Singer, Daniel, The Nation
Europe's landscape is changing -- dramatically in its Eastern half, which is groping toward capitalism, and less spectacularly in the Western part, which is on the road to a single market. The following notes on recent transformations suggest that the two trends are not unconnected.
Big if Not Beautiful. The announcement on July 30 of the long-heralded takeover of International Computers, Britain's champion in this field, by Fujitsu, the big Japanese specialist, creted quite a stir in Europe. It was a reminder that in several fields European corporations cannot compete with the giants of the international marketplace. But Fujitsu's move was taken as a challenge not to Europe's big producers of mainframe computers -- the German Siemens, the French Groupe Bull and the Italian Olivetti -- but to I.B.M., the American giant.
There is no complaint about the invasion of American capital for the simple reason that for some time now money has been flowing across the Atlantic in the opposite direction. The only novelty, according to a recently published study, is that in the past few years Freench companies, particularly state-owned ones, were the leaders in this trans-Atlantic transfer of capital. While new, this development should not be surprising. In the earlier phase of the Industrial Revolution business concentration had proceeded much further in Britain and Germany. It is now the turn of French, and also Italian, corporations to catch up, and the state is helping them to reach the size needed for international competition.
We are approaching the final state of capitalist concentration on the international scale, with giants swallowing giants. The tales about capitalism with companies on a human scale were just tales. Small may be beautiful but our god, Mammon, is on the side of the big batallions.
East for South? Western Europe's "economic miracle" after the last war was partly due to the mass migration of impoverished workers ready to fill less-rewarding jobs. In the mid-1970s, the economic crisis put an end to this movement and in some countries even led to a reversal. But globally, immigrant workers had come to stay and, indeed, judging by the latest report from the Organization for Economic Cooperation and Development, the movement has now resumed to some extent, notably because of a growing demand for labor in the service sector.
The immigrants no longer come from the same places. The Italians, the Spaniards and the Portuguese are not emigrating in such large numbers as in the past. Besides, since their countries are now members of the European Economic Community, they, and the Greeks as well, can legally seek jobs throughout the Common Market. The new outsiders are the Turks and, above all, the north Africans. The threat of a Muslim "invasion" from the Maghreb, which has been raised by right-wing groups, has been inflated by simply projecting into the future huge fertility rates from the past. Those forecasts must be revised downward since the Algerian birthrate is dropping dramatically, following the pattern set in Tunisia and Morocco. It is doubtful whether even the fundamentalists can reverse this trend.
Whatever the future, at present the combination of a young population and an insufficient supply of jobs spells out a dramatic surplus of labor. The rate of emigration fron North Africa would be even greater if unemployment in Western Europe were not still failry high. soon the North Africans may also be hindered by Eastern European competition. Last year more than 700,000 Germans immigrated into the Common Market, half of them ethnic Germans from Eastern Europe and the other half coming from East Germany.
Admittedly, with Germany united, the latter will not figure in next year's immigration statistics. But they will keep on migrating. Capitalism's first blessing from Central and Eastern Europe has been the gift of unemployment. In Poland it has now reached 750,000 and is expected to double by the end of the year. In East Germany it is rising even faster. If this trend continues and spreads throughout Eastern Europe, including the Soviet Union, and the jobless are permitted to leave, the exodus could reach gigantic proportions, limited only by Western immigration barriers. For all sorts of reasons, including racist ones, the European Community is likely to welcome these migrants more than their counterparts from Africa. The South now has to compete with the East not only as an outlet for Western capital but also as a source of labor.
Vultures Over Culture. Sometimes money crosses frontiers to take part in a cultural venture. Thus Einaudi, the prestigious Italian publisher, participated in July in an operation designed to rescue its French equivalent, Gallimard. Founded in 1911 under the auspices of the Nouvelle Revue Francaise, the house of Gallimard has published Gide and Proust, Malraux and Breton, Aragon and Sartre. As the publisher of classics, of important foreign authors and of social science books, Gallimard, though medium in size, is second to none in prestige. But at the beginning of this year the third generation of owners had a falling out and the independence of the house was seriously threatened. Since the official heir, Antoine Gallimard, has apparently won, he keeps 33.5 percent of the shares and thus can veto any decisions. Together with his friends and such influential partners as Einaudi (10 percent) or Havas, the French advertising agency (7 percent), he has an absolute majority. Finally, he has obtained legal guarantees preventing the transfer of shares. Gallimard thus looks safe from conglomerate raiders for a few years.
Nevertheless, the firm has at least two reasons to worry. One of them it shares with other French publishers. A study just released by the French Statistical Office explains why the spread of education is not coupled with a corresponding expansion of readers. The reason is that people in the various social groups tend to read less than they used to. Most notably, students and people with a secondary education read less than their equivalents did twenty years ago. The second warning, the Italian precedent, is more directly pertinent. The Einaudi of the rescue operation is not the Einaudi of old, which, in every respect, was a match for Gallimard. The old family house was taken over in 1988 by an association bringing together Electa, a big producer of art books, and Mondadori, the major Italian publisher not only of books but also of periodicals, including the weeklies Panorama and Espresso and the successful daily La Republica. As to the ownership of Mondadori itself, the battle for its control was a real-life Dallas, a saga of power, passion and money that has fascinated Italians for the past year.
