The collapse of Western Europe as a decisive international factor, now seen to be an astonishingly persistent postwar condition, has come about on so grandiose a scale that it is difficult to avoid falling into bombastic hyper-generalization to describe it. Diffuse and flaccid statements concerning it have become the stock in trade of every commentator, and a pathetic remark of Arnold Toynbee’s about the dwarfing of the former European world powers by the emergence of the monster super-states is now a commonplace.
The banality of the observation may be depressing, but it is present in the consciousness of all those dealing both professionally and amateurishly with politics everywhere in Europe. All programs designed to overcome the blatant inferiority of those dwarfed European states can only hope to do so by submerging them in another monster state that would be capable of competing with the paramount powers of the postwar world.
The cause is of course not mystical. The emergence of the monster states, viz., the United States and the USSR, has taken place on the basis of a persistent crumbling of the material base of European power, the culmination of a lengthy and no doubt inevitable historical process. The destruction of the last war has merely accelerated geometrically the rate at which the smaller powers were being reduced to impotence. No doubt the overriding factors here are political, or even psychological, but their genesis can be best explained by the molecular evolution of material, economic institutions.
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The instability throughout Western Europe, in France and Italy in particular, leaps to the eye: the unflagging tensions and political and financial crises during the last pre-war years, followed by a lacerated economy and political life after the destruction and losses of the war and the succeeding occupations, are now producing an atmosphere of innovation and opposition in internal political life; this is accompanied by the growth of a massive movement of political and social resistance to obsolete forms.
The rupture of economic equilibrium in France and Italy has been brought about both during and after the war by the diminution of their production and consumption at the same time that monetary tokens and the general income of the population were decreasing. The national income was radically redistributed, and redistributed in a lopsided and irregular way, affecting some sections of the population more than others and, above all, taking place on a base shrunken through the war and the occupation. French agriculture, for instance, profited greatly by this redistribution of wealth; commercial and industrial capitalists also increased their share very considerably, whereas the income of the great mass of paid employees and holders of fixed incomes sharply declined. The present socio-political crisis in Western Europe undoubtedly has its roots in this victimization of great strata of the population.
At the same time, on the political and psychological level, Western European countries emerged from the war with extremely emphatic and relatively militant ideals of social justice; the advanced elements of the working class, moreover, were determined not to allow the crisis in the state, and the transformation of the whole structure of authority, to go unaccompanied by some radical change in the basic forms of society itself.
This idealistic mood—which, despite its unarticulated character, was relatively sophisticated politically—faded rapidly, however, at any rate among the top leadership of the left-wing political organizations. De Gaulle, with the willing cooperation of the left-wing parties, was able to subject France, riven by the great witch-trials for treason and collaboration, to a new formula of national unity. In Italy, the tremendously vivacious movement of resistance that sprang up in the north was strait-jacketed and stifled, both by the various occupations and by the generally compliant character of the left-wing groups, into a conventional parliamentary society in which comedy has proved the only endurable elecent. The formula of national unity, of course, has allowed the re-establishment of “order” and the functioning of democratic institutions. In France it also implied, apart from a number of individual acts of reprisal, the reintegration of the great mass of the rural and urban population—which, despite the rapidly inflated myth of total national resistance, largely supported the Vichy regime and the occupation-into the political and administrative life of liberated France. The advance elements of the French Resistance, comprising no more than a small minority of the population as a whole, condemned the old political methods of the Third Republic. In Italy of course the entire Fascist regime was enthusiastically castigated. But neither in France nor Italy did the change of political institutions after liberation rupture the social continuity between the pre-war, the transitional, and the postwar regimes.
The ideological current of the Resistance, for whatever it was worth, has long since been sluiced off into the marshes of day-to-day political haggling, on the basis of largely unaltered social and economic institutions; what remains is the gathering upswing of a two- or three-party system. The French concept of the small or average voter sending to the Chamber of Deputies his own “indepedent, lay, and republican” candidate seems doomed to disappear, as the organized, armed, and directed mass activities that arose during the war gradually swing France, as well as perhaps the entire continent of Europe, towards the concept of a trained, instructed, and organized voter, i.e., the instrument of a group machine, exposed to group ideas, interests, and power, and voting only for combinations and parties. France may not be headed for an Anglo-Saxon form of the two-party system; the Left is divided on questions of foreign policy, and foreign influences prevent the effective ripening of such a two-party system, but French political life is undoubtedly undergoing a process of polarization that will make political alignments more definite and simpler than before.
