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About this book

Standard histories of European integration emphasize the immediate aftermath of World War II as the moment when the seeds of the European Union were first sown. However, the interwar years witnessed a flurry of concern with the reconstruction of the world order, generating arguments that cut across the different social sciences, then plunged in a period of disciplinary soul-searching and feverish activism. Economics was no exception: several of the most prominent interwar economists, such as F. A. Hayek, Jan Tinbergen, Lionel Robbins, François Perroux, J. M. Keynes and Robert Triffin, contributed directly to larger public discussions on peace, order and stability.

This edited volume combines these different strands of historical narrative into a unified framework, showing how political economy was integral to the interwar literature on international relations and, conversely, how economists were eager to incorporate international politics into their own concerns. The book brings together a group of scholars with varied disciplinary backgrounds, whose combined perspectives allow us to explore three analytical layers. The first part studies how different forms of economic knowledge, from economic programming to international finance, were used in the quest for a stable European order. The second part focuses on the existence of conflicting expectations about the role of social scientific knowledge, either as a source of technical solutions or as an input for enlightened public discussion. The third part illustrates how certain ideas and beliefs found concrete expression in specific institutional settings, which amplified their political leverage. The three parts are enclosed by an introductory essay, laying out the broad topics explored in the volume, and a substantial postscript tying all the historical threads together.

Table of Contents

Frontmatter

Chapter 1. Introduction

Abstract
The chapter presents an overview of the subjects covered in the book, combined with a survey of recent historical research on related topics. The focus of our exposition rests on the connections between scholarship on the history of European integration and arguments about the reconstruction of international order during the interwar era, and the relevance of the concept of order for new paradigms of political economy emerging at the time. We conclude with a brief description of the several chapters comprising the volume.
Alexandre M. Cunha, Carlos Eduardo Suprinyak

Economics and Order

Frontmatter

Chapter 2. Eucken’s Competition with Keynes: Beyond the Ordoliberal Allergy to the Keynesian Medicine

Abstract
This chapter explores how Walter Eucken situated himself in respect to John Maynard Keynes’s thought. It will be shown in particular that Keynes and Eucken were less alien to one another than is commonly assumed in the secondary literature. By considering together Keynes and Eucken’s letters to Hayek in response to The Road to Serfdom (1944), a somehow shared criticism is revealed. Keynes and Eucken both notably concentrated on the state positive assignments in order to ensure the proper functioning of a decentralised market economy. Moreover, there was a significant parallel in both methodological and theoretical arguments. Eventually, the Keynes/Eucken contrast proved meaningful for those who wanted to shed light on how they both left such a long-lasting mark on post-WWII European Liberalism.
Raphaël Fèvre

Chapter 3. Third-Way Perspectives on Order in Interwar France: Personalism and the Political Economy of François Perroux

Abstract
The chapter is concerned with the influence of communitarian personalism in the French third-way nonconformist debate in the 1930s that emerges in the framework of Catholic philosophy and a Catholic-based social and political ideas. This allows us to deal with interesting articulations that emerge between personalism, federalism, and corporatism, whether with regard to views on international order, as well as the search for third-way alternatives between liberal capitalism and communism, highlighting the ideas of François Perroux in period as an illustration of how personalist philosophy penetrated the political economy of corporatism.
Alexandre M. Cunha

Chapter 4. Corporatism and Planning in Monnet’s Idea of Europe

Abstract
During the 30s in France the debate on the “third way” was particularly intense. The efforts to develop an alternative to liberal capitalism and socialism involved two main different solutions: planning and corporatism that often overlapped; moreover both of them were imbued with some elements of neo-liberalism. Such a combination of corporatism-planning-neoliberalism characterized France reconstruction after WWII, but it is also the backbone of the French design developed for the European construction. Such a design as originally conceived by Jean Monnet never succeeded and it was instead replaced by a deeply different architecture.
Katia Caldari

Chapter 5. The Construction of an International Order in the Work of Jan Tinbergen

Abstract
This paper analyzes the reasons why Jan Tinbergen was initially hostile to European integration, which he regarded as a poor substitute for an international order. His conviction had three important sources. First his coming of age in The Hague, a government city in a small open country the Netherlands, known for its international institutions such as the Peace Palace. Second his work on economic order on the national level, based on the ideal of social peace supplemented with economic expertise. Third his work at the League of Nations which convinced him of the need for a truly international order. When global economic integration failed to make the desired progress, he gradually became convinced that European integration could be a steppingstone toward international integration.
Erwin Dekker

