Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

In sharp contrast to the United States in its attitude toward the problem of international trade was Nazi Germany. This and other countries were seeking “independence” (that is, political goals in the economic sphere), and they rejected “dependence” even if it did include a higher standard of living. They frequently rejected the argument that autarky was necessarily injurious to the standard of living or to international trade, because by “autarky” they did not mean self-sufficiency in all things, but self-sufficiency in necessities. Once this had been achieved, they stated their willingness to expand the world’s trade in nonessentials to an extent as great as any standard of living might require.

The basic key to the new emphasis on autarky is to be found in the fact that the advocates of such economic behavior had a new conception of the meaning of sovereignty. To them sovereignty had not only all the legal and political connotations it had always held, but in addition had to include economic independence. Since such economic independence could, according to the theory, be obtained only by the Great Powers, the lesser states were to be deprived of sovereignty in its fullest sense and be reduced to a kind of vassal or client condition in respect to the Great Powers. The theory was that each Great Power, in order to enjoy full sovereignty, must adopt a policy of autarky. Since no power, however great, could be self-sufficient within its own national boundaries, it must extend this sphere of autarky to include its weaker neighbors, and this sphere would have political as well as economic implications, since it was unthinkable that any Great Power should permit its lesser neighbors to endanger it by suddenly cutting off its supplies or markets. The theory thus led to the conception of “continental blocs” consisting of aggregates of lesser states about the few Great Powers. This theory was entirely in accord with the political development of the late nineteenth and early twentieth century. This development had seen an increasing disparity in the powers of states with a decreasing number of Great Powers. This decline in the number of Great Powers occurred because of the advance of technology, which had progressed to a point where only a few states could follow. The theory of continental blocs was also in accord with the growth of communications, transportation, weapons, and administrative techniques. These made it almost inevitable that the world would be integrated into increasingly large political units. The inevitability of this development can be seen from the fact that the wars of 1914-1945, waged for the preservation of the small states (like Poland, Czechoslovakia, Holland, and Belgium), succeeded in reducing the number of Great Powers from seven to two.

This integration of states into continental or other large blocs was, as we have seen, a quite legitimate and attainable ambition, but it was sought by the aggressor states (like Germany, Japan, and Italy) by quite illegitimate methods. A better method for attaining such integration would have been based on consent and mutual penetration. But this federalist method of integration could have succeeded only if it were honestly offered as an alternative to the authoritarian solution of the aggressor states. This was not done. Instead, the “liberal” states refused to recognize the inevitability of integration and, while resisting the authoritarian solution, sought as well to resist the whole process of integration. They sought to preserve the atomistic world structure of sovereign states which was so out of keeping with technological developments both in politics (new weapons, speedy transportation, and quicker communications) and in economics (mass production and increasing need for exotic materials such as tin, rubber, or uranium found in small and scattered amounts). As a result the liberal Powers resisted the German efforts to cope with the real world developments without putting any realistic or progressive substitute program in its place.

The policy of negativism on the part of the liberal Powers was made worse by the fact that these Powers had put Germany and others into a position (as debtors) where they were driven in the direction of greater integration of the world on a voluntary basis. This appeared in the fact that these Powers had to adopt freer and increased trade in order to pay their debts. Having put the majority of the countries of the world into this position of needing increased integration in order to pay their debts, the liberal countries made it impossible to obtain such integration on a federalist basis by adopting policies of isolationist, economic nationalism for themselves (by high tariffs, ending of long-term loans, and so on). This dog-in-the-manger policy in economic matters was quite similar to their policy in political matters where, after setting up an organization to achieve peace, they declined to permit Germany to be a part of it and, later, when Germany became a part they refused to use the organization for peaceful goals but instead tried to use it to enforce the Treaty of Versailles or to build up a power balance against the Soviet Union.

This failure of the liberal states in the 1920’s becomes more obvious when we examine the great increase in restrictive economic and financial policies in the 1930’s. It is usually said that the excesses in these were caused by the great increase in nationalism resulting from the depression. This is not true, and the increase in such restrictions cannot be quoted as a proof of increasing nationalism. No country entered upon these policies for nationalistic reasons—that is, for the closer integration of its own people, or to distinguish them more sharply from other people, or for the aggrandizement of its own people over another. The increase in economic nationalism was based on a much more practical cause than that—on the fact that the nation was the only social unit capable of action in the emergency resulting from the depression. And men were demanding action. For this the only available agency was the national state. If a broader agency had been available, it would have been used. Since it was not, the state had to be used—used, not with the purpose of injuring one’s neighbors, but solely with the purpose of benefiting oneself. The fact that neighbors were injured was a more or less accidental result, regrettable, but inevitable so long as the largest unit of political organization (that is, the largest unit capable of complete action) was the nation-state. When a theater catches fire, and persons are trampled in the resulting panic, this is not because anyone desired this, but merely because each individual sought to escape from the building as soon as possible. The result is disaster because the individual is the only unit available capable of action. And the individual is too small a unit of action to spare many individuals from tragedy. If a larger unit of organization exists (as, for example, if the persons in the theater are a company of infantry with its officers), or if some cool-headed person can organize the group into a unit of action larger than the individual, all might escape safely. But the chances of forming an organization after the panic has begun are almost nil. In 1929-1934, the panic started before any unit of action larger than the nation-state existed. As a result, all suffered, and the puny efforts to form an organization after the panic began were vain. This is the real tragedy of the 1920’s. Because of the conservatism, timidity, and hypocrisy of those who were trying to build an international organization in the period 1919-1929, this organization was so inadequate by 1929 when the emergency began that the organization which had been set up was destroyed rather than strengthened. If the instruments of international cooperation had been further advanced in 1929, the demand for action would have made use of these instruments, and a new era of political progress would have commenced. Instead, the inadequacy of these instruments forced men to fall back on the broadest instrument which was available—the nation-state; and there began a retrogressive movement capable of destroying all Western Civilization. The economic nationalism which arose from the need to act in a crisis—and to act unilaterally because of the lack of any organ able to act multilaterally (that is, internationally) was intensified after the breakdown in finance and economics of 1931-1933 by several developments. In the first place, it was increased by the discovery, by Germany in 1932, by Italy in 1934, by Japan in 1936, and by the United States in 1938, that deflation could be prevented by rearming. In the second place, it was increased by the realization that political activity was more powerful and more fundamental than economic activity—a realization which became clear when it was found that every step toward a unilateral economic solution resulted in reprisals from other nations which canceled out that step and made necessary another step, which, in its turn, called forth new reprisals; this soon showed that except in a nation capable of self-sufficiency such actions in the economic sphere could accomplish little and that unilateral action, if taken at all, must be accompanied by political steps (which would permit no reprisals). In the third place, economic nationalism was increased, and internationalism reduced, by the great increase in political insecurity, since the preservation of an international economic organization involved entrusting one’s economic fate, to some degree, to the hands of another. Rather than this, economic nationalism was increased in the name of autarky, security, economic mobilization, and so on. Self-sufficiency, even if it involved a lower standard of living, was held preferable to international division of labor, on the grounds that political security was more important than a highland insecure—standard of living.