Euro: Going, Going... (Head to Head)

By Keith Hart and Stewart Home, 10 March 2002
Image: Illustration by Sneha Solanski

As Euroland takes its first unsteady steps on the world stage, Head to Head asks ‘what difference does it make?’ Keith Hart believes the adoption of the euro could provide an opportunity to challenge the hegemony of the American dollar in the economic sphere, whilst Stewart Home, although not specifically anti-euro, argues for the destruction of all money as a precondition for communism in our time. Let battle commence: we have nothing to lose but our credit cards

Keith Hart - HEAD1

The history of the euro reflects the evolution of world society after the Cold War. In the 1990s, the trials of European Monetary Union accompanied the long boom of the Clinton presidency. Now, just as the euro has become legal tender in 12 countries, America has taken up a new stance in global politics. The euro is not only a matter of European unification, it is about relations with the USA.

After defeating the Soviet Union, America consolidated its lead over everyone else in five principle ways, through its domination of global telecommunications, especially the internet; Wall Street’s dominant role in financial markets; the increased flexibility of its corporations; the reorganisation of world trade in its favour; and, of course, its military monopoly. The Bush government had already shown a penchant for unilateral action before September 11 and made that even more obvious afterwards.

While the euro was still just a virtual currency, it lost a fifth of its value against the dollar. A major swing in favour of the euro was expected during 2001, owing to Europe’s superior macro-economic performance compared with the USA’s (where a huge trade deficit is covered by capital transfers). But the euro only made some minor gains after the World Trade Centre was destroyed. We still don’t know whether the Europeans have escaped from the kind of exchange rate volatility that once marked their national currencies.

How far will Europe now go in differentiating its economic policies from those of the USA? One can easily understand why analysts have not been keen to spell out the growing divergence between America and Europe. The Americans had no reason to advertise the subordinate role of Europe in the post-war western alliance and perhaps the Europeans did not want to inspect their own client status too closely. Now the world economy is being designed to meet the needs of large corporations. This development is clearly led by the USA which accounts for half of the largest corporations in the world (Europe has a third) and whose government, particularly this one, is known to be susceptible to their influence. Will monetary union encourage Europe to take up a more independent stance?

No European government has spoken out against America’s war in Afghanistan. New rules for international trade and investment continue to be passed. The Europeans have raised their voice over American control of the internet. There is some concern here about genetically modified foods. Europeans outside Britain recognise the value of public goods more than Americans. All of this might stir them to articulate a stronger position in our unipolar world.

But America’s advantage also lies in its streamlined federal government. Alan Greenspan needs to consult very few people before changing interest rates. Europe’s fragmented sovereignty and cumbersome decision-making structures are a tremendous handicap in any conflict of interest with America. Euro-isation is helpful in this regard, but it must be accompanied soon by political and administrative centralisation. And, if Germany’s example is anything to go by, the effort of absorbing new eastern European countries could distract the EU from the need to offset the power of the USA.

Governments will not have things all their own way. The arrival of the euro sets in motion wide-ranging changes at all levels of European society. Even if the league of states holds together at the top, Europe’s diversity may assert itself in other ways. By suppressing their national currencies, some countries may encourage the formation of parallel exchange circuits, employing deutschmarks or francs as virtual currencies. The challenge of reconciling such pressures from above and below makes Euroland an experiment of vital interest to the whole world.

Stewart Home - HEAD2

Let’s get this clear, I am not part of the anti-euro camp which consists of those who are concerned about the effects of this new currency on the standing of British sterling and/or the US dollar. I do not wish to defend the dollar and/or sterling, instead what I seek is the abolition of money. The second and third chapters of Capital by Marx provide the theoretical starting point for my position. The chief function of money is to supply commodities with the material for the expression of their values, to represent their values as magnitudes of the same denomination, qualitatively equal and quantitatively comparable. Money thus serves as the universal measure of value.

Marx goes on to explain that because all commodities, as values, are realised human labour, and therefore commensurable, that this can be converted into the common measure of their values, i.e. into money. This is not to argue that Capital can be treated as a Bible and viewed as infallible, since by avoiding delving into a study of the entire process of production and consumption, and limiting his considerations of value strictly to the matter of exchange value, Marx produces an extremely primitive theory. However, such considerations are valid in commodity economies, such as those currently locked in debates over the relative merits of the euro, the dollar and sterling.

Under the capitalist mode of production, the fulfilment of needs is only a by-product and not the driving force of human activity. While the economy is run for profit, what matters is not the individual profits made by capitalists, but the constraint, the orientation imposed on production and society by a system that dictates how we work and what we consume. Communism does not mean taking money from the rich and giving it to the poor. Communism is about the abolition of money and the alienated system of commodity production it facilitates.

In order to create a free and truly human society, we have to get rid of both money and commercial relations, and from this perspective changing the currency in circulation is an utter irrelevance. There are, of course, reformists who advocate alternative systems of commercial exchange, and while these often do away with money (at least in its paper form), such utopian schemes do nothing to tackle the problems of commodification and human alienation.

British media debates about the euro have revolved around questions of national sovereignty and ‘our’ place in the world. Defending sterling against the euro is really no different to favouring Pepsi over Coke, it is a poisonous pseudo-choice. As Marx made clear, and he is not the only revolutionary to have done so, the working class has no country. Class-conscious proletarians must take an internationalist stand against both Britain and Europe as capitalist formations. Down with sterling! Down with the euro! Down with the dollar! Down with work! Down with exchange! Let’s move forward to a world without money or frontiers, where we can live truly human lives in a climate of ecstasy.

Keith Hart <hart_keith AT> is the author of Money in an Unequal World, Texere, New York and London 2001

Stewart Home is, among other things, author of Neoism, Plagiarism & Praxis and The Assault on Culture: Utopian Currents from Lettrisme to Class War (both AK Press)


Illustrations: Sneha Solanki