In his engaging and clear-eyed new book, Jamie Martin traces the origins of what he calls “global economic governance.” He documents the ambitious, and unprecedented new intergovernmental institutions and projects for international lending and reconstruction aid, currency reform, central bank coordination, and commodity stabilization born during the 1920s and 1930s: some are already well-known, such as the League of Nations’ Economic and Financial Committee’s stabilization of Austria’s currency and the Bank of International Settlements, while others – such as the International Tin Committee – are more unfamiliar to scholars of the interwar years.
Across the globe, these projects were plagued by a fundamental dilemma. The private creditors demanded significant oversight over the programs they financed – often stipulating conditions for their loans and bond emissions, including radical domestic austerity measures deployed to trim bloated public spending and restructure devalued currencies, both unleashing mass-unemployment and depressions. Meanwhile, the broad legitimacy of such aid programs required the League to respect the recipient country’s “sovereignty” over its domestic economic policy, as per Article 15 of the League’s Covenant (the so called “domestic jurisdiction” and “non-interference” clause).
Reconciling national sovereignty with access to capital markets was the core challenge to post-1918 global economic governance. Before 1914, the Imperial Great Powers had constantly meddled in – and often forcibly restructured – the domestic governance of their formal and informal colonies to satisfy creditors. The British and the French had imposed international control, via the Public Debt Commission, over Egypt’s finances to enforce the payment of private Anglo-French consortium bank loans in the 1870s. Control was strengthened in the 1880s, when Egypt became a British protectorate. After 1918, Martin contends, this form of crude imperial meddling was no longer politically feasible for the same reason that complicated the reinstitution of the Gold Standard: democratic mass-politics (via the extension of universal suffrage) and the proliferation of new nation-states had rendered overt assaults on sovereignty to serve creditor interests illegitimate. This tension is dramatically illustrated in Chapter 2 (“Enforcing austerity in postwar Europe”), where Martin discusses the League’s stabilization programs in Austria and Albania undertaken, in the wake of World War I. Here, the League acted as a facilitator of loans from British and American banks. To the extent that the League’s program for financial stabilization eclipsed parliamentary sovereignty when enforcing painful spending cuts, the methods employed were not that different from the Public Debt Commission. The Austrian public fulminated at the “Ottomanization” of the young republic. But as Martin shows, the very fact that the League had taken the charge to facilitate a loan to Austria, stemmed from the League officials’ deep commitment to civilizational hierarchies (“Austria is not an Asiatic or African community, but one of the Oldest Civilizations in Europe,” Martin quotes Frank H. Nixon, one of the League officials in charge of the Austrian stabilization loan (p. 83)). Meddling needed to be reinvented to divorce debt-servicing from empire by tying it to new, ostensibly neutral and permanent intergovernmental institutions staffed by a professional class of technocrats: global economic governance was born.
Drawing on over twenty different archives, Martin offers six case studies of global economic governance at work, spanning the regulation of interallied shipping and raw material allocation in World War I all the way to the founding of the IMF at Bretton Woods. Each of these case studies illustrates the tension between the entrenched hierarchies of the global economy and the fiction of sovereign equality embodied by the League. Martin’s work fits within a broader historiographical turn in European and international history which argues that World War I and the Paris Peace Conference of 1919, not World War II or Bretton Woods is the true hinge that birthed the liberal international order which governs our world today.
The book contributes to the historiography on the League and liberal interwar internationalism. Since the early 2000s, a wave of new scholarship has emphasized that the League was more than a failed collective security pact: it also promoted new practices and institutions of global governance, from public health to migration, international traffic controls, and police cooperation.1 Many of the post-1945 UN agencies – such as the Food and Agricultural Organization - built directly on League precedents. Jamie Martin expands this picture to multiple spheres of the economy (reconstruction aid and development, shipping and raw materials, commodity price stabilization, currency reform and central banking cooperation) and traces a through-line from the League’s Economic and Financial Committee to the IMF and World Bank.
Complementing histories of the interwar economy that have focused on trade and finance2, Martin offers a more integrated and holistic picture, by recounting the forgotten achievements of intergovernmental commodity control schemes that proliferated under the watch of the League in the 1920s and 1930s, with the aim of restricting overproduction and stabilizing collapsing raw material prices (Chapter 5). Martin offers a particularly deep case study of the International Tin Committee to offer a window into how meddling by an international public-private body – staffed with representatives of the governments and producers of British colonial Nigeria and Malaya, the Kingdom of Siam, and Bolivia – worked on the ground to effect mining companies’ operations, employment decisions, and contentious colonial labor politics.
