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 PART 10: Nazism and the German
economic miracle
By Henry C K
Liu
(Click here for previous parts)
The term "social market economy" was
coined by one of German chancellor Ludwig Erhard's
close associates, economist Alfred Mueller-Armack,
who served as secretary of state at the Economics
Ministry in Bonn from 1958-63. Mueller-Armack
defined social market economy as combining market
freedom with social equity, with a vigilant
regulatory regime to create an equitable framework
for free market processes. The success of the
social market economy made the Federal Republic of
Germany the dominant component in the European
Union. Focusing on the social aspect, Erhard
himself shied away from praising free markets. He
felt that social rules of the market-economy game
must be adhered to as a precondition in order to
prevent unbridled pursuit of profit from gaining
the upper hand.
Erhard's concept of a
socially responsive regulated market economy was
based on a fusion of the Bismarck legacy of social
welfare and US New Deal ideology of demand
management through full employment, price control,
state subsidies, anti-trust regulations, state
control of monetary stability, etc. It was aided
by the infusion of foreign capital through the
Marshall Plan. It proved to be effective for rapid
and strong recovery of the West German economy via
guaranteed access to the huge US market during the
Cold War, culminating in the postwar economic
miracle (Wirtschaftswunder).
Yet
Erhard's program bore a close resemblance to the
early economic strategy of the Third Reich. The
main difference was that while the Third Reich's
program was one of economic nationalism, the
Erhard program was subservient to US geopolitical
interests in the context of the Cold War. By
relying on US capital and US markets, chancellors
Konrad Adenauer and Erhard accepted the delay of
German independence from US domination for more
than half a century. In contrast, Nazi economic
policy aimed at the reconstruction of the German
economy without the need for foreign capital, as a
program for total and immediate national
independence.
Hitler's economic
miracle
The Nazis came to power in Germany
in 1933, at a time when its economy was in total
collapse, with ruinous war-reparation obligations
and zero prospects for foreign investment or
credit. Yet through an independent monetary policy
of sovereign credit and a full-employment
public-works program, the Third Reich was able to
turn a bankrupt Germany, stripped of overseas
colonies it could exploit, into the strongest
economy in Europe within four years, even before
armament spending began. In fact, German economic
recovery preceded and later enabled German
rearmament, in contrast to the US economy, where
constitutional roadblocks placed by the US Supreme
Court on the New Deal delayed economic recovery
until US entry to World War II put the US market
economy on a war footing. While this observation
is not an endorsement for Nazi philosophy, the
effectiveness of German economic policy in this
period, some of which had been started during the
last phase of the Weimar Republic, is undeniable.
There were major differences between the
German situation in 1933 and that in 1945. Not
having been a battlefield in World War I, Germany
in 1933 was not physically in ruins, as it was in
1945. What lay in ruins was its political and
economic institutions. But in 1933, Germany not
only did not have the benefit of the Marshall
Plan, it was saddled with ruinous war reparations
and an inoperative credit rating. What Germany had
in 1933 was full sovereignty through which the
Third Reich was able to adopt policies of economic
nationalism to full effectiveness. In 1945,
Germany was deprived of sovereign power and
national policies had to be adjusted to comply
with US and Soviet geopolitical intentions.
Economically, the dependence on foreign
investments and credit forced West Germany into an
export economy at the mercy of its main market:
the United States.
After two and a half decades
of economic reform toward neo-liberal market
economy, China is still unable to accomplish in
economic reconstruction what Nazi Germany managed
in four years after coming to power, ie, full
employment with a vibrant economy financed with
sovereign credit without the need to export, which
would challenge that of Britain, the then
superpower. This is because China made the mistake
of relying on foreign investment instead of using
its own sovereign credit. The penalty for China is
that it has to export the resultant wealth to pay
for the foreign capital it did not need in the
first place. The result after more than two
decades is that while China has become a creditor
to the US to the tune of nearing China's own gross
domestic product (GDP), it continues to have to
beg the US for investment capital.
The
period between World Wars I and II, like no other
period in modern European economic history, saw
the success of centrally planned economies in
Germany and the Soviet Union, two major states.
The United States as the dominant victor of World
War II was determined to perpetuate its hegemony
by suppressing national planning everywhere to
prevent the emergence of economic nationalism and
socialism. It promoted global market capitalism
and neo-liberal free trade to keep all other
economies subservient to the US economy. It is the
economic basis of the Pax Americana.
