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From Hunger to Malnutrition

According to recent research, the great post-war challenge in the late 1920s was no longer to contain Germany in its place, but to persuade Britain to remain involved in Europe. The international context was changing fast, as shown by the previous collapse of continental empires: Russia, Austria-Hungary, Germany and the Ottoman Empire. On the other hand, the emergence of the USA forced a new international forum for negotiation. The US government envisaged the League of Nations not as a forum for world governance, but rather as an agency for the negotiation to contain and pacify Europe. The conventional narrative of interwar history has presented the Anglo-Saxon powers as being committed to appeasement throughout the 1920s as a rational constructive policy further pursued in the 1930s. Some recent research has considered this conclusion a mistake, since Britain and the USA were unwise to encourage the creation of an effective framework of security, this becoming the core conflict with France.[1] The USA and Britain were held accountable for their withdrawal from the security framework agreed at Versailles, just at the end of the Great War, to promote disarmament. However, Britain turned to protectionism after 1927, just when the need for international leadership was greater than ever. In addition, the Japanese, Italian and German initiatives that brought down the global political order in the 1930s intensified and prolonged the economic slump. The disaster reached a climax in 1932, but cooperation among the liberal capitalist powers reached a low point in 1934 when the USA still demanded Germany be relieved of reparation payments to safeguard American commercial credit in Europe. At the time, French diplomacy was more realistic about the situation and accepted the necessity of German integration, but they also worried about the security risks posed by Germany.[2]

Britain’s temporising enabled Hitler to occupy the Rhineland and absorb Austria without resistance. Britain’s obvious reluctance to extend practical help to Poland or associate itself with the Soviet Union, together with its ambiguity over military cooperation with France and continued pursuit of a settlement with Germany, persuaded Hitler that Britain would not oppose his expansionist ambitions in the East. The French were divided over a confrontation with Germany; the Communists threatened to oppose war once the Soviet Union became Germany’s ally in August 1939. But after Germany invaded Poland, the French government declared war. The unfortunate role played by liberal democracies, particularly France and Britain, in the Spanish Civil War should be placed and understood in this context. The Anglo-Saxon powers responded very slowly in supporting Europe’s democracies and, until Pearl Harbour, the USA authorities restricted all efforts to resupply Britain and France to enable them to contain the aggressor.

The dual political and economic crisis that started in 1927 and culminated in 1933-1934 gave way to a more general crisis affecting imperialism, autarchy, industrialised warfare and genocide, tragic events that lasted for more than a decade, until the final world war conflict. Some historians consider the Great War to be only a hiatus in the great era of globalisation that began in 1815 and continued until 1927. According to this idea, Robert Boyce argues that it makes more sense to see the period between 1927 and 1947 as a deeply critical moment, a single generalised crisis, as this period ended only in 1947 and a new era started. From a politico-economic perspective, the long 19th century was even longer than generally assumed by historiography, spanning to the start of the Great War. Boyce proposed the period from 1815 to 1927.[3]

The fact is that in 1918 Continental Europe emerged from the war in a critical condition. Its political system was threatened and shaken by revolutionary movements and the collapse of four great empires. In addition, the European economic regime was strongly dislocated by the consequences of the war, consumption experienced a critical stage due to inflation and the breakup of what had previously been a highly integrated market. In July 1914 Europe was comprised of 20 independent countries and goods moved easily in between. By the Armistice, it comprised 27 countries of a much smaller size, including 20,000 km of additional frontiers. To revive trade, the protectionist barriers erected had to be pulled down and the narrow bilateral arrangements replaced by multilateral ones. At that moment in time the City of London remained the world’s greatest clearing house for capital and credit, and the Bank of England sought to turn the League of Nations Financial Committee into the international agency for setting more convenient rules in a post-war monetary and financial system.[4] However, the situation was changing quickly and during the following decade technology was to revolutionise all dimensions of human communication: aviation, transoceanic cables, short-wave radio and telegraph, telephone lines and films. Thanks to the new technologies, international financial activity and corporate enterprise expanded dramatically. Multinational American firms rapidly extended as a prosperous industry. A global tendency dominated the new industries: electrical manufacturing, office equipment, chemicals, fertilizers, motor vehicles, oil extraction, refining and distribution, mining, metal refining for industrial purposes (aluminium, copper, nickel, lead and zinc).

Economic expansion, technological innovation and new international industries coexisted with a fragile political order and deep social conflicts. Under those hard circumstances, the 1929 economic slump led Britain to drop its commitment to economic internationalism in favour of imperial protectionism. This change in strategy initially brought good results within the framework of the British Commonwealth market, and from the end of 1932 Britain enjoyed sustained economic recovery. On the contrary, France was seriously hit by the depression since 1932 and did not recover until 1938. In the meantime, the League of Nations Economic Consultative Committee called for industrial agreements as a means of reorganising Europe. In 1927 the aforementioned World Economic Conference had endorsed the principle of multilateral conventions as a means of liberalising trade, but failed to give a technical solution to how this could be reconciled with the most- favoured nation principle.

