Keeping the World at Bay

The end of the Cold War was the beginning of globalization—or, at least, that is when people began to talk about it. The term itself entered mainstream discourse in 1983, with an article in the Harvard Business Review by the economist Theodore Levitt. The article lauded the global expansion of markets for manufacturers as the start of a process that would inexorably make the world a better place by breaking down “the walls of economic insularity, nationalism, and chauvinism.” A decade later, talk of globalization was ubiquitous. By then, capitalism had triumphed over communism, and one form of capitalism—dedicated to dismantling economic and labor regulations, barriers to trade, and exchange controls—had supplanted the more managed, state-run version of the immediate postwar decades.

Globalization was more than a mere term, of course. Over the last three decades, the world has radically changed and become far more connected by revolutionary technologies, supply chains, and delivery systems. Trade in goods has soared as a proportion of world GDP; cross-border financial flows have grown faster still. Geopolitical shifts in economic power have seen the rise of a prosperous middle class across much of what is commonly referred to as “the global South,” or the bulk of African, Asian, and Central and South American countries. As producers opted for cheaper labor overseas, especially in China, Central America, and Southeast Asia, organized labor in the former manufacturing heartlands of the developed world was decimated. Interdependence and hyperconnectivity also sped up the transmission of global afflictions, from the series of sovereign debt crises that ran across South America, eastern Europe, and East Asia in the 1990s to the COVID-19 pandemic.

For a long time, this extraordinary shift in the way the world works lacked any serious historical contextualization. Economists had long ago lost their predecessors’ interest in history and instead turned toward mathematics. Historians, for their part, were becoming ever less numerate, and by the time of the 2007–8 financial crisis, they had relinquished almost any interest in macroeconomic change. In fact, it is only in the last decade that scholars have seriously begun to think historically about globalization.

Against the World, a new book by the historian Tara Zahra, makes a thought-provoking contribution to this literature. Zahra delves into the tumultuous years between World War I and World War II to argue that it was resistance to globalism and globalization that ended up weakening Europe’s then fragile democracies. Zahra writes that after World War I, free trade and internationalist politics came under fire, leading to stronger tariff barriers and immigration controls and eventually contributing to the continent’s slide into dictatorship. Echoes of that time seem to ring loudly today.

As angst about globalization fuels antidemocratic politics in the United States, Europe, and elsewhere, Zahra suggests parallels between the rise of authoritarianism then and its resurgence now. Her book, she writes, “with its emphasis on the popular politics that animated anti-globalism, is no less a history of the present.” Yet such an analogy insists a little too much. Globalization’s cheerleaders claim that free trade and economic liberalization pave the way for the spread of democracy. History suggests a more ambiguous relationship and shows that democracy can be undone by both nationalist and global forces.

THE LENS OF THE PRESENT

Starting in 1913 in Budapest and ending in New York at the World’s Fair in 1939, Against the World ranges broadly across Europe and the Atlantic. Zahra takes readers through events as disparate as the American pacifist movement and central European famines during World War I before delving into incipient fascism and the rise of the Bolsheviks after the war, the growth of immigration restrictions, and the rise of Nazism. Unlike most conventional treatments of these years, the book features as its protagonists not only statesmen and diplomats but also labor activists, farmers, and writers. Familiar figures such as the British economist John Maynard Keynes, the Austrian writer Stefan Zweig, the American industrialist Henry Ford, and the Indian anticolonial leader Mahatma Gandhi sit alongside relative unknowns, such as the anti-Semitic Italian American immigration lawyer Gino Speranza, author of the xenophobic and racist screed Race or Nation: A Conflict of Divided Loyalties. More salubrious characters include the Czech entrepreneur Tomas Bata, “the King of Shoes,” who piloted his own three-motor airplane more than 20,000 miles across the Middle East and Asia in pursuit of new markets. In discussing the Hungarian Jewish activist Rosika Schwimmer, Zahra introduces readers to the world of peace conferences and a moment when the collapse of the great central European empires yielded the dream of a world united under a single government.

If Zahra’s prose is readable, her approach is often strikingly anecdotal. As in the case of Schwimmer, individuals and places stand in for larger themes. Zahra relies on such pen-portraits to make a few key points. The relative openness of borders before World War I fostered political activism and economic entrepreneurship. The closing of borders during the war, along with the British continental blockade, led to malnutrition, pandemics, and an enduring anxiety throughout the interwar years about ensuring the security of the national food supply. Fascism’s breeding ground lay in the poverty and instability caused by the collapse of political order in central Europe, in particular, as well as in the dislocation caused by the international economic crisis of the early 1930s. What unites Zahra’s large and diverse cast of characters is their role in the grand drama of the struggle between those who stood for some kind of internationalism and their more nationalist and nativist opponents.