Stalin's New Economic
Policy
In the Soviet
Union, Josef Stalin's planned economy had followed
the New Economic Policy (NEP) of 1921-28. NEP was
in essence a mixed market economy; the main part
of the market was in state possession (banks,
industries, foreign trade, etc), while the
peripheral part was owned by collective or private
entrepreneurs. NEP, while successful, did not give
the Soviet economy sufficient growth in the
capital-goods sectors (ie coal, steel and
electricity, transportation, heavy industry, etc),
nor did it provide adequate food for the urban
population even as the middle peasantry managed to
feed itself. To overcome such structural obstacles
and to combat general economic backwardness
inherited from centuries of Czarist rule, Stalin
introduced central planning as a strategy of
national survival.
Starting from 1928, the
Soviet economy was put under a system of planning
whereby all modes of production were socialized
and foreign trade was de-emphasized in favor of an
autarkic system of domestic demand and supply. The
irony was that Soviet central planning adopted
much of its effective techniques from successful
US experience. It was a system of planning focused
solely on unit end-results while externalizing
social costs. The key distinction was that the
Soviets rejected and bypassed the corporate
structure and replaced shareholders with state
ownership. Stalin brought about "revolution from
above". Its main features were: strengthening of
political dictatorship in the name of the
proletariat (equivalent to enhancing management
authority in the US in the name of shareholders),
collectivizing kulak
peasants (equivalent to agri-business development
in the US), emergency measure authority
(equivalent to government bailouts and regulations
in the US), introduction of a five-year plan
structure (adopted from US corporate strategic
planning) and rapid expansion of urban labor force
(equivalent to urbanization in the US), and tight
state control over agriculture (equivalent to farm
subsidy programs in the US), heavy industry
(equivalent to defense contracts in the US) and
finance (equivalent to central banking in the US).
Between 1934 and 1936 the Soviet economy achieved
a spectacular economic growth rate that continued
despite political purges of Trotskyites between
1936 and 1938. Economic growth was unfortunately
interrupted by war in 1941. German invasion of the
Union of Soviet Socialist Republics was not
independent of apprehension of continued Soviet
economic success.
Propaganda works. It worked
in the USSR, in Nazi Germany, in imperial Japan
and in the capitalist US, each to instill in the
general public an acceptance of its system as
being the suitable one if not the best, despite
visible shortcomings. It helped achieve optimal
effectiveness and stability in the overall economy
in all these countries.
Nazi
Germany provided another example of successful
inter-war economic planning. One of the main
differences between the Nazi and the Soviet
economic systems was that the Nazis' was a mixed
economy with strict state control while the
Soviets' was a state-owned economy. Furthermore,
being heavily influenced by the ideas of Walter
Rathenau (1867-1922), German economic planners did
not seek to build anew with revolutionary zeal as
the Russians did, but rather to reform, molding
the existing form of decentralized capitalism into
a more effective centralized system with massive
combines to support national aims.
The Rathenau factor
Rathenau, German
industrialist, social theorist, and statesman, was
the son of Emil Rathenau (1838-1915), founder of
the gigantic German public utilities company
Allgemeine Elektrizitaetsgesellschaft (AEG). He
directed the distribution of raw materials in
World War I and became minister of reconstruction
(1921) and later foreign minister (1922) of the
Weimar Republic. He represented Germany at the
Cannes and Genoa reparations conferences and
negotiated the Treaty of Rapallo in which Germany
accorded the USSR de jure recognition, the first
such recognition extended to the new Soviet
government. The two signatories mutually canceled
all prewar and war debts and renounced war claims.
Particularly advantageous to Germany was the
inclusion of a most-favored-nation clause and of
extensive free-trade agreements. The treaty
enabled the German army, through secret
agreements, to produce and perfect in the USSR
weapons forbidden by the Treaty of Versailles. A
Jew, Rathenau was assassinated in 1922 by
anti-Semitic nationalist fanatics who opposed his
attempts to fulfill war-reparation obligations to
the Western victors. A strong nationalist who
played an important role in Germany's war efforts
in World War I, Rathenau was also a strong
proponent of postwar international cooperation and
his diplomatic initiatives played a key role in
breaking Germany's postwar diplomatic isolation.
