Economic Integration

the newest form of the internationalization of economic life; taking the form under capitalism of an organic combination of two factors—the mutual interconnections of the private monopolies of various countries and the implementation of agreed-upon state-monopoly policies both in mutual economic relations and in relations with third countries. Economic integration represents an objective process caused by the development of productive forces and is one of the trends of internationalization of the economy resulting from this development.

“Already under capitalism, all economic, political, and spiritual life,” V. I. Lenin wrote, “is becoming more and more international. Socialism will make it completely international” (Poln. sobr. sock, 5th ed., vol. 23, p. 318).

The fundamental basis of economic integration is established by the growth of enterprises beyond the size required for the supply of limited domestic markets (especially of small countries) and by the advantages of international division of labor and the demands of stability and regularity in this division.

In bourgeois political economy, the objective nature of the process of economic integration is often held to be one of the factors of the convergence of socialism and capitalism. Such an interpretation has no scientific base. In reality, the integration processes under way in the socialist countries and in the capitalist countries fundamentally differ. This difference is emerging as one of the factors of antagonism between socialism and capitalism.

Capitalist economic integration is an interstate unification that took shape after World War II, during the process of the state-monopolistic regulation of the economy. Capitalist economic integration in contemporary conditions represents a new stage of cooperation of monopolies of various countries in the process of economic expansion and the struggle for capture and redistribution of markets. It develops in the form of regional economic blocs and groupings of states that embrace separate parts of the capitalist world and that are involved in complex antagonistic relations with one another and with the noninte-grated parts of the capitalist world.

Capitalist economic integration emerges from the action of the law of the unevenness of economic and political development of capitalism. One of the aspects of the action of the law is reflected in the fact that all other conditions being equal, imperialist countries with a larger population have an advantage resulting from the larger capacity of their domestic markets, which contributes to optimality in production and gives enterprises greater competitive ability.

In this scheme of things, monopolies of the Western European countries were in an inferior position vis-à-vis those of North America. This inferiority sharply underscored the necessity of expanding markets beyond national boundaries, a need created by the shift to mass and large-scale serial production, and it also underlined the necessity for the elimination of national economic barriers hindering the development of large economic complexes. The major factor contributing to economic integration was the political situation in Western Europe after World War II—the collapse of plans for unification by means of imperialist aggression, the victory of socialism in a number of countries in Central and Eastern Europe, and the disintegration of the colonial system of imperialism.

All this determined the special role of Western Europe as the birthplace and main arena of economic integration. The first practical step toward economic integration was the creation in 1951 of the European Coal and Steel Community by France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg. The second decisive step was the conclusion in 1957 of the Treaty of Rome for the formation by the same countries of the European Economic Community, often called the Common Market, and at the same time of the European Atomic Energy Community (Euratom).

Although the Treaty of Rome was drafted under the slogan of “liberalization” of economic relations of the member countries, the purpose of the Common Market was not to weaken state interference in economic life but rather to attempt to transform this interference into regulation of the economy on the basis of combining national and supranational resources.

Economic integration from the beginning followed a course of collective autarky—the creation of closed economic blocs as new forms of the struggle for division and redistribution of markets. In 1960, as a counterbalance to the Common Market, the European Free Trade Association was created under the aegis of Great Britain.

Western European economic integration contributed to a strengthening of international economic ties of the imperialist countries, both overall and within the integrated organizations. With intensive growth of the volume of foreign trade as a whole, the share of the trade among the Common Market countries grew more than 6.3 times from 1958 to the beginning of 1970. On the basis of an expansion of markets, the centralization of production and capital increased, which in turn triggered a migration of capital both within the Common Market and particularly from third countries, the foremost being the USA. The emergence of integrated state groupings contributed to a further development of private export of capital from some imperialist countries to others (for example, from the USA to Canada and Australia) and to a swift growth of international and multinational companies as one of the most important elements of the integration process.

At the same time, old contradictions are sharpened and new ones emerge in the course of capitalist economic integration. Inasmuch as the interests of the monopolies of individual countries very often are in conflict with the program of economic integration, from time to time talks are resumed in the Common Market about political integration, that is, creating common political bodies and transferring some of the sovereign rights of the national bodies to them. The lack of progress in this area reflects the incompatibility of interests of the participating countries. Even more obvious are the contradictions between the Common Market and the European Free Trade Association.

Relations between the USA and the Common Market are characterized by constant attempts of American monopolies to take root in the expanding European capital market and to overcome the general tariff wall created by the Common Market against third countries. In these attempts, the role of stalking-horse is being played for the USA by Great Britain, which entered the Common Market on Jan. 1, 1973, along with Denmark and Ireland. This entry was opposed by some members of the Common Market, whose ruling circles feared a disruption of the balance of forces to the detriment of their interests. The deep contradictions of interests both between the integrated groupings and outside countries and within the integrated groupings were clearly apparent during the deepening of the currency crisis of 1970–72.

The Western European economic integration accelerated integration tendencies in other parts of the capitalist world, especially in the developing countries, where there are a number of groupings analogous to the Western European unions. In Latin America, the Central American Common Market includes Guatemala, Honduras, Nicaragua, El Salvador (since 1960), and Costa Rica (since 1962); the Latin American Free Trade Association takes in Argentina, Brazil, Mexico, Chile, Paraguay, Peru, Uruguay (since 1960), Ecuador (since 1961), Colombia (since 1961), Venezuela (since 1966), and Bolivia (since 1967). In Africa the decision was adopted at a 1965 conference of West African countries, including Ghana, Liberia, Mauritania, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo, to set up an intergovernmental organization for the coordination of economic development. In 1966 an agreement went into effect for a tariff and customs union of Central Africa (Cameroon, the People’s Republic of the Congo, Chad, the Central African Republic, and Gabon).

In 1965, an Arab common market was created, including Egypt, Iraq, Jordan, Syria, Kuwait, the Yemen Arab Republic, and others. In June 1967 the East African Community was established (Kenya, Tanzania, and Uganda). The direction and activities of these and similar organizations depend to a very large extent upon the social, class, and political relations both within the countries involved and at the international level. Although proimperialist and neocolonialist forces from time to time are dominant in some of these organizations, as a whole their emergence is a progressive factor.