Casino Politics

David Stevenson

  • The Lights that Failed: European International History 1919-33 by Zara Steiner
    Oxford, 938 pp, £35.00, April 2005, ISBN 0 19 822114 2

The Oxford History of Modern Europe belongs to a more leisured era. Its first volume, A.J.P. Taylor’s The Struggle for Mastery in Europe 1848-1918, appeared in 1954. Half a century later its two founding fathers, William Deakin and Alan Bullock, are dead, and their project remains incomplete. Individual volumes cover Germany, France from 1848 to 1945, Spain, the Low Countries, Romania and the European Jews. As yet they include only tsarist (not Soviet) Russia, and there is nothing on Austria or Italy. Even so, the formula has generated a number of classics, which have remained in print for decades.

The series is now fullest in its coverage of international relations, Taylor’s volume having been complemented by Paul Schroeder’s Transformation of European Politics 1763-1848. Zara Steiner’s new history will inevitably be measured against these distinguished predecessors, and it stands up to the comparison: considered as a monument to scholarly stamina, it is even more impressive. Although The Lights that Failed has been some twenty years in the making, it is only the first of two volumes (the second, The Triumph of the Night, will continue from 1933 to 1941). This initial instalment alone devotes eight hundred pages of text to a span of 14 years, whereas Taylor and Schroeder dealt with seventy or more. This is not said as a criticism – The Lights that Failed is undeniably a very long book, but its author does not waste words – rather it is a comment on the outpouring of specialist literature since the opening of the relevant European archives (few of the secondary texts cited predate the 1970s). Steiner has done her share of archival digging, in Britain, France, Germany and in the League of Nations files at Geneva, but essentially her book distils the fruits of a generation of academic inquiry. The focus of research on international history has now shifted towards the Cold War, and investigation into the interwar decades has slackened, which is another reason this synthesis is likely to last.

Steiner stresses the novelty of the 1920s. International relations by this period can no longer be analysed as a chess game played by aristocratic and bureaucratic elites in isolation from domestic politics. Recalcitrant parliaments and freshly expanded electorates exerted pressure on Western leaders as never before. Economic questions were newly prominent, too, ranging from German reparations in the early 1920s to currency stabilisation later in the decade and the onset of the Great Depression. An intimidating technical literature has accumulated on these topics, whose findings Steiner accessibly communicates. Secret intelligence, which was gathered more systematically than it had been before the First World War, even between the democracies, was also of enhanced importance. Thus the British regularly intercepted French diplomatic traffic, with findings that intensified the distrust between the two governments. Diplomacy was now conducted not only between states but by means of innumerable conferences in Europe’s resorts and spas – ‘casino politics’, as Raymond Poincaré disparagingly called them – as well as the League of Nations. Finally, there was a larger cast of actors. During the 1920s new states in Eastern Europe – Poland, Czechoslovakia – enjoyed real independence. Nor can European politics be understood without reference to the United States (which was less isolationist than it would be in the 1930s), and to the Soviet Union, which oscillated between playing by the traditional power political rules and seeking to overturn them by exporting revolution.

Steiner insists that the 1920s repay study in their own right, not just as a prelude to the more familiar tale of Nazism, appeasement and the origins of the Second World War. The leading theme of the decade was the failed endeavour to rebuild a stable Continental order after the disaster of 1914-18. Steiner’s volume is thus divided into two parts: ‘The Reconstruction of Europe 1918-29’ and ‘The Hinge Years 1929-33’. At the end of the first phase many observers supposed that stabilisation was proceeding successfully; by the end of the second it was a commonplace that Europe was destined to go to war again. Until then, Steiner maintains, the Western European ‘peace process’ was not foredoomed to failure: ‘more doors were opened than shut.’ To sustain this contention she has to navigate a series of historiographical rapids, starting with the 1919 Treaty of Versailles. Rightly (and in common with other recent writers), she challenges Keynes’s contention, in The Economic Consequences of the Peace, that the treaty was unjust and unworkable and made a second conflict almost inevitable. The First World War ended in peculiar circumstances, with the reality of Germany’s defeat concealed from its population and the November 1918 revolution removing Kaiser Wilhelm II but leaving the country’s authoritarian and militaristic elites otherwise intact. Hence there was never much prospect that the victors could anchor the peace settlement in German compliance. Yet they made the treaty more flexible and open-ended than has commonly been acknowledged: sufficiently rigorous to protect them against renewed aggression but capable also of being revised and moderated. All would depend on how it was implemented. In the event an initial French-led bid to enforce the Versailles terms was followed by a British and American-driven effort at conciliation. Both approaches failed, and the end-product was a Germany that not only remained vengeful but had recovered enough strength to act.