In his writings, Rathenau
criticized free-market capitalism and argued that
technological change and industrialization were
pushing civilization toward a stage of high
mechanization, in which the human soul would be
under threat. In an attempt to find an alternative
to laissez-faire capitalism that did not involve
state socialism and Marxism, Rathenau proposed a
decentralized, democratic social order, in which
the workers would have more control over
production and the state would exert more control
over the economy. His translated works include In Days to Come (1921)
and The New Society
(1921). Despite his great contribution to the
German economy, Rathenau epitomized the living
target of Adolf Hitler's accusation of
internationalist Jewish treachery that betrayed
the German nation. Hitler's rejection of the loyal
nationalist support of the German Jews played an
undeniable role in his own defeat. Jewish
contribution to the flowering of German economy,
culture and civilization had been the strongest in
any European nation. Nazi persecution of the Jews
was a strategic error more fundamental than the
Nazi invasion of the USSR. The emigration of
German Jews to the West, particularly to the US,
played a critical role in the defeat of Germany in
World War II. It is a lesson that the Arab nation
in general, and Palestinians in particular, have
yet to learn.
The
economic power of full employment
From the very outset of his
rule, Hitler, whose main short-term goal was the
economic revival of Germany with the help of
German nationalist bankers and industrialists, won
popular support of the nation. Hitler adopted an
aggressive full-employment campaign. Between
January 1933 and July 1935 the number of employed
Germans rose by a half, from 11.7 million to 16.9
million. More than 5 million new jobs paying
living wages were created. Unemployment was
banished from the German economy and the entire
nation was productively engaged in reconstruction.
Inflation was brought under control by wage freeze
and price control. Besides this, taking into
account the lessons learned during 1914-18, Hitler
aimed at creating an economy that would be
independent from foreign capital and supply, and
be well protected from another blockade and
economic war. For Germans, all of the above was
proof that Hitler was the one who had not only
brought Germany out of economic depression but
would take it directly to prosperity with new
pride. German popular trust in the Fuehrer rose
dramatically.
In September 1936, British
economist John Maynard Keynes, whose ideas had
been credited as behind US president Franklin
Roosevelt's New Deal, prepared a preface for the
German translation of his book, The General Theory of
Employment, Interest and Money. Addressing a
readership of German economists, Keynes wrote:
"The theory of aggregate production, which is the
point of the following book, nevertheless can be
much easier adapted to the conditions of a
totalitarian state, than ... under conditions of
free competition and a large degree of
laissez-faire. This is one of the reasons that
[justify] the fact that I call my theory a general
theory. Although I have, after all, worked it out
with a view to the conditions prevailing in the
Anglo-Saxon countries where a large degree of
laissez-faire still prevails, nevertheless it
remains applicable to situations in which state
management is more pronounced." Keynes clearly
understood that the greater the degree of state
control over any economy, the easier it would be
for the government to manage the levers of
monetary and fiscal policy to manipulate
macroeconomic aggregates of total output, total
employment, and the general price and wage levels
for purposes of moving the overall economy into
directions more to the economic-policy analyst's
liking.
The radical Spartacists in
Germany regrouped themselves as the Communist
Party in 1920. They continued their opposition to
the liberal government of the Weimar Republic.
From 1923-29, the Communists always obtained about
10% of the seats in the Reichstag. Unlike elitist
Italian Fascism, Nazism had a high regard for the
German peasant. Unlike Fascist Italy, Nazi
Germany, while imposing sweeping government
control over all aspects of the economy, was not a
corporate state.
In four short years, Hitler's
Germany was able to turn a Germany ravaged by
defeat in war and left in a state national malaise
by the liberal policies of the Weimar Republic,
with a bankrupt economy weighted down by heavy
foreign war debt and the total unavailability of
new foreign capital, into the strongest economy
and military power in Europe. How did Germany do
it? The centerpiece was Germany's Work Creation
Program of 1933-36, which preceded its rearmament
program. Neo-liberal economists everywhere seven
decades later have yet to acknowledge that
employment is all that counts and living wages are
the key to national prosperity. Any economic
policy that does not lead to full employment is
self-deceivingly counterproductive, and any policy
that permits international wage arbitrage is
treasonous. German economic policies between 1930
and 1932 were brutally deflationary, which showed
total indifference to high unemployment, and in
1933 Hitler was elected chancellor out of the
socio-economic chaos.
