The Deluge: The Great War, America and the Remaking of the Global Order, 1916-1931

"This book is about the inter-war period, the twenty years between the two world wars—and in the academic book market, that has been a pretty crowded space for a long time. There are a lot of good books but I like Adam Tooze’s book, partly because I like him as an historian. He’s written some really, really good books, like one, which came out before The Deluge , on the Nazi economy, called The Wages of Destruction . I’d say that this is one of the best economic history books of all time because he goes into depth about the forces of deflation and inflation and what really happened in the German economy leading up to the 1930s and the economic thinking of the Third Reich. The Deluge is different. It’s not just a European book. I think what Adam Tooze really wants to do with this book is to write America into the broad history of this turbulent inter-war period. One of the consequence of this period was that America emerged as the uncontested power. Europe couldn’t rival America anymore. It’s an interesting period in many ways. It is the final nail in the coffin for European imperialism or having empires as an organising unit in Europe. We can have a debate about which empires fell at what time, but it’s certainly the case that the Dual Monarchy and the Ottoman Empire didn’t survive the First World War and its aftermath, and that nationalism became the guiding idea of Europe. France’s Third Republic also started its decline then. So this is a period when empires are falling and nation-states are constructed. And I think that’s interesting in itself for economic nationalism and its acceleration in the mid-war era. The book also covers the types of nationalism that started to grow in this period and where they came from. One of the ironies, if you look at this period with our current views, is that perhaps the strongest political impulses for nationalism came from America and American progressives. This was the peak of progressive nationalism and one of its leaders, Woodrow Wilson, was also the US president that led America into the war and outlined an ambitious idea for liberal internationalism after the war. So the liberal order was, in a way, built on the primacy of nationalism. Wilson of course had internationalist aspirations but it’s quite often forgotten that of his classic Fourteen Points-plan that he took to the Versailles peace conference, nine were about nation-states and nationalism. He, himself, was much inspired by Giuseppe Mazzini, the Italian nationalist of the 19th century, who led the way in creating a united Italy . He had more difficulties with Bismarck and the German brand of nationalism, for obvious reasons, but, at the same time, he could see the benefits of it. And he had himself, as an academic before he became president, been a strong believer in the German bureaucratic system and wanted to take that unitary state order to America and break with the old factionalism and the philosophy of divided government that came from James Madison. “We should acknowledge that progressivism can lead to pretty extreme forms of nationalism” So, he was a nationalist, but he was also progressive. And after the First World War, nationalism gets a progressive character. The respectable form of nationalism that survives is by and large progressive. That’s what makes Tooze’s book interesting, this period’s discovery of new ideas and how they manifested themselves in new policies coming out in the inter-war period. Nationalist economic practices get much stronger in this period. Many countries are increasing protectionism and raising tariffs, and one of the countries raising tariffs more than others, of course, is the United States. Especially after the collapse of the efforts to restore the gold standard, you get into a macroeconomic form of nationalism. Money and finance becomes a lot more organized around a notion of your own uniqueness and your own desire to control your own economic territory, in ways that couldn’t be done in the past, when there was a more internationalist monetary system. As soon as you start to move away from the gold standard, you get into fiat money-types of structures, which lend themselves a lot more to nationalist political thought. And then, of course, this is the time when you start seeing the strong regulation of labour markets, when trade unions get a prominent role in economic policy and the national discourse, where everything from welfare states through to ideas of public works become strong. All this gradually leads to a certain type of economic nationalism, or at least an order with such influences. Countries start to protect the welfare state order from the intrusion of foreign impulses. And it’s probably that type of economic nationalism that has been the strongest in the post-war period—the desire to protect your workers and your capital markets against competition from abroad, because you think it’s something unique to your own local markets, and that it’s necessary for your own unitary idea of the state and how you control your own territory, that you have these highly regulated and protected markets. I think we need to acknowledge that economic nationalism has different origins, and one of the origins is progressivism. When you merge progressivism with a certain state culture, it’s quite easy to end up in political domains that are close to nationalism—or worse. And also, remember that progressives like Gunnar Myrdal, who was a Swedish Nobel laureate in economics and an important figure in the UN system—and Woodrow Wilson and many others of a similar ideology—believed in eugenics . They believed in a notion that man was a raw material that needed to be formed or reformed, and national culture was one of the methods to do that. I think somewhere Wilson says that “men are as clay in the hands of the consummate leader”. For many of them, there were no clear boundaries between individuals and the state, no clear limit to what the state could do with individuals and to change human nature. The progressive discussion now is different, but the thought that there shouldn’t be limits for states to control individuals did have progressive origins. So we should acknowledge that progressivism can lead to pretty extreme forms of nationalism, and pretty extreme versions of how you think about man. It’s basically the unstoppable force of America—an America which, prior to the First World War, was a highly isolationist country, navel-gazing, rather than interested in the rest of the world. But it makes a new entry into the world in the inter-war period. In a very short period of time, it got a lot richer than all other countries. Around the 1860s America wasn’t, economically speaking, much larger than Britain or any other of the great European powers. But then, before the First World War, it was far richer than any other great power. And, of course, after the First World War, that gap had grown much larger. And in 1944, with the Bretton Woods Conference and the coming end of World War Two, it’s obvious that there is no European power that is remotely close to America in terms of money and power."