The Deluge

by Adam Tooze

  And yet despite this general conformity, the insurgents were to get their chance, which brings us back to the essential question posed by the hegemonic crisis historians. Why did the Western Powers lose their grip in such spectacular fashion? When all is said and done, the answer must be sought in the failure of the United States to cooperate with the efforts of the French, British, Germans and the Japanese to stabilize a viable world economy and to establish new institutions of collective security. A joint solution to these twin problems of economics and security was clearly necessary to escape the impasse of the age of imperialist rivalry. Given the violence they had already experienced and the risk of even greater future devastation, France, Germany, Japan and Britain could all see this. But what was no less obvious was that only the US could anchor such a new order. Stressing American responsibility in this way does not mean a return to a simplistic story of American isolationism, but it does mean that the finger of enquiry must be pointed insistently back at the United States.57 How is America’s reluctance to face the challenges posed by the aftermath of World War I to be explained? This is the point at which the synthesis of the ‘Dark Continent’ and hegemonic failure interpretations must be completed. The path to a true synthesis lies not only in recognizing that the problems of global leadership faced by the United States after World War I were radically new and that the other powers too were motivated to search for a new order beyond imperialism. The third key point to establish is that America’s own entry into modernity, presumed in such a simple way by most accounts of twentieth-century international politics, was every bit as violent, unsettling and ambiguous as that of any of the other states in the world system. Indeed, given the underlying fissures within a formerly colonial society, originating in the triangular Atlantic slave trade, expanded by means of the violent appropriation of the West, peopled by a mass migration from Europe, often under traumatic circumstances, and then kept in perpetual motion by the surging force of capitalist development, America’s problems with modernity were profound.

  Out of the effort to come to terms with this wrenching nineteenth-century experience emerged an ideology that was common to both sides of the American party divide, namely exceptionalism.58 In an age of unabashed nationalism, it was not Americans’ belief in the exceptional destiny of their nation that was the issue. No self-respecting nineteenth-century nation was without its sense of providential mission. But what was remarkable in the wake of World War I was the degree to which American exceptionalism emerged strengthened and more vocal than ever, precisely at the moment when all the other major states of the world were coming to acknowledge their condition as one of interdependence and relativity. What we see, if we look closely at the rhetoric of Wilson and other American statesmen of the period, is that the ‘primary source of Progressive internationalism . . . was nationalism itself’.59 It was their sense of America’s God-given, exemplary role that they sought to impose on the world. When an American sense of providential purpose was married to massive power, as it was to be after 1945, it became a truly transformative force. In 1918 the basic elements of that power were already there, but they were not articulated by the Wilson administration or its successors. The question thus returns in a new form. Why was the exceptionalist ideology of the early twentieth century not backed up by an effective grand strategy?

  What we are pushed towards is a conclusion that is hauntingly reminiscent of a question that still faces us today. It is commonplace, particularly in European histories, to narrate the early twentieth century as an eruption of American modernity onto a world stage.60 But novelty and dynamism existed side by side, this book will insist, with a deep and abiding conservatism.61 In the face of truly radical change, Americans clung to a constitution that by the late nineteenth century was already the oldest Republican edifice in operation. This, as its many domestic critics pointed out, was in many ways ill-adjusted to the demands of the modern world. For all the national consolidation since the Civil War, for all the country’s economic potential, in the early twentieth century the federal government of the United States was a vestigial thing, certainly by comparison to the ‘big government’ that would act so effectively as the anchor of global hegemony after 1945.62 Building a more effective state machinery for America was a task that progressives of all political stripes had set for themselves in the wake of the Civil War. Their urgency was only reinforced by the disturbing populist upsurge that followed the economic crisis of the 1890s.63 Something had to be done to insulate Washington from the alarming rise in militancy that threatened not only the domestic order but America’s international standing. This was one of the principal missions both of Wilson’s administration and its Republican predecessors early in the twentieth century.64 But whereas Teddy Roosevelt and his ilk saw military power and war as powerful vectors of progressive state construction, Wilson resisted this well-trodden, ‘old world’ path. The peace policy that he pursued up to the spring of 1917 was a desperate effort to insulate his domestic reform programme from the violent political passions and the wrenching social and economic dislocation of the war. It was in vain. The calamitous conclusion to Wilson’s second term in 1919–21 saw the coming apart of this first great twentieth-century effort to remake American federal government. The result was not only to unhinge the Versailles peace treaty but to precipitate a truly spectacular economic shock – the worldwide depression of 1920, perhaps the most underrated event in the history of the twentieth century.