The financing of Nazi
economic-recovery programs drew upon sovereign
credit creation techniques already experimented
prior to Hitler's appointment as chancellor. What
changed after 1933 was the government's
willingness to create massive short-term sovereign
credit and the its firm commitment to retire in
full the debt created by that credit. Short-term
sovereign credit was important to change the
general climate of distrust on government credit.
The quick rollover of short-term government notes
created popular trust within months in German
sovereign credit domestically.
Hitler told German
industrialists in May 1933 that economic recovery
required action by both the state and the private
sector. The government's role was limited to
encouraging private-sector investment, mainly
through tax incentives. He expressed willingness
to provide substantial public funding only for
highway projects, not for industry. Investment was
unlikely if consumers had no money to spend or
were afraid because of job insecurity to spend
money to buy products produced, and Hitler
understood that workers needed decent income to
become healthy consumers. Thus full employment was
the kick-start point of the economic cycle. To
combat traditional German fear of the social
consequences of appearing better off than their
neighbors, Nazi propaganda would psychologically
stimulate the economy by developing a lust for
life among consumers.
Hitler stressed on May 31,
1933, that the Reich budget must be balanced. A
balanced budget meant reducing expenditures on
social programs, because Hitler intended to reduce
business taxes to promote needed private
investment. To avoid reducing social programs, a
large work program without deficit spending had to
be financed outside of the Reich budget. Hitler
resorted to "pre-financing" (Vorfinanzierung) by means
of "work-creation bills" (Arbeitsbeschaffungswechseln),
a classic response of using monetary measures to
deal with a fiscal dilemma.
Under the scheme of
"pre-financing" with work-creation bills, the
Reich Finance Ministry distributed these WCBs
(three months, renewable up to five years) to
participating credit institutions and public
agencies. Contractors and suppliers who required
cash to participate in work-creation projects drew
bills against the agency ordering the work or the
appropriate credit institutions. These credit
institutions then accepted (assumed liability for
payment of) the bills, which, now treated as
commercial paper, could rediscount the bills at
the Reichsbank (central bank). The entire process
of drawing, accepting and discounting WCBs
provided the cash necessary to pay the contractors
and suppliers. The experience of successful
rollover every three months quickly established
credit worthiness. The Reich Treasury undertook to
redeem these bills, one-fifth of the total every
year, between 1934 and 1938, as the economy and
tax receipts recovered. As security for the bills,
the Reich Treasury deposited with the credit
institutions a corresponding amount of tax
vouchers (Steuergutscheine) or
other securities. As the Treasury redeemed WCBs,
the tax vouchers were to be returned to the
Treasury. Hitler increased the money supply in the
German economy by creating special money for
employment.
In the US Banking Panic of
1907, J P Morgan (1837-1913) did in essence the
same thing. He strong-armed US banks to agree to
settle accounts among themselves with
clearinghouse certificates he issued rather than
cash and thus illegally increased the money supply
without involving the government, and ended up
owning a much larger share of the financial sector
paid for with his own paper, ironically with the
gratitude of the government. The difference was
that the economic benefit went to Morgan
personally rather than to the nation as in Nazi
Germany and the private money was used to save the
banks rather than to save the unemployed.
Nazi
economic experts understood that sovereign credit
creation for purposes of job creation posed no
inflationary threat and that it would be a far
more responsible policy than the conservative
approach of tax increases and welfare cuts to
balance government budgets. The idiotic policy of
monetary restraint and social-spending reduction
to balance government budgets in order to pay
foreign debts is still being advocated by the
International Monetary Fund (IMF) in debtor
nations around the world - except for the United
States, the world's largest debtor nation, which
uses dollar hegemony as an escape hatch or, more
to the point, escape hedge. Redeeming WCBs did
burden the 1934-39 Reich budget, but the decline
in Reich expenditure for welfare support and other
tax subsidies as a result of full employment
recovery more than offset the redemption payments.
The surplus was then used to reduce public debt
and taxes further.