Chapter 6. At the Origins of European Monetary Cooperation: Triffin, Bretton Woods, and the European Payments Union

Abstract
This chapter explores how the economic and political difficulties of the interwar period and the immediate postwar era forced politicians, economists, and institutions to rethink the European economic and monetary system. Triffin was a key figure in that dynamic and quick to spot the fundamental dilemma of international economic relations. The failure of the Bretton Woods system to restore multilateralism order led Triffin to consider that the regional approach was the appropriate level to achieve a stable international economic order. This vision gave birth to the European Payments Union in 1950 whose success produced the conditions to deal with monetary integration in depth in Europe.
Pierre-Hernan Rojas

Democracy and Technocracy

Frontmatter

Chapter 7. Technocracy, Corporatism, and the Development of ‘Economic Parliaments’ in Interwar Europe

Abstract
In Interwar Europe corporatism was mainly used to refer to the comprehensive organization of political society seeking to replace liberal democracy with an anti-individualist system of representation. In fact, in many cases corporatist, or ‘economic parliaments’, either co-existed with and assisted parliaments or replaced them with a new type of legislature with consultative functions, which provided the government with technical assistance. The most influential theorist of Quadragesimo Anno, the Jesuit Heirich Pesch, did mention the ‘economic parliament’ as a ‘central clearing house’ of his organic view. In 1937 Karl Loewenstein saw ‘this romantic concept of organic representation’, in new legislatures trying to be a ‘true mirror of the social forces of the nation and a genuine replica of its economic structure’. However, the role of corporatist bodies in dictatorships was certainly much less romantic. The chapter explores the processes of corporatist institutional reform, both under democracy and dictatorship, in interwar Europe and its ideological legitimation.
António Costa Pinto

Chapter 8. Pluralism, Tripartism and the Foundation of the International Labour Organization

Abstract
In 1919 tripartism, intended as a form of cooperation between employers, employees and governments, was one of the founding principles of the International Labour Organization (ILO). The chapter explores the theoretical sources of such an idea and its ideological contents. It argues that the early twentieth century British Pluralist movement offered a model of governance predicated upon a system of codetermination between interest groups and governments that was exploited by a group of British international civil servants for creating the ILO. Furthermore, the paper suggests that this resulted in an international agency created to offer a compromise with moderate trade unions and to avoid violent social revolution. Overall, through the ILO the tripartite idea was put at the service of the post-war conservative movement, contributing to reconstructing social order and reforming capitalism.
Valerio Torreggiani

Chapter 9. Pluralism and Political Economy in Interwar Britain: G. D. H. Cole on Economic Planning

Abstract
Pluralist political philosophy offered a popular alternative to the extremes of individualism and collectivism in early-twentieth century Britain. Positing the existence of multiple political allegiances, pluralism questioned the notion of state sovereignty by advocating that other associational forms should be recognized as legitimate sources of political power. In an age of increasing state intervention in economic affairs, however, this fragmentation of power concerned political economy as well. The paper explores the interplay between political claims for a weaker state and economic claims for a stronger state through a case study of G. D. H. Cole, an advocate of guild socialism and prolific writer on economic planning. Cole envisioned state-led economic planning as a transitional device for developing the communal loyalties necessary for democratic industrial self-management.
Carlos Eduardo Suprinyak

Chapter 10. Ordoliberalism and the Rethinking of Liberal Rationality

Abstract
Ordoliberalism is often referred to as the German version of neoliberalism and the dominant economic ideology behind the European economic constitution. Following the German experience of the interwar period, ordoliberal theory is best known for its emphasis on state and rule-based coordination for a functioning market economy. This article deals with the intellectual genealogy of ordoliberalism. It challenges conventional interpretations that frame ordoliberalism as a reaction to historical events, political ideologies, or competing economic theories. Instead of a political or economic doctrine, the project examines ordoliberalism as a philosophical and moral program that formulated itself in opposition to classical liberalism.
Timo Miettinen

