Political Economy and International Order in Interwar Europe (Palgrave Studies in the History of Economic Thought)

Standard histories of European integration emphasize the immediate aftermath of World War II as the moment when the seeds of the European Union were first sown. However, the interwar years witnessed a flurry of concern with the reconstruction of the world order, generating arguments that cut across the different social sciences, then plunged in a period of disciplinary soul-searching and feverish activism. Economics was no exception: several of the most prominent interwar economists, such as F. A. Hayek, Jan Tinbergen, Lionel Robbins, François Perroux, J. M. Keynes and Robert Triffin, contributed directly to larger public discussions on peace, order and stability. This edited volume combines these different strands of historical narrative into a unified framework, showing how political economy was integral to the interwar literature on international relations and, conversely, how economists were eager to incorporate international politics into their own concerns. The book brings together a group of scholars with varied disciplinary backgrounds, whose combined perspectives allow us to explore three analytical layers. The first part studies how different forms of economic knowledge, from economic programming to international finance, were used in the quest for a stable European order. The second part focuses on the existence of conflicting expectations about the role of social scientific knowledge, either as a source of technical solutions or as an input for enlightened public discussion. The third part illustrates how certain ideas and beliefs found concrete expression in specific institutional settings, which amplified their political leverage. The three parts are enclosed by an introductory essay, laying out the broad topics explored in the volume, and a substantial postscript tying all the historical threads together. Preface 6 Contents 10 Notes on Contributors 13 List of Tables 19 1 Introduction 20 1 International Order and European Integration 21 2 Political Economy and the Search for Order 28 3 The Structure of the Book 35 References 38 Part I Economics and Order 41 2 Eucken’s Competition with Keynes: Beyond the Ordoliberal Allergy to the Keynesian Medicine 42 1 Shaping the Economic Order: From Interwar National Experiences to the Post-war International Order 45 1.1 The General Theory’s Reception in Interwar Germany 45 1.2 Letters to Hayek: Plea for a Positive Programme 48 1.3 Rebuilding the (International) Economic Order 52 2 Eucken: Keynes’s Obvious Challenger 55 2.1 Eucken’s Twofold Reception of Keynes 55 2.2 Informing the Economic Policy 58 2.3 Keynes and Eucken: Inside-Out National Traditions 61 3 Concluding Remarks 64 References 66 3 Third-Way Perspectives on Order in Interwar France: Personalism and the Political Economy of François Perroux 75 1 Personalism and Nonconformist Third-Way Discourses 77 2 Personalist and Federalist Views on the “International (Dis)Order” 85 3 Corporatism, Community and the Science of Man in François Perroux’s Works 91 4 Final Remarks 103 References 104 4 Corporatism and Planning in Monnet’s Idea of Europe 108 1 Introduction 108 2 Between Neo-Corporatism and Planning 110 3 Thinking of the National Reconstruction... 114 4 The Directed French “Concert” 118 5 A French “Concert” for Europe? 122 6 Some Concluding Remarks 127 References 127 5 The Construction of an International Order in the Work of Jan Tinbergen 131 1 The Hague and an International Order 132 2 At the League of Nations 138 3 A Globalist of the Left? 141 4 Second Thoughts About Europe 145 5 Conclusion 148 References 149 6 At the Origins of European Monetary Cooperation: Triffin, Bretton Woods, and the European Payments Union 152 1 Introduction 152 2 The Crisis in the 1930s: Triffin and the Case of Belgium, a Small Open Economy 156 3 Toward a More Flexible International Monetary System: The Case of Latin America 160 3.1 Criticism of the Orthodox View of the Workings of the Gold Standard 160 3.2 Advocating Counter-Cyclical Monetary Policies 162 4 Triffin’s Advocacy of European Monetary Integration 165 4.1 Bilateralism and Liquidity Shortage: The IMF’s Failure 166 4.2 A Multilateral Approach: Triffin and the European Payments Union (EPU) 170 5 Triffin’s Support for Closer European Integration 176 6 Conclusion 184 Appendix 187 Archival Sources 188 Part II Democracy and Technocracy 192 7 Technocracy, Corporatism, and the Development of ‘Economic Parliaments’ in Interwar Europe 193 1 Social and Political Corporatism During the First Wave of Democratization 196 2 Interwar Dictatorships and Corporatist Institutions 200 2.1 The Primacy of Italian Fascism 200 2.2 Fascism and Social Catholicism in the Iberian Peninsula 203 2.3 Dolfuss’ Austria 208 2.4 The Challenges of Corporatism in the Competitive Authoritarianisms of Central and