The League of Nations’ Economic Committee therefore requested Walter Stucki, the Swiss Economy Minister, to investigate and report on the practical options. In April 1929 he presented a report in which he proposed that the states agree to an exception to the most-favoured nation principle, substituting it with multilateral conventions, as long as they met three main conditions: they had to contribute to the reduction of tariff barriers, have the approval of the League of Nations and be open to all countries to join on a similar basis.[5] Exceptions made room for preferential trade between countries with longstanding historical or geographical links. As a result of this policy, a Nordic clause allowed preferential trade between Sweden, Norway and Denmark; an Iberian clause was established as well between Spain and Portugal; and Baltic, Ottoman and imperial British clauses were accepted. But since the spring of 1929 France-like Belgium and Britain-was fearful of a recrudescence of protectionism and, for a few more months, remained loyal to the idea of European economic integration.

In February 1930 the challenge strengthened Europe’s position in the League of Nations. In May 1930, at the 10th General Assembly of the League of Nations, a memorandum was circulated on the construction of a European Federation through the integration of markets. The document called for a common economic policy, industrial agreements, improvements in general infrastructures and coordination of civil works, as well as cooperation in transport, communications, credit provision, labour policies and migrations. But Europe was simply too divided to take this plan any further, and, from a British viewpoint, France was too powerful and aggressive integration-wise so as to support such a unification programme. British authorities were wary of France as a global power and were confident of Germany coming back to its position in Europe. They did not consider Germany to be a problem but a way of containing the French. Britain promoted the appeasement of Europe through the League of Nations and supported disarmament, having to choose between entering a European federation and remaining the head of the Empire. Indeed, Europe’s growth was a threat to the Empire, the maintenance of which required liberal internationalism in both political and economic spheres, and firm opposition to the project of European integration.

As is known, in the Reichstag election of May 1928, when the German economy was still relatively strong, the Left and Right parties did poorly: the Communists obtained 54 seats and the Nazi party only 12, altogether accounting for 14 per cent of parliament. But the situation changed very quickly. Two years later, in 1930, with unemployment soaring above three million, the budget deficit threatening currency stability and the nightmare of inflation growing out of control, the two parties rose to 33 per cent: the Communists obtained 77 seats and the Nazis 107 seats, becoming the second largest party in the Reichstag.

On the other hand, since the end of the Ruhr crisis in 1924 until the spring of 1928, Germany enjoyed a period of relative stability and economic growth, although unemployment had grown to 1,188,000, which accounted for 12.9 per cent of the work force in December 1927, rising to 16.7 per cent by December 1928 and 20.1 per cent in December 1929. The political twist represented by Hitler’s victory undermined the remaining international confidence in Germany and this in turn intensified the political crisis, the economic slump and the decline. By December 1930 unemployment in Germany had gone up to 4.4 million and to nearly 4.9 million in January 1931, accounting for 34 per cent of the working population.

In the 1930s the economic and political situation became extremely complex in Europe. The 12th annual Assembly of the League of Nations, held in September 1931, saw 50 delegations, a record-breaking figure. Mexico was admitted as a member and Soviet Russia and the USA sent unofficial representatives as observers. But, for the first time since the League’s foundation, Britain was not represented in the Assembly by a delegation headed by a minister.

The suspension of the gold standard on September 21, 1931, opened a window of opportunity for Britain to get back its leadership of the international monetary system. The economist John M. Keynes was prepared to accept almost any sacrifice to keep the sterling on the gold standard. He and other prominent British economists and bankers promoted an international currency conference to try to address the economic issues through a combination of unilateral external action, protectionism and imperialism. But at the time Britain was no longer prepared to take the international lead in this field. The British financial system had become extremely vulnerable to the crisis and French newspapers described the situation as la decadence anglaise. The global picture was terribly dull. World industrial production declined over 10 per cent between 1929 and 1930, 20 per cent by 1931 and over 30 per cent by 1932. Unemployment rose accordingly to 2.75 million or 15.6 per cent of the industrial workforce in Britain, 2.8 million or 17 per cent in France, 12 million or 36 per cent in the USA and 6 million or 44.6 per cent in Germany. Furthermore, world trade touched a new low, falling to merely 52.5 per cent of the 1929 level.[6]

In 1930 and 1931 the economic crisis in Eastern Europe had drawn the attention of the League of Nations’ Economic and Financial Committees, as well as that of the Committee of Enquiry for European Union, created to follow up on the plans for a European Federation. The situation was extremely serious, as the collapse in commodity prices had devastated agrarian countries like Poland, Hungary, Romania, Yugoslavia and Bulgaria, also weakening the precarious economy of Austria and increasing unemployment in Czechoslovakia. The Danube region got divided between French plans and German influence. Moreover, in 1932 a regional initiative was implemented - the Ouchy Convention in Lausanne - by Belgium, the Netherlands and Luxemburg, with a view to reaching commercial agreements and economic cooperation.

The end of World War II marked a new point of departure characterised by the challenge of a redefinition of the international sphere. After 1947 new international institutions were created: the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (central component of today’s World Bank), and the General Agreement on Tariffs and Trade (GATT). The British leaders encouraged a unified Europe after the war, but not including Britain itself. The heads of the Labour government did not favour this stance and ordered party members to stay away from the Hague Congress in May 1948, which marked the rebirth of the

  • [1] Ibidem, pp. 32-40.
  • [2] Ibidem, pp. 32-34.
  • [3] Ibidem, pp. 62-70.
  • [4] Ibidem, pp. 43-47.
  • [5] Ibidem, p. 252
  • [6] Ibidem, p. 346.
 
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