, devaluation distribute this loss tendentially over the population as a whole. Even the upper classes are affected in some way, and in a modest version. “Interior devaluation”, on the contrary, strucks only those who earn wages and are dependent upon their income from similar sources. They worsen the level of the lower classes. And exactly there lies the profit of a currency union for entrepreneurs and rentiers. However, to implement such an “interior devaluation” is a political action, and the Troika has demonstrated this beyond any doubt. National elites may be too weak to prevail, especially if there are general elections. Thus, the trick is to relocate the political decisions, away from national competences and to a politically irresponsible centre, to Frankfurt, the ECB, and Brussels, the European Commission.

Moreover, money has become, since its invention in far antiquity, a symbol for state success and state failure. Especially in Italy we could observe this aspect in blazing clarity. The lira was for many Italians the sign for the failure of their political system, not only since 1990, but since 1945. Thus they were all to willing to let it go. Most of them did not realize that Italian economy, compared to most national economic systems in Europe, were most successful. Surely, that is a question of regional perspectives. The Problem of Mezzogiorno is the one side, the success of Piedmont and Venezia is another one. Nevertheless, Italian governments in the late 1990s were quite certain to have the support of a overwhelming majority of their people when letting go the Lira.

Crisis and “Crisis”

The financial crisis of 2008 and the following years has at least two faces. On the one side, it is the European version of a general crisis of global character. It originated out of the steady and accelerated distribution up to the financial oligarchy and the elites, out of the “Great U-turn”. Politics tried to cheat the population about the consequences of this process, and the result of this game was a banking and financial crisis. Not by chance arising first in the USA, it intruded into Europe as a banking crisis. Especially Germany and the UK were affected first. However, as the bankers lost trust in governments and had a more accurate look at some of their clients, some European governments, most rapidly the banking crisis turned into a crisis of some peripheral states. A debt crisis emerged. This debt crisis immediately threatened the Euro-system as a whole. The Euro-crisis was perceived by financial capitalist and their protectors in ECB and Brussels as a deadly existential crisis. The political elite panicked, and in this moment, the crisis got a totally different character.

It became the unexpected instrument to establish all what the bureaucracy was wishing and longing for, and which it could not attain for lack of forces in many years before. And this aspect became soon dominant. Today, we must say: The crisis is the pre-delected device of the most aggressive conservatism in Europe. Ironically enough, most persons of the left did not realize this.

It was not only the elite which panicked for a very short moment. The population felt more precariously than since decades. As soon as the more audacious or more brutal of the elite realized this mood, they attacked. With both hands they grabbed at this occasion. Super-Mario Draghi, and his bailiffs at the national level, such characters as Junckers, Schäuble, Monti, Bersani, Napolitano and Renzi, the most recent version of the in Italy so frequently occuring type of mini-Duce, this Christian democrat turned into Social democrat, called Partito Democratico, are lending them their faces. There are a lot of stars belonging to the second and third category. In Austria we are punished by a personal so miserable we have never had.

Thus the “crisis” became a vehicle for the most reactionary policy since WWII. The Left has always lamented the formal character and the non-effectiveness of parliamentarian representation as a means for democratic participation. Now, we have arrived at a state of affairs that working parliamentarianism at the national level has come to be a nostalgic reminiscence. Right, it was hazardous. However, at this moment it seems that the game of the oligarchy has succeeded. The dualistic structure of the European society is a fact for most countries. In Austria we lagged behind in this regard. But now also our period of grace is over. While until now the retired and aged were the preferred object of social cutbacks, the next field to gain for the oligarchy is the politics of health.

With the new possibilities to intervene into fiscal policies, the central bureaucracy in Brussels can implement rather comfortably the assaults on national exemptions and their protective cloak.


The deplorable rests of the European Left, at least in central and Western European countries, have been overrun by this development and by their own political inertia. There are some efforts for opposition. We can discern two main patterns and strategies:

(1) The German party The Left or, better to say: its majority, has chosen the way to Godesberg, the social democratic highway. This is the project of Gysis, of the most familiar figure of this tendency. They do never forget their own submissive attitude and many of them seem to do everlasting repentance for their political activism in the former GDR. Their single most important aim is political respectability and a role as junior partner in a provincial government. It does not matter that the party is almost collapsing in the regions here this politics has taken place for some years, in Berlin and in Brandenburg.

(2) A minority faction is upholding old political values and failed strategies of the end-twenty-century. The prototype is KKE in Greece. They are not able to rethink critically their error of affiliating to Soviet marxism. Thus, the ideas of the Third International are constituent to them. A candidate to EP of the DKP, f. i., argued stubbornly that EU is the most progressive international form of capitalist development and bourgeois politics. So, we must not try to destroy EU, even if we had the power and means to do so. We have to impropriate it and to reverse it into a socialist instrument. Surely, a dictum by Lenin and a phrase of Marx is not an argument in today’s politics. However, as the most important theoricians of history and society we have some reason to reflect what they said. It was the most fundamental idea that the old state cannot simply be taken and converted into a socialist one.

