Book Review: Adam Tooze, “The Deluge”

“Liberalism is the only thing that can save civilization from chaos – from a flood of ultra-radicalism that will swamp the world…” These are the words of Woodrow Wilson aboard the SS George Washington in December 1918, reflecting on the tasks confronted by the United States and her allies after their victory in the First World War. It is also the fundamental thesis of Adam Tooze’s The Deluge, the long-awaited followup to his brilliant discussion of the political economy of Nazi Germany (for a discussion of which, see here and following). Applying his profound talent for combining political economy with international relations, Tooze’s central subject is the aftermath of World War I and the challenge of creating a new world order amidst the ruins of the old European powers. This challenge, as he presents it, was a dual one. On the one hand it involved the recognition by all European powers, victors or vanquished, that the United States was now the pre-eminent economic power in the world, with the potential of translating this tremendous advantage into equivalent military and political power on the world stage; and on the other hand it involved the attempts by Woodrow Wilson as American President to effect this transformation of the world balance of powers while simultaneously disentangling the United States from a war alliance that he had never wanted in the first place, and which threatened to perpetually constrain the freedom of action the Americans needed to make this potential a reality.

The main dynamic through which this contest was fought out, in Tooze’s economic historical telling, is the question of debt and credit. While Tooze emphasizes that the American contribution to the Entente victory in the military sphere was modest at best, the main American contribution lay not in manpower or materiel, but in the financing of the war effort. The Entente victors ended the war owing the United States a vast sum in inter-Allied debts, and the Americans – Democrats and Republicans alike – were intent on making good on these claims and in so doing subjugate the British and French permanently to a world order of American dominance. However, what complicated the picture was the demand for reparations established by the Entente powers against (especially) Germany, which was perpetually unable to actually pay these. The efforts of international diplomacy and politics in the period 1916-1930 therefore became a veritable pyramid scheme with the United States on top, and each debtor below attempting to recoup their own losses before the whole collapsed under its contradictions. In order to forestall such a collapse and to obtain the necessary leverage combined with the equally necessary flexibility, the Entente powers attempted various means of political institutionalization of the debt and credit relations, from the League of Nations to the series of international agreements between Versailles (1919) and the Young Plan (1930).

Tooze’s narrative, while complex and providing a wealth of substantive detail on everything from the Soviet-Polish War to the internal dynamics of Japanese interwar parliaments, can roughly be summarized as follows. Wilson’s politics, Tooze argues, have wrongly been portrayed as a naive or ‘idealist’ internationalism. Instead, what Wilson recognized was that the only possibility to prevent another such political crisis as 1914 was the establishment of a new liberal order. This order must be based on the fact of American hegemony (which naturally Wilson favored), and in order to achieve this, it was necessary to avoid permanent alliances between the US and European powers, instead favoring ‘peace without victory’ in World War I. When this failed, Wilson shifted to a strategy of using the inter-Allied debt leverage to enforce his vision, seeking to use this constraint on the freedom of the victorious European powers to prevent them from any further 19th century style inter-imperialist rivalry. Instead of the old balance and rivalry of powers, there was now to be a world based on the ‘Open Door’, the freedom of the seas, and the liberal international institutions like the League of Nations. This would guarantee a world where liberal-democratic principles could slowly embed themselves in all the major states and where American economic superiority could be peacefully translated into political dominance without the need for further intercontinental entanglement.

Tooze’s tale, however, is not one of success but of failure. The two central theses he develops out of his narrative are the observations that 1) this liberal-democratic new order was the only possibility to prevent the twin radicalisms of Communism and fascism from taking hold in a serious way, and 2) that it failed to come about due to the incompatibility of the demands of the winners and losers of the post-WWI settlement and due to the repeated failure of American diplomacy to effectively cajole the main powers into a ‘peace without victory’. The result was the ‘second Thirty Years War’, as some historians are now describing it, that we are all familiar with. This approach involves a convincing reinterpretation and rehabilitation of many aspects of the period often dismissed in later years: Wilson’s internationalist vision, both less naive and less successful than often portrayed; the Versailles Treaty, a necessary step in institutionalizing the “chain gang” that bound the losing powers to the winning powers and the winning powers to the United States; and even the much-condemned Clemenceau and French foreign policy, whose supposed revanchism against Germany appears very defensible in light of the damaged and exposed position of the postwar French state.

