The Deluge

by Adam Tooze

  By comparison with the recalcitrant patriotism of the right wing of both the French and German socialist parties, Kurt Eisner, the spokesman of the German left-wing USPD, cut a brilliant figure. The acting Prime Minister of Bavaria, alone amongst all the delegations, was willing to condemn not only imperialism in general, but to admit his nation’s principal culpability.28 It was this willingness to break the patriotic ranks that in 1919 would transform the USPD into the acceptable face of German democracy, as far as the Allies were concerned.29 But by the same token it made Eisner and his comrades disastrously unpopular with the German electorate. In early 1919, faced with the guns of the Freikorps paramilitaries, the USPD shifted further to the left, adopting the Bolshevik slogan of all power to the Soviets and flirting with affiliation to Lenin’s Comintern. The party paid the price, and not only in votes. On 21 February, 11 days after the end of the Berne conference, having accepted the verdict of his party’s crushing defeat in the National Assembly election, Eisner was on his way through the streets of Munich to submit his resignation as Prime Minister when he was gunned down by a right-wing assassin.

  The subject of violence was on the agenda at Berne. But what preoccupied the majority of the conference was not the, as yet, sporadic attacks from the right. What concerned them was the systematic class terror openly advocated by Lenin and Trotsky. The organizers wanted to follow Kautsky, who attended the conference as a delegate for the USPD, in distancing European socialism from this violent dogma. The social democratic Second International would soon dispatch a delegation to give encouragement to the embattled republic of Georgia, where social democracy was struggling to establish itself against the looming threat of the Red Army. But at Berne, there was no unity on the question of Bolshevism. After the right wing of the French Socialist Party had monopolized the first two days with their anti-German campaign, it was now the turn of the French left wing to unite with the radical fringe of the Austrian Socialist Party to block any common resolution on the question of dictatorship in Russia.

  The one motion at Berne that did not provoke protests from one or other wing of the French Socialists was the vote of approval for Wilson’s promise of a progressive peace and the League of Nations. There were, of course, good reasons for reformist Social Democrats to take this stand. A strong League of Nations would provide the international mediation that had been so tragically lacking in July 1914. A coordinated international approach to labour legislation would remove cut-throat foreign competition as the most telling argument against national welfare measures. It made sense for a gathering of labour movements to demand that the League of Nations be based on properly democratic principles. But the spokesmen of the radical left could easily have found reason, as the Leninist Comintern was soon to do, to dismiss any such talk as ‘bourgeois internationalism’. In Berne, the left wing stayed their hand. Whatever their other differences, if there was one thing German and French socialists of every stripe could agree on, it was their delight in the shadow that Wilson was casting over the ‘imperialists’, Clemenceau and Lloyd George.30

  Nox doubt negative stereotyping can serve a useful purpose in fostering political cohesion, and Wilsonian internationalism might have helped to weld together the disunited European labour movement as a democratic force. But though it did salve the wounds, socialist Wilsonianism was too weak a force to restore the unity sundered by the war and the Bolshevik seizure of power. With Lenin consolidating his grip in Russia, the idea that a unified left, stretching from Rosa Luxemburg to Gustav Noske, could gain a democratic majority anywhere in central or western Europe, was a mirage. In many places, a democratic programme of national reform did command a majority. However, it was one built not on a unified socialist bloc, but, as Germany demonstrated, on a decision by the right wing of social democracy to drop the far left and to opt for a coalition with Christian Democrats and Liberals.31 This was a painful choice. As the German example demonstrated, it could have lethal repercussions for the far left, all the more so if they gave repression a chance by espousing the rhetoric and the practice of Leninist civil war. Wilsonianism did not make it any easier. By casting suspicion on the likes of Erzberger, Clemenceau and Lloyd George, Wilsonian rhetoric helped to discredit precisely the figures on whom the prospects for a broad-based progressive coalition, in fact, depended. By offering moderate social democrats the false hope of a radical internationalism that was not Bolshevism, Wilsonianism made broad-based progressive coalitions less, not more, thinkable. Nowhere were the ironic consequences more evident than in Britain, the least Bolshevik and most Wilsonian of Europe’s labour movements.

  III

  In Britain a more or less explicit alliance between the mainstream Liberal Party and organized Labour had been a mainstay of radical reform since the 1870s. In 1914 the vast majority of the Labour movement had rallied to the war. Since December 1916, Lloyd George had made sure always to include a trade union representative in the inner circle of his war cabinet. But the peace debate unleashed by Wilson in 1917 put this incorporation under real pressure. Since 1914 Ramsay MacDonald had led a small minority in opposition to the war, entertaining close relations with the Union of Democratic Control, the British grouping of radical liberals that served as a sounding board for Woodrow Wilson. In 1917 this anti-war bloc gathered far greater weight when the formerly pro-war Labourite Arthur Henderson abandoned the Lloyd George government over its refusal to allow him to attend the Stockholm peace conference. Lloyd George’s January 1918 declaration of war aims was an effort to hold the Labour Party behind the war, but with Henderson in the lead the labour movement was now preparing to compete not as a Liberal auxiliary, but as an alternative government.32 With the franchise having been vastly expanded, there seemed no reason why Labour should not claim a majority of the electorate that was now overwhelmingly working class.