So, for once let us recall what Marx thought about simplistic ideas of linear progress! In 1881 the Russian activist Vera Sassulitsch in a letter had asked him a question paramount to all developing countries: Is ist really a historical necessity that we have to repeat and rerun all the way capitalist societies have come along? There is, f. i., in Russia the communal tradition of the Mir, the village community incorporating a lot of non-capitalist modes to produce and to distribute the results of production. Wouldn’t it be a good idea to look for our own way? Marx took this problem extremely serious. However, he could not make up his mind. Four times he tried to come to a conclusion, and there are some rather lengthy drafts for an answer to the Russian comrades (MEW 19, 242 – 243, 384 – 406). In the end, he sent a very short and rather formal letter to V. S. There, he asserted only his interest in the Mir, and nothing more. Only many years later, this drafts were published. Marx argued in a highly complex way. To start from indigenous relations is possible if there is a global situation – as he considered to be at his time – of high productivity in the most developed countries. No society is obliged to repeat all the often vicious processes of other societies, f. i. the West: „The contemporaneity with the capitalist mode of production gives it the most complete material conditions to organize collective labour at a huge scale“ (MEW 19, 405). This letter, not sent and not published in Marx’ life-time, is the most explicit stance against historical determinism.

Friedrich Engels, with his inclination to technocracy in sometime a trivial fashion, to European suprematism and to great power chauvinism, did not know of this. His stance on the same problematic was totally different. Capitalism with all ist social and political consequences is unavoidable. It is an iron necessity for Russia and the other developing countries. It is not the Russian society which can transform itself (Cf. 1894: Remarks to: Social Affairs in Russia – MEW 22, 421 – 435). „The start of such a possible transformation of the Russian community can only be acted on the assumption of industrial-proletarian politics in the West“ (ibid., 426f.). While Engels surely was a realist in political terms, he lacked political fantasy. Lenin and Mao in some way were followers of Marx, while Deng Xiao-ping and the Chinese leadership, as well as the Vietnamese one, chose it to follow Engels – and in fact to follow Pinochet.

Why we are reasoning on this piece of an old text and on a seemingly rather exotic argument? In my view, it is not really exotic! The question whether EU is a progress compared to the nation-states and to national economies is basically of the same brand. Are we the pawns of a history which takes its way without human actions and by historical laws not encompassing humans?

What is to do?

The critical, the consequent Left has in fact a choice: Either to integrate into the mainstream of European politics and policies; or the frustrating way to combat it with all the illusions linked to such a vision of historical necessity. There is a high risk of failure. And yet: The political opportunities a better than ever since more than half a century.

To combat neoliberalism and the Euro is to combat EU as such! A considerable part of the populations is ready to support such an anti-EU-stance.

However, in some way, the financial oligarchy and the bureaucracy have reached their goal. The European super-state is not reversible by ordinary political means. If there is any chance, the elites are very eager to block the means. This has been called the permanent coup d’etat in Italy (Bechi 2014), but that is not a problem of Italy alone. And we know all too perfectly that we are not living an a revolutionary situation, not in central and Western Europe, and not even in the South. We do not dispose of revolutionary means. Furthermore, Lenin’s, Mao’s and Ho Chiminh’s revolutions have told us a long way about the risks of such a revolution. The very concept of revolution has to be reflected in the most radical fashion.

But this does not mean to cease with politics, or to resign completely. There are different ways to stay active. And in my view we must re-evaluate the virtues of a certain division of labour. There are those who are active in the field of practical politics, at the local, the regional and the national, and of course, the international level.

And there are those who are mainly active in the field of theoretical re-construction. This may be also a matter of age, of mood and of temperament. I myself have sought and found my field of activity in the practice of theory. We should not neglect the paramount role of hegemony, and the fight against conservative and neoliberal hegemony and for a more progressive one.

In this field I see two fundamental challenges.

(1) We need a new analysis and a new theory of global capitalism. We have to start again withe the most fundamental concepts and problems. Central in this is the role of politics and of political action even in the field of economics. We have to ascertain right from the beginning the primacy of politics and policies. This is perhaps the most basic analytical concept. However, it immediately turns into the most fundamental political principle. The role of the state is part and parcel of this analysis.

(2) We have to re-think urgently the contemporaneous class structure; we need a new class analysis!

It is not by chance that Thomas Piketty harvested such a huge success with his work on unequality and distribution. The theory has become practical in a quite unexpected way in this case. It is a glaring instance of the political importance of theory.

We have to return to our starting point. To combat the Euro means to link inextricably the struggle to a better welfare regime with the struggle for democracy. Such a struggle has at least to start at the national level. Surely we have to look immediately for a new internationalism, not to be confounded with the internationalism of the financial oligarchy and the EU-bureaucracy. The struggle against the ugly face of financial capital and of authoritarian bureaucracy has to start in national terms before transforming itself into international solidarity.


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