The strength of Tooze’s narrative, besides his admirable command of source materials and the logic of international macroeconomics, is to replace the usual psychologizing narratives of WWI and its aftermath (Clemenceau’s revenge, Lloyd George’s deceit, Wilson’s naivete, Lenin’s devilishness, etc) with a plausible model that explains the diplomatic continuities across parties of the period in terms of economic and political interests. In that sense this work definitely represents the ‘realist’ approach in international relations at its best. But it is not wholly shorn of discussions of ideology and the domestic conflicts of parties and factions either: an important part of Tooze’s discussion of the would-be liberal global dispensation is the domestic opposition between the liberal-internationalist politicians, oriented towards the United States, and the radicals of left and right, seeking to prevent the former from bringing about this order. In this model it therefore makes less difference what individuals or even political ideologies were involved, but mainly what position they took vis-a-vis this “remaking of global order”, as the book’s subtitle puts it – hence the convergence between a bourgeois radical like Clemenceau and a rightwing nationalist like Stresemann. Yet both the oppositionalism of left and right radicals and the opportunism of this expansive ‘center’ meant that those in the “chain gang” failed to come to terms with the new order sufficiently to make its institutions work. The result, Tooze suggests, was the stillbirth of democracy in much of the world and the victory of the radical forces over the liberals, so that another world war became inevitable.

The obvious strengths of this explanation are also its weaknesses. Much more than in his rightly lauded previous work, The Wages of Destruction, the worldview expressed in the book seems that of a contemporary ‘muscular liberalism’. Tooze truly believes in the liberal hierarchy of nations supervised by the United States, and wishes it could have been established earlier. This necessitates some political judgements that are, to say the least, debatable. He does not hide the fundamentally imperialist nature of Britain or France after WWI or their futile efforts to combine the new internationalism with a stronger grip on their colonies. But he never quite reconciles the enduring imperialist adventures he describes – from the colonization of Egypt in 1919 to the Japanese efforts to divide and rule in China or the Franco-British schemes in the Middle East – with his repeated assertion that the new world order was based on the recognition that the ‘old imperialism’ (which Tooze argues only really started in the 1880s anyway) was no longer possible in an era of mass mobilization, and that the era of global competition was over (287). He is therefore unjustifiably sanguine about the “liberal imperialism” and its supposed moral advances over the previous era.

Tooze is honest enough to report the contradictions: “Liberal visions”, he writes in a discussion of the British suppression of Indian national liberation between the wars, “were necessary to sustain empire in the sense that they offered fundamental justifications. But they were always likely to be reduced to painful hypocrisy by the real practices of imperial power…” (391). Very true. But how are we to reconcile this hypocrisy with the seemingly self-evident desirability of the liberal order over that of the ‘radicals’? A similar problem appears in the omission of any discussion of the racial dimension. Again, Tooze honestly reports on Wilson’s white supremacist views, and how the latter’s politics were founded on his hatred of the Reconstruction period. He regularly mentions the usage of racial categories and language by the diplomats of the Entente nations, and the hasty rejection of Japan’s motion for racial equality in the Treaty of Versailles. But the connection between these views of racial hierarchy and the content of what he sometimes calls the “liberal imperial order” – even had it succeeded – is not made explicit.

This stands in strange contradiction to the importance he attaches to the racial-colonial dynamic of Nazi Germany’s war strategy in The Wages of Destruction, where precisely the importance attached to this dimension gives his narrative such an added explanatory power. Japan’s defection from the liberal order towards fascist military adventurism is portrayed as a consequence of the Great Depression, which there as elsewhere robbed the liberals of their main (economic) arguments to hold the revanchists at bay. This is true enough as it goes; but might it not also have something to do with the statement by Victor Wellesley of the Foreign Office on Chinese policy, which was founded on the observation that “the prestige of the European races has been steadily declining in the Far East… and it has suffered a severe blow as a result of the Great War” (406)? Do not the repeated expressions of racial contempt for Slavic peoples, for the ‘Jewish degenerate’ Bolsheviks, and the horror stories about the Senegalese forces in French service, combined with the white supremacist policies of the Americans, perhaps matter more than incidentally for the shape the postwar order took and the inspiration of fascism? In his previous book Tooze was clear about this; in the present it seems much more muddled.

Radicalism, for Tooze’s liberal IR realism, is all of one kind and necessarily leads to war and destruction without clear advantages. The book throughout equates Communists, fascists, anarchists and other radicals in the political sphere, making it a matter of diplomatic indifference whom one is dealing with; he equally applauds Gustav Noske’s repression of the Spartakusbund as the failure of the Beer Hall Putsch. The Soviet Union is treated with nothing but scorn and contempt, and Lenin appears as nothing but a deluded adventurer who destroyed Russian democracy (the Constituent Assembly, which gets a great deal of space) and became a puppet of German interests. (Given Tooze’s main sources on the Russian Revolution and its aftermath appear to be the works of Richard Pipes and Orlando Figes, his lopsided and absurd judgements are perhaps not so surprising.) The repeated repression of the workers’ movement, from the French miners to the revolutionary moment of 1919-1920 all the way to the UK General Strike of 1926, is virtually without fail applauded by Tooze. For him, Noske is a responsible statesman, Clemenceau a “pragmatic reformer” who was “demonised” for repressing the miners’ strikes with armed force by the “doctrinaires” of the French Socialist Party, and the Entente intervention against the October Revolution a defense of democracy. The ‘Red Scare’ and Palmer raids in the US after WWI, often seen as precursors to McCarthyism, are a mere “carnivalesque distraction” (354). The minor welfare programmes and high taxes of the Lib-Lab policies in Western Europe after the war, however, represent “immense new burdens” (250), and the pensions and compensations for war veterans a dubious “new notion of entitlement” (359).