  In due course, these predictions were to be confirmed. The fact that between 1923 and 1945 Britain was to elect a Labour government three times on a platform committed to a British form of socialism, ought to be counted amongst the more remarkable peaceful transitions of modern political history. But it was only in 1945 that Labour on its own was in a position to win an outright majority. Both in 1923 and 1929 the Labour governments depended on Liberal support. In 1918 the party’s overconfidence was to exact a high price. When Lloyd George decided to call a quick post-war election and offered Labour candidates safe seats on his coalition ticket, the party leadership refused. Counting on their new national organization, contesting almost half the seats, Labour expected to make dramatic gains and wanted to draw a clean line between itself and the government it now denounced as warmongering.33 Instead, on 14 December, the government scored a crushing electoral victory. Lloyd George and his Tory coalition partners virtually eliminated the rump of the Liberal Party led by former Prime Minister Herbert Asquith. Of 300 Labour candidates only 57 entered the House of Commons.

  Ironically, rather than being celebrated as a triumph of democratic reform, the first election under Britain’s new comprehensive franchise became notorious as a triumph of jingoist nationalism. Under the shadow cast by Wilson, the ‘khaki election’ was greeted by a barrage of criticism not from the right, but from the left. Faced with the ‘degradation of this Parliament’ Ramsay MacDonald, who had lost his seat, despaired altogether of human nature.34 Lloyd George and his Tory partners had, it seemed, found a way to turn democracy into a vehicle for reaction. Lloyd George, the staunch opponent of the Boer War, stood accused of pandering to the basest instincts of nationalism. The sense of having been cheated was only amplified by the arbitrariness of Westminster’s first-past-the-post constituency system. Although Asquithians, Liberals and Labour gained more than one-third of the electorate, they won only one-eighth of the seats.35 But though this rankled, the vagaries of the Westminster system were predictable and they did not make the system inherently conservative. In 1906 it had given the Lib-Lab coalition a landslide. During the reform debates of 1917
, it was the Conservatives who had pushed for proportional representation, wanting to protect themselves against what they took to be the inevitable working-class majority under a universal franchise. But though the electorate did indeed expand by two-thirds in 1918 as compared with 1910, what the government had not reckoned with was the suicidal incompetence of their opponents. In 1918 the Labour Party made no arrangement with the Asquithian Liberals, thus splitting the opposition vote, with predictable results.

  The Coalition, however, was under no illusion about the actual popular mood. Jingoistic demonstrations and newspaper headlines aside, they knew that there was no tidal wave of nationalist enthusiasm behind the government. Despite Lloyd George’s encouragement of the ‘trench vote’, the vast majority of the soldiers were too exhausted and apathetic to turn out. The Conservatives gained their huge share of the House of Commons seats from only 32.5 per cent of the electorate, a lower share than in any British election in the twentieth century other than the historic defeats of 1945 and 1997. Of course, this was in part an effect of their coalition agreement with Lloyd George. But the Tory leadership were convinced that Lloyd George was essential as a shield against the rise of Labour.36 And the modest electoral share was to prove a persistent feature of Tory electoral fortunes in the 1920s, a decade in which they broke the 40 per cent threshold only once. Despite the superficial dominance of the Coalition in Parliament, it was clear that the ground was shifting. In the election in Britain on 14 December 1918, the trade unions were strong enough to pay for half of Labour’s candidates.37 And this was backed outside Parliament by a truly unprecedented wave of labour mobilization.

  The upsurge in working-class militancy between 1910 and 1920 was a phenomenon that swept the entire world.38 Rather than seeing it as a mere epiphenomenon of the socialist revolution that did not happen, it deserves to be seen as a transformative event in its own right. In the United States, in the last 18 months of Wilson’s presidency, it was to unleash a veritable right-wing panic. In France, the delegates to the Versailles peace conference witnessed street battles on May Day 1919. By the summer of 1919 Rome appeared on the point of losing control of much of urban Italy. The surge of militancy in Britain may not have been so radical in its rhetoric, but it was nevertheless formidable. Whilst the British Empire was still battering at the Hindenburg line, the Lloyd George government faced a police strike and a serious railway stoppage.39 So worrying was the situation that the government authorized local police forces to call on military assistance (Table 6).40

  With the war at an end, repression gave way to a major dose of conciliation. On 13 November 1918 Lloyd George signalled generosity by promising to maintain the real purchasing of wages at their armistice level. But wage increases were no longer the only trade union demand. Across Europe, America and even in the ranks of the nascent Asian labour movement, the eight-hour day was as much a symbol of the new order as the League of Nations. In December, facing the threat of a general railway strike, Lloyd George forced his Conservative cabinet colleagues to agree to the introduction of the eight-hour day at full pay. Clemenceau followed suit in the spring of 1919, as did the Weimar Republic. The third major trade union demand was for the state to assume control of key industries. In Britain the key battleground’s were the coalmines, which were overwhelmingly most important source of fossil fuel not only for the UK, but for much of the rest of Europe. The so-called ‘Triple Alliance’, a coalition of railway workers, dockers and miners, had the capacity to paralyse not just Britain but the entire inter-Allied supply network.