There were legal, political
and institutional restrictions unique to Germany
on the scope of the Reichsbank that virtually
dictated resources to WCBs as a way of putting 6
million unemployed Germans back to work. But the
principle of WCBs can be applied to the US or
China or any other country today to combat
unacceptably high levels of unemployment. Alas,
this common-sense approach is faced with firm
opposition rationalized by obscure theories of
inflation in most countries. The real reason is
that the banking sector can reap excess profit by
treating high unemployment as an externality in
the economy that translates high unemployment and
low wages directly into corporate profits. The
profit from high unemployment is kept in private
hands, while the cost of high unemployment is
socialized as government expenditure.
In
1933, Hitler sought to reassure Germany's business
leadership that Nazi rule was consistent with the
preservation of the free-market system, because he
needed the support of the industrialists. He could
buy that support by keeping wages down during the
recovery, but any rigorous effort to curb prices
and profits would alienate the business community
and slow down economic recovery. Instead, Hitler
sought to restore profitability to German business
through reduced unit cost achieved by increasing
output and sales volume, rather than through a
general increase in prices (Mengenkonjunktur, niche
Preiskonjunktur - output boom, not price
boom). Adoption of "performance wage" (Leistungslohn - payment
on a price-rate basis) increased labor
productivity, thereby driving costs down and
profit up. Some upward price movements were
permitted to adjust price relationships between
agricultural and manufactured products and between
goods with elastic and inelastic demands, also to
prevent price wars and below-cost dumping. These
principles of "output boom, not price boom" and
"performance wage" could also work in combating
inflation today in many economies generally and
China specifically.
Hitler saved the German
farmers from their heavy debt burden through
relief programs and through subsidized farm
prices. The stable farm income came at the
expenses of the middlemen institutions, but Hitler
sustained popular support by the provision of
living income to consumers. Had Nazi Germany been
a member of the World Trade Organization (WTO),
this option would have been foreclosed to it.
Hitler sought price stability only in sectors
critical to the national economy and to the
ultimate goal of rearmament. Germany had no
overall price policy until the 1936 Four Year
Plan, which concentrated economic authority in the
hands of Hermann Goering for war production and
put an end to regulated free-market policies.
Business managers generally
make investment and employment decisions based on
their judgment of the prospect for new orders. The
difference between German economic recovery under
Hitler and US economic stagnation under Roosevelt
in the 1930s was the degree of uncertainty for new
orders for goods. Hitler made it clear that after
1936, a major rearmament program would make heavy
demand on German durable-goods and capital-goods
industries without the need to export. With that
assurance, German industry could plan expansion
with confidence. Roosevelt was unable to provide
such "confidence" to industry and had to rely on
anemic market forces until after the Japanese
attack on Pearl Harbor, Hawaii.
The Marshall Plan: A Trojan
horse for monetary conquest
The Marshall Plan grew out of
the Truman Doctrine, proclaimed in 1947, stressing
the moralistic duty of the United States to combat
communist regimes worldwide. The Marshall Plan
spent US$13 billion (out of a 1947 GDP of $244
billion or 5.4%, or $632 billion in 2004 dollars)
to help Europe recover economically from World War
II to keep it from communism. The money actually
did not all come out of the US government's
budget, but out of US sovereign credit. The most
significant aspect of the Marshall Plan was the US
government guarantee to US investors in Europe to
exchange their profits denominated in weak
European currencies back into dollars at
guaranteed fixed rates, backed by gold at $35 an
ounce.
The Marshall Plan helped
establish the US dollar as the world's reserved
currency at fixed exchange rates established by
the IMF, which had been created by the Bretton
Woods Conference. The Marshall Plan enabled
international trade to resume and laid the
foundation for dollar hegemony for more than half
a century even after the dollar was taken off gold
by president Richard Nixon in 1971. While the
Marshall Plan did help the German economy recover,
it was not entirely a selfless gift from the
victor to the vanquished. It was more a Trojan
horse for monetary conquest. It condemned
Germany's economy to the status of a dependent
satellite of the US economy from which it has yet
to free itself fully.
The Marshall Plan lent Europe
the equivalent of $632 billion in 2004 dollars.
Japan's foreign-exchange reserves alone were $830
billion at the end of September 2004. In other
words, Japan was lending more to the United States
in 2004 than the Marshall Plan lent to Europe in
1947. And Japan did not get any benefits, because
the loan is denominated in dollars that the US can
print at will, and dollars are useless in Japan
unless reconverted to yen, which because of dollar
hegemony Japan is not in a position to do without
reducing the yen money supply, causing the
Japanese economy to contract and the yen exchange
rate to rise, thus hurting Japanese export
competitiveness.
