The War Over Ukrainian Identity
Nationalism, Russian Imperialism, and the Quest to Define Ukraine’s History
In 2010, Greece was mired in a major debt crisis. It had been hit hard by the global collapse of financial markets and had just seen its government bonds downgraded to junk status. Facing the distinct possibility of default, the country turned for help to international organizations: the International Monetary Fund (IMF), the European Commission, and the European Central Bank. These organizations provided Greece with three enormous loans in 2010, 2012, and 2015. But the bailouts came with stiff conditions, forcing domestic political and economic reforms and imposing austerity measures that plunged an already reeling country into further turmoil. Successive Greek governments acquiesced to the terms of these bailouts but then tried to claw back control of the country’s domestic economic policy under pressure from both the left and the right.
Greece’s travails with the IMF and other international creditors point to how national sovereignty is conditional, not absolute, in the modern world. Sovereign nation-states are supposed to be the constituent units of the international system. International organizations such as the Bretton Woods institutions—the IMF and the World Bank—and the United Nations exist, in part, to maintain stable political and economic relations between independent states and prevent some from riding roughshod over others. But belonging to these organizations invariably curbs the freedom of many member countries, especially weaker ones. An international order that claims to rest on the sovereignty of states often forces some countries to reckon with how partial their sovereignty truly is.
In The Meddlers, the historian Jamie Martin traces the evolution of the modern international economic order in the decades before the rise of the IMF and the World Bank. In 1920, in the wake of World War I, the governments of the victorious countries created the League of Nations, a body meant to peacefully resolve political disputes and prevent future wars. The league also sought to help distressed countries by delivering economic advice and giving lenders implicit guarantees that they would recoup their loans to countries in need. The league’s role laid the groundwork for the present economic order.
With a critical eye, Martin explores this history of the relationship between international organizations and their nominally sovereign member states. He finds that the international economic order rests on deep inequality, on powerful states dictating terms to the less powerful, and thus on the infringement of the sovereignty of weaker states. The league and its future incarnations, specifically the IMF and the World Bank, may have formally accepted the equal sovereignty of their members, but in practice, they have habitually violated this sovereignty. That truth, however, is not surprising. It is not altogether realistic to expect, as Martin seems to, that the international economic order will uphold the respect of sovereignty. That implausible demand gets in the way of a finer understanding of how countries actually retain and lose sovereignty in the modern age, how sovereignty is often willingly, although sometimes not openly, traded off by some groups within states for economic gain. Big external forces may eat away at the full independence of countries, but so, too, do the forces within.
Before the nineteenth century, countries didn’t really have to grapple with these sorts of questions pertaining to sovereignty. Countries fought one another, plundered treasures, took slaves, imposed monopolies, and did not worry much about rules—because there were very few. But questions of sovereignty became more relevant with the advent in the nineteenth century of the system of nation-states, which at first covered only Europe and European settler societies (such as Australia and the United States). De jure and de facto European protectorates, such as China, Egypt, Tunisia, and the Ottoman Empire, belonged to the gray zone of states that were nominally independent but in reality were under the thumb of European powers. When such protectorates were unable to repay their debts, European states would enforce payment by taking control of national treasuries; when protectorates were unwilling to trade, European states would compel them to open their ports. The United Kingdom assailed China in this way during the two Opium Wars of the nineteenth century. British, French, and Spanish troops jointly landed in Mexico in 1861 to extract debt repayments from the fledgling Mexican republic. Germany, Italy, and the United Kingdom imposed a naval blockade on Venezuela between 1902 and 1903 after that country’s president refused to pay its foreign debts. Gunboat diplomacy met gunpoint debt collection.
These relationships changed with World War I. The Meddlers opens with a retelling of that conflict, when the Allies worked together to coordinate access to raw materials necessary for the war effort, such as wheat from Argentina, nitrate from Chile, and tin from Malaya. They also coordinated the shipping of food, making sure that civilian populations in France, Italy, and the United Kingdom did not go hungry. Such planning required each participant to surrender bits of its economic sovereignty for the collective good, for instance, by organizing collective bidding processes for foreign-produced raw materials and food so as to limit price increases. It also complicated the relationship between governments and their countries’ private sectors, leading to the first attempts at state-directed economic planning in Germany and among the Allies.
