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Europe In Retrospect

by Raymond F. Betts

Disorder: Europe in the 1920's

To the faithful, toil-burdened masses the victory was so complete that no further effort seemed required. . . A vast fatigue dominated collective action.

The Aftermath, 1929

No figure after the war captured the popular imagination and represented the condition of the masses of society better than did Charlie Chaplin. He was called by an English publication "Everyman on the Screen," the allusion being, of course, to the character in the medieval morality play who stood for the human condition. Chaplin's film roles were constant: the gentle, little tramp, simple of mind and purpose, who was in search of happiness but was continually frustrated by authority (in the form of the policeman) and modernity (in the form of the gadgets and activities of the industrial age). That Chaplin's success--unlike the tramp's--was international can in part be explained by the fact that films were then silent, the style of acting therefore bordering on exaggerated pantomine within easy reach of all viewers. More important, however, was the identification of the Chaplin tramp with the pathetic humor of the time, the hollow laughing of people uncertain of the future and not reassured by the past.

For millions of war veterans readjustment to civilian life was an immense problem. The search for jobs, the attempt to repair marriages disrupted by years away from home, the bitterness over reports of war profiteering, and the disappointment over the shortages of housing were personal difficulties quickly dampening the enthusiasm for the long sought-after peace.

Psychologically, the leaders of Europe looked backward. The very word used to describe the early postwar mood was "reconstruction," an attempt to reorder what had been. Western European politics tended to be conservative, and so did the business outlook. But drastic changes had taken place that made such an attitude unrealistic.

The readjustment to a peacetime economy was never made successfully in the interwar period. True, prewar production figures would be reached and surpassed in most industries by the middle 1920s. And the newer industries, like the automotive, radio, and the film, were providing highly exportable products. However, in face of these rising production figures stood the much more impressive world output of the United States and, somewhat later, of an industrialized Japan. The sum of the matter is this: While European production recovered and exceeded postwar records, the percentage of the growing world market held by Europe declined. Relatively speaking, therefore, European economic vitality had slipped.

More significant, however, was a general condition of instability that was widely felt and recognized. And it was a condition with its own hard facts.

First, Europe was no longer the world's banker. The capital reserves of the major nations were badly depleted: England had lost one-fourth of its foreign investment; France, one-half; Germany was deprived of most of its foreign investments. Added to this fiscal difficulty was the indebtedness of the Allied Powers of France and England to the United States for war loans. The result was a severe weakening of European currency. Some idea of the problem can be grasped from the fact that the French premier, Raymond Poincare, who stabilized the franc in the mid-twenties, was given the title "saviour of the franc." Only once before in French history had "saviour" been popularly employed--and that was for Joan of Arc.

Second, industrial needs drastically shifted. Certain heavy industries like steel and shipbuilding were no longer required to meet the grotesque demands of the military. They therefore cut back in production, hence in manpower as well. And other industries, like aircraft and munitions manufacturing, collapsed with the advent of peace. Finally, the increased production of certain resources like copper, phosphates and wheat, all essential to wartime needs, now meant overproduction--a glut which sent prices reeling.

Third, the rearrangement of the European political map disturbed the economy. The increase of protective tariffs among the newly created nations slowed down the flow of goods on the continental level. Nowhere was this more evident than in the lands of the former Austrian Empire now divided, as a result of the peace settlement, into separate nation-states that had once existed as a large customs union but now were burdened with national trade barriers. Moreover, as the new nations took form, populations suddenly found themselves with a new political allegiance. Thus, problems in manpower availability and distribution within national economic units occurred as large numbers of people were added or subtracted politically. The German demographic situation was one of the most telling. By 1925 some 705,000 Germans had left territories incorporated into the new state of Poland, while 132,000 Germans left Alsace-Lorraine, once again part of France.

Fourth, the war reparations program, whereby Germany had to assume financial responsibility for civilian war damages, had unanticipated effects. The German treasury was soon emptied of precious metals, a condition that caused German money to become all but worthless, hence a grave matter for all those Germans who had bank accounts and stocks and bonds. Because of Germany's precarious position, international trade with neighboring states was adversely affected. And those countries to which the reparations payments were made felt the impact of imported German industrial goods, now that the new German republic tried to pay in kind because it could no longer pay in cash.

Under these conditions, the fact that labor unrest was a major problem in the postwar era is easily understood. Workers feared for their positions in an economy that was undergoing conversion from wartime to peacetime needs and in an economy that was out of equilibrium. Returning servicemen sought employment, and in so doing displaced many of the women who had been given job opportunities for the first time during the war. Finally, the depletion of capital inhibited the modernization of older industries and the creation of new ones so that job opportunities were not expanding significantly in new directions.

