On Mon, 4 May 1998, Cynthia M. Hewitt wrote:
> So I think
> the Euro unity will be somewhat tied down for now with its challenge to
> solve (1) its needs for a cheap labor force (anywhere) and (2)
> acceptance by workers in Europe of the dismal dog-eat-dog existence that
> the U.S. has been weaned on.
The EU already has a cheap labor force: Eastern Europe. Of course, cheap
is a relative phenomenon -- we're talking an exploitable,
learning-oriented workforce which will provide adequate services,
transportation, etc. and be governed by a strong work ethic. The
Visegrad countries fit the bill nicely, and EU multis have been investing
a fair amount in the region. Second, the world-system has a slight problem
called "declining effective demand", i.e. too many Asian factories
exporting to overindebted American consumers. If the EU really does follow
the US model and razes its welfare state, we're in for a world Depression
of galactic proportions, because Japanese and American consumers are not
going to pick up the global slack. But if the EU instead follows the
euro with some serious monetary stimulus/redistribution, this would indeed
have major effects on the US: the EU would start growing quickly again, and
catch up with and surpass the USA in per capita GDP terms, just like West
Germany passed the UK some time in the early Sixties. In other words, the
long US decline would noticeably accelerate, to the point where we'd end
up where Britain is today vis-a-vis Continental Europe -- an archaic,
backward appendage of more efficient and effective capitalisms. That's
bound to create some serious political tensions in a country whose ruling
class still likes to imagine it reigns as the Supreme Warlord and
Currency-Giver of the planet, and regularly bombs the hell out of other
countries to prove it; not necessarily Left tensions, either -- it could
push us still further to the barbaric neo-nationalist Right.
-- Dennis