There must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing…There must be a strict supervision of all banking and credit and investments; there must be an end to speculation with other people’s money.
Franklin D. Roosevelt, First Inaugural Address, March 4, 1933
This quotation from President Roosevelt’s 1933 Inaugural Address seems very familiar to us almost 80 years later. But it is not just in anti-banking rhetoric that our two periods have a great deal in common. Many of the more serious political reactions to the great recession of the Thirties find their counterparts in the present day, too. And perhaps there are lessons for us to learn from some of the mistakes of that earlier generation. Foremost among these is the lesson of the danger to democracy created by knee-jerk reactions to the crisis.
It has often been pointed out that the economic crisis of the Thirties was one of the causes of the rise of authoritarian movements and regimes in that period; but the sense that democracy was inadequate in face of such an unprecedented situation ran far deeper than this, even among democracy’s most fervent proponents. One has only to look at the number of book titles, in the early Thirties, which dealt with the problem, to see how central it was: for example, After Democracy (1932) by H.G. Wells, Democracy in Crisis (1933) by H.J. Laski, Is Democracy a Failure? (1934) by J. R. B. Muir. And one country at least seemed to many, at the time, to have proved that authoritarian rule could produce results. The German “economic miracle” created by the Nazis was quoted, by many in the democratic West, as an example to be followed (though, of course, if the war had not intervened that “miracle” would soon have been seen to be merely a temporary one). The temptation towards authoritarianism was experienced even in the United States, seen by many as the epitome of democracy. As Roosevelt put it, in his 1933 Inaugural Address:
I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption. But in the event that Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis — broad Executive power to wage a war against the emergency.
Small wonder that Harold Nicolson, hearing that speech on the radio at a house in the US, should have said to his garrulous hostess, who kept talking during it: “Mrs Strachey, do you realise that your new President has just proclaimed that he will, if need be, institute a dictatorship?”
All this seems far from the concerns of Europe in our present time; but there is a more insidious influence, based in the anti-democratic mood of the Thirties, which has fed through directly into the assumptions of the European Community, and that is the belief in the political importance of an elite of economic “experts” or “technocrats”, as expressed in the theories of “planism”, a popular doctrine of the Thirties which was espoused by many who later went on to be founding fathers of the post-war Community.
“Planism” takes its name from the Plan du Travail of the Belgian economist Henri (or Hendrik) de Man, produced in the first years of the Thirties at the request of the Belgian Labour Party (the Parti Ouvrier Belge). The theories underlying this Plan were highly influential, particularly in European left-wing circles, throughout the Thirties, even though de Man (prominent at ministerial level in successive Belgian governments during that period) was prevented by the realities of coalition government from putting them into effect, and though his most prominent French follower, Marcel Déat, was similarly frustrated politically. Because de Man and Déat, and a good number of their associates, became collaborators during the German occupation of their countries in the Second World War, “planism” has tended to be associated by a number of historians with fascism. But it is true to say that, for most people associated with it in the Thirties, it had no such connotations. At the regular annual conferences devoted to it at the French conference centre at Pontigny, the participants represented a broad spectrum of the European Left, including French trade unionists from the Confédération Générale du Travail, Italian anti-fascists, prominent members of the Belgian government including Max Buset, Jef Rens and Paul-Henri Spaak, Belgian trade unionists like Paul Finet, and a young member of the British Labour Party, Hugh Gaitskell, representing his economic guru G. D. H. Cole (who in 1935 devoted an important Fabian pamphlet, Planned Socialism: The Plan du Travail of the Belgian Labour Party, to these theories).
It is also true to say that (despite the views of various historians of Fascism) neither de Man nor Déat showed much sign, before 1940, of being anything other than democratic politicians. De Man, Vice-President of the Belgian Labour Party, held several important ministerial posts in the period 1935-40, culminating in becoming Vice-Premier in 1939-40; and in France Déat’s splinter party of the Left, the Union Socialiste Républicaine, was respectable enough to be included in Léon Blum’s successful Front Populaire alliance at the 1936 elections, and provided three ministers in the resultant government (of whom one, Paul Ramadier, was after the war to become the first prime minister of the Fourth Republic).
Yet one has to ask whether there was some intrinsic characteristic of planism that led so many French and Belgian planists, from 1940 onwards, almost inevitably towards co-operation in the European “New Order” created by the Nazis. It is of course important, in this context, to note that there were important exceptions to this: several planists were prominent in anti-Nazi activities during the war. Among the Belgians, Paul-Henri Spaak, Jef Rens and Paul Finet were members of the Belgian government in exile, in London. The Frenchman Pierre Viénot, a member of the Resistance, was arrested in 1942, escaped in 1943, and joined General de Gaulle in London, becoming the ambassador for the Free French to the British government. Other important members of the French Resistance included the planists Paul Ramadier, Robert Bothereau and Robert Lacoste.
Can, therefore, the collaboration with the New Order by people like de Man and Déat merely have reflected their impatience with the inability of democratic government to deliver support for their policies, and a desire to put them into effect now, thanks to the opportunities presented by the new situation? Or was there in fact, at the core of planism, a series of anti-democratic assumptions? The later postwar careers of what we might call the “Resistant” planists, far as they were from any fascist sympathies, shows that this may indeed have been the case.
