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The European Union at 50
Why some nations grow faster and socially and environmentally less
contradictory than other nations, can be explained by various social science
theories. Much amount of western aid, including EU aid, to the less-developed
regions of the world is devoted to the dimension of international
competitiveness. A brief look will suffice here to explain the theoretical
backgrounds to this approach. Poor regions must be supported to achieve a
sufficient level of international competitiveness. Hirschman, Kaldor, Kalecki,
Mandelbaum, Rosenstein-Rodan, Rothschild and many other prominent
economists, who knew the Eastern European region very well, were all very
much aware of the problems of monopoly power and structural imbalances that
are to be observed under conditions of 'market imperfection'.
The almost unlimited number of empirical studies on peripheral capitalism and
development on a world level in the B-phase of the Kondratieff cycle from 1965
onwards go back, in a way, to the classic essay, published by Johan Galtung in
the spring issue of the Journal of Peace Research a quarter of a century ago
(Galtung, 1971). Skepticism about the expanding world order, dominated by the
transnationals, as a tool for achieving stable market-oriented development
persisted, the neo-liberal transformation literature in the wake of the earthquake
of the revolution of the year 1989 in Eastern Europe and the breakdown of
communism notwithstanding (Aslund, 1992; Sachs, 1993). The second 'Great
Transformation' of our century that from socialism back to the world-wide market
economy, can be seen in the perspective of the specific globalization aspects also
inherent in the writings of Karl Polanyi: a Polanyian world view would hold that
authoritarian socialism in Eastern Europe crumbled like the old Hapsburg empire
back in 1918 under pressure of the world market that democracy had a chance in
the region, as it had from 1918 onwards, but that this new chance, as the one in
1918 is now being at stake. For followers of the globalization school, Polanyi's
anthropology in a way foresaw the destabilization, the nationalist warfare, the
unemployment, the international conflict, the social decay, and the more than
800000 excess mortality cases since the transformation in the whole of Eastern
Europe and the former USSR, as Cornia's UNICEF study so aptly put it in 1994.
These phenomena also, the argument goes on, imply why in the East the lessons
of 'critical' development theory should remain on the agenda. Political turmoil
continues in some regions of Eastern Europe and the former USSR 7 years after
the transformation, and transnational crime from the East and the South has
become a very serious negative factor in international relations. Indeed, it is
even plausible that the old big-power rivalries will continue under the new
banner of culture and nationalism. Only four of the seventeen countries that
adopted democracy during the Kondratieff cycle B-phase between 1915 and
1931 could save democracy; and today, freedom in the world is again on the
retreat while violence and repression is on the increase. At the end of 1993, only
57.5% that is, 107 out of 186 UN member countries had competitive elections
and various guarantees of political and human rights (Lipset, 1994: 1).
Small nations in the world economy might find it difficult to get access to bigger
markets. That is one of the main themes of dependency theory. In Western
Europe, unemployment and early retirement rose dramatically, while in the USA
there was a considerable withdrawal from the labor force into crime (Wood,
1994). The institutional greater flexibility of wage labor in the US still allowed for
a better employment creation record than in Western Europe, with both major
regions of developed capitalism being affected by trans-border migration and a
growth of the shadow economy. The South's official exports of manufactures to
Entelequia. Revista Interdisciplinar · CAEI Arno Tausch / 29