UC Berkeley - HIST 186 - 2012 Spring - Sargent - International and Global History Since 1945 - Lecture 09 - Letting Go of Empire, or Not - 01h 16m 49s

Introduction and Lecture Overview: Keynesian Economic Theory and Liberalism in Western Europe

[0:00]

Okay, apologies for the slow start. We're trying an experiment today in which the lecture notes appear on the screen with the slideshow so we'll see how it works. But when I first tried to do this the notes were not appearing so I had to figure out how to make them appear, but now they're here so ... We can talk about the transformation of capitalism in the postwar, first postwar decades, the 1950s and the 1960s.

[0:26]

We've talked a little bit already about sort of the large scale transformations that occurred in liberalism during the mid-decades of the 20th century. We've talked about sort of the ascendancy of Keynesian economic theory in the context of the New Deal, the practice of the New Deal itself, and so on.

[0:47]

So what I'd to do today is to sort of shift our focus to postwar Europe. We're going to talk about Western Europe today we'll talk about Eastern Europe and the Communist world more broadly on Thursday.

[0:59]

But today our focus is exclusively on the advanced industrial capitalist world. And what we're going to be talking about in particular is you know what I would characterize as the social democratic moment. The sort of particular moment in postwar European history when political parties of both of the center-left and the center-right converged around a set of common solutions that might be characterized as social democratic.

[1:24]

What were these solutions? How did they come into being? These are the questions that we want to grapple with today. We'll also talk about the experience of the United States and sort of the question of whether the experience of the United States was different from that of Western Europe in the '50s and '60s or whether there were similarities in the political economic transformations that occurred in Europe and in the US from about the end of the Second World War through to the late 1960s.

Smithian Liberalism to Keynesian Liberalism

[1:52]

Let me just start by sort of recapitulating some of the issues that we've previously discussed just to make sure you haven't forgotten them.

[1:58]

What changes in liberal economic theory between the era of Adam Smith↗ in the late 18th century and that of John Maynard Keynes↗ in the 1930s?

[2:13]

How would we summarize the transition from Smithian liberalism to Keynesian liberalism? What are the distinguishing characteristics of the two?

[2:23]

(Student response)

Absolutely. It's really the key, key transition. Whereas Smith famously talks about the market as a self-regulating mechanism, the invisible hand↗, Keynes argues that in a complex modern economy markets don't necessarily regulate themselves. They don't always self-correct.

[2:41]

This transformation as the slide posits it from Smithian economic to Keynesian liberalism does not of course command an absolute consensus. We've already talked about Friedrich Hayek↗ and Hayek's critique of Keynes. Hayek argues that the consolidation of a powerful managerial state will ultimately have fraught political consequences.

[3:05]

It may ultimately lead to the consolidation of political authoritarianism. That's one critique of managerial liberalism. But for the most part this transition from Smithian liberalism to Keynesian liberalism commands a broad consensus.

[3:19]

Not only in Europe but also in the United States.

[3:23]

Of course the intellectual genealogy of Europe's social democratic moment is more complicated than that. It's not as if the only social democrats are former liberals. We talked about a week ago about the sort of inner history of European socialism, the rise of the reform socialist movement from the late 19th century. Socialists who accept the basic institutional framework of parliamentary democracy are also you know absolutely critical to the creation of Europe's postwar social democratic moment.

[3:56]

We can see the moment, you know as I previously discussed, as representing a convergence of reform socialism and progressive liberalism. These are really the two intellectual strands that help to constitute the social democratic moment after the Second World War.

The Swedish Model

[4:13]

But these are issues that we've you know already dealt with. Let's talk today about what actually happens and where. I'm going to start by talking about the Swedish model.

[4:22]

You know Sweden is an appropriate place to start because it's frequently invoked through the present day as an exemplar of social democracy. What is the Swedish model? How does it come to be? What are its distinguishing characteristics?

Saltsjöbaden Pact of 1938

[4:36]

You know where do we begin the history of Swedish social democracy? Probably as good a point as any to begin is with the Saltsjöbaden Pact of 1938↗ which is a formal agreement between the representatives of capital, business, and labor, trade unions, and the state to regulate the economy in pursuit of some, you know, consensual vision of national well-being.

[5:03]

This agreement between capital, labor and the state is in some ways sort of prototypical of for what will happen elsewhere in other national contexts, but most directly it facilitates the creation of a postwar welfare state in Sweden.

[5:19]

A state, in which the national government, the nation-state will play a crucial role as sort of mediator between the competing interests of capital and labor as provider of basic welfare guarantees which sustain a minimum level of social and economic well-being.

The Swedish Model in Practice

[5:37]

What defines this Swedish model in practice? Well, to start off with it's a model that depends upon very high levels of taxation. Swedish tax revenues are sort of notoriously high through to the present day. The government taxes a great deal and it spends a great deal too.

[5:55]

What does it spend on? Benefits are you know a central priority for Swedish social democracy. This is a very redistributive model in which you know taxes are collected and benefits are paid out. The government in a sense tries to sort of mitigate unequal social outcomes by taking from those who earn more and redistributing to those who have less. So it's a model that pursues social egalitarianism through the mechanism of state redistribution.

[6:26]

And this is not necessarily true in every social democratic model. This is a distinctive aspect of the Swedish experience.

[6:33]

What does the government not do? And this is important to ask particularly when we you know compare and contrast the Swedish model to you know for example the socialist models that develop in China and the Soviet Union.

[6:45]

How different is Sweden from these? Well, actually the answer is quite different. And you know one of the key variables that distinguishes the Swedish model from the Soviet model of socialism is that the state in Sweden does not take ownership of private industry, of what Marx called the means of production.

[7:05]

Factories, extractive industries like mining, timber, and so on these all remain in the hands of you know private owners. So capitalism remains essentially unchanged. Which is to stay the structure of ownership of the economy doesn't change in the Swedish model.

[7:21]

What does happen is that the state taxes earnings at very high rates and uses those revenues in order to ameliorate unequal social outcomes.

The Swedish Model in the Social Democratic Moment and the Intrusive State

[7:33]

Is this a positive model? Well, that's really a political question and the answer depends upon your own point of view. It might be worth sort of emphasizing a point which Tony Judt↗ makes in the readings for this week.

[7:47]

Which is that the sort of managerial controlling ethos of the Swedish state has a dark side which is sort of represented in the state's commitment to eugenics↗. The intrusive state doesn't only redistribute wealth but it also tries to determine the biological fitness of its citizens.

[8:08]

Sweden runs a eugenics program from the mid-'30s through to the early 1970s in which around 60,000 people are forcibly sterilized over the period of about half a century because the state deems them to be you know sort of unfit to reproduce.

[8:23]

So while there may be a great deal to admire in the Swedish model in terms of the egalitarianism of its social outcomes it's also you know worth just being mindful of the fact that the intrusive state doesn't limit itself to mitigating economic outcomes it also tries to intervene, you know, directly to assure the biological fitness of its population.