West Germany's postwar
economy functioned well for several decades, and
became one of Europe's strongest. Much of its
success was due to the German tradition of strong
social welfare that dated back to the days of Otto
von Bismarck a century earlier, and the system of
co-determination, which gave workers in factories
a voice about their management and provided West
German industries a long period of labor peace.
The economics of the Cold War also gave Germany
guaranteed markets in the US. The export-oriented
economy received another boost with the creation
of the European Economic Community (EEC) by the
Treaty of Rome in March 1957. West Germany was one
of the EEC's founding members. Since the end of
the Cold War, this economic order has been under
threat from neo-liberal globalization that first
attacked the developing economies in Latin America
and then the world over.
Sovereignty, finance
capitalism and democracy
Jean Bodin (1530-96), the
first thinker in the West to develop the modern
theory of sovereignty, held that in every society
there must be one power with the legitimate
authority to give law to all others. The Edict of
Nantes issued by Henry of Navarre, the Huguenot
(French Calvinist) chief, who reigned as Henry IV
in 1598, was a sovereign edict that laid the
foundation of French royal absolutism of the
sovereign state. The Edict protected a Huguenot
minority, composed mostly of members of the
aristocracy, against popular opposition from the
Catholic peasants with the support of the papacy.
Henry IV was a member of the politiques who believed
that no religious doctrine was important enough to
justify ever-lasting war. He abjured the Calvinist
faith in 1593 and subjected himself to papal
absolution, supposedly remarking that Paris was
well worth a Mass. He wanted to rebuild France
from a war-torn economy caused by religious strife
into a prosperous nation, with "a chicken in every
pot" for every French family, a phrase borrowed by
Roosevelt two and a half centuries later to
describe the goal of his New Deal.
The
Edict to protect the Protestant aristocrats led to
the assassination of the converted Catholic king
by a Catholic fanatic in 1610. The widowed queen,
Marie de Medici, a devout Catholic and scion of
the celebrated banking family of Florence, handed
control of France to Cardinal Richelieu, who
undertook a secular policy to enhance the economic
interest of the state with mercantilist measures,
by allowing the aristocracy to engage in maritime
trade without loss of noble status, and by making
it possible for merchants to become nobles through
payments to the royal exchequer. This provided a
political union of the aristocracy and the
bourgeois elite that held the nation together
until the French Revolution of 1789.
In
1627, the Duke of Rohan led a Huguenot rebellion
from La Rochelle with English military support.
Richelieu suppressed the rebellion ruthlessly and
modified the Edict of Nantes with the Peace of
Alais in 1629, by allowing the Huguenots to keep
their religion but stripping them of their
instruments of political power: their fortified
cities, their Protestant armies and all their
military and territorial autonomy and rights.
Calvinism has been identified by social historians
as the driving force behind modern capitalism.
The
Age of New Monarchy in Europe laid the foundation
for the age of sovereign nation-states by placing
royal authority to institute a fairer social
contract above feudal rights, a development that
began in the High Middle Ages. The new monarchs
presented the institution of monarchy as a
progressive guarantor of law and order and
promoted hereditary monarchy as the legitimate
means of transferring public power. Monarchism was
supported by the urban bourgeoisie, as it had long
been victimized by the private wars and marauding
excesses of the feudal lords. The bourgeoisie was
willing to pay taxes directly to the king in
return for peace and royal protection from
aristocratic abuse. Its members were willing to
let parliament, the stronghold of the aristocracy,
be dominated by the king who was expected to be a
populist. The direct collection of popular taxes
by the king, bypassing the feudal lords, gave the
king the necessary resources to maintain a
standing army to keep the feudal lords in check.
These new monarchs revived Roman law, which
favored the state and incorporated the will and
welfare of the people in their own persons. Direct
payment of taxes to the sovereign also ensured
that future wars were fought to protect or enhance
national interests, rather than at the personal
pleasure of the king. The new monarchs ruled by
the mandate of the dictatorship of the
bourgeoisie, just as communist governments ruled
centuries later with the mandate of the
dictatorship of the proletariat. It was by
protecting the people against abuses from
aristocratic special interests that the king
protected himself, a principle that escaped Louise
XVI of France to his own sorrow.
