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Mazower, Mark: Dark Continent, P. 138-326 Parties Even Try Rethinking Theory and Practice in the Light of Unemployment and the Slump

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Mazower, Mark: Dark Continent, P. 138-326 Parties Even Try Rethinking Theory and Practice in the Light of Unemployment and the Slump Mazower, Mark: Dark Continent, p. 138-326 parties even try rethinking theory and practice in the light of unemployment and the slump. The best example was Sweden, which devalued early and REFORMING A DEMOCRATIC CAPITALISM recovered fast, thanks to the reflationary policies of its 1932 Social Democratic government. Here was an administration keen and prepared to use fiscal policy 'It suffices to consider countries as different as the United States of America, to engineer an upswing. 'There will be no spontaneous recovery,' affirmed the Soviet Russia, Italy or Germany, insisted the leading Belgian socialist Hendrik Swedish finance minister in 1933, 'except to the extentt that the policy of the de Man in October 1933, 'to understand the irresistible force of this push state will help to bring it about.' The government gave a massive boost to towards a planned national economy.' The question for western Europe in the investment and by 1937-8 unemployment was shrinking fast (from 139,000 in 1930s was whether democracy could learn from these striking new tendencies 1933 to under 10,000) and there was a manufacturing boom. Official Policy in economic life. was worked out in acdvance and carefully planned. It is true that Sweden The fascist and communist emphasis on will and action impressed west enjoyed certain economic advantages which protected the country from the European intellectuals who felt increasingly surrounded by mediocrity and worst of the international depression: nevertheless, in its counter-cyclical fiscal fatalism. After 1933, it was above all younger socialists - stunned by the swift policies and the pact between unions and employers which helped reguilate annihilation of German social democracy - who became impatient with their industrial relations, it looked ahead to the managed capitalism 'which the rest own leaders' caution. Mocking the mood of the French socialist leadership at of - western Europe only adopted after 1945. Industrial Belgium, clinging to their 1933 congress, one critic wrote sarcastically that the delegates had been gold and mired in depression, provided the other noteworthy response - told 'it was necessary to be prudent, it was necessary to be patient, it was capitalist planning. In 1933, Hendrik de Man returned there from Germany to necessary to measure the opposing forces accurately. We were not to advance work on his Plan van der Arbeid. The novelty of the idea that there might be a towards power because that would be too dangerous; we would be crushed by socialist effort to plan within a capitalist framework, and within a nationalist the resistance of capitalism itself; we were not to advance toward revolution one at that, was reflected in the opposition which greeted de Man even within because we were not ready, because the time was not ripe . We are to his own Workers' Party: advance nowhere!' In Britain, similar feelings attracted Labour MP Oswald Mosley to fascism; When I first unfolded the Plan before the Executive Bureau of the Workers' "Party in he was not alone in feeling exasperated by what a fellow-MP called the Labour October, I met more opposition than I had foreseen. Some said: 'You are really too moderate leadership's 'passion for evading decisions'. Mosley had proposed a radical plan in that you replace the concept of socialization with that of a directed economy. And in place for economic recovery at the 1930 Labour Party conference; its rejection by of loyalty to class struggle you seek an alliance with the middle class and the farmers.' Others: the leadership on grounds of cost prompted him to leave the party and begin 'What you lay before us is thinly-disguised fascism. You make the state all-powerful and you the move rightwards which would culminate in the British Union of Fascists. A can only realize your programme through a dictatorship. And above all, you expect everything generational gulf of outlook and temperament separated young men like from the nation and nothing from the International.' Mosley, who had fought in the First World War, from the older socialist leadership. The latter were keen to show the electorate they could play by To such objections, de Man replied that the fate of Weimar had revealed capitalism's rules; the 'Front Generation' thought the rules themselves irrational what could happen when social democrats refused to cooperate with the and the leadership passive, defeatist and geriatric. 'This age is dynamic, and the middle classes: it was no use proposing schemes for boosting employment pre-war age was static,' argued Mosley. 