The British Model

[8:45]

Probably more familiar than the Swedish model is the British model of social democracy, which develops sort of in the immediate context and aftermath of the Second World War.

[8:56]

Of course the British economy is substantially transformed by the war itself and this is an important sort of point of departure. In order to wage the war at maximum efficiency, to channel resources to the purposes of war production, the British state during the Second World War establishes broad controls over the economy. It implements sort of unprecedented kinds of economic planning.

[9:23]

So the basic you know sort of apparatus of government economic planning is established during the war itself. Not to serve the purposes of social welfare but so as to enable the British state to wage the war with what planners presume to be maximum efficacy.

The Beveridge Report

[9:39]

But during the war a set of commitments to social amelioration also develops. The key document here is the 1942 Beveridge Report↗. How many of you have heard of the Beveridge Report? Okay, a few of you. Would anybody offer a quick description? What does the Beveridge Report do?

[9:57]

(Student response)

[10:04]

Absolutely -- it offers a set of prescriptions for the improvement of social outcomes in Britain. Essentially it's a blueprint for the postwar British welfare state.

[10:15]

What Beveridge↗ envisages in his 1942 report is a really profound transformation of British liberalism. The British liberal state had previously been fairly limited. It hadn't provided a great deal by way of public benefits to its citizens. And Beveridge wants to transform that. He wants to create sort of new institutions to support and sustain the well-being of the British population.

[10:40]

You know one of the turns of phrase which becomes associated with the British welfare state is that it's a state that supports its citizens from cradle to grave. And the blueprint for that design comes out of Beveridge's 1942 report.

[10:54]

The fact that the Labor Party, the party of the center-left, wins the election, the general election in June 1945, creates a sort of political climate that is hospitable to the implementation of Beveridge's proposals.

[11:11]

With that, it should you know nonetheless be noted, that even the Conservative Party, Winston Churchill's party which was defeated by the Labor Party in 1945, was also supportive of the Beveridge recommendations. So Beveridge's report commands a broad consensus of support within British political opinion. Both the center-left, the Labor Party, and the center-right party support it.

[11:38]

And that fact is indicative of the ways in which the war transforms sort of the political, economic expectations of British society.

The Transformation of British Society by the Second World War

[11:48]

The war itself has transformed the relationship of government to society and more than that the war has helped to create a set of expectations about the peace.

[11:59]

Insofar as the war has been hugely costly, a major exertion of national resources and of human lives, Britains across the political spectrum expect that the peace, or hope that the peace, will be better than the situation that had existed prior to the war. For what has the war been fought?

[12:17]

Has it been fought merely to defeat Nazi Germany or has it also been fought to build a better Britain? The notion that the war has been fought to make Britain better is in part what helps to explain the broad groundswell of support for the Beveridge recommendations in British politics in the mid-1940s.

[12:35]

But it's the Labor Party that wins the election and it's the Labor Party that plays the leading role in the construction of the postwar welfare state.

Implementation of the Postwar Welfare State in Britain

National Insurance Act

[12:43]

Now what does this involve? In 1946 Labor introduces the National Insurance Act↗. This establishes a nationwide scheme of unemployment insurance for the first time. There had previously been sort of partial unemployment schemes but the National Insurance Act of '46 introduces a comprehensive nationwide system of social insurance.

National Health Service

[13:07]

Even more striking is the National Health Service Act of 1948↗. This establishes a publicly funded system of health care in which all, you know, British people have equal access without any payment of fees. The whole thing is sustained by central government revenues. And that's created in 1948 -- the National Health Service Act, or sort of NHS Act. The health service in Britain today is usually known by that acronym -- NHS.

Nationalization of Core Industries: Coal, Gas and Electric

[13:35]

Besides creating new provisions to sustain and support social well-being the Labor government goes about nationalizing core industries and this is one difference between the British model and the Swedish model. Coal, gas and the electric industry are all nationalized by the postwar Labor government.

[13:55]

This is really interesting. Because Labor is doing what you know Marx had recommended, right, which is that the state is seizing control of the commanding heights of the economy↗ -- the phrase commanding heights, is Lenin's by the way.

[14:10]

Not necessarily sort of in order to transform social outcomes however. And this is a key difference between nationalization in the Soviet context and nationalization in the British context.

[14:23]

But the state takes over these enterprises, but it continues to run them on more or less the same basis as they had been run before the war as private industries.

[14:33]

Which is to say you know that the nationalized industries still maintain pay differentials -- managers are paid more than ordinary workers and so on.

[14:44]

And one of the things which is interesting when you actually look at the history of nationalization in Britain is that the terms on which it is justified have far more to do with the experience of the war than they do with socialist doctrine.

[14:56]

The idea of making these industries more efficient is absolutely central to the nationalizing project. It doesn't have to do you know nearly so much with sort of a Marxian or revolutionary agenda as it does with preserving what is widely understood at the times to be the accomplishments of wartime government mobilization of the economy.

Nationalization of the Bank of England

[15:22]

Besides nationalizing these core industries the British government nationalizes the Bank of England↗. The Bank of England had previously been a private bank even though it had a special sort of role in that it was the only bank in England by the 20th century that printed paper currency.

[15:39]

The British government nationalizes it after the Second World War. This is really important because controlling the central bank enables the government to control monetary policy. If you don't control the central bank you don't control monetary policy.

[15:52]

Indeed fifty years later one of the first things that Tony Blair↗ does when he comes to power as the new Labor Prime Minister is to ... He doesn't transform the Bank of England back into a private bank but he substantially reduces the government's capacity to control the Bank of England.

[16:12]

He makes it independent for the purposes of decision-making which has the effect of diminishing government control over monetary policy. Because Blair in the 1990s, in 1997, wants to sort of depoliticize monetary policy, and to make it more, you know, and to render it more immune to political influence than it had been from sort of the late 1940s through to the late 1990s.

[16:38]

But the nationalization of the Bank of England is sort of a key development of the postwar Labor government

Broad Support for the Welfare State in Great Britain

[16:47]

It's important when we sort of think about these changes, and these are big changes, they represent a substantial transformation in the political economy of Great Britain, it's really important to remember that there is an authentic breadth of support for them. These are not changes that are being imposed upon a reluctant country by a, you know, leftist government that somehow manages to win power in the aftermath of the war.

[17:12]

These are changes that are supported not only by Labor but also by the center-right Conservative Party. Indeed when the Conservative Party comes back to power in 1951, which is does under Winston Churchill who will lead Britain for another four years, the Conservative party does not try to roll back any of these welfarist accomplishments.

[17:33]

In fact the Conservatives add new welfare entitlements, for housing for example, and they also nationalize the steel industry which Labor hadn't done.

[17:43]

So the creation of the postwar welfare state is supported by a kind of broad swathe of opinion in the United Kingdom.

The French Model

[17:53]

Okay let's talk next about the French case. What kind of social democracy is created in France after the Second World War? How does it differ from the British and the Swedish models?

[18:06]

One of the differences between the French experience and the British experience, or the Swedish experience for that matter, is that the French state is dominated by the political center after the Second World War.

