Saturday, December 15, 2007

"Perhaps the hardest question of twentieth-century history"?

I owe the following quotation from Harvard historian Niall Ferguson to Tiger Hawk
The contrast between the American and German responses to the Depression illuminates the central difficulty facing the historian who writes about the 1930s. These were the two industrial economies most severely affected by the economic crisis. Both entered the Depression as democracies; indeed, their constitutions had much in common -- both republics, both federations, both with a directly elected presidency, both with universal suffrage, both with a bicameral legislature, both with a supreme court. Yet one navigated the treacherous interwar waters without significant change to its political institutions and its citizens' freedoms; the other produced the most abominable regime ever to emerge from a modern democracy. To attempt to explain why is to address perhaps the hardest question of twentieth-century history.

Niall Ferguson sometimes says things congenial to conservatives but I think that the above quote shows very well that he is far from being a conservative. He seems blissfully unaware of one of the most frequent themes of conservative thinking: The importance of cultural continuity and the value of tradition. From Burke onward, conservatives have argued that the slow accumulation of "what has worked" in a given society is a valuable legacy that can only be lost or discarded at considerable peril. Yet that is exactly where Germany and the USA of the 1920s and 30s diverged.

Germany lost WWI and the USA won it. That did kinda make a difference. And the difference it made in Germany's case was great. Prior to 1918 Germany had been a constitutional monarchy where the legal powers of the monarch were not much different from the powers of the British monarch. But the traditions were very different. Where the British monarch conspicuously stayed out of politics, the Kaiser was very much a political voice. He made up for a lack of legal powers by using the great prestige of his office to persuade the politicians to do what he thought best for Germany. He saw his role as a check on the politicians and a voice on behalf of the ordinary people of Germany. He was, in short, an important father-figure and the embodiment of the Prussian traditions that were so influential and respected in most of Germany.

But after 1918 that was all thrown away. Not only did the Kaiser go into exile but many of Germany's previous constitutional arrangements were torn up and a substantially new system of government was invented largely out of thin air. All of the systems that had led to Germany's defeat were discredited and new systems had to be adopted wherever possible. Any conservative could have predicted where that would lead. And it did.

The USA, by contrast, came out of the war with flying colours, retained its traditional arrangements and remained stable -- despite the huge economic disruptions caused by its meddlesome Democrat President. The knowall FDR managed to convert a normal cyclic depression into the Great Depression by attacking business at exactly the time when business most needed support rather than hostility. (See also here and here)



UrbanBard said...

Unfortunately, Hoover was an interventionist before FDR was. In the 1921 Banking Panic, which washed out the debts and misallocation of the First World War, Hoover wanted to immediately use the government to "help" people. But, by the time that he could get President Taft to do anything, the crisis was over.

Hoover closed banks and created a liquidity crisis. He thought high wages and prices had to be propped up. FDR campaigned against Hoover's intervening in the economy, but FDR interfered worse than Hoover did.

It was just the times. The Progressives, the reformers, were demanding radical changes in America. And how the politicians responded to that made everything worse.

ΛΕΟΝΙΔΑΣ said...

I do not believe Taft was president in 1921. Try Warren G. Harding. You are however correct that Hoover was as bad at intervening as FDR.