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It would be very incorrect to see in this merely the consequence of the war and its aftermath. The fact is, that the current political turmoil is taking place in a society that has been economically stagnant for a very long time. Indeed, it is probably only now that we can see just how far this economic decay had gone. The example of France, now probably the pivot of European politics, is most instructive.
As is well known, the principal deficiency of the French economy cannot be altered: it lies simply in France’s limited power-producing resources. The inadequacy of these resources, particularly of coal, weighs like a heavy mortgage on her entire economic future. The French economic structure suffers also from a scarcity of raw materials.
But it is precisely these natural shortages that emphasize the extraordinary inefficiency of her use of manpower, and the generally low level of her technique. In the United States, for instance, between 1900 and 1940 the proportion of labor in industry and agriculture sank from 61 per cent to 49 per cent, although during this period the American economy made enormous progress. In France the percentage diminished only from 72 to 69. French productivity in agriculture per capita is still very low: a French farmer feeds four Frenchmen, whereas an American farmer feeds twenty Americans. The output of American industry, with scarcely twice the industrial manpower of France, is more than ten times that of French industry (thirty billion dollars in 1936 as against three billion for France). To extract four tons of coal a day in France requires five miners, in Germany two, and in the United States one. Finally, the manufacture of one automobile in France required ninety working days in 1937; in America it took twenty-five days. Before the war, net industrial costs in America, calculated in gold, were lower by half or even two-thirds than French costs.
There is a startling contradiction here between the meager population of France, a standing headache in French politics for decades, and the non-rational utilization of French manpower. The babble about the French genius for the personal touch and French respect for the quality of the individual is in this connection merely laughable.
French industrial equipment was destroyed and considerably reduced during the war and the German occupation, but a large proportion of it had been obsolete for years. In 1939, the French machine-tool plant was estimated at 590,000 machine tools, of an average age at that time antedating the First World War. Taking into account the removals by the Germans and war’s destruction, France now has no more than a very small proportion of really modern machine tools. Great Britain has about two million machines of an average age of seven to nine years and the United States three million machines, averaging five to seven years.
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But, of course, the general standard of living in France was relatively low; not merely was French production inadequate, but French consumption was, too: in 1939 Frenchmen consumed only one-third as much milk, fruit, and eggs as the British; meat consumption had gone down from sixty kilograms per capita at the beginning of the century to forty.
In 1938 the gross per capita income in France was $300, in Great Britain $500, and in the United States $600. The decrease in France’s national income following the war amounted to 40 per cent. But this decrease, just as, for that matter, the renewed upswing since the liberation, did not affect all social categories equally. As noted above, it is very clear that in addition to her material imbalance in production, France has inherited from the war and the occupation an immense disproportion in the distribution of wealth. It may be true that the rich have not become richer, but there is no doubt that the poor have become much poorer.
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The root of this French stagnation was probably the absence of properly channelized investment. While in countries like the United States a large portion of income was continually being reinvested in capital equipment, French capitalists were always averse to investing their profits to a sufficient degree in their businesses or in the creation of new firms. France literally ate up her national revenue and did not, moreover, eat it so well or so cheaply as other countries. Investments were aimed at quick and easy profits and also at a maximum circulation of goods, so that those branches of industry producing goods for immediate consumption attracted the bulk of private investments. It has been calculated that in the period 1930-1939 France invested only 2 per cent of its annual income in capital equipment, while the United States invested 5 per cent and the USSR 20 per cent. In France at the outbreak of the last war, scarcely 5 per cent of the active population was working in the production of capital equipment, while in the United States the figure was 13 per cent. When it is remembered that the French construction of buildings and merchant vessels had already diminished considerably between the two wars and that the world crisis of 1929-1934 was not felt much in France because of her already low level of consumption and production, it is clear that by 1939 French economy was dying.
The principal features of the French economic structure may be summed up as follows:
- a relatively unconcentrated industry, producing at high cost and in limited quantities and sheltering itself behind quotas and tariffs, and distinguished by an excessive prudence in financial management;
- a badly oriented agriculture, with a badly managed protective system incapable of assuring its population, despite a variety of agricultural talents, of an abundant food supply at reasonable prices;
- a very saturated and overdeveloped commerce, with what was unquestionably the heaviest commercial apparatus in the world based on a multitude of intermediate phases (middlemen) between producer and consumer;
- a banking organization that in questions of credit played the role of a moneylender against security rather than that of an originator or sponsor of business enterprises, since French banks had for long refused to mobilize or utilize rationally the bulk of currency on behalf of the economy.
American capitalism is still borne ahead by a great appetite for expansion and, in this narrowly defined sense, by and large remains progressive. French capitalism had fallen into a static condition by renouncing not merely the conquest of external markets (the French colonies), but also any economic expansion in its sheltered domestic position.