This kind of coordination expanded markedly with the founding of the League of Nations. At its inception, the league had 42 members, including countries in Latin America, Asia (notably China and Japan), and even a few from Africa. The league got involved in a variety of thorny issues that bedeviled many countries in the wake of the war. It sent economic advisers to control government spending and stabilize the hyperinflation that ravaged parts of the former Austro-Hungarian Empire. It provided a forum for the negotiation of the intractable issue of German reparations. And it tried to boost economic development in southern Europe by issuing small loans to those ethnically Greek refugees who, in one of the population exchanges common after the war, had left Turkey and moved to Greece. The multilateral power of the league far outstripped the scope of earlier economic treaties agreed to by two or a handful of countries. Members of the league had joined a voluntary international organization that could at some point limit their economic sovereignty if they could not service their debts or adequately run their economies.
The league, Martin argues, ended up creating the kinds of rules and procedures that are today taken for granted and enshrined in the policies of the IMF and the World Bank (both founded in 1944). Many countries accept the IMF’s regular annual oversight through the so-called Article IV consultations, and should they borrow funds from the IMF, the international body places various conditions on their domestic economic and social policies that limit their sovereignty. The league inaugurated a different kind of external interference in domestic affairs, one far subtler than what had transpired before, which Martin describes as the “unwanted meddling that empires long visited on semi-sovereign countries.”
In exchange for help from the league in obtaining loans, a country had to accept the league’s superintendence of its economic affairs. Martin recounts how such tradeoffs worked in the cases of Albania and Austria between 1922 and 1924, Greece in 1925, and, more fleetingly and unsuccessfully, China in the 1930s. To Albania and Austria, the league provided foreign advisers who controlled each country’s fiscal policies to assure foreign lenders that the funds were not being squandered. In Greece, the league provided housing and business loans to refugees. It sent Jean Monnet, a French diplomat (who would eventually help found the European Economic Coal and Steel Community), to China to advise the country’s new National Economic Council, a body created in 1931 to help speed economic reform in the country. But Monnet’s mission made little impression in the midst of China’s other problems, including civil conflict, competing centers of power, and Japanese interference.
The league’s first forays into imposing austerity policies (and thus into limiting the sovereignty of member states) took place in European countries, which bristled at being treated no better than the populations of Africa and Asia. People in Christian European states imagined themselves at the top of a global hierarchy; they could venture out and limit the sovereignty of people elsewhere, but they struggled to accept the surrender of their own sovereignty. The league’s work could not help but carry colonial overtones. J. G. Moojen, a longtime Dutch colonial official, thought that his experience in suppressing uprisings in South Sumatra uniquely qualified him for the position of the overseer of the league’s activities in Albania. In his application for the job, as Martin recounts, he drew a parallel between his former experience and the work in Albania: the people in South Sumatra were “independent and fond of liberty,” much like “the Albanian mountain inhabitants.” Moojen did not get the job—it went to another Dutch East India official—but a league bureaucrat agreed with his assessment of the situation, noting that Albania was a country where “a certain amount of financial wisdom may have to be instilled by means of a revolver.”
Perhaps one of the more fundamental features of this system became clear only in hindsight. The league was formally composed of equal member states, but in fact, the victorious great powers—France, Italy, the United Kingdom, and, lurking on the outside, the United States—did not think that they were beholden to the same rules as weaker member states. The defeated European powers, Austria and Germany, were aggrieved that they were not afforded seats at the high table. Japan held less sway simply by being an Asian country. And African countries and colonies found themselves at the bottom of this hierarchy. A similar pecking order persists to this day. Countless authors have told the story of the United Kingdom’s sterling devaluations in 1967 and 1976, which were imposed by the IMF. This episode has won so much scholarly attention precisely because the IMF’s intrusion into the economic policies of a major Western power remains hard to imagine today. Nowadays, when the IMF imposes identical or much greater limits on economic decision-making in Argentina or Nigeria, for instance, the action hardly arouses any interest beyond the predictable statements of concern about the profligacy of countries in the so-called global South and the usual worries in Western capitals about whether the debtors will repay their creditors.