The attempt at enforcement centred on the issue of reparations. Germany’s default on the Allies’ financial demands outlined in the 1921 London Schedule of Payments triggered a crisis in 1923-24, when France and Belgium retaliated by occupying the Ruhr. Historians still differ over whether Germany could have paid the money. Steiner comes down with the majority who maintain that the London Schedule demands were severe but affordable and the problem was not a technical inability to compensate the Allies but a political refusal to do so. Berlin was encouraged in this refusal by its accurate perception that the victors were deeply divided. Whatever the merits of the Allied case, however, Steiner doubts whether the paltry sums eventually obtained justified the economic and political turmoil that the dispute engendered. Although the compromise resolution of the Ruhr imbroglio in the 1924 Dawes Plan was a major French defeat, she does not by implication see it as in itself clearing the road for German expansion. True, the French lost the ability to pronounce Germany in default again, and had to content themselves with a more modest payment schedule financed by a German government bond issue that was largely floated in the US – by these indirect means, American intervention overcame the financial impasse. But the Dawes Plan also made possible a political settlement, negotiated in 1925 at Locarno, under the terms of which France, Belgium and Germany undertook not to use force to alter their borders, and Britain and Italy guaranteed the arrangement – Germany’s eastern frontiers with Poland and Czechoslovakia enjoyed no such great-power protection.

For several years the most influential text on the 1920s has been Sally Marks’s The Illusion of Peace. It dismisses Locarno as a house built on sand. (The book was published in 1976, at a time, perhaps not coincidentally, when US conservatives were assailing the Kissinger-Nixon policy of détente with Moscow.) Steiner is considerably more charitable towards Locarno and its makers – Austen Chamberlain, Aristide Briand and Gustav Stresemann – whom she describes as ‘neither cynics nor idealists, but realists and pragmatists . . . Illusions,’ she continues, ‘are built on nothing: hopes may have real foundations, however fragile or temporary. This was the case with the postwar decade.’ All the same, she endorses many of the criticisms levelled at the agreement, and particularly those directed against the British. Holding the balance between Paris and Berlin flattered Chamberlain, who likened himself to Castlereagh. On the other hand, assuming obligations to defend both France and Germany against the other ruled out effective co-operation with either. The British made no plans to fulfil their Locarno obligations, which in 1936 they promptly reneged on when Hitler remilitarised the Rhineland. Thus the political agreements underpinning European recovery in the late 1920s were scarcely more dependable than the flow of American private capital to Germany, which proved a flimsy safeguard against economic collapse. The interests of the Western European powers temporarily converged in an attempt to reduce tension after the Ruhr confrontation, but Steiner shows how domestic support for the Locarno détente was crumbling even before the 1929 crash. It remains plausible to argue, however, that down to that date events were not bound to end as disastrously as they did, and the book lays greatest emphasis on developments between 1929 and 1933 in setting Europe on its ‘crooked path to the new Armageddon’.

Steiner’s analysis of the early 1930s highlights three developments: the depression, the crisis in Manchuria and the failure of disarmament. She shows how the withdrawal of American investment tipped the Central European financial system over the edge, and follows Barry Eichengreen in arguing that the recently restored gold exchange standard, a system supposed to nurture stability, acted as a transmission mechanism for collapse. The standard’s eclipse after 1931, accompanied by reinforced tariff barriers, eventually facilitated national recoveries – emphasis was placed on economic self-sufficiency. Steiner also deals here with Hitler’s rise to the German Chancellorship, for which mass bankruptcies and unemployment were a necessary precondition. In contrast, her second section plays down the importance of the Japanese Kwantung Army’s conquest of Manchuria in 1931-33. Although Japan was condemned by the League of Nations and complied with that organisation’s rules by leaving it, the Japanese action did not necessarily set a precedent for aggression elsewhere – and the League in any case had never been more than a useful forum for addressing second-order issues. Disarmament and rearmament, by contrast, were not only of consuming interest to contemporaries, but also crucial for the preservation of peace, and Steiner treats them more fully than any previous account has done.

Again, this story goes back to the Versailles Treaty, which had justified the unilateral disarmament imposed on Germany on the grounds that it was a precondition for multilateral disarmament. In fact what happened was that the military machines built up during the war were rapidly dismantled, but after the early 1920s defence spending by the former Allies stabilised once more. No general agreement was negotiated, and the failure grievously harmed the League’s reputation. The obstacles were familiar and remained constant throughout. The British military maintained that they had already cut arms spending as much as they could, given their far-flung imperial obligations. France possessed on paper the largest armed forces in the West, but increasingly their equipment was obsolescent, their training neglected, and their strategic doctrine passive. The French government refused to cut arms spending further, on what appears in retrospect the eminently reasonable grounds that Germany’s attitude to the treaty remained revisionist, the League was a paper tiger and the British and American alliance which had been offered in return for French concessions in the 1919 peace negotiations had fallen through, with nothing comparable replacing it. Locarno represented the maximum security commitment that any British government would assume on the Continent, and the most that could be extracted from the successive Republican administrations in Washington was the solemn general renunciation of aggressive war in the 1928 Kellogg-Briand Pact.