Democracy can be undone by both nationalist and global forces.

Much of this history will be familiar to students of fascism, a subject that already boasts a vast literature. Indeed, it would scarcely be an exaggeration to say that the professional study of twentieth-century European history grew from an interest in fascism’s origins and why fascism succeeded in some places and failed in others. Zahra’s contribution seems to have been motivated by the resurgence of right-wing authoritarian politics in the present. “I began this book in 2016,” she notes. “Donald Trump had been elected president. . . . There was a refugee crisis, and populist, right-wing parties were winning elections across Europe with anti-migrant platforms.” Trump’s presidency revived interest in fascism past and present in the United States. His rise, fueled by various populist and nationalist grievances, also suggested for the first time that analyzing the crisis of democracy required paying attention to opponents of globalization. This modern context explains the novel frame with which Zahra approaches some old questions about the upheavals of the interwar years. “The past is supposed to help us better understand the present,” she writes. “But in this case, I have been more surprised by the ways in which the present has altered the way I see the past.”

Seeing the past through the present can be fraught. If globalization is a term devised in the late twentieth century, can it be used meaningfully to describe events in the interwar years? Zahra is much too good a historian not to consider the risks of anachronism. She tackles the problem head-on and insists that globalization was, in its fundamentals, a long-term process that stretched back at least into the nineteenth century.

Although the term was not used in its current sense until the 1980s, that does not mean that globalization as a phenomenon could not have existed before then. In some respects, it clearly did. Trade, for instance, expanded rapidly across the world at various points in the nineteenth century. According to one recent study, the openness of the world economy (measured in terms of exports as a proportion of GDP) grew between 1830 and 1870 at a rate that would not be matched again until the late twentieth century. The rise of New York as one of the world’s great metropoles was as sudden as the growth of Mexico City or Jakarta over the past half century. Zahra finds early opponents of globalization in people who disliked free trade and unfettered immigration, worried about fragile, far-flung supply chains across oceans and fretted when domestic workers lost out to cheaper labor abroad. The Italian dictator Benito Mussolini, she writes, was “both radically nationalist and anti-global”; anti-Semitic violence in central Europe was “a violent manifestation of anti-globalism,” and “Jews were targeted as symbols of international finance, unchecked migration, cosmopolitanism, and national disloyalty.” In these and other ways, the concerns of “anti-globalizers” a century ago sound familiar today.

THE MURK OF THE PAST

On the other hand, the growth patterns of recent decades are unprecedented and without plausible parallel. Between 1980 and 2008, Europe’s export-to-GDP ratio grew from 24.3 to 41.1 percent, and the worldwide figure from 20.4 to 31.0 percent. Border-crossing financial markets, institutions, and elites rapidly gained enormous control over national economies. In short, the degree of openness in the world economy around the year 2000 was far greater than in any other period in history.

Not only was the world economy opening up after 1980 in a way that had no historical precedent, but it was doing so in a more permanent way. World trade at the bottom of the interwar slump was down a third from its 1929 height; the slump after 2009 was not nearly so pronounced or so lengthy. In other words, the interwar years in Europe—the core of Zahra’s book—were roiled by a crisis of a severity that has not been matched since. Any attempts to mine the past for lessons should take this stark truth into account.

In Zahra’s story, the term globalization serves as a synonym for a number of quite different things, including the ability to travel without a passport, a smoothly functioning international monetary system based on the gold standard, and international conferences of pacifists from around the world. Insofar as a global order existed before World War I, it was an imperial one run by bourgeois and aristocratic elites. Zahra acknowledges at the start that those she calls globalizers tended to be white and well-off, and she accepts that figures such as Keynes and Zweig were exponents of a kind of liberalism that emerged out of a world of empires and could only with difficulty adapt to the era of decolonization that followed World War II.

Yet perhaps because Zahra’s wonderful early work often focused on the Austro-Hungarian Empire, her intellectual roots in the study of the Habsburg world, and perhaps a certain attachment to its values, go deep. Time and again, readers of Against the World will feel beneath the historian’s warnings the tug of a kind of Zweigian nostalgia for what was lost with the end of Habsburg rule. It is helpful to be reminded that the inhabitants of the Adriatic port of Fiume, now Rijeka in Croatia, felt worse off when the empire collapsed because they faced commercial calamity and that it was for this reason that many of them sympathized with the swashbuckling protofascist Gabriele D’Annunzio when he seized control of the town for Italy in 1919. But it does not add much to shoehorn these developments, as Zahra does, into some struggle between those for and against globalization. D’Annunzio wanted a larger Italy to compete in a world of empires: did that make him a globalizer or an antiglobalizer? The answer is surely neither. After the fascists took charge of Italy in 1922, they started out committed to the gold standard and free trade and then reversed course. Italian fascism and globalism were not inherently opposed until the Great Depression forced the issue.