Though Belgian and French planism was above all a movement of the Left, it was strongly based in the anti-parliamentary tradition of international socialism. One of the clearest expressions of de Man’s aims is to be found in a 1934 document entitled the “Pontigny Theses”. In these 14 theses, De Man put forward a very reasonable case for a “mixed economy (nationalised sector and private sector)”, a “directed” economy which would “create the economic conditions for an adaptation of consumer capacity to productive capacity”. Discussion of the methods by which this was to be achieved was, however, couched in often obscure phraseology which, by skilful use of the words “economic” and “political” — contrasting the former favourably with the latter — and also by the use of fudge words such as “deparliamentarisation”, disguised the assignment of an authoritarian role to the state:
The new economic state will constitute itself under different forms from the old political state. There will be an autonomous corporative organisation, enterprises that are nationalised or controlled by the state, deparliamentarisation of control procedures, revision of the doctrine of division of powers, etc…To the classical doctrine of bourgeois democracy, which no longer corresponds to present-day reality, we must substitute a new doctrine based on a different concept of the separation of powers.
Further evidence of a trend towards technocratic control is to be found in the writings of a significant group of young intellectuals within the British Labour Party (including G.D.H. Cole, Hugh Gaitskell, Evan Durbin, Douglas Jay and Colin Clark) who became enthusiasts for “planning” on this model. Cole’s ideas, as expressed in his book Principles of Economic Planning (1935), have been described as follows:
A planned economy would be a state-planned economy, in which the state would be the sole producer — or at least the sole major producer. Cole thought of planning in a statist or physical manner. The state would control directly the essential economic variables — production, investment, income, and prices — to achieve maximum production.
As Durbin put it, the aim was to substitute “conscious foresight for the instinctive adjustments of the competitive system”. The historian Ben Pimlott, describing the attitudes of this group, stated that their ideal was “an open and meritocratic society governed by an enlightened elite”.
Elitism was in fact one of the predominant characteristics of planism, which shared with fascism a mistrust of the intellectual or practical capabilities of the people. To set the people on the right path one had to rely on an elite. While for the fascists this elite consisted of dynamic and charismatic “leaders”, for the planists it was made up of intellectual “authorities”, experts who “knew”, and who, it was believed, could solve the world’s problems better than anyone, and certainly better than democratically-elected politicians who had got where they were because of the votes of the ignorant masses. Economists and technocrats were to be the ruling class of the future; politics (now seen as a dirty word) had had its day.
Which brings us to the European Community. It is probably not fortuitous that, among the admirers of de Man’s planism, one finds some of the people later to be most responsible for that planners’ delight, the series of European institutions that emerged after the war. Paul-Henri Spaak of the Belgian Labour Party was one of the founding members of Benelux, the prime negotiator in the founding of the Council of Europe, President of the European Movement, and a founding member of the European Union; Paul Finet became President of the European Iron and Steel Community; and there were several others. It is perhaps significant that so many of the non-fascist planists from the Thirties should thus have found, after the war, a suitable vehicle for their policies in the fundamentally anti-democratic institutions of the Community, where so many of the decisions are taken by non-elected bureaucrats.
This is in no way to suggest that there is any direct connection between de Man’s planism and the current European Community. The crisis of the eurozone, however, appears to have produced a number of the knee-jerk reactions that characterised the political thinkers of the 1930s in face of a similar crisis, to the extent that we are in danger of repeating their mistakes. Prominent among these appear to be a mistrust of democracy, and a trust in the ability of elites, mainly economists and other technocrats, to deal with the situation at a political level.
The most recent phase of the eurozone crisis has illustrated this in stark terms. Under pressure from the centre, democratically-elected governments have been expelled from office in Greece and in Italy. As Stephen Foley put it in the Independent on November 18, 2011, “by imposing rule by unelected technocrats, Italy has suspended the normal rules of democracy, and maybe democracy itself”. Economic “experts” have been parachuted in, over the heads of the elected politicians. Italy’s new government of technocrats is headed by Mario Monti, who though Italian is clearly a product of the European machine, and is pleasing to the Community. In Greece, the EU clearly believes that the indigenous politicians are not to be trusted, and it is even being suggested that teams of outside “monitors” should help to direct operations in Greece on a semi-permanent basis. In all this, the people are being ignored, and their sense of frustration is leading to violence and to the possibility of a breakdown of Greece’s democracy (which has always been fragile, from the civil war of 1946-49 onwards).
All this is ironic, in view of an answer I received some years ago, in the late 1970s, at a public meeting at the time when Greece was being considered for membership of the EU. I asked, from the floor, why a country that could be of no economic advantage to the Union, and probably a burden to it, should be being considered. Sir Brandon Rhys-Williams, a leading europhile, replied from the platform that the considerations had not been purely economic, and that one of the main reasons for admitting Greece was because this would serve the cause of democracy in that country (the dictatorial regime of the colonels, 1967-74, had only recently ended). Yet now, some 35 years later, democracy appears to be very low down on the EU’s list of priorities for that unfortunate country.
It could be argued, in the present situation, that desperate circumstances justify desperate measures; but what has been happening is in fact merely a rather more obvious manifestation of already existing trends within the European Union. It is not as though economists have a good record as far as the reliability of their theories, their forecasts, and their practical solutions to problems are concerned. Yet from de Man’s Plan onwards, the elevation of the economic technocrat into a political role for which he or she is unsuited has been a major part of European political thinking. It is high time for the relative roles of politicians and technocrats to be re-evaluated.