Eastern Europe 209 2.5 Corporatism and the Presidential Dictatorships of the Baltic Countries 214 3 Concluding Remarks 216 References 219 8 Pluralism, Tripartism and the Foundation of the International Labour Organization 225 1 Introduction 225 2 A Society of Societies 230 3 Pluralism and Post-War Reconstruction 236 4 The Reconstruction Committee and the Whitley Report 241 5 Tripartism and the Foundation of the International Labour Organization 245 6 Conclusions 251 References 255 9 Pluralism and Political Economy in Interwar Britain: G. D. H. Cole on Economic Planning 261 1 Introduction 261 2 Pluralism and Political Economy in Interwar Britain 263 3 Cole’s Pluralism 267 4 Planning the Route to Industrial Democracy 271 5 Concluding Remarks 276 References 278 10 Ordoliberalism and the Rethinking of Liberal Rationality 280 1 Ordoliberalism and the Market as a Political Event 283 2 Between Norms and Reason 285 3 Ordoliberal Idea of Science 291 4 Towards Liberalism as a Science: Theory of Orders 295 5 Normative Science 297 6 Conclusion 301 References 302 Part III The Power of Ideas 307 11 Classical Liberalism, Non-interventionism and the Origins of European Integration: Luigi Einaudi, Friedrich A. von Hayek, Wilhelm Röpke 308 1 Introduction 308 2 Free Markets in a Peaceful World. The Legacy of Richard Cobden 310 3 Luigi Einaudi, the Division of Labour and the End of Sovereignty 316 4 Federalism, Pacifism and International Order: Friedrich A. von Hayek and Wilhelm Röpke 322 5 Wilhelm Röpke’s Criticism of European Integration 331 6 Conclusion 337 References 338 12 Staving off the Protectionist Slide: Snowden and the Struggle to Keep Britain Open 343 1 Narrative 346 1.1 1930: The Rise of the Protectionist Tide 346 1.2 Imperial Conference 1930: “Critical Juncture” 349 1.3 Snowden: Liberalism’s Last Gasp 352 2 Conclusion 361 References 363 13 The Formation of Research Institutes on Business Cycles in Europe in the Interwar Period: The “Kiel School” and (In)Voluntary Internationalization 369 1 Introduction 369 2 The Role of the Rockefeller Foundation 374 3 The Kiel Institute of World Economics: Excellence for Seven Years 377 4 (In)Voluntary Internationalization 381 References 388 14 Divided by an Uncommon Language? The Oxford Institute of Statistics and British Academia (1935–1944) 391 1 Introduction 391 2 Beginnings: The Birth of OIS Under Marschak’s Direction (1935–1939) 393 2.1 Marschak’s View About the Scope and Method of Economics and the Oxford Milieu 394 2.2 Marschak’s Political Stances: A Restricted Minimalist Integration for the Post-war World 396 3 1940–1945 Burchardt’s Nouvelle Vague and the Bulletin 399 3.1 Burchardt Remarks to Keynesian Theory 400 3.2 Balogh and the International Post-war Integration 404 4 Concluding Remarks 406 References 408 15 Postscript: The Intellectual Origins of European Integration 410 1 Introductory 410 2 Reconceiving the State 413 3 Revisiting “The Rules of the Game” 416 4 New Methods and Approaches 419 5 Europe at the Centre 422 6 Conclusion 427 References 428 Index 430 Standard histories of European integration emphasize the immediate aftermath of World War II as the moment when the seeds of the European Union were first sown. However, the interwar years witnessed a flurry of concern with the reconstruction of the world order, generating arguments that cut across the different social sciences, then plunged in a period of disciplinary soul-searching and feverish activism. Economics was no exception: several of the most prominent interwar economists, such as F. A. Hayek, Jan Tinbergen, Lionel Robbins, François Perroux, J. M. Keynes and Robert Triffin, contributed directly to larger public discussions on peace, order and stability. This edited volume combines these different strands of historical narrative into a unified framework, showing how political economy was integral to the interwar literature on international relations and, conversely, how economists were eager to incorporate international politics into their own concerns. The book brings together a group of scholars with varied disciplinary backgrounds, whose combined perspectives allow us to explore three analytical layers. The first part studies how different forms of economic knowledge, from economic programming to international finance, were used in the quest for a stable European order. The second part focuses on the existence of conflicting expectations about the role of social scientific knowledge, either as a source of technical solutions or as an input for enlightened public discussion. The third part illustrates how certain ideas and beliefs found concrete expression in specific institutional settings, which amplified their political leverage. The three parts are enclosed by an introductory essay, laying out the broad topics explored in the volume, and a substantial postscript tying all the historical threads together.-- Provided by publisher