[18:20]

It's not to say that there was not a strong left in France. Indeed as we've already discussed the left does very, very well in the elections that take place in the fall of 1945.

[18:29]

But by 1947-48 the center has stabilized. Moderates are in the political ascendant in the postwar Fourth Republic↗. As a consequence it will be political moderates, not socialists, but liberals, who dominate the process of postwar sort of political economic construction.

The French Model and Pursuit of Growth

[18:52]

Whereas the British welfare state and the Swedish welfare state make the pursuit of social equality their overriding objectives, the French postwar state is much more concerned with the production and sustenance of growth.

[19:10]

This is a really important distinction. The French state will do certain things to try to promote growth that resemble the innovations of the British and Swedish welfare states. Well, at least -- I'm sorry -- that will resemble the British state -- industries core industries are nationalized -- rail for example. This in some ways resembles the British experience.

[19:34]

The overriding objective however is somewhat distinct. Nationalization of core industries is not linked to a socially egalitarian agenda rather it is undertaken with the express purpose of making France more efficient, more modern, more dynamic.

[19:55]

Besides nationalizing core industries, the postwar French state, also provides incentives to private investment -- particularly in sort of core sectors of the economy. And it constructs an enhanced and improved national infrastructure particularly for transportation.

[20:14]

Indeed the sort of modernizing accomplishments of the Fourth Republic are now being taken much more seriously by historians who look at issues like the construction of the postwar highway system, the autoroutes↗, and sort of emphasize the importance of these developments as preconditions for France's impressive postwar growth rates.

[20:36]

The pursuit of economic growth by the state does not come in the French case with such a, you know, well developed commitment to public, to welfare, as it does in Great Britain. Unlike the British case where the government establishes a national health system the French continue to depend upon insurance in which private individuals sort of pay into health insurance schemes rather than the public provision of health. So social insurance rather than outright welfare becomes the sort of basic modus operandi of the French postwar social state.

[21:22]

Unlike Britain and Sweden inequality is not such a central focus for postwar French welfare policy. France is, you know, thus representative of a different kind of model. There's still a central role for the state but the purposes are somewhat distinct from what they are in Britain or in Sweden.

The German Model

[21:42]

Let's talk finally about Germany. Germany is also a really interesting important case. Of course in some ways the circumstances in Germany are a little bit different from what they are in France or Sweden or Britain.

[21:55]

And this has to do of course with the Nazi legacy, which is a particular aspect of Germany's 20th century experience. Ironically one of the consequences of the Nazi legacy in Germany is to make Germany after the Second World War very committed to liberalism. Germans will be much less willing than Swedes, ironically, to sustain eugenics programs after the Second World War because the Nazi experience has been so harrowing.

[22:28]

The leaders of postwar Germany are for the most part staunch liberals who believe, you know, very firmly in a sort of doctrine of individual rights -- particularly in a doctrine of individual rights vis-à-vis the state.

[22:42]

And this commitment to liberalism imposes some checks on the expansion of the postwar German welfare state. Germany is also somewhat distinct in that the left is less powerful after the Second World War than it is elsewhere. That owes in part to Germany's particularly sort of international location. The division of Germany into two parts, East and West, also has the effect of making West Germany more staunchly centrist than might have been the case had Germany remained an integral whole.

[23:15]

Of course a number of German left-wingers, Communists in particular, go to the East which becomes a sort of Communist state.

[23:22]

The West is very much recreated after the war as a liberal state in which the political center, moderate conservatives, will be ascendant.

The Christian Democrats and Konrad Adenauer

[23:33]

The party of the center-right, the Christian Democratic Party, led by Konrad Adenauer↗, dominates German's politics after the Second World War. You know dominates is probably too weak a word. The Christian Democrats rule Germany from 1949 until 1966. That's 17 years of uninterrupted Christian Democratic ascendancy.

[23:55]

Which is quite different from say the British experience where the center-left and the center right, you know, vie for dominance.

The Social Market Economy and Ludwig Erhard

[24:03]

The Christian Democrats are not you know necessarily a free market party however. On the contrary the Christian Democrats embrace the doctrine of what becomes known as the social market economy↗. Both the social and the market are really important to this concept.

[24:22]

It's a concept that is particularly associated with Ludwig Erhard↗, who's an economist and the German Economics Minister under Konrad Adenauer. He's economic minister for a long time, about 14 years, and then he becomes Chancellor of Germany, which is Germany's prime minister role in 1963.

[24:40]

So Erhard has a very long influence on postwar German politics. His aim, in the promulgation of the social market doctrine, is to reconcile socialism and liberalism. Erhard remains a liberal but he understands that liberalism, if it is to flourish, has to do a better job of ameliorating adverse social outcomes.

[25:04]

In order to do this the social market doctrine commits the state to intervene in the economy where necessary to sustain growth, to keep inflation low -- inflation, you should remember, had been very disruptive in Germany before the Second World War, and to keep unemployment low.

[25:21]

So there's a substantial sort of managerial role for government in the framework of the social market.

[25:29]

The government will also tax and spend in order to mitigate social inequalities. The government provides for Germans who cannot provide for themselves. Indeed economic rights will be guaranteed by law in the postwar Federal Republic.

The Grundgesetz: Political, Social and Economic Rights

[25:44]

The basic constitutional law of postwar Germany, the Grundgesetz↗, which is sort of inaugurated with the state in 1949, identifies a broad range of rights that Germans have as citizens of the Federal Republic.

[26:00]

These don't just include the predictable political rights, you know, to freedom of assembly, freedom of speech, freedom of the press and so on, they also include social and economic rights: right to work, rights to a guaranteed income, right to housing, and so on.

Further Expansion of Rights

[26:15]

These rights are expanded even further by subsequent innovations. The 1957 Employment Law for example offers a very ambitious expansive set of commitments to Germans who become unemployed. Indeed it commits the state to continue to pay you when you become unemployed at the same salary which you had been earning when you were, you know, working in your job.

[26:38]

So this a, you know, costly commitment for the state, particularly when the beneficiaries are middle class people.

[26:44]

You know unemployed bankers can continue to be paid at the rates that they would ... actually -- we had something like that here didn't we ... But (laughter)... but in Germany it's guaranteed for all people not just representatives of the financial sector.

The Social Democratic Moment's Effects

[27:00]

Okay, let's try to draw some generalizations across these different national experiences.

[27:05]

First question that any good social scientist should ask: [[wikt:cui bono|cui bono]? This doesn't have to do with the Irish rock band. It's Latin. Who benefits? Who wins?

The Benefit to the Middle Classes

[27:16]

Who are the beneficiaries of the postwar European welfare state? And in general the middle classes are the major beneficiaries -- not the poor.

[27:27]

You know this is really, really important to remember. The British welfare state for example: What does it do? From who does it redistribute and to whom. For the most part it's the top 10% who pay into the system in Britain. The major beneficiaries are the next 40%. It doesn't do so much for the really poor. It does more for the ranks of the middle class entitlements like you know public funding for higher education for example really of greater benefit to the middle classes than they are to the very poorest members of society.