Today, as the institution of
democracy is supplanted by control by the moneyed
class, democracy will lose its popular mandate.
What the US needs is not to spread democracy
around the world, but to restore economic
democracy at home. Similarly, when the Chinese
Communist Party permits neo-liberal market
fundamentalism to distant itself from its
revolutionary mission of protecting the peasant
masses from market abuse, it will lose its mandate
as the legitimate defender of the dictatorship of
the proletariat. What China needs is not political
reform to accommodate capitalistic democracy, but
a restoration of its revolutionary ideological
line in its political institutions and a renewal
of populist commitment on the part of its
leadership. Political reform driven by flawed
ideology is institutional suicide.
The
new monarchies in Europe, by breaking down feudal
tariff barriers within the kingdom, contributed to
the rise of the commercial revolution and the
development of extended cross-border markets. In
the rise of capitalism, the needs of a new
military not dependent on the aristocracy had been
of critical importance. The standing national
armies of the new monarchs required sudden
expenditures in times of war that the traditional
feudal dues and normal flow of tax revenue could
not meet. Private bankers emerged to finance wars
by lending money to the kings secured by the right
to collect taxes in the future from conquered
lands. The medieval prohibition of interest as
usury, denounced as the sin of avarice and
forbidden by canon laws, faded in practice even as
it continued to be upheld by all religions. Luther
denounced "Fruggerism" in reference to the bankers
of the Holy Roman Empire. Even Calvinism only
gradually made allowances on the issue of
interest.
The new monarchies, caught
between fixed income and mounting expenses, were
forced to devalue their money by diluting its gold
content. They began to borrow from private banks
to deal with recurring monetary crises. These
monetary crises led to constitutional crises that
produced absolute monarchies in Europe and the
triumph of bourgeois parliamentarianism in
England. The need to find new conquered lands to
repay sovereign indebtedness gave birth to
imperialism and colonialism, which the Atlantic
Charter centuries later categorically rejected in
the third of its eight points of "common
principles in the national policies of their
respective countries on which they base their
hopes for a better future for the world". The
third point stated that "they [the US and Britain,
and later the United Nations members] respect the
right of all peoples to choose the form of
government under which they will live; and they
wish to see sovereign rights and self-government
restored to those who have been forcibly deprived
of them".
German rearmament to defend
neo-imperialism
Notwithstanding the
high-sounding rhetoric of the Atlantic Charter,
the outbreak of the Korean War in 1950 provided a
propaganda opening for the US to impress on its
submissive Western allies in the United Nations
that international communism was a clear and
present danger to residual Western imperialism and
colonialism in the Third World. Under president
Harry Truman, the US began to abandon its wartime
anti-colonialist posture and to solicit the help
of European imperialists, particularly the British
and French, to support its global war on
communism.
Colonel Harry G Summers Jr,
US Army (retired), in an article in Military
History magazine titled "The Korean War: A fresh
perspective", pointed out that during a post-Cold
War Pentagon briefing in 1974, General Vernon
Walters, then deputy director of the Central
Intelligence Agency (CIA), revealed what amounted
to the unpredictability of US policy intentions on
Korea: "If a Soviet KGB spy had broken into the
Pentagon or the State Department on June 25, 1950,
and gained access to our most secret files, he
would have found the US had no interest at all in
Korea. But the one place he couldn't break into
was the mind of Harry Truman, and two days later
America went to war over Korea."
Truman, unprepared for global
leadership, insecure and paranoid, fell under the
spell of Winston Churchill, who, borrowing from
Lenin, equated anti-imperialism with
anti-capitalism. Churchill aimed at using the Cold
War as a device to save European imperialism by
offering the fruits of neo-imperialism to the US
in the name of democracy. In taking the United
States to war in Korea, Truman, in addition to
placing the US firmly on the side of imperialists,
made two critical decisions that would shape
future US military actions.
First, he decided to fight
the war under the auspices of the United Nations,
a pattern followed by president Lyndon B Johnson
in the Vietnam War in 1964, president George H W
Bush in the Gulf War in 1991, by president Bill
Clinton in Bosnia-Herzegovina in 1999, and by
President George W Bush in Afghanistan in 2001 and
in Iraq in 2003. Second, for the first time in US
military history, Truman decided to take the
nation to war without first asking Congress for a
declaration of war. Using the UN Security Council
resolution as his authority, he said the conflict
in Korea was not a war but a "police action". With
the Soviet Union then boycotting the Security
Council, the United States was able to gain
approval of UN resolutions labeling the North
Korean invasion a "breach of the peace" and urging
all members to aid South Korea, notwithstanding
that both North and South Korea had been aiming
for unification by force for several years.