Martin shows that the country most reluctant to give up any morsel of economic sovereignty was then, as it is now, the United States. The United States, despite the efforts of President Woodrow Wilson, never joined the League of Nations. It was unwilling to bear the costs of multilateralism, to curb the power of its private companies, to risk being dragged into future wars, or, most of all, to share sovereignty. The British and the French felt more urgently the necessity of international coordination, perhaps because they were less powerful than the ascendant United States.
The international economic order rests on deep inequality and on the infringement of the sovereignty of the weak.
The American position, of course, changed after World War II, in part because the United States could then fully dictate the rules of the game, which it was not yet strong enough to do after World War I. The last part of The Meddlers discusses the forensically studied negotiations among the soon-to-be-victorious Allies in 1944 and 1945 in Bretton Woods and at Dumbarton Oaks that led to the founding of the IMF and the World Bank and the entire postwar global economic order. Martin explores the differences between the two main protagonists: the United States, as embodied by the Treasury Department official Harry Dexter White, and the United Kingdom, represented by the economist John Maynard Keynes. The main point of contention between the two was how countries would access IMF funds, which would largely be provided by the United States. The United States insisted that the provision of funds above a certain sum had to be followed by increasingly tight conditions placed on domestic policy. The United Kingdom, knowing that it would need to borrow soon, argued that members of the IMF should treat access to funds as a right, not a privilege. Unsurprisingly, given the relative imbalance of power, American preferences won the day.
This is well-trodden ground. But in several tantalizing sentences, Martin challenges, without naming it, the economist Dani Rodrik’s influential argument about the “golden age” between 1945 and 1971 of international economic coordination and limited globalization, during which the Bretton Woods system functioned without too much friction and allowed member states significant policy autonomy. Martin’s underlying argument that the international system never treated all countries the same undermines Rodrik’s thesis. Martin writes, “The challenges of global governance . . . are more significant than what is implied by stylized histories of embedded liberalism and its collapse into neoliberalism. There was no stable era of mid-twentieth-century autonomy that can be easily recaptured.” And also, “There was no golden age of national autonomy and sovereign equality after 1945.”
Without fully developing his argument, Martin seems to dispute the view that the neoliberal era, ushered in by figures such as British Prime Minister Margaret Thatcher and U.S. President Ronald Reagan, represented a true departure from the so-called golden age that preceded it. For Martin, hierarchy has always existed in international economic relations. The notion that relations between powerful economies and less powerful ones in the decades after World War II were not shaped by inequality and discrepancies in power was an illusion, an ideological façade made necessary by the Cold War, in which the Western camp needed to present itself as a team of equals.
Martin underlines how this parity was always chimerical. No iteration of international order in history has allowed member countries to fully preserve their sovereignty. As it is, countries are rarely hermetically sealed. Even if one thinks in purely economic terms, the borders between what is domestic and what is foreign are thoroughly permeable in a world of interdependence. For instance, the anti-inflationary policies of Paul Volcker, who was chair of the U.S. Federal Reserve in the 1980s, cannot be understood as only a domestic issue: higher interest rates in the United States had enormous repercussions for indebted countries as varied as Brazil, Mexico, Poland, and Romania. (The anti-inflationary measures being imposed now by the U.S. Federal Reserve will likely have similarly deleterious consequences for many emerging economies.) Today, China applies all sorts of conditions, such as requiring the transfer of technology, on access to its market; that can hardly be construed as domestic policy. Continuous trade deficits or surpluses are not simply the concerns of the countries involved; if China and Germany run large trade surpluses, for instance, other countries have to run trade deficits, which they can reduce significantly only by depreciating their currencies.