Greater Social Stability

[28:05]

The welfare state does, you know, besides benefiting sort of the working middle classes, serve to produce great social stability. The value of this particularly in the aftermath of fascism and the Second World War should not be underestimated.

Growth and the Social Welfare State

[28:23]

What about growth? We've talked about the impressive rates of economic growth that Europe experiences after the Second World War. To what extent was welfarism the construction and consolidation of postwar welfare states an important factor in the achievement of high and sustained rates of growth?

[28:43]

This is really, really difficult to say. I think that the most that could be said is that the expansion of state economic regulation and management is one variable amongst many to which we might want to make reference in the explanation of Europe's postwar growth. It's probably not the most important.

[29:08]

More important than the role of the state is, you know, simply the expansion of economic inputs -- demographic growth, the transformation of agricultural labor into industrial labor, which enables Europe to grow at a very high sustained rate for about two decades.

Comparison of the French Case and the British Case

[29:29]

The state may have played some role and the role may of course have varied from one context to another. Here a comparison of the French and the British experience might be instructive. The French state which you know makes the promotion of growth its central objective after Second World War grows at a fairly impressive clip -- sustains an average annual growth rate of about 4% between, you know, 1950 and 1973.

[29:57]

Part of that is presumably attributable to the work of the state and the provision of a transportation and communications infrastructure are friendly to the growth of private business. In Britain growth rates are less impressive. Now that of course doesn't just have to do with government policy it also has to do with the fact that Britain had much more substantially industrialized than France had before the Second World War.

[30:21]

So there's simply less slack in the economy, less room for growth in Britain than there was in France at the beginning of the postwar era.

[30:30]

These kinds of comparisons are difficult because the variables are so many. But they may help us you know to get some perspective on the possible role that government played in promoting and sustaining growth in postwar Europe.

Political Consequences of the Social Democratic Moment

[30:46]

What about the political consequences though? These are probably easier to identify and to talk about than are the economic consequences. The single most important overarching political consequence of the social democratic moment in my view is the transformation of the left.

The Diminishment of Radicalism and the Growth of Liberalism Within the Left

[31:04]

The left had for you know almost a century since the last decades of the 19th century, been a revolutionary force in European, West European, political life, a force that had challenged the political status quo.

[31:20]

Revolutionary socialists, of course, had proposed replacing the liberal order with an entirely different social and political order of things. This radical left dies a death very quickly after the Second World War.

[31:34]

Why does it die a death? Well, in part because its natural constituency, the working class, is won over to liberalism, or to a transformed version of liberalism, by the social democratic moment. The postwar welfare state secures, you know, the support and loyalty of the working classes to the political economic and institutional status quo. Sort of one consequence will be the effective death of radicalism, at least of economic radicalism, as a sort of viable political force in Europe.

[32:12]

Indeed most people who call themselves socialists in Western Europe will abandon Marxist revolutionary doctrine after the Second World War if they haven't done so already.

[32:25]

There is a convergence moreover between social democrats -- people coming from the left -- and Christian democrats people coming from a more you know liberal or even conservative tradition around a shared set of commitments to sort of welfarism.

The Bad Godesberg Meeting in 1959

[32:40]

One symbolic moment that you know sort of represents this transformation in the politics of the left really well comes in 1959 when the German Socialist Party, which remember has been out of office for a very long, time because the Christian Democrats have been dominant ever since the inauguration of the Federal Republic.

[33:02]

The socialists, out of power, meet in Bad Godesberg in 1959↗, in order to sort of formulate a new agenda and shared set of commitments for the party.

[33:12]

This meeting produces a manifesto, the Godesberg Manifesto, which formally renounces the party's commitment to Marxism. It formally renounces its commitment to class struggle as the basic sort of conceptual framework for political action, and commits the Socialist Party to seek the political support of all social classes.

[33:38]

To seek you know the support of bourgeoisie voters as well as working class voters. This is a major transformation right. For a party that had historically defined itself at the party of the working class the formalization in 1959 of a commitment to pursue middle class votes as well as the votes of workers suggests that something really big has changed in the relationship of the Social Democratic Party to German society.

[34:06]

1959, you know, in effect marks a renunciation of radicalism and a formal acceptance of the sort of institutional status quo of liberal democracy.

The Social Democratic Moment and the Cold War

[34:18]

Now what did this all of you know transformation have to do with the Cold War? It's a really important question.

[34:25]

It's certainly the case that the accomplishment of social and economic stabilization in postwar Europe serves Cold War purposes -- serves the purposes of the United States for example.

[34:37]

And the United States both supports and encourages Europe's postwar social democratic transformation. This is a really important point. The United States does not see the construction of welfare states in Europe as a threat to American interests. Even when these welfare states, you know, protect their economies with tariff barriers, even when they engage in sort of extensive social redistribution as the British welfare state does, the United States doesn't see this as you know representing a threat to the West either in terms of a threat to American economic interests or the beginnings of a potential slippery slope that might lead to Communism.

[35:16]

On the contrary the United States sees the consolidation of European welfare states after the Second World War as a guarantee against Communism, as the construction of a sort of bulwark that will inhibit the success of you know Communist parties within the nation-states of Western Europe.

[35:35]

So it would be wrong to see the consolidation of welfarism after the Second World War as serving an agenda that could in anyway be construed as sort of pro-Soviet. On the contrary the leaders of European social democratic parties are often among the most, you know, vigorous anti-Communists that there are in the European continent.

British Foreign Secretary Ernest Bevin's Opposition to Communism

[35:59]

You know to illustrate that point we might just you know sort of go back to the postwar Labor government in Great Britain. The foreign secretary in that Labor government, Bevin↗, was as you know a convinced and dogged an anti-Communist as just about anybody in the history of Cold War diplomacy.

[36:18]

It was Bevin's absolute, you know, conviction that you couldn't trust the Russians, you couldn't trust Communists, there was no useful dealing to be done with them.

[36:28]

In part that represented Bevin's own experience as a man of the left. Bevin as a trade unionist had had contact with socialists. I mean with real revolutionary socialists. So he had a sense for the power that ideology exerted over you know committed Marxist revolutionaries and this is one of the factors that sort of informs his own anti-Communism which is very influential on British and Western policy after the Second World War.

Conclusion: The Social Democratic Moment and the Cold War

[36:58]

But the key point you know to remember is that social democracy does not represent in anybody's mind a step on the road to the accomplishment of a Soviet style socialist state. Rather it represents an alternative, an alternative that is closely aligned with the United States, and which self-conceives as committed to sort of the institutions of liberal democracy.

European Integration

[37:25]

Let's talk a little bit now about the creation of Europe as a political and economic project. European integration is a project that is in many respects closely linked to the consolidation of social democracies within Europe's postwar welfare states.

[37:42]

At the same time there are, you know, kind of distinct aspects to the history of European integration that ought to be understood and discussed on their own terms.

