Can Putin Survive?
The Lessons of the Soviet Collapse
THE prospect of a new American tariff -- and we have come to know what that generally means in increased duties -- has attracted wide attention in Europe; it has also produced various reactions which may be considered as expressing the consciousness of a closer European unity. In point of fact, a highly protectionist American tariff is no new thing, and certainly this is not the first time that we see Europe roused in protest against the Chinese wall which the United States more and more efficiently is building around its frontiers: I can well remember similar storms, in 1890 when the McKinley tariff was voted, and in 1897, 1909 and 1922, when the Dingley, the Payne-Aldrich and the Fordney tariffs were passed.
This time the reaction is in itself not very different, but there are at least two new facts which plainly make the relationship of Europe and America a new one.
The first is the now manifest vulnerability of the United States as compared with its previous complete immunity to economic retaliation. At the time of the McKinley tariff it mainly exported foodstuffs and raw materials (raw cotton, wheat, meat and oil made up about three-fourths of the total) and no retaliation was possible against such articles. This was the reason why the United States often found itself able to obtain the benefit of minimum tariff conditions while only granting -- should I say the benefit of a general tariff? We in Europe needed the new continent as a provider of primary products and the new continent did not need us at all; at least it was sure to have us as a market, since only too obviously we could not do without its exports. But this now has ceased to be true. Manufactured goods constitute over one-half of present American exports, and against them retaliation is possible, a fact of which Europe is well aware and which may in the long run contribute to modify the spirit of traditional American tariff policy.
The second fact -- for I feel entitled to call it a fact -- is the closer union of Europe. As everybody knows, Europe before the war had hardly more of a sense of unity than China. In the Middle Ages there had been a real unity of Christian Europe, and even in the eighteenth century there obviously was a strong sentiment of the unity of culture among Europeans. But it seems as if the nineteenth century had obscured the old world's consciousness of this, just at the time, too, when Europe in reality controlled the world. I can remember how when travelling around the world at the end of the nineteenth century I used to react as a Frenchman and also as a member of the dominant white race, but hardly as a European. Since the war, Europe's consciousness that it is a definite and articulate entity has been growing day by day, and what has contributed most directly to producing that sense of individuality has been the controlling position assumed by the United States. As far as I can see, what has impressed us is less the new and irresistible political power of America than the fact that a new civilization has arisen across the Atlantic, a civilization with a continent as its domain. By thinking of the United States in the terms of a continent we have been led to consider Europe in the same way, and we notice the personality of European civilization more than we did before.
In the west, indeed, we are witnessing something like the birth of a new age of the human race, with new methods of production which we in Europe feel we should adopt if we want not only to win but to survive. In that sense a certain Americanization of Europe is felt to be necessary in order simply to resist America. It was not such a very different problem that Japan was confronted with sixty years ago, when it decided to Occidentalize itself in order the better to resist the Occident. But Japan was alone and united, while Europe is numerous and divided against itself. The best she can do, at least for the present, is to make some sort of a coalition, and I am reminded of the phrase of General Sarrail, general-in-chief of the Armée d'Orient during the Great War, who said: "Since I command a coalition I admire Napoleon less."
The union of Europe seems to be as common a topic of discussion on the American side of the water as on the other. In the United States one frequently hears somewhat hasty generalizations about the unification of Europe. Many people speak of the United States of Europe as though an arrangement of that sort were a possibility of the near future -- a sort of continental Zollverein. Now it is interesting to pause at this point to characterize the tariff atmosphere existing in Europe today. There is no sensible person, I think, who believes that the present European system of tariffs can long endure. Just after the war several British economists brilliantly and sensibly explained the absurdity of the Chinese walls which were being erected around the new states, some of which were often not larger than courtyards; but the influence of their arguments would have been greater if they had not exactly coincided with the interests of Britain, always in search of new and free markets. The League of Nations has been working in the same spirit for nearly ten years, but the result, as far as tariffs proper are concerned, has not yet been decisive or even material. When they gather in Geneva, the representatives of the various countries usually admit that tariff walls are exaggeratedly high, but their governments have not followed their recommendations. Some substantial results have been obtained by means of commercial treaties, but in general it must be admitted that frontal attacks against tariffs have failed.