It is often impossible to convincingly distinguish between the domestic and the international sphere. By criticizing how stronger countries exercise power, as Martin does, one is simply writing a chronicle of the inevitable and the obvious. An international organization, such as the IMF, should not try to contrive equality among its members; it should set itself the more realistic goal of minimizing inequity. It could do this by taking the social concerns of borrowing countries more seriously and allowing them much longer periods of adjustment. For instance, it could ask borrowers to phase out subsidies over ten years rather than three; it could resist the impulse to excessively financialize economies through encouraging the private provision of pensions and education, which often helps only the rich and does little for the poor and the middle class; and it should not penalize government investments in infrastructure and health.
An ideological infrastructure that presumes equality will only invite the strong to come up with ever more clever narratives to justify their hegemony. Then, in addition to de facto inequality, countries will have to deal with hypocrisy, too, as happens today when rich countries clamor for more attention to climate change while remaining among the greatest per capita emitters of carbon dioxide: the United States’ per capita emissions are nine times as great as India’s; Finland’s are ten times as great as Zimbabwe’s.
An additional problem hinted at in the chapters discussing austerity policies in post–World War I Austria and development loans in Greece is unfortunately not developed further. The desire for equal sovereignty implicitly frames every country as a homogeneous entity with discrete interests. In this view, the League of Nations and other international organizations are imagined as powerful external entities clamping down on the independence of weaker states. But countries are not homogeneous; every country contains many class, social, and political groups, and some of them use international organizations to impose policies that they are not strong enough to see through the domestic political process. The Austrian government in the 1920s, as Martin notes, did precisely that when seeking to advance fiscal reforms and circumvent opposition in Parliament. Innumerable other governments have followed suit, shifting blame to foreigners (and willingly surrendering domestic sovereignty) as a way to further a particular domestic interest. They cry, “Foreigners made us do it!” even when the tail is wagging the dog.
This is how powerful groups with specific agendas collaborate in the neoliberal era. Countries yield domestic sovereignty not under the implacable pressure of international organizations but through international agreements that powerful social groups use to lock in their preferred policies. In Globalists (one of the books Martin cites), the historian Quinn Slobodian shows that such an approach was pioneered by libertarians and the Mont Pelerin Society they founded in Switzerland in 1947. They realized that there was no real possibility of a single world government that would advance the interests of businesses. Instead, they argued for a “double government”: “the imperium,” which would deal with political, cultural, and symbolic matters and would be fully autonomous, and “the dominium,” which would be internationally controlled and deal with economics. Within the latter, cross-country business interests would hold sway and ensure secure property rights, low taxation, and the independence of central banks (among other business-friendly measures) across borders. Should one country defect and try to pursue, say, an independent exchange-rate policy or abandon independent central banking, markets would rapidly punish the renegade. The society’s vision of the dominium is indeed at work today: powerful social and class groups within countries willingly trade portions of national sovereignty to further their own interests.
Martin’s prose is dense, and his blow-by-blow recounting of the events that took place over almost half a century is at times tedious, although impressive in its detail. Future economic historians will no doubt find the book useful for its list of sources: the endnotes consist of 66 pages of references in small type, which, at first guess, may include more than 1,000 books and articles. The problem with Martin’s detail, however, is that it often obscures the big picture. The major issues emerge periodically, but one wishes that the book were structured more around the key questions of ideology—for instance, the belief in the unconstrained free market and its counterpart, the insistence on the meaningful role of the state—and international law that shape the interactions of states.
The idea that all countries are sovereign underpins the international system. But that fundamental basis appears increasingly mythical given the ways countries surrender elements of their sovereignty. For one, weaker countries are not nearly as sovereign as more powerful ones; inequality in international relations places limits on the independence of less powerful countries. And second, countries voluntarily surrender sovereignty, however surreptitiously, because doing so benefits particular political or class factions in those societies. In other words, international organizations should not be judged against an unrealistic standard of upholding the national sovereignty of all their members, both because power is distributed unequally worldwide and because national sovereignty is divided locally among different groups with different interests. Any international economic order must rest on the precarious foundation of a world of unequal and split sovereignty.
Nationalism, Russian Imperialism, and the Quest to Define Ukraine’s History