Origins of European Integration

[37:52]

Where does the European integration come from? How far back does it go?

[38:00]

Would anybody offer a guess as to you know how far back we should take the history of European integration?

[38:09]

(Student response)

The Congress of Vienna

[38:14]

Yeah, 1815 is a really good point of departure actually because the peace settlement that brings the Napoleonic Wars to an end, the so-called Congress of Europe system, does involve a set of, you know, shared commitments by Europe's political elites to maintain international peace and social order within 19th century Europe.

[38:36]

Now of course this is a conservative settlement. The elites who come together in the Congress of Vienna↗ want to preserve the ascendancy of European aristocracy. So it's an anti-revolutionary peace, but it you know certainly reflects a set of shared commitments, a belief that Europe constitutes a sort of organic whole, that can be administered cooperatively if not from a single political center.

Military Conquest of Europe Throughout the Centuries

[39:04]

So 1815 is really important. But I would suggest that we can take the history of European integration back even further than that, right. For how long have Europeans construed of themselves as members of a common sort of civilizational or cultural if not political unit?

[39:23]

It's, these are all contestable points, but we could take the history of European integration perhaps back as far as Charlemagne↗. Frankish king who ruled in the late 8th and early 9th century and who accomplished the transient political integration of much of you know what is today Western Europe.

[39:50]

Of course, you know, Charlemagne did this a very long time ago, more recent attempts to sort of integrate Europe have, had also have occurred.

[40:04]

Napoleon, after, sort of 1793, attempts a political project this is an integrationist project. It's a different kind of integrationist project perhaps from that which the European economic community will attempt, and Napoleon attempts to integrate Europe within a sort of imperial framework of French rule. But the project is nonetheless an integrationist one.

[40:27]

So too will Hitler during the Second World War very briefly integrate Europe. Now Hitler's project is even more imperialistic, even more hierarchical, even more vile than Napoleon's had been. But it nonetheless achieves a sort of transient integration of the West European continent.

[40:51]

These are all efforts that you know powerful political and military leaders undertook to integrate Europe by force.

The Intellectual History of European Integration

[40:59]

But the history of integration is also an intellectual history. It's not just a history of conquest and power. But it's also a history of visions. Visions of Europe transformed perhaps by common institutions unified within a singular political framework.

Henri de Saint-Simon

[41:17]

The history of visions of European integration goes back a long way. One of the thinkers to sort of articulate the clearest vision of a pan-European confederation, at least in the modern era, is the man pictured in the slide here: Henri de Saint-Simon↗.

Claude Henri de Saint-Simon

Saint-Simon in 1814 published a blueprint for European integration. It was very much a product of the the Enlightenment↗ context in which it was drafted.

[41:42]

It envisaged a rational, secular, European state, with a single European parliament and a single European monarch too. Of course a constitutional monarch not an authoritarian one.

[41:55]

What Saint-Simon offered was a sort of utopian vision of a Europe unified. Utopian because a Europe unified along Saint-Simonian lines would of course be a Europe in which war was implausible.

[42:09]

War would be a thing of the past in a Europe unified within a singular political framework.

Winston Churchill's Zurich Speech of 1946

[42:14]

This notion that unification offers an alternative to war, an alternative to organized violence, was also very much on the mind on Winston Churchill in the immediate aftermath of the Second World War.

[42:28]

If Europe was to be peaceful, Churchill proclaimed in 1946 in an important speech on European unification, we must build a kind of United States of Europe.

[42:39]

What Churchill is arguing at that moment is that Europe is doomed to repeat the experience of the Second World War unless it can establish some confederal institutional framework that will suppress its innate disposition towards conflict and violence.

[42:57]

It should be said just as a footnote to the Churchill point that Churchill did not expect that Great Britain would itself participate in this United States of Europe. It was to be a United States of Europe for the continental Europeans -- not one in which the British Isles would join.

European Integration as an Antidote to War

[43:14]

But the overriding rationale was of course political, and this political rationale has been a common theme in the long sort of history of ideas about European integration: integration as a means to surmount conflict, integration as a means to surmount belligerent tendencies that are sort of inherent in the international relations of states, and you know pervasively present in Europe's bloody history.

The Economic Advantages of Integration

[43:45]

But there are also economic advantages which the would-be integrators of Europe in the 1940s identified and emphasized. Insofar as Europe's nation-state's are relatively small in scale, Europe as a patchwork of nation-states would never be able to develop the kinds of continental economies of scale from which the economy of the United States has benefited, right.

[44:13]

The rise of American economic power in the first half the twentieth century was a model that struck a great deal of, you know fear, and trepidation into sort of Europeans who witnessed and watched it. Because the United States seemed to benefit from the fact of its being a vast integrated economic unit. There are of course no trade barriers between the states of the United States.

[44:42]

You know California and New York and all of the states in between them are part of a single integrated economic arena. And Europeans who looked at the United States attributed the economic prosperity of the United States to that basic fact.

[44:58]

The fact of the United States being an integrated economy on a continental scale. So an alternative kind of rationale for European integration develops during the course of the 20th century in particular.

[45:09]

And this is a rationale of economic integration. One which proposes self-consciously to emulate the historical experience of the United States of America. Integration of the European economies will in this framework create economies of scale that will be productive, so the theory goes, of kind of growth and prosperity that could not be accomplished in a Europe of independent nations.

The Paramount Rationale for European Integration: Political or Economic

[45:37]

So these are two possible rationales for constructing Europe: political and economic. There are also two explanations that historians have offered. There's no really consensus amongst the historians of European integration as to whether political or economic motives were paramount.

[45:54]

Why was Europe built? Was it because European statesmen wanted to preserve the peace or was it because they wanted to create an integrated economy that would be productive of you know prosperity that a Europe of nations could not sustain.

The Materialistic Explanation

[46:12]

You know my own sympathies are with the more materialistic explanation -- that the integrationist project had to do with economics and not so much with international relations. But you know other historians will see things differently and I don't want to suggest to you that either interpretation is correct, but I will be honest as to what my biases are.

The Course of European Integration

[46:33]

Okay, so let's tell this history and try to figure out it happens in practice. Who favors European integration after the Second World War? Who are the major you know theorists, and thinkers and political leaders who bring about the integration, the economic integration of Europe's nation-states?

Paul Hoffman and the Economic Cooperation Administration

[46:54]

One of the first people, you know, we should mention when we think about the founding fathers of Europe is ironically an American: Paul Hoffman↗.

Paul Hoffman in 1950

[47:02]

Paul Hoffman before the Second World War had been head of the Studebaker Motor Corporation. He goes to work in Washington like a lot of businessmen do during the war.

[47:11]

And after the war becomes the head of the European Cooperation Administration↗.

[47:16]

A US government agency that is set up to promote the economic rehabilitation of Europe after the war has been won. In this capacity Hoffman is responsible for the disbursement of Marshall Aid funds.

[47:28]

He is in effect the principle administrator of the Marshall Plan in Europe. This is a position of considerable influence and responsibility, and Hoffman from this position becomes a very strong advocate of European integration.