In short the phenomenon so obvious in the United States, where a liberal and dynamic capitalist economy in full bloom contributed efficiently to raising the standard of living, lowering the prices of the goods produced, and above all to reinforcing the military and economic potential of the country, was no longer present in France.
But, surprisingly, it was not until after the war that it suddenly became obvious to other than doctrinaire and ideological partisans that France was very backward in comparison with the great powers.
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But were it only a matter of repairing and reanimating the physical apparatus of the French economy, I think that the problem, being merely technical, could be solved. It is, however, an unfavorable, indeed disastrous, political situation that nullifies from the outset any serious attempt at a radical solution. In the countries in the Soviet orbit, for instance, where actual physical damage and economic backwardness are if anything far greater than in France, the particular combination of frustration and despair that characterizes French political life is completely absent. There, at any rate, a decision has been reached; it may not be agreeable, or for that matter even viable in the long run, but the die has at least been cast. The decisive feature of the French situation is precisely that an all-pervading tension and uncertainty hamstrings any genuine attempt at revival. Political life is dominated by an insecurity that, while familiar for decades, has only now become a basic feature of French life.
The historic reluctance of the investing classes to apply their investments to the renewal of capital equipment has been reinforced by the general uncertainty to a point where it is impossible to persuade them to undertake in the least the mandatory task now confronting French economy: namely, the total renovation and augmentation of the French industrial apparatus. This reluctance is, naturally, the direct result of a situation in which people’s thoughts no longer turn on the question of mere disorder, but on the actual transfer of social power.
It is in this context that the wave of nationalization that has swept over the whole of Europe must be judged. It is evident that the needs of postwar economy were so peremptory that a strong and central executive power was necessary for economic reconstruction, regardless of the specific policy to be adopted. This is entirely independent of party politics. The question was, where was the capital investment to be assembled in order to organize economic reconstruction?
Structural reforms in society are now necessary, not only for the re-establishment on a more stable basis of the distribution of goods and the allocation of incomes, but for even more compelling reasons. In the present period it must be remembered that what is now at stake is the whole position of France as a sovereign power, which is being threatened by her economic backwardness: the problem of export, almost as vital for her as for Great Britain, must be energetically solved in order for her to pay for imports; this alone means that French industry must be modernized at a maximum rate of speed in order to bring down her prices and enable her to meet competition in markets abroad.
Then there is of course the question of who is to accomplish the industrial renovation—the state or private enterprise. Aside from the factors of security that make practically all long-range investment impossible in France, it is clear that, while ownership might be left untouched, the management of enterprise must be controlled by a central agency. An adequate re-equipment and modernization of outworn French industry presupposes financial means on such a scale as to justify, or compel, state intervention—even in the view of its bitterest opponents. If only in the interests of national defense, the state will have to see to it that the needs of French industry in machine tools are somehow met, and as long as the import of machines cannot be paid for by foreign exchange arising out of exports, it may well be that the state will have to bring to bear the public reserves and even recreate the entire machine tool industry in France out of the whole cloth.
It is evident that decisive measures must be taken: but again, by whom? and against whom? This is evidently a purely political question: the great weakness of the Monnet Plan, for instance, consists precisely in the fact that the imperative demands for industrial re-equipment are hard to reconcile with immediate consumption needs, which so far have been held in check but are potentially expansive and even, perhaps, explosive. This also means that necessary investments for industrial modernization must be made possible by an integrated planning system controlling both income and consumption, or else be left free to the regulation of the profit mechanism. But it is impossible to lay down the rhythm of investment—which is the essence of the matter-without first making sure (1) that capital will really be saved; (2) that it will be placed in fields where modernization and renovation are primary needs; and (3) that this will happen at the appropriate rate of speed.
There are clearly two alternative investment policies: that of the USSR, where the portion of the national income intended for investments is fixed first, with incomes, prices, and wages limited accordingly, to insure a certain rhythm of investment; and the system, far less painful but also much more uncertain, of setting a general figure for the investment considered desirable or necessary, without fixing any limits for consumption and income.
Here, where it is obvious that the fate of France as a whole is involved, the indispensable and general program of reconstruction implies far-reaching political decisions.
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In this connection it is interesting to compare the wave of nationalization as it took place in Eastern Europe, in the Soviet orbit, with that in the West. The chief difference between the two is first of all in motivation.
