From our other favorite Marxist economist, December 1:
Questions from almayadeen TV, Lebanon. Mohammad Itmaizeh
1 – In light of the conditions that Europe is experiencing, in terms of high energy prices and the repercussions on the industrial sector, like the closure of factories and the high cost of production. In your opinion do European countries have the capacity and resources to prevent industrial investments from “escaping”? Especially since the US plans in general to restore industry to its lands, thus, it may represent an opportunity to lure European industries to move to there and take advantage of cheap energy prices. This shift will have wide repercussions on Europe’s productive capacities and competitiveness, as well as on its trade balance. So, what happens to the position of Europe in the global economic system? Will it remain part of the capitalist center or deviate from it?
MH: The wording of your question basically answers itself. The European political leaders are unwilling to resist U.S. demands. All they can do is complain at their mistreatment. That has led to a split between German and other European businessmen and the European political parties.
See for instance Politico, November 24, 2022: “Europe accuses US of profiting from war.” “Biden’s green subsidies and taxes that Brussels says unfairly tilt trade away from the EU and threaten to destroy European industries. Despite formal objections from Europe, Washington has so far shown no sign of backing down. … the price Europeans pay is almost four times as high as the same fuel costs in America. Then there’s the likely surge in orders for American-made military kit as European armies run short after sending weapons to Ukraine.”
But even businesses are surrendering, and planning to move to the United States and become American companies. “Businesses are planning new investments in the U.S. or even relocating their existing businesses away from Europe to American factories. Just this week, chemical multinational Solvay announced it is choosing the U.S. over Europe for new investments.”
For a scenario of the resulting depopulation and deindustrialization of Europe, see the mass exodus of people from Latvia, Estonia and Lithuania since 1991. The alternative is to move to Russia or China, which produce energy – and also arms – at much lower cost than the United States.
The problem is that Europe cannot withdraw from NATO without dissolving the European Union, which commits military policy to NATO and hence to an immense balance-of-payments drain to purchase high-priced U.S. arms as well as other necessities. If the question is how long Germany and Europe can put political and military loyalty to the United States over their own economic prosperity and employment, the answer by the Greens is that “shock therapy” will help make Europe greener.
At first glance that is right as heavy industry is shut down. But it seems that Europe’s fuel of the future is coal and cutting down its forests....
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