If the victors would not disarm, Germany could claim that it should re-arm, and because of its demographic and industrial preponderance equal rights would mean German dominance. Nonetheless, the constraints established by the peace treaty were progressively eroded. In the wake of the Ruhr crisis, and in full knowledge of Berlin’s efforts to circumvent the disarmament clauses, the victors agreed to withdraw the weapons inspectors of the Inter-Allied Military Control Commission (IMCC) and to evacuate their troops from the most northerly of the three Rhineland occupation zones. Their last forces left Germany in 1930, five years earlier than the Versailles Treaty stipulated. From 1928 German military chiefs were planning systematic rearmament, and when the long-awaited Geneva disarmament conference finally met in 1932, its main result was to lift the diplomatic barriers to a new arms race by conceding the principle of parity. As Winston Churchill commented, the Germans were not really interested in questions of status: ‘They are looking for weapons, and when they have the weapons, believe me they will ask for the return . . . of lost territories.’ (Churchill, whom Steiner quotes several times, is one of the few statesmen in London to emerge with some degree of prescience.) Disarmament was the crunch issue: for as long as the Versailles security clauses were maintained, Germany, however discontented, could not start a new great war. But much of the apparatus needed to uphold them – the IMCC, the Rhineland occupation and Allied military superiority – had been eroded before Hitler came to office. The justification for the conciliation policy was plausible and put eloquently by Austen Chamberlain:

I regard it as the first task of statesmanship to set to work to make the new position of Germany tolerable to the German people in the hope that as they regain prosperity under it they may in time become reconciled to it and be unwilling to put their fortunes again to the desperate hazard of war. I am working not for today or tomorrow but for some date like 1960 or 1970 when German strength will have returned and the prospect of war will again cloud the horizon unless the risks are still too great to be rashly incurred.

The dismal truth, however, was that concessions strengthened German nationalist forces rather than assuaging them. In these circumstances, it was the victors who became the gamblers, and who lost catastrophically.

The one considerable omission from Steiner’s comprehensive analysis is a historiographical one: the ‘war-guilt controversy’ of the 1920s, in which the Berlin Foreign Office successfully orchestrated an assault on the Allied claim in Article 231 of the Versailles Treaty that German aggression had caused hostilities in 1914. Intellectual ‘revisionism’ prepared the terrain in Britain and America for political revision. In anticipation of Steiner’s second volume, I offer three larger sets of speculations. First, exactly when and how did the interwar leaders fail? If, on the one hand, Versailles can be defended as a flexible settlement that could have made a second war impossible and the Dawes Plan and Locarno were not without justification, and yet, on the other, it can be argued that Britain and France had little practical alternative to appeasement at Munich, at what point between 1919 and 1938 were their choices unambiguously mistaken? In other words, were there any guilty men? A second issue is the comparison between the two postwar eras. Now the 1920s are better understood, they might seem to anticipate events a generation later, the Dawes Plan prefiguring the Marshall Plan and the international steel cartel of 1926 resembling the European Coal and Steel Community scheme of 1950; in 1930 Briand proposed a ‘European Union’ (open to all except Soviet Russia, Turkey and the Vatican), which Britain and Germany rejected. Yet the institution-building initiatives of the later period were reactions against their precursors as much as imitations of them. More fundamentally, in the 1920s and 1930s the Allies first coerced and then conciliated Germany, whereas their post-1945 successors did both simultaneously: or rather, Stalin supplied the coercion while the West rebuilt and reintegrated the Federal Republic. In time, this dual process promoted a cultural and political transformation within the country that had been the missing element in the 1920s and which eventually enabled reunification to proceed without endangering Germany’s neighbours. Yet only the Cold War elicited the more durable American and British commitment on the European mainland without which Franco-German relations might have continued as the ‘perpetual prize fight’ (in Keynes’s sardonic formulation) that they had been since Bismarck. The new Soviet-American hostility created the circumstances in which the older Franco-German hostility could be transcended.

Following on from this, my final speculation concerns the fundamental character of relations between states. Both Taylor and Schroeder began their volumes with explicit statements of their premises. Taylor, although a man of the left, started from a realist view, focused on the balance of power and on diplomacy as the pursuit of national interest in an environment of overriding anarchy. Schroeder, in contrast, rejected the balance of power as a meaningful concept and asserted that the statesmen who made the Vienna peace settlement of 1814-15 permanently tamed Europe’s dynastic rivalries and civilised international conduct. His analysis reflected a more optimistic understanding of the world as a place that rational leaders can improve by concerted action. Steiner – although well versed like Schroeder in theoretical approaches to her discipline – is more guarded. She seems to take a middle position, and repeatedly characterises the 1920s as an era of competition between ‘internationalist’ and ‘nationalist’ forces, in which the latter moved towards predominance. It will be intriguing to observe how she pursues this insight through the sombre years that followed.