In his analysis of the League, Martin builds upon the foundational argument advanced by Susan Pedersen and Mark Mazower that British and French liberal internationalists helped establish the League of Nations in 1919 not with the aim of unraveling their Empires, but instead to give them a new lease on life: They hoped that internationalizing their own domestic colonial governance through the Permanent Mandates Commission (PMC) would give them more legitimacy in the age of national self-determination.3 Martin deftly demonstrates how the invention of global economic governance grew out of a similar set of concerns. In doing so, he illuminates a core tension between liberal internationalism and national economic sovereignty – the problem at the heart of recent works by Nicholas Mulder and Quinn Slobodian on the origins of sanctions and neoliberalism, respectively.4 Slobodian’s “globalists” share striking affinities with Martin’s “meddlers”: after 1918, the Geneva school of neoliberals who were nostalgic for the Habsburg Empire sought to create new international institutions that would make markets immune to the new pressures of nationalist democracies. Martin’s cohort of meddlers are by no means “neoliberal”: Martin underlines that they hail from across the ideological spectrum: some are conservatives (Arthur Salter), others are liberal (John Maynard Keynes), centrist Christian-democrats (Jean Monnet), or some radical socialists (Étienne Clémentel). But they come to the same conclusion as the interwar “neoliberals”: global credit markets are incompatible with unlimited democratic sovereignty.
A hallmark of a good book is that it provides evidence for drawing alternative conclusions. Readers will find much to grapple with in Martin’s work. The author has indicated in recent interviews and public engagement, that he intends his book to contribute to a critique of global capitalism and specifically the IMF, galvanized as it were by the Greek debt crisis.5 Still, Martin’s book offers ample evidence that, even though access to international capital markets comes at the cost of infringing upon the sovereignty of debtor states, Martin’s account on the League’s reconstruction activities in Greece or China in Chapter 4 (“The Origins of International Development”) provides ample proof that such loans were not only tools of subjugation, but also enablers of development.
Ultimately, the book prompts its readers to ask if the integration of small debtor states into international capital markets is compatible with popular sovereignty. In the 20th century, the price of financial autarchy has been inordinately high: as the Soviet Union and Maoist China opted for financial self-sufficiency, this imposed devastating privation on its population.6 Martin alludes to a way out of the meddling trap, obliquely proposed by Keynes at Bretton Woods: the international socialization of investment, which would have deposed the private international creditors from their power. But this would have required an improbable sacrifice of economic sovereignty from the world’s biggest lender, the United States, as Keynes himself realized. Still, Martin’s brilliant reading of the 1940s debates on the possibility of creating a more equitable order between debtors and creditor nations strikes a particularly resonant chord as the world faces another emerging market debt crisis.
Notes:
1 Susan Pedersen, Back to the League of Nations, in: The American Historical Review 112 (2007), 4, pp. 1091–1117.
2 Some of the classic accounts of interwar economic history include: Patricia Clavin, Securing the World Economy: The Reinvention of the League of Nations, 1920–1946, Oxford 2013; Barry Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, 1919–1939, Oxford 1992; Harold James, The End of Globalization: Lessons from the Great Depression, Harvard 2001; Charles Poor Kindleberger, The World in Depression, 1929–1939, Berkeley 1986.
3 John Gallagher, “Nationalisms and the Crisis of Empire, 1919–1922,” Modern Asian Studies 15 (1981), 3, pp. 355–68; Mark Mazower, No Enchanted Palace: The End of Empire and the Ideological Origins of the United Nations, Princeton 2009; Susan Pedersen, The Guardians: The League of Nations and the Crisis of Empire, Oxford 2015; Natasha Wheatley, “Mandatory Interpretation: Legal Hermeneutics and the New International Order in Arab and Jewish Petitions to the League of Nations,” Past & Present 227 (2015), 1, pp. 205–48.
4 Nicholas Mulder, The Economic Weapon: The Rise of Sanctions as a Tool of Modern War, New Haven 2022; Quinn Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism, Cambridge, Mass. 2018.
5 Jamie Martin discusses "The Meddlers" with Quinn Slobodian, October 18 2022, https://www.youtube.com/watch?v=8RBIpteLAbk (20.02.2022).
6 See for instance: Oscar Sanchez-Sibony, “Global Money and Bolshevik Authority: The NEP as the First Socialist Project.” Slavic Review 78 (2019), 3, pp. 694–716.