- Adjust your moral compass
He is the economist credited with having the most influence on the Archbishop of Canterbury. And Paul Dembinski is clear that regulation is not enough to improve banking - a fundamental cultural shift is needed
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Reviewed by Brendan Simms
Allen lane, 583pp, £30 )
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Once we are done re-examining the origins of the great European conflagration which broke out 100 years ago, attention will shift to how the West won that war, and then, as the cliché has it, “lost the peace”. This is the subject of Adam Tooze’s remarkable new synthesis which draws on his two particular areas of expertise, Eurasia and especially Germany, and the global financial system revolving around London and, increasingly, New York. Tooze chronicles how this primarily Anglo-American democratic capitalist coalition crushed Berlin’s attempt to overturn the global order and then struggled to contain a broader “insurgency” across the continents and seas.
The drama opens in 1916, when the world war was, in Tooze’s words, “in the balance”. Germany was attempting to mobilise the resources of Mitteleuropa in her support, while “revolutionising” the encircling coalition, especially Tsarist Russia. The Entente hurled itself at the central powers in a series of offensives in the West, especially on the Somme, and in the Brusilov offensives on the Eastern Front. What sustained Britain and France was not only the inherent economic strength of their vast overseas empires but their ability to tap into the immense financial and industrial power of the United States. The climax of the struggle came in 1917, when the Berlin-supported Bolshevik Revolution effectively knocked Russia out of the war, and President Wilson entered the lists on the side of the Entente, though only – Tooze reminds us – as an “associated”, not an Allied, power.
Still it was touch and go: it took all the resources of the coalition partners to bring Germany to heel, ending the first great “insurgency”. Unsurprisingly, therefore, the subsequent peace settlement at Versailles was designed to globalise the containment of the defeated foe. Its terms were written into the covenant of the new League of Nations, the first attempt at truly global governance, through disarmament, reparations and institutions of international cooperation. Resistance to this order came not merely from the defeated – especially Germany – and the marginalised, such as the leftists who protested against the capitalist system and often in favour of the Soviet Union, from Latin America, across Europe, to South Africa and East Asia. It was also mounted by victors, such as Italy, Japan and China, which for one reason or another felt that the settlement had not given them what they deserved, or at least had demanded.
This is a well known story, but the great strength of Tooze’s book is that he invites us to look at familiar events in unfamiliar ways. The apparently punitive treaty of Brest-Litovsk which ended the war between Germany and Russia is shown to have been based on an ethnically more equitable division of territory than before or shortly after; the First World War German vision of empire in the East also emerges as relatively progressive rather than as a mere forerunner to Naziism. The elections after the first, non-Communist, Russian revolution of 1917 are resurrected as a serious exercise in democracy which mobilised more voters than the US Presidential contest of 1916. Tooze also restores a proper sense of openness to Chinese and, particularly, Japanese developments, which showed a real potential to progress in the direction of participatory politics.
Above all, contrary to the prevailing view of a Western modernity under pressure after 1918, the author emphasises the strength of the great democracies, who had not only crushingly prevailed in armed conflict (and were to do so again), but stamped themselves decisively on the post-war scene. It was the needs of Anglo-American political economy, especially the question of how to disentangle inter-Allied war debts and German reparations, which dominated international architecture from the Versailles Settlement itself, through the Dawes and Young plans of the 1920s. Indeed, the author sees 1919 as a “unipolar” moment much closer to the US Cold War triumph of 1989 than the shared victory over Nazi Germany in 1945 with which it is usually compared. He takes a correspondingly dim view of President Wilson’s failure to anchor the “peace without victory” which he craved within a realistic security guarantee for a chronically insecure France.
Tooze’s account brims with contemporary resonances. He notes the propensity of Western academics, “then as now”, to prescribe authoritarian government for the Chinese. Closer to home, this time without explicit comparison but surely with an eye to the Euro crisis, Tooze chronicles the way the first attempts at international economic cooperation in the 1920s hinged on the imposition of unpopular and painful “austerity” measures. He is too good a historian, however, to turn this into a simple argument for Keynesian deficit financing. Indeed, Tooze stresses that austerity had the merit of preventing prohibitively expensive re-armament programmes. It was only when the British and Americans themselves abandoned this straitjacket after 1931 – which forms the terminal date of the volume – that the Japanese were able to embark on the military spending spree which ultimately led to their suicidal attack on the United States.
INEVITABLY A BOOK of this scope and ambition will not command universal assent. This reviewer, for example, might cavil at the idea that 1989 was really a unipolar moment, given that it also saw the massacre at Tiananmen Square and thus the survival of an alternative form of authoritarian politics which has since made a spectacular comeback. Others will baulk at his reading of Woodrow Wilson. No matter. As we contemplate today the emergence of a new and extremely dangerous order in the east of our continent, and thus the collapse of the post-Cold War order, the general public and policymakers alike will – must! – turn to Adam Tooze for instruction about how the first “coalition of liberal powers to manage the vast unwieldy dynamic of the modern world” disintegrated.