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Nutrition and Health: the Political Economy of Scientific Knowledge in the 20th Century

The Political and Economic Landscape

International relations broke down during the inter-war years as a consequence of the chaotic conditions created by the world economic depression. The collapse of the international political system was closely linked to the fall of the international economic system.[1] The consequences were extremely hard for Europe. In 1918 the Entente, together with its associated powers, imposed the Versailles Settlement, according to which Germany lost both territory and population and had to face demands for reparations and take the blame for the Great War. In Eastern Europe, the Bolshevik revolution also created a source of regional instability, while the Anglo-American powers tried to assist in the recovery of Germany, Austria and other countries in Central Europe seriously damaged by the conflict. Under those critical circumstances, the Wall Street crash triggered the onset of the world economic catastrophe. The collapse of trade and the enormous unemployment rates created the right conditions for Hitler to take power, and induced Japan and Italy to start new colonialist expansions. Attempting to avoid a breakdown of the existing fragile order, liberal democracies, mainly Britain and France, encouraged by the USA, implemented an appeasement policy.

The British historian Eric Hobsbawn has qualified the first half of the 20th century as the Age of Extremes, a period of revolutions, crises and conflicts in all realms of social life, as well as in the values and referents that define the human condition.[2] Suffice it to mention the impact of the Great War, but also the rise of the worker movement and the revolutionary threat (leading to the Bolshevik triumph and the Soviet revolution), the advent of nationalism and the National Socialist expansion, the clash and tension between the Triple Alliance and the Entente, which divided Europe into two conflicting blocks - the prelude of the Spanish Civil War, which in turn constituted the preamble to World War II and the failure of negotiation and pacification policies. All these events drew a landscape of conflict, tension, radicalism and political instability in the whole world, but with Europe as the main stage.

Some historical narratives have considered that the outbreak of the war in 1914 certainly resulted in the collapse of the international states’ system, but only caused global economic relations to be suspended.[3] Expressed in economic terms, economic historians have argued that the 1920s bore a much closer resemblance to the pre-war period than has been commonly assumed. Historical evidence shows that by the second half of the 1920s world trade and international financial flows were greater than before the war and increasing at twice the rate of national growth.[4] By this time Soviet Russia had reached great international power, while the United States of America (USA) had retreated to its pre-war status as a potentially great nation. Germany had regained its sovereignty to some extent and was already the chief threat to the international states’ system, just as it had been before the Great War. According to present political and economic historiography, the decisive turning point was not 1914, as could be easily assumed, but 1927, when the great interwar crisis began, bringing out the collapse of both the global economic and political systems. British protectionism was not the only important element in the picture at the time; the most remarkable feature was the progress made in reestablishing a globalised economy and the expansion of international trade and investment after the Ruhr crisis in 1924. On the contrary, between 1929 and 1933 world industrial production declined by about 37 per cent and world trade dropped by at least 27 per cent (68 per cent in current prices), while agricultural prices fell by 75 per cent from the levels reached in the period 1923-1925.[5]

As a consequence of this exceptionally critical situation, many countries did not resist the temptation to retreat into autarchy, foreign investment ceased sharply and by June 1933 the international monetary system was chaotic. Industrial unemployment reached 22 per cent in Britain, 37.6 per cent in the USA and 44.3 per cent in Germany, where wholesale trade fell below 1914 levels. Exports and steel production experienced a strong reduction of nearly 75 per cent. A similar decline took place among Japanese farmers producing silk for exports. At first France seemed to be the exception, apparently little hit by the slump.

Unemployment in France was only 276,000 in 1933, but numerous parttime employees, women and some 2.4 million emigrant workers returned to Spain, Portugal and Italy, and unemployment continued to rise until 1936, reaching seven per cent and accounting for 850,000 registered workers. The economic crisis had increasingly negative consequences among the European population. In those years, peasants living in rural Hungary, Romania, and Asian countries such as India and China faced hunger and starvation.[6]

Prior to the depression, the international markets operated according to a set of rules, restraints and institutions capable of ensuring social, political and economic stability. The framework of regulations and institutions was never done away with, as that would have led to the breakdown of the capitalist system. Central banks and international institutions - such as the Bank for International Settlements (BIS), the International Monetary Fund (IMF), the World Bank (WB) and the World Trade Organization (WTO) - ensured the convertibility of currencies and therefore markets remained open. Before the Great War, Britain provided the key institutions to sustain the global economy: the Bank of England, Lloyds of London, the Baltic Exchange and other financial powers settled in the City of London. Nevertheless, between 1927 and 1929 global economic and political relations became increasingly precarious. Notwithstanding important developments elsewhere, Europe was still the centre and the nucleus of the three great democratic powers: Britain, France and the USA. In the 1920s they accounted for 25 per cent of world economic activity, producing nearly 60 per cent of the world’s manufactured goods. Altogether, the three of them controlled 33 per cent of world trade and supplied no less than 70 per cent of manufactured exports. In the period 1924 to 1928 they provided over 85 per cent of the world’s capital lending and investment and in 1929 possessed nearly 60 per cent of the world’s monetary gold reserves.[7] These records suffice to confirm their international power.