In consequence, a tariff union of Europe still appears to be rather remote. It is contemplated by many, however, not so much as a possibility of the future as a necessity. When the 1927 Economic Conference met at Geneva, it was commonly said that it would be an anti-American conference. I attended its sessions from beginning to end and saw no such thing. The Americans were present and received a cordial reception. Yet it could not escape attention, especially in the second committee which discussed tariffs, that the Americans, as well as the representatives of several other non-European countries, appeared a bit isolated. It was not so much an opposition between Europe and the United States as it was a contrast of attitude between the countries outside Europe, richly endowed with natural resources, and the countries of Europe, in search of and in need of raw materials and foodstuffs. The United States, it was easy to see, was destined to find increasing difficulty in sustaining the position which it had adopted and forced other countries to accept since the time of the McKinley tariff. Of course nothing like a European tariff union was in sight at Geneva, but the birth of a common European point of view in respect of tariff policies was obviously taking place. Signs of the same process might be observed during the last meeting of the International Chamber of Commerce. After all, it is quite natural that countries where similar economic conditions prevail should sooner or later be led to feel and argue in the same manner. Although no practical step is imminent, then, the idea of a most favored nation clause, limited to Europe, may come up for discussion in the not very distant future.
But, as I said before, tariff walls are strong and are not likely to be overthrown by frontal attacks. As far as the construction of a united European economy is concerned, much more practical and ready results are to be expected from direct understandings between the manufacturers of different nations. It is no exaggeration to say that since the war the industrial cartels have been playing a dominant part in Europe. A better realization of the entirely new conditions prevailing since the armistice seems to have been vouchsafed the great manufacturers than the politicians, who are still permeated with the nationalist ideas of the past. The capitalists in general do not allow themselves to be led by sentiment, but rather by cold-bloodedly considering what methods will lead them to success. They may have been nationalists before and during the war. But the war, and especially the first post-war years, taught them many lessons. They have come to recognize that mutual understanding pays better than violence. The example of America, also, which practically all of them have studied, seems to have exerted an immense influence. They now know -- or rather realize, because they knew it before -- that the primary condition nowadays of cheap production costs is an extended market which you control and which allows you thus to standardize your production. The American market is made up of 120 million people, but in Europe (Russia excepted) there is no single market with more than 70 million customers. We in France have for a long time been under the handicap which lies in the fact that, with a domestic market of only 40 millions, we are obliged to make a practically unlimited number of models. In certain industries this fact may work as an advantage, but in all industries where standardization is a condition of success the existence of numerous small markets presents a difficult obstacle. That is why the advantage of making agreements across the frontiers cannot escape the attention of those captains of industry whose production is sufficiently centralized to allow such a policy. By agreeing internationally about the volume and conditions of their production, and also about their respective positions in the different markets, they to a certain extent artificially create the benefits of the large market which political circumstances have withheld from them. When producers have reached an agreement of this sort, it is plain that the question of the tariff loses much of its importance for them, since they have previously agreed about production and markets.
The impulse which during the last five years has given birth to such a great and constantly increasing number of cartels is obviously spontaneous, born out of the circumstances of the time rather than the conscious will of statesmen. Statesmen have known of the movement and approved of it, but they have in no way created it. Therefore, if the reconstruction of Europe comes that way, economic rather than political good-sense will have to be given the credit. And yet it should always be borne in mind that agreements between great capitalist interests would not have been possible if the moral and political atmosphere of Europe had not been favorable. From this point of view the changing of the political temperature which followed the end of the Ruhr occupation and the French elections of 1924 cannot be too much emphasized. A new era in European development certainly was initiated at that time.
It now remains to be seen what we mean by Europe. Some people conceive it without Russia and Great Britain; others insist that a merely continental Europe, without the Russians and the British, would be hopelessly incomplete. The first point of view has been brilliantly defended, but I hardly think it has won the support of the majority of European economists.