US Support for European Integration in the Postwar Era

[47:44]

This is not a quixotic move on his part. On the contrary the State Department is wholly committed to the promotion of an integrationist agenda in postwar Europe.

[47:55]

The reason for this, you know, has to do in part with the Cold War. Europe, so the State Department line goes, will be more secure and more resilient if it can integrate the European nation-states, and more vulnerable as they are than as they would be if they sort of reconstituted themselves into a federation under some super national authority.

[48:17]

So the US is a powerful cheerleader for European integration. In part that has do with a set of presumptions about American history, right. Insofar as the prosperity of the United States seems to have been built upon the integration of a large continental market so American planners argue will Europe be more prosperous if it can emulate the historical experience of the United States.

European Supporters for Integration

Jean Monnet

[48:42]

So the United States is both a model for European integration and a powerful supporter of the integrative process. But there are plenty Europeans who are also enthusiastic even zealous integrators -- none more important than Jean Monnet↗.

[48:56]

And Monnet, you know, I would argue has a stronger claim than anybody else to be the sort of most important of Europe's founding fathers. That is the most important founding father of Europe as an integrative project.

[49:11]

This is all the more curious when we think about the fact that Monnet never held elected office. Monnet with a technocrat, an economist, a civil servant, but not a political leader. He was a French economist who served the prewar French government and reentered government service after the Second World War following the end of the Vichy regime↗.

[49:36]

Monnet very much favored integration as an economic quest. He wanted to create a single integrated European market that would, as he saw it, be more prosperous and more productive than Europe could be in the absence of integration. Monnet did not however conceive that an integrated Europe would be a rival to the United States. Rather he saw a commitment to Atlanticism↗, to close relations between Europe and the United States, and European integration as complementary projects.

[50:09]

He wanted both to integrate Europe as an entity unto itself and to build close and even integrated relationships between North America and Europe.

[50:21]

Monnet's vision is one that enjoys considerable support amongst the political leaders of postwar Europe.

Robert Schuman, Konrad Adenauer, and Alcide De Gasperi

[50:31]

Who are the key leaders? They include Robert Schuman↗ the Prime Minister of France, Konrad Adenauer↗ the Christian Democratic Chancellor of Germany, Alcide De Gasperi↗, the Italian Prime Minister.

[50:43]

The fact that these three men, three men who are very pivotal in the construction of Europe, rule at the same time is consequential. There are affinities between them as a group of leaders that help to explain their shared enthusiasm for the European project.

[50:59]

Each of these men comes from a border region. Schuman was born, I think in Luxembourg,, Adenauer in the Rhine↗, sorry, not, maybe Adenauer might even have been born in Alsace-Lorraine↗. I'm not entirely sure you'd have to check that on Wikipedia. But he was born from the western portion, in the western portion of Germany, which has you know frequently been contested between Germany and France.

[51:24]

De Gasperi was actually born in the Austro-Hungarian Empire↗ before you know it became part of the Italian nation-state.

[51:32]

So they all have experience of living in contested border regions. These are not people who come from the centers of their own national projects, but they're people with, you know, a sensitivity to, you know, cosmopolitanism, to the fragility of life upon a contested international border.

[51:56]

They're also all devout Catholics, and this is important too, right. Insofar as the Catholic Church is an institutional framework which encompassed much of Europe for most of its history, at least until the Reformation↗, and which continues even after to maintain sort of aspirations of being a universal church for all Europeans.

[52:19]

The fact that Schuman Adenauer, and De Gasperi are Catholics may be of some consequence. Probably more important as a practical matter is the fact that they all speak German.

[52:31]

So they're able to converse with each other: the leaders of France, Germany and Italy without having to make recourse to translators. These affinities will in intangible but nonetheless important respects help to facilitate and sort of lubricate the process of institutional integration.

The European Coal and Steel Community

[52:49]

How does this process of institutional integration come about? What are the first kind of, you know, major steps? The first really significant step has to do with the construction of the European Coal and Steel Community↗.

[53:03]

It's not a terribly evocative or you know romantic name but it is nonetheless the most important of the early institutional steps that are taken to build a united Europe.

[53:15]

The ECSC, The European Coal and Steel Community, is in its inception a French proposal. Schuman puts forward a plan, the Schuman Plan↗ in 1950 that proposes to create a single high authority to regulate the coal and steel production of northwestern Europe.

[53:37]

The design, though it bore Schuman's name, had been drafted by Jean Monnet the leading sort of technocratic proponent of European integration in the French government.

[53:49]

Coal and steel are important economically. There's also a political or symbolic importance to the proposition for a European Coal and Steel authority.

[54:00]

After all coal and steel are both you know basic implements of war. Factories that produce munitions depend upon coal for energy. Steel of course is so vital to...you know, it's importance as a resource for war production can hardly be overemphasized.

[54:20]

So there is a you know sort of political symbolism to the construction of the European Coal and Steel Community too.

[54:27]

The Coal and Steel Community will involve Germany, Italy and the Benelux↗ countries as well as France. So it brings together the nation-states that will constitute sort of the core from which European integration proceeds.

[54:44]

It's inaugurated in 1951 and Monnet becomes its first president.

The European Coal and Steel Community in Practice

[54:49]

What is the Coal and Steel community in practice? What does it do? It's not a supernational government. It doesn't sort of directly control steel resources which continue in many cases to be nationally owned.

[55:04]

France for example had nationalized steel after the Second World War. What the Coal and Steel Community does is simply to sort of reconcile competing national priorities: to set production targets, to mediate amongst diverse national interests.

[55:21]

So rather than an exercise in supernationalism the ECSC represents a framework for institutionalized cooperation amongst nation-states. It tries to balance national priorities. It's, you know, fairly successful in doing so.

European Military Integration

[55:39]

It doesn't take long for Europeans to pursue other kinds of integration. Here the story of military integration is particularly important. The question of what to do with Germany, particularly the question of what to do with German military power, was of course one of the really burning questions that Europeans confronted after the Second World War.

[56:00]

By the late 1940s the United States is advocating strongly in favor of German rearmament. Germany is of course a very powerful, or at least potentially powerful country, to the extent that Germany can be integrated to the West than the West will be you know strengthened as a counter balance to the strength of the Soviet led East Bloc.

[56:20]

But the countries of Western Europe, France in particular, are very leery of German rearmament with good reason. Germany had invaded France twice, within the past forty years.

[56:34]

So French political leaders are sort of unwilling to countenance German rearmament.

The European Defense Community

[56:40]

In 1950 a concept for reintegrating Germany within a sort of Pan-European framework emerges. This becomes known as the European Defense Community↗ or EDC.

[56:54]

It's a framework which enjoys strong support in Germany, in Italy, and in the Benelux countries, and it would be create a single sort of authority for sharing military resources and integrated military command that would you know represent a substantial step towards the military, if not the political integration of Europe.

French Rejection of the European Defense Community

[57:17]

France ultimately will not go along with the EDC, the European Defense Community proposal, decides in 19545 to veto it.