On the other hand, the economic slump coincided with an extraordinarily deep political crisis. Political historians have underlined the repeated efforts made by Britain and the USA to modify the Versailles settlement and accommodate Germany again into the international states’ system, something that was in opposition to France’s commitment to establishing a global security framework. The consequence was the previously described prosperous world of the early 1920s, but the international political system was exceptionally vulnerable partly due to the fact that the three victor powers did not agree upon the way of managing the situation. Several European countries remained in conflict with the existing states’ system and the winning powers failed to come to terms with the rules for operating the international gold standard, the role and functioning of international institutions and the shaping of a framework for international security. Robert Boyce synthesised the critical situation:

The conventional narrative of interwar history associates the breakdown of the post-war settlement with the rise of extreme political doctrines, including militarism, aggressive imperialism, communism, anarchism, antisemitism and above all fascism and its German variant Nazism... and it is true that they made most of the running in the 1930s. But this was not the case in the 1920s or at least until the great crisis began. On the contrary, the dominant political doctrine in this period was liberalism and its economic

expression, market capitalism. The three main victor powers were all liberal

8

powers.

Therefore, the key to understanding the origin and consequences of the slump is to recognise the causal connections between economic and political factors. According to Boyce, the great interwar crisis started in 1927, resulting in the collapse of international trade and investment. Unemployment punished millions of citizens, currencies were undermined and banking systems endangered, so the survival of countries depended principally upon their economic relations with other countries. The subsequent crisis was one of the greatest catastrophes in modern history. Its crippling effects devastated the lives of a whole generation.[8] [9]

A meaningful feature to keep in mind is that, as a result of the victory in the Great War of the major Western democratic powers, the world’s dominant political ideology was not communism or fascism but liberalism, predominantly in its Anglo-Saxon version. In the political scene, it was manifested in the rejection of the ‘old diplomacy’ of alliances as well as of the ideal of a balance of power in favour of a ‘new internationalism’ symbolised by the League of Nations. Notwithstanding the rise of radical ideologies, a closer analysis of international relations shows that until 1927 liberalism remained on the rise and dominated the global economic and political spheres. However, after 1927 international networks weakened, support for globalisation decreased and the great interwar crisis started. In a few years, by 19331934, the crisis had brought to a violent close the world’s second great era of globalisation. In fact, the very real failure of liberalism took place at this moment and hostility to liberalism was increasingly dominant along the 1930s with the growing influence of socialist, communist, anarchist and radical nationalist movements.

In the late 1920s crises occurred in many different regions: the Balkans, Morocco, Egypt, Iraq, China and elsewhere. But the key to maintaining world stability remained the containment of Germany within the context of the European states’ system, since only a German crisis was likely to affect the balance of the world’s powers. Yet an important stabilising factor was missing: no security system existed for maintaining international order. The USA remained isolationist, demanding the European powers to join its policies in disarmament while refusing to openly support the League of Nations as the international venue for challenging threats of aggression.

Unable to draw the Anglo-Saxon powers into a European framework, France saw no alternative but to engage in direct dealings with Germany in 1924. When the Pan-European Union was founded in April 1924, it reached prominence after its first conference in Vienna in 1926 as the most relevant pro-European organisation between the wars. At the 1925 League of Nations General Assembly, the French minister Loucher - a liberal in favour of eliminating trade barriers - nevertheless defended the view that some government intervention was essential to ensure a ‘rational economic system’, the only one that could handle the uncontrolled tendency of economic competition to aggravate nationalism and the response leading to a recrudescence of protectionism.

On September 24, 1925, the Assembly of the League of Nations, on the motion of the French Delegation, invited the Council to constitute a Preparatory Committee under the presidency of Georges Theunis. From May 4 to 23, 1927, the International Economic Conference met in Geneva. More than 400 delegates and experts from 50 countries attended, including the USA and Soviet Russia. Representatives of the IIA, ICC and ILO were also present. Britain was still the world’s greatest trading nation and at the time suffered from heavy unemployment, apparently due to national protectionism. To most historians, economists and politicians, the 1927 World Economic Conference marked a victory for the liberal approach to international economic relations and a defeat for the regulated French approach. Nevertheless, global economic relations remained precarious. The world economy continued to expand and the Wall Street crash was still six months away. However, by 1928 signs that the era of globalisation was nearing its end were already multiplying.

  • [1] Boyce, R., The Great Interwar Crisis and the Collapse of Globalization, London,Palgrave Macmillan, 2009.
  • [2] Hobsbawn, E., The Age of Extremes, 1914-1991, London, Abacus, 1995.
  • [3] Boyce, 2009, p. 23.
  • [4] Ibidem, p. 3-4.
  • [5] Ibidem, p. 4.
  • [6] Ibidem, p. 5-8.
  • [7] Ibidem, p. 10.
  • [8] Ibidem, p. 17.
  • [9] Ibidem, p. 426.
 
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