  Unlike the political leadership of the Labour Party, however, the trade unions displayed a clear sense of the realities of power. They knew their own strength, but they also appreciated that an all-out strike would leave the government with no option but to resort to force. As Ernest Bevin, the leader of the powerful Transport Workers’ Union, put it, if the ‘Triple Alliance’ were to activate their threat, ‘I think it must be civil war, for I cannot see how it is possible, once all the TU are brought in, for the government to avoid fighting for the supremacy and power, and I do not believe that our people, if they knew what it meant, would be prepared to plunge into it.’41 Given the failure of the Labour Party in the elections, Lloyd George would have Parliament behind him. Both sides had too great a stake in Britain’s self-image as a ‘peaceable kingdom’ to risk such a clash. Instead, both the unions and the Lloyd George coalition preferred to haggle.

  On 24 February 1919, to placate the Triple Alliance, Lloyd George persuaded the Miners’ Federation of Great Britain to agree to a Royal Commission on nationalization. In November 1918 the Prime Minister had signed up his reluctant Tory partners to a platform boldly entitled a ‘Democratic Programme of Reconstruction’. With remarkable frankness the Conservative Party leader Andrew Bonar Law spelled out to the patrician Lord Balfour the logic of this arrangement. It might be tempting for the Tories to break with their erstwhile nemesis, Lloyd George. But if they did so they risked facing a ‘combined Liberal and Labour party . . .’. Even if the Conservatives were able to muster a majority on their own, the resulting polarization would be highly dangerous. ‘The only chance . . . of a rational solution’ to the vast array of reconstruction problems was that they should be addressed by a government that was drawn not from one ‘section’ of British society but from elements of all the main camps. Then there would ‘at least be a chance that the reforms, which undoubtedly will be necessary, should be made in a way which was as little revolutionary as possible’.42 At crucial moments Lloyd George reminded his cabinet colleagues of this basic political insight. After what they had spent on securing victory in the war, it was nonsense to squabble over hundreds of millions needed to secure domestic peace. If the war had lasted another year, would they not have somehow or another raised another £2 billion? Compared to that, ‘£71 million was cheap insurance against Bolshevism’.43

  Of course, wartime spending habits could not be continued indefinitely. On 30 April 1919, Chancellor Austen Chamberlain presented Parliament with a budget that cut public spending in half.44 But whereas military spending was slashed, one-fifth of the budget was set aside to subsidize bread prices and railway fares and to pay for war pensions and other costs of demobilization. Never before had welfare spending been given such clear priority over imperial defence.

  Before the war Lloyd George had proved himself as one of the great architects of modern democracy, in his struggle with the House of Lords over the creation of a modern progressive tax system. His challenge back then had been to find a democratic basis on which to pay both for increased welfare spending and the naval arms race with the Kaiser’s Germany. In 1919, having contributed to the defeat of Germany, his government faced a fiscal crisis of unimagined proportions. In 1914 British public debt had stood at only £694.8 million. Five years later the figure had mounted to a dizzying £6.142 billion, of which £1 billion was owed to America, and not in sterling but in dollars (Table 7).45 Already in 1919 debt service amounted to 25 per cent of the budget and would in the foreseeable future rise to something closer to 40 per cent. These burdens were heavy, but Britain was rich. The load both of domestic and foreign debt on France and Italy was proportionally even heavier. According to contemporary estimates public debt contracted during the war came to 60 per cent of pre-war national wealth in Italy as opposed to 50 per cent in Britain and only 13 per cent in the US.46

  On 11 December 1918, in an impromptu speech in Bristol, Lloyd George had made his most inflamatory statement of the ‘khaki’ election campaign. When it came to reparations, he announced to a cheering crowd, the Germans should not expect to get off easily – ‘we shall search their pockets’.47 With this resort to populism, Lloyd George’s critics alleged, the Prime Minister opened the door to disaster at the Versailles peace conference. But to see his speech as mere demagoguery ignores the reality of the financial crisis and the unprecedented severity of social conflict. Despite the talk of a Wilsonian peace without in
demnities on the Labour left, reparations were not a simple left-right issue. If repayment of the war debts was not to stymie any effort to create a fairer society by means of public education, social insurance and public housing – the agenda shared by new liberals and reformist socialists across Europe – some additional source of funding had to be found. As John Maynard Keynes, later one of the arch-critics of reparations, admitted in the spring of 1919, the ‘intense popular feeling . . . on the question of indemnities . . .’ was not based on ‘any reasonable calculation of what Germany can, in fact, pay’. It was based on a very ‘well-founded appreciation of the intolerable situation’ that would arise for the European victors if Germany did not carry a substantial fraction of the burden.48 When Lloyd George, the father of Britain’s system of social insurance, spoke of searching the Germans’ pockets for reparations, what he was promising anxious middle-class taxpayers was that these immense new burdens would not be borne by them alone.