In Eastern Europe the liquidation of businesses belonging to Germans and to collaborationists undoubtedly played a very important role. As is well known, the Germans installed a very powerful auxiliary war economy in countries like Yugoslavia, Poland, and Czechoslovakia in order to support and augment their own war effort. This included not only the creation of new enterprises by the Nazi regime, but the incorporation of already existing firms belonging to the collaborationists in the satellite and subjugated territories. In the course of confiscating property as a reprisal for treason and collaboration with the enemy, the liberated states in Eastern Europe found themselves, practically automatically, at the head of a substantial industrial apparatus.
In addition, nationalization for Eastern Europe and the Balkans also meant the elimination of foreign capital and foreign investments, which had anyhow been partly taken over by the Germans. Foreign investments were extremely important in oil, textiles, and mines in Poland, in the big industrial enterprises in Czechoslovakia, in the oil industry in Rumania, in heavy industry and metal mining in Yugoslavia, etc. The mixture of exuberant nationalism and political upheaval in these countries produced an atmosphere very favorable to the expropriation of foreign capitalists. This expropriation was in the most precise sense a “nationalization” of the country’s economy.
In Czechoslovakia, for instance, the Germans controlled 75 per cent of the chemical industry and almost 60 per cent of the paper industry; accordingly, any measure of nationalization was bound to touch all branches of the economy. This is probably one of the reasons why nationalization in Eastern Europe has had an integral character. In addition it coincided with a number of other measures, such as the agrarian reform that parceled out the big landholdings. (There is also of course the Russian influence.)
The nationalizations that took place in France and Great Britain, which were rather limited in number and “mild” in type, are distinguished from their Eastern European counterparts principally by their gradual and piecemeal style, as opposed to the policy of abrupt and massive expropriation. In addition, the methods of indemnification in Western Europe were what one might call equitable, being based either on profits, or on the estimated value of the installations taken over, or, as in France, on the stock market quotations of the industrial stocks. The mildness of the procedure can be illustrated sufficiently by recalling that the nationalizations by the British Labor government were considered so “equitable,” or profitable, according to taste, that the announcement of an impending nationalization was enough to boost automatically the quotations of the stocks affected. Although the nationalizations in Great Britain were politically determined in the sense of their having been made possible only by the accession of Labor to power, they are very far indeed from being politically revolutionary: they are in essence motivated by economic considerations and amount to only a light retouching of the economic structure.
In France, the initial élan stemming from the Resistance has long since abated, and is now in decline, as it is in England. But this evolution does not signify a return to economic liberalism, since the state is now called upon more than ever to direct the economic renovation and reconstruction. But even the wave of nationalizations, which began with such verve, has neither shaken nor brutally transformed the basic institutions of Western society. On the contrary, the governments of the liberation, and especially of the left-wing parties throughout Western Europe, instead of concentrating on the increase of production and the improvement of consumption, have done their best to delimit and localize the revolutionary current at any price.
The principal cause of the complexity of the general situation may well be that reforms alone, which is what the nationalization movement has boiled down to, cannot solve the economic and financial difficulties. The abatement of the nationalization movement has naturally led now to the discrediting, more or less, of the left-wing groups that supported it in the first place.
Meanwhile the opponents of nationalization in principle have begun to rally their forces on the assumption, no doubt illusory, that nationalization as such can be taken as a sure indication of a general radical political orientation.
But the situation in Western Europe generally, and certainly in France and Italy, has gone far beyond the superficial question of nationalization, which now, despite decades of socialist theorizing, is seen to be no more than a tactical or technical matter that does not at all compel a socialist course.
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France is riven. The whole system of reconstruction has highlighted not only the material difficulties of her position, which is merely an extreme case of the malaise affecting the whole of Western Europe, but also the sharpness of class antagonisms, which these same material difficulties are rendering intolerable. The economic foundation of society has been so narrowed that class antagonisms, become highly self-conscious, have no slack to ease their friction.
It probably would be quite wrong to say that a mood of civil war prevails in France, but perhaps correct to say that such a mood is a looming potentiality. There are the surface manifestations: a mass desire to emigrate (unheard of in France before); a widespread, universal, and profound polarization of political life, that is, the exacerbation of a two- or two-and-a-half-party system; an unheard-of rancor in political discussion; a taking-for-granted on the part of the possessing classes of an inevitable conflict, to be avoided only by a victorious war led by the United States against the Soviet Union. This is all so obvious that one inevitably tends to underestimate it, blaming it on the pains and annoyances of reconversion, excitability of the French temperament, etc.