In one corner you had the ingegnere ("engineer"), Carlo de Benedetti, whose European empire is built around his Olivetti base. In the other, you had sua emittenza ("his broadcasting highness"), Silvo Berlusconi, king of commercial television and owner of three Italian channels. In the middle stood the original owner, the Formenton family, which at first was intimately linked with de Benedetti. But part of the family switched to the other side and there followed an intricate legal battle which ended, if such feuds ever do, last June, with the victory ofthe ingegnere.
Most press lords in Italy are industrial tycoons such as the Agnelli family of Fiat. Berlusconi, like the Frenchman Robert Hersant, belongs to the new breed of media magnates who tend to expand beyond national frontiers. When oneobjects to both kinds of vulture that increasingly have come to dominate European culture, the standard reply is that such moguls are needed to stand up to the mighty Americans. But the problem is not keeping out Twain, Faulkner or Doctorow. The problem is to resist American trash, and it is small consolation if this commercial rubbish acquires European citizenship.
Grazhdanin Kane. In 1986 Bertelsmann A.G. had to pay a fortune to purchase Doubleday, the U.S. publishing house. On July 30 it spent a mere $2.14 million to acquire a controlling interest in Nebszabadzag, hungary's biggest daily and not so long ago the mouthpiece of that country's Communist Party. Such are the ironies of history, and Bertelsmann is no pioneer. In Budapest it follows in the footsteps of Axel Springer, Robert Maxwell and Rupert Murdoch. Indeed, citizens Kane and Co., our Western gang of plunderes, are now scanning Eastern Europe. The prices are dirt cheap, yet they are lookin less for immediate profit than for long-term domination. For the moment they have moved strongly only into newspapers and publishing, but, as deregulation proceeds, they will be spreading into radio and television. And they are already dreaming of the huge Soviet market.
Nobody is nostalgic for pre-glasnost Pravda, censorship, Zhdanov and "socialist realism" (which had no connection with either socialism or realism). Yet anyone who visited Eastern Europe knows that there was another side to this story: that newspapers, books and other publications were cheap, that the general public could afford tickets for the theater, that opera was not for the happy few. Those advantages are being rapidly torn apart by the logic of the capitalist gospel. The freedom we are bringing to Eastern Europe in this domain is the subtle slavery of commercial culture.
To be accurate, we are exporting our system at its worst, minus the cushions provided by prosperity, minus the fat of the foundations. Unless the new regimes find a third way between neo-Stalinism and capitalism, unless they manage to combine new freedoms with some of their former advantages, these countries will find themselves in the worst of possible worlds, linking the most modern means for exploiting culture with the savagery of the capitalism of another age. They will have both Dallasty and primitive accumulation.
Privileged of All Lands Unite. The Soviet Union does not yet have a capitalist class, but it already has its spokes-persons. A good illustration is provided by the lengthy dialogue, published in Literaturnaya Gazeta on July 18, between its editor, Fyodor Burlatski, an establishment figure since Khrushchev's days, and the economist Nikolai Shmelev, whose famous adage "everything that is efficient is moral" turned him into the darling of the priviligentsia. The two comperes talk at length about what is to come, giving "counsels to the president council," but their real passion is provoked by the prospect of a progressive income tax.
As long as incomes were centrally determined in the Soviet Union, taxing them served little purpose, and the tax for the highest income bracket amounted to 13 percent. Now that wages and salaries are to be locally determined and highly differentiated, Mikhail Gorbachev's advisers have proposed a more steeply progressive income tax, at least by Soviet standards. For the highest bracket, for people earning 3,000 rubles a month -- more than twelve times the average salary -- the tax will be in the region of 35 percent. This drives citizen Burlatski mad.
He begins by attacking smart alecks who point out that in the West income tax is even more progressive; they forget that "for an article a writer gets 10-20 times as much and the filmmaker or footballer -- 100 to 200 times." He clearly prefers to be compared with Steven Spielberg or Joe Montana than with the average Soviet wage earner. He even asks wittily whether the purpose of the whole operation is, a la Plato, "to chase poets and musicians out of the new, market-regulated socialist paradise." Burlatski then gets serious. Even Stalin, he argues, while killing intellectuals, paid the survivors well so as to get them to produce good tanks and planes, good literature and music. Even Khrushchev, while quarreling with the intelligentsia, kept their remuneration in lne with prices. Et tu, Gorbachev? Both our men are cursing his advisers, who are leading him astray and who invent "laws for the stifling of culture."
Such a plea against progressive taxation could be published in Fortune or Forbes. On second thought, it probably wouldn't. Our panegyrists for the acquisitive society require greater sophistication, even if they may lack the zeal of these aspiring nouveaux riches.
Daniel Singer is The Nation's Europe correspondent.…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Creeping Capitalism. Contributors: Singer, Daniel - Author. Magazine title: The Nation. Volume: 251. Issue: 10 Publication date: October 1, 1990. Page number: 342+. © 1999 The Nation Company L.P. COPYRIGHT 1990 Gale Group.
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