Although Tooze repeatedly admits that the liberal imperial order he favors did not really – beyond the persona of Wilson – have the support of the great majority, he sticks to defending it without fail as “progressive” or the “progressive center”, even putting ‘imperialist’ between scare quotes when applied to its protagonists, despite his own descriptions of the fundamental accuracy of that term. In distinction to this progressivity, the radicals can never be right – that Weimar Germany or Soviet Russia attempted to come to understandings with defeated or colonized powers like China, or indeed each other, is depicted as “self-indulgent nationalist fantasy” (436). Sinn Fein’s independence movement was an expression of “apocalyptic radicalism” (377), and the repeated “political concessions to nationalism” forced upon the British empire (the only one examined in detail) are discussed with more than a hint of regret. One will find little patience with national liberation ideas or radical politics of whatever stripe in Tooze’s book: it’s the American way or the highway as far as the peace of nations is concerned.

This also generates difficulties for him in describing the deflationary policies that have become so notorious in retrospect. Whereas an economic historian like Barry Eichengreen represents mainstream opinion in (probably overly simply) seeing the crisis caused by the deflationary policy and the subsequent dissolution of the liberal-imperialist interwar order as the result of bad economic theory, Tooze is more ambivalent. He explains the virtual universality of the deflationary attachment to the gold standard as the expression of the desire to be part of the new American-led order of ‘Open Door’ international relations, surely a much more plausible explanation than simple error. However, the difficulty is that this deflationary economics undeniably was a major factor in the crisis of 1920-1921 as well as that of 1929; and these crises, in turn, destroyed the world order Tooze so favors. It therefore appears both as the necessary result of liberal internationalism and its destruction, which raises the question whether – just as with the notion of ‘liberal imperialism’ in India and elsewhere – the strategy was not too internally contradictory to have ever been a plausible historical outcome to begin with.

On that note, one final aspect of the work should be noted. It does not escape Tooze, of course, that parallels can be found between the institutionalization of international debt and credit relations between the wars and the construction of the European Economic Community after them; nor the significance of the League of Nations, the Kellogg-Briand Pact and other treaty forms of American-led international pacification for the United Nations of today. Indeed, Tooze emphasizes such continuities, suggesting that he seems to regard the present order and its problems as comparable to those of the internationalist liberalism of the Wilsonian vision. Even the role of (Soviet) Russia is perceived in this way, where German policy is portrayed as a necessary response to its inherent threat after WWII as much as before the Great War: it was the “very real threat of a Soviet takeover”, we are told, “that drove West Germany willy-nilly into the arms of the West and kept it there” (276). (In fact, Stalin repeatedly offered the possibility of a neutral and united Germany, which the West, including West Germans, declined.) For Tooze, the ad hoc alliance between the Entente nations presages NATO and the Marshall Plan, equally defined by the opposition between liberal democratic internationalism and the violent revanchism of radicals. But as the present Eurozone crisis demonstrates, the straitjacket or “chain gang” such ‘internationalism’ of debt and credit represents can do at least as much harm as the radicals, and moreover helps to bring radicalism about – a similar contradiction today to that that frustrated the Wilsonian order.

These political considerations aside, one is unlikely to find a better treatment of the intersection of global economics and diplomacy between the wars than Adam Tooze’s The Deluge. As with his previous work, it certainly helps to have a basic grasp of macroeconomics and international trade, as monetary policy, trade deficits, and budgetary constraints carry a lot of explanatory weight and the author does not pause to explain their basic mechanics. The great virtue of this work is to make reason out of folly: to make sense from the perspectives of the participants of what is often simply portrayed as naive errors of economics and politics. That is to say, at least from the perspectives of the supporters of the Wilsonian order. The tale of the rise and fall of ‘liberal imperialism’ and ‘liberal internationalism’, frustrated by the incompetence of Wilson himself, the opportunism and economic weakness of the postwar European powers, and the opposition of radical political factions, is fundamentally strong and merits a serious reading. However, Tooze’s political perspective does not allow him to tease out the inherent contradictions in these concepts and the reality of what such an order actually did and does entail, not least for those at the bottom end of the “chain gang” hierarchy. And that limits the explanatory scope of the work compared to his deeper perception in his previous book.


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