But it seems to me that the division is very profound indeed. Profound, for the reason that it is no longer possible to set the French economic system—or more broadly, perhaps, the entire structure of capitalism in Western Europe—on its feet again without some resolution of these irreconcilable political antagonisms. There is no fat left to live on. Actually, of course, it may be absurdly exaggerated to put it this way; there is still a good deal of fat on France. Only, it is badly distributed, and has been deposited in such awkward places that for all practical purposes there is no way out of the resulting social dilemma but an act of violence, or, at any rate, of authority.
This Western European division, however, cannot be resolved within its own framework. It is not only that the USSR and the United States are now counterposed in world politics as a whole: the purely domestic division in France is characterized by the fact that the strongest and most highly organized section of the population, the trade unions—which are under the control, or at any rate the decisive influence, of the Communist party—occupies a position of radical ambiguity. The Communist party, the most pregnant political factor in Europe, is itself hamstrung by the contradiction between its role as a mass party representing the vital demands of the most powerfully organized sections of the working class and its de facto position as an arm of the Soviet foreign office.
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The emergence of the Communist party as the incontestable contemporary leader of the working classes, in an arena highly polarized, would make it perfectly possible, in fact, to discuss the whole crisis in Western Europe in terms of the crisis of the Communist party.
The Communist party, which emerged from whatever resistance there was in France as the most closely knit and best organized social organism—for reasons independent of the domestic situation—quickly applied itself as a brake on the powerful, though vague, current in favor of radical social reforms; it utilized its position as the vanguard of the working class, not to upset social regulations, but to obtain portfolios. Now that the state itself has become a state of inter-party contention, the Communist party has seen fit to sacrifice nearly all its previous ideological conceptions in order to secure its administrative expansion.
It is evidently considered that the defense of the USSR is better insured by a variety of observation posts in the actual French governmental structure than by expostulations in opposition to it. But remaining a government party while leading a movement of opposition from below has at best been a tour de force made possible only by a temporary conjuncture: it may be true that the Communist party is being strategically manipulated in defense of Soviet interests, but the hitch is that the entire strategic value of the Communist party for the Soviet Union lies in its remaining the mobilized expression of the vanguard of the working class. This working class in its turn has its own aims, conscious or not, which may or may not coincide with those of the Soviet Union. For some time there will undoubtedly exist a very real possibility that the French Communist party, basing its policy on the conciliation of the peasantry, the petty bourgeoisie, and the middle classes, will be outflanked from the Left, and at the same time lose the sympathies of even those conservative elements in the population which all its blandishments have not yet succeeded in turning into a dependable following. The Communist party must therefore tread very gingerly between the alternate dangers of losing its working-class support and of prematurely alarming the United States: all this at a time when the deteriorating economic apparatus is in need of a revival that can be affected only by securing the confidence of the possessing classes—who are still perched on the summits of society—and simultaneously satisfying at least some of the basic demands of the working class, from which the party’s power stems to begin with.
A difficult furrow to plow. And there may be a whirlwind ready for the harvesting. In both France and Italy the Communist parties have been losing ground steadily of late. Six months ago it was a commonplace in Paris that, if it wished to, the party could take the power overnight—“a few telephone calls,” etc. Now this possibility seems extremely farfetched. At that time the chief obstacle in the way of such a seizure of power was considered to be the strategical wiliness of the Kremlin: now it is more likely that the domestic opposition to the party has been consolidated and fortified everywhere. Six months ago the possibility of major industrial strikes taking place, not only without party approval, but under the leadership of rival left-wing groups, would have seemed fantastic: from now on it may happen often.
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What makes it difficult for the left-wing parties to control the French working class is the explosive combination of a backward economic system and a militant and politically educated working class living in a persistently unsatisfactory economic situation that exacerbates their demands for relief. The interaction between these two elements in France seems to be almost exactly the opposite of the constellation in America, where the stupefying technical capacity of the industrial apparatus makes possible such far-reaching concessions to a working class relatively backward in political sense that that working class’ political education becomes unnecessary at the moment.
If Western Europe, in its present condition, is not to pass definitely into one or the other of the present hemispheric “camps,” it will need reorganization. The disquieting likelihood, at this writing, is that this reorganization may be provided by de Gaulle, whose figure once again looms portentously. “De Gaullism,” in its new incarnation as the Rassemblement du Peuple Francais, seems at the moment to be a specifically French phenomenon; but its potentialities as a rallying point for all projects for European reorganization, union, etc., aimed just as much at the United States—at least ostensibly—as at the Soviet Union, are immense. The chance still remains, however, that de Gaulle, as the standard-bearer of the Right and Center, will be forestalled by some serious rival in the opposing camp. If that happens—and perhaps there is only a remote chance—Europe, still the most substantial concentration of human talent and energy in the world, may once again change the perspective of mankind.
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