[57:26]

The rationale for the veto, the French Prime Minister Pierre Mendès France↗ explains, is that the EDC contains too much integration and too little England. That's the phrase he used.

[57:39]

What does that mean? Well, it suggests that France does not want to subordinate its military and thus its political autonomy within a Pan-European framework.

[57:50]

France wants a degree of economic integration via the ECSC but it is not so enthusiastic about military integration. Moreover France does not want to participate in a military organization that would implicitly marginalize Great Britain as a factor in Europe's political military relations.

[58:12]

This is really interesting. It tells us you know something about France's complex relationship with the European Project. France will be a powerful driver of economic integration but when it comes to political and security affairs the French in 1954 prefer to ... You know they prioritize their relationship or alliance with Great Britain over the possibility of an integrated European Defense Community.

The Integration of Germany into NATO

[58:44]

With the failure of the EDC the alternative solution ends up being the integration of Germany to NATO. And this is an important accomplishment so far as the NATO alliance is concerned. It represents a sort of escalatory move in the Cold War.

[59:01]

But it's also a setback so far as the project of European integration is concerned for a couple of reasons. And the first is that NATO is not a particularly tightly integrated, you know, military system. It's an alliance of nation-states but not a, you know, sort of defense community as the EDC would have been.

[59:20]

Moreover NATO is a transatlantic community in which the United States plays the predominant role. So it would be hard to construe NATO as a framework for European integration. It's something much bigger than that.

[59:32]

It's a framework that integrates the military resources of the entire West.

Economic Integration of Europe in the Mid 1950s

[59:36]

By 1955 the European project is at a sort of impasse. The ECSC has been very successful. The EDC has been much less successful. You know what should be done next?

[59:52]

What do European integrationists want to do as they look towards the future? The lessons of the early 1950s are fairly obvious. Economic integration has been a success. Military political integration has been much harder to accomplish. The integrationists decide to press forward with economic integration.

The Messina Conference

[60:10]

Negotiations undertaken at Messina in Italy in 1955↗ which agree upon the goal of creating a European wide free trade area. This is really, really important.

[60:25]

Removing tariffs barriers between the nation-states of Europe will create what amounts to a single integrated continental market. At least it will create sort of the opportunity for business to create an integrated continental market.

The Treaty of Rome

[60:38]

Messina inaugurates two years of very complicated negotiations which lead in 1957 to the Treaty of Rome↗ -- the treaty that creates the European Economic Community↗.

[60:52]

This is in many senses the big bang moment for European integration. The Treaty of Rome commits its signatories: France, Germany, Italy, and the Benelux countries to create a single sort of integrated harmonized tariff bloc within a fairly limited time span.

The Absence of Great Britain

[61:14]

One of the sort of interesting features of the Rome treaty is the absence of Great Britain. Where is Britain at Rome? The answer is that Britain is not there. Though Britain was invited to participate in the discussions the British demure.

[61:31]

They're excessively preoccupied with the Commonwealth↗ which is the sort of post-imperial alliance between Great Britain and its former colonies. They don't want to participate in the European Economic Community at least not at this time.

[61:46]

So the British abstain from participation in the project of European integration at the moment when it really takes off and begins to accelerate.

Rationale for European Integration

The Benelux Countries

[61:57]

Why do those countries that do participate in it decide to do so? The Benelux countries are probably the most ardent supporters of European integration. The reasons for this are fairly obvious, right.

[62:09]

These are very small countries, Belgium, the Netherlands and Luxembourg, tiny, tiny, little countries. Their economic prospects as autonomous nation-states are not very good. Only by being integrated into a larger European framework will these countries be able to participate in a larger market which will you know provide them with expanded economic opportunities.

Germany

[62:32]

Germany is a strong supporter of European integration. That in part has to do with the legacies of the Nazi era -- what you might call war guilt. Participating in the construction of a democratically and peacefully unified Europe offers at least some salvation for the crimes of the very recent past.

[62:52]

Of course the European project also offers opportunity for German industry in the form of export markets which German industry can export to without having to surmount tariff barriers. So for Germany there are both political and economic incentives inherent in the integrationist project.

France

[63:12]

France's relationship to the integrationist project is probably the most complicated. France certainly seeks an expanded political role in the world via Europe. It is the expectation of French statesmen that they will dominate Europe politically and that by dominating Europe they will be able to exercise a world role if not commensurate to that of the United States then at least a lot closer to that of the United States than which France would be able to you know exercise on its own.

[63:43]

So far as economic integration goes the French are less enthusiastic about it than the Germans and the Benelux countries are. France is particularly committed to agricultural protection -- to the establishment of specific provisions to protect the interests of French farmers.

[63:59]

Once these provisions have been accomplished, which they are, when the other countries agree to establish a common agricultural tariff policy and a system of subsidies to provide for direct payments to French farmers, than France will be an enthusiastic support in the European project.

[64:16]

But for France of establishment of special provision and protection for French agriculture is a precondition of participation virtually from the outset.

European Integration Post-1957 and the Treaty of Rome

[64:26]

1957 you know sort of sets up the basic project. The subsequent history of this project is one of ongoing incremental development and integration.

[64:39]

There's really not a grand plan for European integration. At least there's not a sort of grand plan that produces the European Union↗ as it exists today.

[64:47]

What we see instead is rather a process of sort of evolutionary integration. There are multiple institutions. These overlap and overlock.

[64:56]

The ECSC, and the EEC, the European Economic Community↗ which is created in 1957, are wholly different institutions. Another institution, for example, Euratom↗, which is a Europe wide atomic regulatory agency is also created.

[65:11]

And it's a separate institution too. Let me just show you a quick diagram which sort of illustrates the complexity of the European project as it evolves after the Second World War.

[65:23]

The European project involves a number of different institutional frameworks and bodies. Euratom, the ECSC, the EEC, the West European Union↗, European Political Cooperation↗ entity.

[65:36]

There's a lot going on here, and it's not necessarily, it's not necessary to unpick or unravel all of these. Most Europeans couldn't tell you what different purposes these institutions serve, so we're not going to expect you to do that.

The Trajectory of European Integration

[65:51]

What you should have a sense of is of the basic vectors of development. Where does the European project go? Well, it basically moves in two directions. Integration becomes tighter and more intense. And the project expands spatially or geographically.

Spatial Expansion

[66:07]

The first 15 years after 1957 can be understood as a period of spatial expansion. Most importantly Great Britain becomes a member of the European Economic Community at long last in 1973. Sort of a critical moment in the spatial expansion of the European community, a process that today has taken the borders of integrated Europe all the way up to the Ukraine and Belarus.

[66:35]

Of course that little bit of the map we might be shading a different color soon.

[66:44]

So, Europe expands, eastwards, Europe expands northwards to encompass Great Britain and the Scandinavian countries.

Increase in the Intensity of Integration

[66:53]

During the 1970s, and this is a history that we'll come to in due course, the intensity of integration also deepens. The first steps to harmonize monetary policy take place in 1973. Negotiations to produce a single currency begin in the 1980s.