  If we bear these structural features of America’s constitution and political economy in mind, then the ideology of exceptionalism can be seen in a more charitable light. For all its celebration of the exceptional virtue and providential importance of American history, it carried with it a Burkean wisdom, a well-founded understanding on the part of the American political class of the fundamental mismatch between the unprecedented international challenges of the early twentieth century and the peculiarly constrained capacities of the state over which they presided. Exceptionalist ideology carried with it a memory of how recently the country had been torn apart by civil war, how heterogeneous was its ethnic and cultural make-up, and how easily the inherent weaknesses of a republican constitution might degenerate into stalemate or full-blown crisis. Behind the desire to keep a distance from the violent forces unleashed in Europe and Asia, there lay a recognition of the limits of what the American polity, despite its fabulous wealth, was actually capable of.65 For all their forward-looking vision, progressives both of Wilson’s and Hoover’s generation were fundamentally committed not to a radical overcoming of these limitations, but to preserving the continuity of American history and reconciling it with the new national order that had begun to emerge in the wake of the Civil War. This then is the central irony of the early twentieth century. At the hub of the rapidly evolving, American-centred world system there was a polity wedded to a conservative vision of its own future. Not for nothing did Wilson describe his goal in defensive terms, as one of making the world safe for democracy. Not for nothing was ‘normalcy’ the defining slogan of the 1920s. The pressure this exerted on all those who sought to contribute to the project of ‘world organization’ will be the red thread that runs through this book. It connects the moment in January 1917 when Wilson sought to end the most calamitous war ever fought with a peace without victory, to the depths of the Great Depression fourteen years later, when the all-consuming crisis of the early twentieth century claimed its last victim – the United States.

  The tumultuous, blood-soaked events recorded in these pages turned the proud national histories of the nineteenth century on their head. Death and destruction broke the heart of every optimistic Victorian philosophy of history – liberal, conservative, nationalist, and Marxist as well. But what was one to make of this catastrophe? For some it betokened the end of all meaning in history, the collapse of any idea of progress. This could be taken fatalistically, or as a licence for spontaneous action of the wildest kind. Others drew more sober co
nclusions. There was development – perhaps even progress, for all its ambiguity – but it was more complex, more violent than anyone had expected. Instead of the neat stage theories projected by nineteenth-century theorists, history took the form of what Trotsky would call ‘uneven and combined development’, a loosely articulated web of events, actors and processes developing at different speeds, whose individual courses were interconnected in labyrinthine ways.66 ‘Uneven and combined development’ is not an elegant phrase. But it well encapsulates the history we tell here, both of international relations and of interconnected national political development, stretching around the northern hemisphere from the United States to China by way of Eurasia. For Trotsky, it defined a method both of historical analysis and of political action. It expressed his dogged belief that whilst history offered no guarantees, it was not without logic. Success depended on sharpening one’s historical intelligence so as to recognize and seize unique moments of opportunity. For Lenin, similarly, a key task of the revolutionary theorist was to identify and attack the weakest links in the ‘chain’ of imperialist powers.67

  Taking the side, not of the revolutionaries, but of the governments, the political scientist Stanley Hoffmann, writing in the 1960s, offered a rather more graphic image of ‘uneven and combined development’. He described the powers, great and small, as members of a ‘chain gang’, a lurching, shackled-together collective.68 The prisoners were differently proportioned. Some were more violent than others. Some were single-minded. Others exhibited multiple personalities. They struggled with themselves and with each other. They could seek to dominate the entire chain, or to cooperate. As far as the chain would give, they could enjoy some degree of autonomy, but in the end they were locked together. Whichever of these images we adopt, they have the same implication. Such an interconnected, dynamic system can be understood only by studying the entire system and by retracing its movements over time. To understand its development, we must narrate it. That is the task of this book.

  ONE

  The Eurasian Crisis

  1

  War in the Balance

  Viewed from the trench lines of the Western Front, the Great War could appear static – a struggle waged over a handful of miles at the cost of hundreds of thousands of lives. But this perspective is deceiving.1 On the Eastern Front and in the war against the Ottoman Empire the battle-lines were fluid. In the West, though the front line barely moved, this stasis was the result of massive forces locked in a precarious balance. From one month to the next the initiative shifted from one side to other. As 1916 began, the Entente were planning to crush the Central Powers between a concentric series of assaults delivered in sequence by the French, British, Italian and Russian armies. It was in anticipation of this onslaught that the Germans on 21 February seized the initiative in launching its assault on Verdun. By attacking a key point in the French fortress chain they would bleed the Entente to death. The result was a life-and-death struggle which by the early summer had sucked in more than 70 per cent of the French Army and threatened to turn the Entente’s concentric strategy into little more than a series of ad hoc relief operations. It was to seize back the initiative that at the end of May 1916 the British agreed to bring forward their first major land offensive of the war, on the Somme.

