Wednesday, January 01, 2014

The year of multiple Archduke deaths

The new year is the 100th anniversary of the beginning of the First World War, known as the Great War before the second one came along in 1939.

Poor Archduke Franz Ferdinand will die again over and over and over in the reminiscences. They will at least inform a lot of people about history they didn't know much about. Ten-year anniversaries and multiples thereof are good occasions for that.

Inevitably, there will be analogies to the present day. Some better than others.

California Gov. Jerry Brown made a carefully-considered and not overly specific one in 2011 in an interview with CNN's Candy Crowley:

No, I'm not angry. I'm just, I'm alarmed at, uh, at, uh, where America is. I mean, we, you know, you look back at history and all the elites, the ruling families of Europe in 1914 were feeling pretty good about themselves. And yet, it wasn't just a few months into the summer when they began what was an absolute catastrophe. So blindness is compatable with good breeding, good education and good relationships. Well, we don't even have that now in much of Washington.
Jim Lobe tried a more dubious one in On WWI Centenary, Will Congress Repeat the Blunders of Russia and Germany? LobeLog Fopreign Policy 12/24/2013. While I agree with him that it would be bad for Congress to undermine President Obama's genuinely constructive nuclear diplomacy with Iran. But the analogy of the US and Iran to the Habsburg monarchy's obsession with punishing Serbia is strained at best.

As Jeffrey Record has explained at some length in Making War, Thinking History: Munich, Vietnam, and Presidential Uses of Force from Korea to Kosovo (2002) and The Specter of Munich: Reconsidering the Lessons of Appeasing Hitler (2007), making current policy by historical analogy has produced unfortunately miscalculations and destructive consequences more than once in American history.

Whatever Lessons Of History may be there to be learned don't boil down to easy historical analogies.

With the Great Recession - which, like the Great War, will probably go into history with some other label - is more than an analogy to the Great Depression. It is an economic event of the same type, an extreme form of the business cycles that are a chronic feature of the capitalist economic system. Jerry Brown in the quote above was referring to the bad judgment and self-delusion among political elites in 1914 in the face of the current economic crisis and the democratic deficit that the advanced countries of the US and Europe are currently suffering.

I quoted Wolfgang Münchau the other day, who recently wrote, "What do 1914 and 2014 have in common? Unfortunately, quite a lot. The current situation of the euro crisis is fatally reminiscent of the months before the First World War. Angela Merkel has recognized that - and nevertheless does the wrong thing."

This is a situation to which Paul Krugman applies one of his outstanding contributions to the American English political vocabulary, the Very Serious People, Ideas favored by the privileged and the powerful become conventional wisdom, and often stubbornly remain so, even in the face of dramatic disconfirmation in the real world.

Jakob Augstein takes up the 1914/2014 analogy in a somewhat kitchier way than Münchau (Jubiläums-Krisenjahr: 1914, 2014 - und weiter? Spiegel Online 30.12.2013). Speaking of the VSPs of 1914, he writes:

Sie wussten, dass sie mit dem Feuer spielten, und dennoch versuchten sie, die gegenwärtige Gefahr zum eigenen Vorteil zu nutzen. So halten es die Verantwortlichen heute in der Euro-Krise. In Frankreich, in Griechenland, in Italien, aber auch in Deutschland.

[They knew that they were playing with fire and still they attempted to use the present danger for their own advantage. So stand the responsible figures today in the euro crisis. In France, in Greece, in Italy, but also in Germany.]
I can believe Münchau's assertion that Merkel realizes the risk Germany is taking, that the country is riding the tiger with it eurozone austerity policies.

But I'm not sure I would read that back into the history of 1914. John Kenneth Galbraith in his book The Age of Uncertainty (1977) lists several background sociological, historical and political reasons for the bad decision-making in Europe in 1914. He then adds:

There was a final consideration, one that it is always thought a trifle pretentious to stress. Rulers in Germany and Eastern Europe, generals in all countries, held their jobs by right of family and tradition. If inheritance qualifies one for office, intelligence cannot be a requirement. Nor is its absence likely to be a disqualification. On the contrary, intelligence is a threat to those who do not possess it, and there is a strong case, therefore, for excluding those who do possess it. This was the tendency in 1914. In consequence, both the rulers and the generals in ·world War I were singularly brainless men.

None was capable of thought on what war would mean for his class- for the social order that was so greatly in his favor. There had always been wars. Rulers had been obliterated. The ruling classes had always survived. To the extent that there was thought on the social consequences of war, this was what was believed.
And leaders like Bismarck, who was reactionary but brilliant, were in short supply among the Very Serious People of Europe in 1914.

They could see the potential problems of the networks of military alliances that Bismarck had been a key figure in building in Europe. But knowing that a problem could occur is different from having the ability or will to to head it off. Or predicting when a crisis will break out.

The euro very nearly collapsed as a currency in mid-2012 as a result of renewed speculative attacks on national debt. The ECB headed it off by a commitment to buy national bonds to prevent speculative attacks, using a roundabout that evaded its statutory limits. This occurred even though Germany and Chancellor Angela Merkel had staunchly opposed such moves previously.

But that action bought time. Time the EU and the eurozone have not used to make substantial progress on essential elements to make the currency viable.

It's hard to say when a new existential crisis for the euro will occur. Paul Krugman in a blog post I can't find right now quoted another economist on a major financial crisis saying: it took forever, and then it took a single night.

The next acute euro crisis will probably seem a lot like that.

Speaking of the First World War, John Kenneth Galbraith's series of 1977 TV documentaries for which the book quoted above was the companion volume included an episode on the war called Episode 5 Lenin and The Great Ungluing. He includes Lenin because the Bolshevik Revolution of 1917 was one of many major consequences of the slide into war that occurred in 1914.

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