Week 55

 

The end of the Great War opened a new phase of international relations. One that begun with the realization of the total German defeat, of the irresistible dissolution of the Austro-Hungarian Empire, of the inability of the Ottoman Empire to hold onto its peripheral structures of power. In the eyes of the victors – and the vanquished alike – those came to be at the same time objective factors of their political elaboration and abstract themes of the post-war. What is after all a total defeat? An irresistible dissolution? What tells apart the core and the periphery of a nation?

This dialogue between objective realization and abstract formulation inspired a large part of the relations between the various European nations and the ongoing proceedings of the Versailles Conference, with its courts of delegates, scholars and diplomats. The European establishment, which had been slow to react and adapt to the new nature of the war, found itself at risk of being equally slow to adapt to the new nature of peace – nor was the non European establishment, invested at the beginning of the peace talks of an almost superhuman aura in the personality of the US President Woodrow Wilson, much better at finding a way to translate its generic formulations of a peace doctrine into a concrete alternative to the old habits of the failing European realpolitik.

And yet those difficulties should not surprise, since immense changes had taken place within Europe and beyond; the results of processes that had been in action since before the conflict and of new ones that had been unleashed by it. In the East, in place of a centuries old empire, there was not only an entirely new political subject but a new political doctrine as well – and further East large nations that had been kept subdued and unable to affect the European politics directly, were stirring under the influence of similar themes of nationality and national identity to those that had caused the great unrest of mid XIX Century. The Austro-Hungarian Empire, which had been able to weather that storm, had been eventually unable to resist both the internal pressure towards national autonomy and the external pressure of over four years of war. Central Europe, the Balkans, the whole periphery of the immense Russian Empire were shaken by revendications and claims where each national group sought confirmation of its own rights and prerogatives. New nations were forming and smaller, more cohesive political formations were replacing the larger structures of before the war.

But, while the re-discovered principle of nationality seemed to push towards ideas of autonomy and independence, the Great War had also created a legacy of unprecedented interdependence between the European nations, the US and the whole world. The reliance on foreign imports, on credit, on a shared system of resources allocation had increased markedly during the conflict – a war that for many observers had showcased not only the power of the national sentiments or the mounting tide of the socialist masses, but also the necessity of a globally integrated economical system. For many nations, victors and defeated alike, the Great War had sanctioned the triumph of international debt; a factor that perhaps had already made a revision of the entire financial system of the major powers necessary.

 

In the November-December issue of the periodical La Riforma Sociale - once edited by Luigi Roux and Francesco Saverio Nitti but since the 1910s by liberal economist Luigi Einaudi – appeared a review of the eloquently titled “European federation or Society of the Nations”; a book of recent publication due to the work of economist Attilio Cabiati (himself a collaborator of Einaudi) and industrialist and owner of the FIAT Giovanni Agnelli.

“Their book” - explained Einaudi - “was coming out just at the right time.”

Conceived and discussed since the end of 1916, written clearly during the first semester of 1918 […] it has become even more urgent and relevant now that the situation has changed and the Entente has been victorious. The necessary premise to the actuation of their plan […] we must win - has been accomplished. And on such premise it is now possible to begin the reconstruction.

The “vital node” of the issue, as the authors call it, is the following: the idea of a “society of the nations” is too vague, too unstable to originate a permanent political formation. Historical experience serves as evidence of the impossibility to achieve concrete results on the basis of a simple league of nations: from the confederation of the Greek cities of 470 a.C., to the United Provinces of the XVIII century […] No state formation can exist in the absence of a central power with its own financial means and its own army. [Therefore] one must interpret the concept of a Society of the Nations not as that of a society of independent states, which would then take upon themselves generic commitments of friendly relations and make promises to find an agreement to punish the violators of general peace – which would be more or less the old idea of “balance of power” - but rather as that of a Federal Europe. States independent and free to develop their action and inclinations towards social and economical life and progress; except for a few well defined fields: foreign policy, land and sea armed forces, federal finances, tariffs and custom policies. Those functions would be assigned to a central power, on the model of […] those states where the central government holds only those powers assigned to it by a constitution. Powerful forces act towards the creation of such a superior organism: 1) the impossibility to face the financial consequences of the war […] 2) the difficulty of removing otherwise those military castes basing their existence on war 3) the difficulty of simplifying […] the transition process between one state and another 4) the opportunity […] of solving the problem of the colonies by preventing them from becoming ground for the exploitation of a single state 5) the need for those states with less advanced social, health and education legislation to adjust to the level of the more advanced ones 6) the immense advantages of a unified market.

Einaudi continued by quoting a passage from Agnelli:

In Europe we had reached the absurd point that any new factory built within a State became a thorn in the side of any other State: that, while the extraordinary technical developments […] had already erased the distances and turned the world into one great center and international market, the small men on the other hand put their effort to destroy the immense advantages of such great discoveries, by artificially creating isolated markets and small centers of production and consumption. And they failed to see that the protectionist system had eventually managed to cause its own death […] Since, with every State dedicated to the same ends, to produce everything, and in the largest possible amount, like never before, during the last twenty years that competition that one had wanted to prevent had instead become more desperate, more severe, more refined and violent. […] Only a Federal Europe could give us the most convenient organization of the productive process, through the abolition of tariffs and customs. It's enough to consider the heavy burden of that artificial machinery that weights on the whole of continental Europe nowadays […] to understand how the eradication of such a cancer oppressing Europe would be enough compensation for the sacrifices of the War. What reasonable person could then argue, without concern, in favor of the possibility, after such an enormous conflict, of resuming an economical policy of favors, of exclusives, of localization, and throwing the burden of supporting it onto the exhausted consumers? [But] A European economical market which, by carefully [...] take the place of the particular markets of the single states, realized a full rational allocation of work forces, would produce, with the maximum profit for the producers, a lowering of the prices substantial enough to allow the consumers to face the financial obligations of the war […] [More so] The problem of the allocation of raw materials, that of transports, of food stuff, which keep busy every European committee dedicated to the solution of the post war problems, would be immediately solved. And the enormous expansion of the market from national to continental would make it so that the industrialists, overcome a first period of adapting, found such unexpected capabilities of absorbing the increased production, that the industries would receive an impressive impulse, similar to that of the American ones after the end of the secession war.