  As the combatants strained to the limit, their diplomats worked urgently to drag more countries into the maelstrom. In 1914 Austria and Germany had lured Bulgaria and the Ottoman Empire onto their side. In 1915 Italy came in on the side of the Entente. Japan had joined the cause in 1914, snapping up Germany’s Chinese concessions in Shandong. By the end of 1916 Britain and France were luring the Japanese navy out of the Pacific to do escort duty against Austrian and German submarines in the eastern Mediterranean. Vast amounts of cash and every conceivable means of diplomatic pressure were brought to bear on the last remaining central European neutral, Romania. If it could be flipped into the Entente camp it would pose a mortal threat to the soft underbelly of the Austro-Hungarian monarchy. But there was only one power in 1916 that could truly transform the balance of the war, the United States. Whether in economic, military or political terms, its stance was decisive. It was only in 1893 that Britain had seen fit to upgrade its legation in the American capital to the status of a full embassy. Now, less than a generation later, European history seemed to hang on the posture that Washington would adopt towards the war.

  I

  The success of the Entente’s strategy depended on combining a devastating series of concentric military offensives with the slow economic strangulation of the Central Powers. Before the war the British Admiralty had prepared plans not only for a naval blockade but also for an annihilating financial boycott of all central European trade. But, in August 1914, in the face of fierce protests from America, they shrank from the rigorous enforcement of these plans.2 The result was an uneasy standoff. Britain and France compromised the effectiveness of their ultimate maritime weapon. But the blockade even in its partial form was hugely unpopular in the United States. The American navy regarded the British blockade as ‘untenable under any law or custom of maritime war hitherto known . . .’3 But even more politically charged was the German response. In an effort to turn the tables on the Entente, in February 1915 the Kriegsmarine deployed its U-boats in the first all-out assault on transatlantic shipping. They managed to sink almost two ships per day and an average of 100,000 tons per month. But the shipping resources of Britain were deep and if continued for any period of time this assault seemed bound to force America into the war. The Lusitania in May and the Arabic in August 1915 were only the best-known casualties. Anxious to avoid further escalation, at the end of August the Kaiser’s civilian government retreated. With the backing of the Catholic Centre Party, the progressive Liberals and the Social Democrats, Chancellor Bethmann Hollweg issued orders to restrict the U-boat campaign. Just as the Entente could not properly enforce its blockade for fear of antagonizing America, Germany’s counterstroke miscarried for the same reason. Instead, in the spring of 1916, the German navy tried to break the maritime deadlock by luring the British Grand Fleet into a North Sea trap. On 31 May 1916 in the battle of Jutland, 33 British and 27 German capital ships clashed in the largest naval confrontation of the war. The result was inconclusive. The fleets slunk back to base, henceforth to exert their influence from offstage as massive, silent reserves of naval power.

  In the summer of 1916, as the Entente struggled to regain the initiative on the Western Front, the politics of the Atlantic blockade remained unresolved. When the French and British sought to tighten their grip by blacklisting American firms charged with ‘trading with the enemy’, President Wilson could barely contain his anger.4 It was ‘the last straw’, Wilson confessed to his closest advisor, the urbane Texan Colonel House, ‘I am, I must admit, about at the end of my patience with Great Britain and the allies.’5 Nor did Wilson content himself with expostulation. The American Army might be small, but even in 1914 the American fleet was a force to be reckoned with. It was the fourth largest in the world and unlike the Japanese or the German navies it actually had a proud memory of having clashed with the Royal Navy in 1812. To the followers of Admiral Mahan, America’s great theorist of naval power from the gilded age, the war presented a priceless opportunity to outbuild the Europeans and to establish undisputed control over the oceanic waterways. In February 1916 President Wilson fell in with their demands, launching a campaign to gain congressional approval for the construction of what he boasted would be ‘incomparably the greatest navy in the world’.6 Six months later, on 29 August 1916, Wilson signed into law the most dramatic naval expansion plan in American history, appropriating almost $500 million over three years to build 157 new vessels, including 16 capital ships. Less dramatic, but no less consequential in the long run, was the establishment in June 1916 of the Emergency Fleet Corporation to oversee the construction of a merchant shipping fleet to rival that of Britain.7

  When in September 19
16 Colonel House and Wilson discussed the likely impact of America’s naval expansion on Anglo-American relations, Wilson’s view was blunt: ‘let us build a navy bigger than hers and do what we please’.8 The reason that threat was so ominous for Britain was that, once roused, the United States, unlike Imperial Germany or Japan, clearly had the means to make good on it. Within five years America would be acknowledged as Britain’s naval equal. From the British point of view, in 1916 the war thus took on a fundamentally new aspect. As the twentieth century began, containing Japan, Russia and Germany had been the chief priorities of imperial strategy. Since August 1914 all that counted was the defeat of Imperial Germany and its allies. In 1916, Wilson’s evident desire to build an American naval force equal to that of Britain raised an alarming new prospect. Even at the best of times a challenge by the United States would have been intimidating. Given the demands of the Great War it was a nightmarish prospect. Nor were America’s naval ambitions the only fundamental challenge facing the Europeans in 1916.9 The rising economic power of America had been evident from the 1890s, but it was the Entente’s battle with the Central Powers that abruptly shifted the centre of global financial leadership across the Atlantic.10 In so doing, it redefined not only the locus of financial leadership, but what that leadership actually meant.