A sign of the times was the increase in the number and frequency of strikes, particularly in the years immediately after the war. In Italy and France a series of strikes in major industries caused national alarm in 1919 and 1920. Then in England in 1926 a most impressive general strike occurred with 2 l/2 million workers participating. Begun in the coal industry, it ran through other heavy industries, but was conducted with little violence and some goodwill. All such strikes were manifestations of a grave economic situation and of the government's seeming inability to arrive at a plan for meaningful economic recovery.

The plight of the industrial laborer was converted into a fear among many middle-class entrepreneurs. The British Socialist Harold Laski, one of the most influential thinkers of the interwar era, looked back at the postwar condition and wrote: "Capitalism's conception of what was reasonable was limited by two factors--the economic crisis on the one hand, and the profound fears engendered by the Russian Revolution on the other." His assertion was not much exaggerated.

If the economic situation was chaotic to the laboring masses, it was precarious to the entrepreneurial classes. The popular myth of the "Bolshevik" quickly grew: a fear of conspiratorial activity between citizens who were Communists and the newly established Soviet Union, committed to International revolution and the overthrow of capitalism. The establishment of the Third International, the Communist International--or Comintern, for short --in 1919 lent credence to this fear, because the newly emerging Communist parties in Western Europe joined the Comintern. In 1920, for instance, the French Socialist party split in two over the question of adherence to the Comintern. The emergent French Communist party had, by 1921, some 140,000 members, while the residual Socialist party only had 30,000.

Communism added a new but ill-defined dimension to many aspects of European life in the interwar period. Governments were concerned about subversive activities because of the control Moscow maintained over the Western European parties; much of the upper middle class saw communism as a threat to private property; yet some intellectuals assumed that the Soviet Union heralded the advent of a new social order soon to redress the worst evils of modern industrial society.

As the French Revolution before it, the Russian Revolution of 1917 introduced a political and social system that stood in opposition to the established European order. But the first two decades of Soviet rule were chaotic, repressive, and brutal. With the ascendency of Joseph Stalin to power in 1927, the regime took on the characteristics of a police state, one far removed from the earlier Marxist proclamation that under communism the "state would wither away." Prison camps in Siberia for enemies of the regime, severe regimentation of labor in order to develop the economy according to state planning, the creation of a secret police organization used primarily as a weapon of terror--all were characteristics of interwar Russia and the features which led later critics to compare Stalinist rule with that of Hitlerian Germany.

If the enthusiasm some European intellectuals had initially felt for the Communist experiment now declined, fear of the new Soviet regime as a potentially disturbing force both in domestic and international politics continued. "The Red Menace" and "the Bolshevik Threat" were popular terms suggesting that Marx's introductory statement to the Manifesto had belatedly come true: "A specter is haunting Europe--the specter of communism." And it was a specter all the more ominous because of the instability of the postwar economic order.

Not everyone despaired of the economic situation, however. A newly emerging managerial elite, professionals concerned with the social implications of modern technology, addressed the perplexing question of how to assure industrial development. They had behind them a wartime experience in industrial management, brought about by the accelerated growth in productive capacity, the amassing of labor for new tasks in the factory, and the distribution of scarce raw materials. "War socialism" created conditions of state intervention and rudimentary governmental planning that ran counter to older free-trade and competitive-market concepts. Moreover, enthusiasm for the American industrial system, so recently distinguished by the mass-assembly techniques developed by Henry Ford, was generated as a result of the steady flow of wartime supplies from the other side of the Atlantic.

In the peacetime environment, this new group of technocrats, the professional managers and planners, turned their attention to the reordering of society so as to make it more productive, but by means of techniques that stressed "social engineering." Here the ideas of Frederick W. Taylor, an American engineer who had tried to regularize labor with machinelike precision, were persuasive because they suggested the route to greater efficiency. But the resulting efficiency in production was seen by many of the European technocrats as a means to social as well as to economic betterment. Through "social engineering," worker, manager, and machine would be harmoniously integrated into something approaching an economic community. Output would increase; social tension would decrease. And thus the older utopian dream of a society based on cooperative and well-integrated economic activity, not on political factionalism and dispute, would be realized.

The translation of these managerial ideas into the working of the post-war factory system was not made to any great degree, however. The widespread interest in "rationalization" suggested that the European economic order was in need of renovation. While the era did witness new corporate growth and integration, this was primarily made in the form of mergers and international consolidation: Unilever, the great English soap combine, and Royal Dutch Shell, the oil refining company, are two notable examples. Planning, even though tried in the Soviet Union with considerable success but at an enormous cost in human life, remained excluded from European economic considerations until World War II.

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