Russia is generally considered, at least in Germany and in France, as an indispensable organ in the European body. As a source of foodstuffs and raw materials it could not possibly be replaced, and scarcely more easily as a factor in the spiritual life of the old world. There is no natural boundary between Europe and Asia. If Russia offers herself as a link -- which she really is -- the advantage for Europe is obvious, but if she chooses to be a buffer or refuses to accept any solidarity with Europe, then we must conclude that the importance of Europe, reduced to being a small peninsula of Asia, will be permanently diminished. In brief, hope has not been given up that Russia will again find its place in the European community, though as to the methods and conditions of bringing this to pass any conclusion would be premature. All we know is that, while Russia is a link between Europe and Asia, Germany also is a natural link between Western Europe and Russia.
The case of Great Britain is no less interesting and important. Britain appears to be hesitating at the parting of two ways. Among the British, some believe and say that Great Britain could never sever itself from Europe -- indeed that she is, especially since the war, a very part of Europe. Others contend that they should have the least possible to do with the continent and should turn towards the Dominions and the United States in order to build up what to all intents and purposes would be a union of English-speaking countries. In the event of that second conception being adopted, Great Britain would cease to be mainly European and would to a certain extent displace her center of gravity. Britain is far from having made up her mind on this important question, but her policy occasionally gives indications that she tends to one side or the other. Thus the hope of framing a customs union with the Dominions (although probably impracticable) seems to have been one of the main factors which kept the British out of the metallurgic cartel of 1926. Certainly Britain feels extreme reluctance to acknowledge complete solidarity with the continent.
Now whether Great Britain chooses to be more or less European is something which may have important reactions on the framing of a new European economic and moral unity. Not in France only, but also, I think, in Germany, you would find many thoughtful people who feel strongly that England is a necessary element in the European order. Less openly, less consciously perhaps, but none the less truly, you would also find the belief that Great Britain is a necessary link between Europe and the other continents, just as much as Russia is a link with Asia. We know the advantage of enjoying the liberty of the British Empire (if this liberty is to last) for the needs of our foreign trade. We know how precious it is, for France and the rest of the continent, to have at our doors the huge British entrepôt of goods, through which for over a century the produce of the world has been drawn towards the old continent. We know that, through Great Britain a large part of the world (and especially the Dominions) gravitates around Europe. Without England the continent of Europe could not remain a world economic center comparable to the economic center which is being built up in America.
We are perfectly aware of the dangers which threaten the economic position of Europe, and we cannot shut our eyes to the fact that some of these dangers lie just in the question as to what conception the British Empire may choose to have of itself. If Great Britain, deserting her place in Europe, consents to be mainly (or only) a partner in the huge concern of the Anglo-Saxon races outside the old world, then we cannot fail to see that she might easily lose the first place in that concern, because some of the Dominions possibly will feel attracted (not politically but economically or racially) towards new centers. Such countries as Australia and Canada, although fully faithful to the British flag, already instinctively look to Washington for their "ethnical defense." The conclusion is obvious and of real concern to Europe, because if the Dominions cease to gravitate around Great Britain they will also cease to look to the old continent as their natural focus, thus shifting the center of gravity of the planet very far from its ancient and traditional location. That is why we should prefer that Great Britain should remain the indisputed center of its own Empire and keep the rôle of trait d'union between Europe and the rest of the world.
All these discussions and considerations are obviously born from the war; I hardly think they would have been given serious thought before 1914. And it is not even the war itself but rather the consequences of the war which may be deemed responsible for Europe's new conception of its real position and its real rôle. Possibly the war itself might have proved a useful lesson of unity and common consciousness, but I think the main factor in the formation of the common consciousness becoming manifest today is the presence of a powerful, rich and dominant United States. The spectacle of that successful country is a lesson which cannot possibly be ignored. But at the same time the fact that America is somewhat lacking in international mindedness is a warning. She has been accustomed to full economical autonomy, and that she intends to stick to it can be seen from the proposed new tariff. At the same time she now needs foreign markets, and though she is reluctant to acknowledge a complete international solidarity she will insist on concessions from foreign countries. The reaction to this, and a very natural one, is the growing realization in Europe of a common European point of view. Although the practical consequences which may flow from this are still uncertain, a frank observer cannot fail to acknowledge that the consciousness of solidarity exists as it never existed before.