[67:13]

So the economic integration of the bloc will accelerate in due course. The euro of course will be introduced around the turn of the twentieth century. These are issues that we're going to deal with later so we're not going to belabor them now.

Conclusion: European Integration

[67:26]

The point is that Europe evolves. It becomes wider, and it also becomes you know sort of deeper. What does this transformation signify in the larger scheme of things? What has happened to Europe since the Second World War? And what does this imply not only about sort of European politics but also about larger transformations in the international relations of nation-states.

[67:52]

The transformation of Europe is really, really interesting because it conjures at least the possibility, if not the fact, of a different kind of international order.

[68:03]

An international order comprised not of wholly sovereign nation-states each defensive of their own self-interests but rather the possibility of an international order regulated and governed by shared institutions.

[68:16]

It's particularly interesting that this new order of things has developed in Europe. Because Europe after all is the region of the world where the classical sort of international system of nation-states first developed.

[68:29]

It was the Treaty of Westphalia↗ in 1648 that gave symbolic birth to the international system of nations. That is to say sort of an idea of international relations in which nation-states are the elemental units.

[68:46]

Europe of course fought a great many wars between 1648 and 1945. Wars were fought for national aggrandizement. Wars were fought to preserve the European balance of power. Whatever the reason a great deal of them were waged and the consequences were very, very bloody.

[69:05]

After the Second World War Europe in effect transforms its international relations. It integrates. And as a consequence perhaps no European war has been waged since 1945.

[69:18]

The creation of Pan-European institutions, you know, thus sort of facilitates, enables would be too strong a word, but it facilitates the transformation in the inner character of European states. Insofar as European states after 1945 privilege welfare, which is to say the construction of sort of social democracy, they put less and less emphasis on warfare.

[69:43]

Raising and maintaining armies was from the 17th century through to the mid-20th century the primary enterprise to which European states committed themselves. After the Second World War it's been very different. Promoting the welfare of their citizens has become the primary commitment to which European states are wed.

[70:05]

The transformation from the warfare state to the welfare state has you know larger global echoes but it is in Europe that it has been most pronounced.

[70:15]

European institutions haven't produced this transformation, at least not on their own, indeed the history of Europe's social democratic moment antedates the history of European construction. But the creation of an integrated European community has at least facilitated the rise of a quite different kind of European nation-state from the European nation-state of the modern era more broadly.

[70:42]

To what extent has this European project been exceptional? Should we see Europe in the world today as something wholly different from other regions of the world or are their similarities in the institutions that Europeans have constructed to regulate their continental affairs and institutions like the United Nations or the International Monetary Fund that exist at the global scale? These are questions that we should think about.

The United States and the European Social Democratic Moment

[71:09]

Let me just talk for a few minutes -- last five minutes -- of the lecture -- about the United States.

[71:14]

The United States has an essential but at the same time ambivalent relationship with the history of the social democratic moment in Europe. To an extent that is hardly paralleled elsewhere in the West socialism remains a dirty word in the United States.

[71:32]

We might infer if we think about the toxic nature of the world socialist in American politics today that the United States has sort of always historically been opposed to social democratic socialist construction.

US Support for the Social Democratic Moment in Europe

[71:47]

In fact the history of the early postwar years is quite different from that. Far from opposing European socialism or social democracy the United States supported it after 1947 through the disbursement of Marshall Aid funds, through the provision of technical assistance, through the promulgation of a sort of doctrine that one historian Charles Maier↗ has called the politics of productivity -- the idea that becoming more productive can mitigate social conflict.

[72:17]

The United States supported the project of European rehabilitation and of European integration. The Bretton Woods institutions↗ in which the United States was preeminent also accommodated the global expansion of the public sector. This is an issue that we've already talked about. We'll come back to in due course. But let's remind ourselves that the Bretton Woods institutions accommodate the rise of postwar welfare states.

[72:42]

The United States also provides free security. Mostly free security. American military forces are stationed in Europe after the Second World War -- provide European countries with security which enables those European countries to focus their fiscal resources on the provision of welfare to their citizens.

[73:01]

So the United States in a sense underwrites the emergence of Europe's sort of postwar social democratic consensus.

US Demurral of Welfarist Policies Within Its Own Borders

[73:09]

But what of the United States itself? Does it participate in this social democratic moment? Of course the New Deal↗ left legacies you know that amounted to a skeletal welfare state. Social Security in the United States was introduced in 1935, the minimum wage was also a legacy of the New Deal.

[73:30]

So there are developments in the American experience that parallel those that occurred in Europe after the Second World War. The American welfare state is more limited however.

[73:41]

When Harry Truman after the Second World War proposes to expand upon Roosevelt's New Deal with the creation of what he calls a Fair Deal↗, a new package of welfare provisions that will include a national health service, Congress pushes back. Says we're not going to do this -- that would be too much socialism.

[73:58]

So the project of welfarist construction in the United States encounters obstacles that it does not encounter in Europe.

[74:06]

But nonetheless there are important gains for sort of social democracy, to use the term very broadly, in the United States. Nobody is more important in the history of European social democratic construction than, sorry, in the history of American social democratic construction, than Lyndon Baines Johnson.

[74:25]

President from 1963 to January 1969, LBJ, was a, you know, sort of devotee of Roosevelt's New Deal. He sought in the 1960s to emulate and expand upon Roosevelt's accomplishments.

[74:42]

In 1964 he declared a war on poverty. It involved the provision of sort of new assistance to ameliorate poverty particularly in inner city and rural America.

[74:51]

Johnson presided over the establishment of new programs to provide welfare to American citizens. AFDC -- Aid for Families with Dependent Children↗, and most important of all in terms of their scale and consequence, Medicare and Medicaid.

[75:08]

Thanks to increased social spending under the Johnson administration overall public spending commitments in the United States increased fairly dramatically in the years after the Second World War.

The Social Democratic Moment Internationally

[75:22]

Now this chart with which we, you know, will conclude the lecture shows the transformation of the public sector in the United States in a sort of narrow international context.

[75:36]

If we look at public spending in France, Germany, Japan, Britain and the United States, the five biggest countries of the West, which is what this chart illustrates, then we see an essentially similar pattern, right? During the course of the twentieth century public sector commitments increase markedly.

[75:52]

This increase is more pronounced in some contexts particularly France, Germany, and Britain than it is in Japan and the United States.

[76:01]

But the basic trend line is universal. So though there will be sort of differences of accent, differences of intensity between the American experience and the West European experience, the basic pattern is more or less parallel. The postwar decades bring about the consolidation of welfare's commitments and a commensurate increase in the scale of the public sector.

[76:27]

Now there will be consequences to this story. There will be backlashes against it and to those we will turn in about a week when we sort of come back to the political economic story.

Lecture Overview for the Next Session

[76:38]

On Thursday we're going to be dealing with a very different set of issues -- a set of issues having to do not with the West and with the capitalist world but with the East and the Soviet Union and its socialist model.