'The men of tthe pre-war age are much which were politically unacceptable to them, nor to talk of doing away with "nicer" people than we are, just as their age was much more pleasant than the capitalism when the Party lacked the strength or the will for this. Like Mosley, present time. The practical question lis whether their ideas for the solution of de Man offered cogent insights into the new situation created by the crisis: the the problems of the age are better than the ideas of those whom that age has need for socialists to come to terms with nationalism, to challenge the gospel produced.' For many of the 'Front Generation', fascism and communism both of the balanced budget and to offer a decisive alternative to the market. But in represented more 'modern' and more dynamic forms of economic practice he was only slightly more successful: as minister of public works in the organization than either Iliberalism or reform socialism. 1935 Belgian Government of National Renovation, de Man brought down Their exasperation was understandable. Only occasionally did socialist unemployment substantially. But this was chiefly the result of the long-overdue currency devaluation the government imposed at the same time rather than of Kalecki. In an article on the Blum experiment, Kalecki argued that exchange the Plan de Man. His achievement was a real one, but far from the triumph of controls were necessary for governments wishing alter the balance of industrial planisme he fought for. Disillusioned, de Man moved slowly to the Right, and power to labour's advantage; otherwise capitalists could always threaten capital he collaborated with the Germans in 1940, declaring that Nazism was 'the flight to undermine a regime's credibility. Kalecki belonged to a school of German form of socialism'. But his ideas bore fruit after the war: the famous economists which argued that the state needed to 'wind the economy up' to full Plan was in many ways a model for state planning in much of western Europe employment a doctrine which underpinned the Polish 1936 Four-Year after 1945. Investment Plan, one of the most important ventures in centralized planning to In France, the Plan de Man was widely discussed, but an equivalent plan was take place outside the Soviet Union. In Keynes, we can see the incipient entirely omitted from the Popular Front programme in 1936; worse still, the rethinking of capitalism which provided guidelines for post-war policy in Blum government tried to satisfy workers' demands at the same time as western Europe; in Kalecki, the doctrines which contributed to state socialism preserving a strong franc. Blum had come to admire Roosevelt's pragmatism, in the East. In both East and West, the memory of classical liberalism's failure and offered himself as a 'loyal manager' of French capitalism. The result was in the 1930s would provoke a reassessment of the balance between public and economic failure, satisfying neither Left nor Right, dashing the high hopes private power in the modern economy, paving the way for the great post-war many had held of the Popular Front, and further diminishing the prestige and boom. That the state needed to be brought in to the life of the national self-confidence of the non-communist Left in Europe. Even the much-vaunted economy was not, therefore, a lesson which the Europeans needed to be gains of the popular Front government - the paid holidays, forty-hour week taught by the Russians or American New Dealers; their own experience and arbitration in industrial disputes - had already been won in many other between the wars pointed to the same conclusion. countries. While de Man, Mosley and others gave up on democracy, and came to believe that concerted action against unemployment was only possible through the authoritarian state, the 1930s and its lessons for democracy could also be interpreted rather differently. Some liberals came to reject state interventionism and economic nationalism entirely as the root of the problem, and saw planning itself as inherently authoritarian. This was the free-market critique of the totalitarian state. Popular in both Britain and Italy, it was espoused most forcefully by emigre Austrian economists Hayek and von Mises. The 1930s, however, were not the best time for their message to strike home, and they would have to wait another forty years to make their mark. In the short run, liberalism's democratic critics were far more successful. Many shared the view of one analyst of the 1930s, H. W. Arndt, who wrote in 1944 that 'the Nazis developed a number of economic techniques - in the sphere of Government finance, planned State intervention, exchange control and the manipulation of foreign trade - which mutatis mutandis may well be applicable in a worthier cause'. John Maynard Keynes, for instance, came to discern certain virtues in economic nationalism, in particular the autonomy which individual states had gained over policy as a result of the collapse of a unified
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