The Power of Ideas

Frontmatter

Chapter 11. Classical Liberalism, Non-interventionism and the Origins of European Integration: Luigi Einaudi, Friedrich A. von Hayek, Wilhelm Röpke

Abstract
What did classical liberal thinkers contribute to the theoretical underpinnings of the European unification project? This paper examines works by Luigi Einaudi, Friedrich A. von Hayek and Wilhelm Röpke, attempting to understand to what extent the nineteenth-century pacifist tradition of classical liberalism came back to life in works of these authors. Their views on the international order show a certain degree of homogeneity—but up to a point. While Einaudi and Hayek were distinctively more favourable to the European project, Röpke had a less favourable view of European unificaton, fearing it may result in increasing centralisation. They, nonetheless, shared some common elements in understanding international order that we trace back to nineteenth-century liberalism.
Antonio Masala, Alberto Mingardi

Chapter 12. Staving off the Protectionist Slide: Snowden and the Struggle to Keep Britain Open

Abstract
Traditionally, the interwar collapse of European and international integration is thought to have been overdetermined in its causes and redundant in its scope. International decline, combined with protectionist interests and ideology at home, made Britain abandon its signature free trade policy and embrace an Imperial Preference system in 1932. However, this narrative veils the intense debate during 1929–1931 over whether the Labour Government’s internationalist trade policies should be sacrificed for the sake of the economically consolidating the British Empire. When leading intellectuals and policymakers found themselves compelled to embrace tariffs and preferences in the hope of addressing the economic slump, Britain’s Chancellor of the Exchequer Philip Snowden launched a powerful defence of free trade, effectively staving off Britain’s introduction of protectionism in 1930.
Oksana Levkovych

Chapter 13. The Formation of Research Institutes on Business Cycles in Europe in the Interwar Period: The “Kiel School” and (In)Voluntary Internationalization

Abstract
Theoretical and empirical research on business cycles became the dominant theme in economics in the interwar period. The foundation of the Harvard Committee in 1917 and the NBER in 1920 in the USA stimulated the foundation of similar research institutions in many European countries from the mid-1920s onwards, often co-financed by the Rockefeller Foundation. A special focus is on the Kiel Institute of World Economics which in the years 1926–1933 attracted many scholars who soon gained international reputation, so that Schumpeter in a letter to Keynes from October 1932 classified it as “the finest economic institute in the world.” A few months later, almost all leading economists were forced to emigrate, from Nazi Germany, continuing their academic career mainly in the UK and the USA.
Harald Hagemann

Chapter 14. Divided by an Uncommon Language? The Oxford Institute of Statistics and British Academia (1935–1944)

Abstract
From October 1935 to 1944, the research agenda implemented by the Oxford Institute of Statistics diverged from the lines of research of both Cambridge and the Oxford Economic Research Group. Rather than following the Marshallian tradition, the OIS staff assumed a continental scheme of thought, influenced by Marx, Walras and the “Kiel School,” thus focusing on business cycles and the role played by capitalist institutions. Thanks to the funding provided by the Rockefeller Foundation, the Institute became an atypical research centre within the British academia. On the one hand, its members rejected Marshall’s equilibrium theory for its staticity. On the other hand, they were also sceptical about Keynesian theory for its scarce attention to institutions. Therefore, an uncommon language inescapably divided them from British academia.
Roberto Lampa

Chapter 15. Postscript: The Intellectual Origins of European Integration

Abstract
This chapter draws on the previous contributions in this volume to consider the intellectual origins of European integration. First, it analyses the many changes in, and responses to, the operation of “the state” wrought by the First World War and the calamities that followed. In this period, the classic questions surrounding the relationship between law, order and liberty took on new meaning and inspired new ideas. Some of the more ambitious—even radical—figures suggested rewriting entirely the so-called “rules of the game.” Others sought to re-establish the old order on a more philosophically robust and practically pragmatic footing. These new ideas both followed from, and fostered, new approaches, methods and academic collaborations across the traditional disciplinary, cultural and national borders. For many, these dynamics brought a heightened urgency and a new sense of possibility to the age-old dreams of a united Europe. The chapter closes by reflecting on the work undertaken—and the work left unfinished—by the architects of the post-war European project.
James Ashley Morrison, José Luís Cardoso

Backmatter

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