THE INESCAPABLE NATION-STATE

One comes away from Zahra’s book feeling that, on the whole, nationalism is a bad thing and that fascist politics were what you might well end up with if you turned your back on free trade, unrestricted migration, and the gold standard—in short, what she presents as the interwar version of globalism. Zahra thus offers a message rather like that of globalization’s proponents today. In so doing, she portrays interwar politics in ways that obscure some of the real challenges of those times.

The question of how to deal with the spread of nationalism after World War I was unquestionably at the top of the international agenda a century ago. The nation-state’s march of triumph had begun in the mid-nineteenth century and continued with new vigor at the Paris Peace Conference in 1919, when the victorious Allies presided over the dismembering of the Habsburg and Ottoman empires, creating the modern map of eastern Europe and the Middle East. The process resumed again after World War II with decolonization in what was left of the European empires. Borders proliferated and made international economic life harder.

No real alternatives stood in the way of the spread of the nation-state. Empires could not simply be restored: one cannot find a plausible politics in Zweig’s nostalgia for the helpless cosmopolitanism of Habsburg life. Yet preserving prosperity in a world of nation-states was complicated by radical changes in every domain of life. For one thing, world wars had increased rates of political participation and taken governance out of the hands of older elites. At the same time, the collapse of the nineteenth-century gold standard meant that the international monetary system required concerted management for the first time. In the 1920s, the Bank of England, the U.S. Treasury, and the Financial Committee of the League of Nations decided to resurrect a version of the gold standard. What they produced was political crisis: the gold standard presupposed a degree of fiscal discipline that strained the newly democratic politics of many countries beyond what they could bear. Organized labor resisted the downward pressure placed on wages by the effort to remain on the gold standard; downward pressure on commodity prices produced turmoil internationally. The effort to return to old-style globalization slammed into the mass politics of the interwar years with catastrophic results.

In such circumstances, opposition to globalization was rational. It made sense for many national governments in the early 1930s to abandon the gold standard, opt for autarky, support or nationalize industry that sought to replace imports, and subsidize domestic grain production. Such moves did not inevitably lead to fascism: the outcome in many countries was quite different. Indeed, from the 1930s to the 1960s, the thrust of development economics across much of the global South was premised on this model: the promotion of national prosperity by state-led industrialization drives that identified infant industries and facilitated urbanization.

If a return to empire offered no clear ideological alternative to interwar nationalism, that left only one other option: Bolshevism. It is curious—but oddly characteristic of a lot of contemporary U.S. historical scholarship—that communism’s global impact hardly registers in Zahra’s book. And yet it was the manifest failures of early twentieth-century capitalism to improve living standards for the masses that more than any other single factor helped give Bolshevism worldwide appeal. Apart from an allusion to the possibility of revolution in central Europe in 1919, Zahra largely ignores the Soviet experiment. Is this because Lenin’s desire to export world revolution failed or because the universal ambitions of communism complicate even further the book’s binary framework of globalizers and antiglobalizers? The commitment to build socialism in one country never led the Kremlin to abandon its longer-term desire to see communism triumph worldwide. Theirs was surely a form of global politics, utterly distinct from any other.

THE RIGHT LESSON?

Against the World is at its best in recalling the unexpected ways in which the collapse of the imperial world of nineteenth-century trade and bourgeois hegemony played out in the era of mass politics. It sketches a convincing and fresh picture of the torment World War I brought to eastern Europe and of the plight of Europe’s Jews, in particular. Zahra also draws out the new forms of mass mobilization that flourished between the wars and the new actors who emerged onto the political scene.

Her attempt to draw parallels with today’s anxieties about globalization, however, leads away from the real lessons to be learned from the collapse of European democracy in the interwar years and its subsequent postwar revival. Nationalism not only framed democracy’s demise in the 1930s; it also framed democracy’s recovery after 1945. Democracy was not restored in western Europe because of globalization. That restoration came about because of how national governments stewarded their economies, producing steady economic growth and decades of low unemployment. Indeed, after 1950, national economies opened up only slowly to one another: regional integration took decades.

The real lesson drawn at the time from the tumultuous interwar years was that laissez-faire economics could be fatal and that politicians had to understand the need for strategic national leadership. Today, thanks in no small measure to decades of globalization, politicians have abandoned this understanding of their responsibility and have ceded their power to central banks, constitutional courts, and the private sector. The last thing societies need at the moment is to be told that democracy, now or in the past, depends on globalization.