Another consequence of the
Korean War was damage to the image of the UN as a
neutral world body. Secretary general Trygve Lie
was forced to resign over Soviet complaints of the
way he manipulated Security Council procedures to
comply with US dictates.
Colonel Summers pointed out
that, in reality, UN involvement was a facade for
unilateral US action to protect its vital
interests in northeast Asia. The UN Command was
just another name for General Douglas MacArthur's
US Far East Command in Tokyo. At its peak strength
in July 1953, the UN Command stood at 932,539
ground troops. Republic of Korea (ROK) army and
marine forces accounted for 590,911 of that force,
and US Army and Marine Corps forces for another
302,483. By comparison, other UN ground forces
totaled 39,145 men, 24,085 of whom were provided
by British Commonwealth Forces (Britain, Canada,
Australia and New Zealand) and 5,455 of whom came
from Turkey. The troop composition was similar to
that of the "coalition of the willing" in the 2003
Iraq war. While the UN facade was detrimental to
the prestige of the UN, Truman's decision not to
seek a declaration of war set a dangerous
precedent in the erosion of the constitutional
power of the US Congress.
Claiming that their
war-making authority rested in their power as
commanders-in-chief, both Johnson and Nixon
refused to ask Congress for approval to wage war
in Vietnam, a major factor in undermining popular
support for that conflict. In the entire history
of the United States, only seven wars had been
declared by Congress, with World War II the last
declared war. Ten other wars were not declared:
the Florida Seminole Wars, 1817-58; the Civil War,
1861-65; the Korean War, 1950-53; the Vietnam War,
1964-72; the first Gulf War, 1991; the war on
drugs, 1980s to the present; the Kosovo war, 1999;
the "war on terror", 2001 to the present;
Operation Enduring Freedom (Afghanistan), 2001;
and the second Gulf war (Iraq), 2003. Instead of
formal war declarations, the US Congress has
issued authorizations of force. Such
authorizations have included the Gulf of Tonkin
Resolution of 1964 that officially initiated US
participation in the Vietnam War, and the
"use-of-force" resolution that started the 2003
Iraq war. Questions remain as to the legality of
these authorizations of force.
Ironically, the Federal
Republic of Germany, whose own empire had been
partitioned out of existence since the end of
World War I, was pushed to contribute financially
to its own defense against Soviet threat so that
its less prosperous but victorious imperialist
allies, Britain and France, could spend their
hard-pressed resources to defend their crumbling
empires outside of Europe in the name of
democracy.
For West Germany, five years
after having lost the most devastating of all
wars, this meant forming a new army, a step
unthinkable for many Germans who had just gone
through de-Nazification and demilitarization
indoctrination during Allied occupation. But the
worldwide "Korean War boom" of 1950 came at
exactly the right moment for an export-addicted
Germany eager to capture new overseas markets. As
West Germany prospered from profits garnered from
new wars to defend imperialism in Asia, the US was
in a position to push Germany into rearmament,
despite the fact that German rearmament was
anathema not only to German citizens, but also to
all their apprehensive neighbors, especially
France. As the Korean War continued, however,
opposition to rearmament lessened within West
Germany, and China's entry into the war caused
Gaullist France, which was apprehensive of the
liberating impact of Asian communism on its
crumbling empire in Southeast Asia, to revise its
negative posture toward German rearmament, as long
as the new German war machine was oriented toward
the east. Instead of the tradition Franco-Russian
alliance against a powerful Germany, the French
began to see benefits in using the Germans to
deter Soviet intentions to march toward Paris. It
was a classic balance-of-power move. Germany,
deprived of sovereign authority, was at the mercy
of superpower global conflict.
To
contain a newly armed Germany, French officials
proposed the creation of the European Defense
Community (EDC) under the aegis of North Atlantic
Treaty Organization (NATO), but with strengthened
European control, with a European Army to run in
parallel with the European Steel and Coal
Community that France and Germany had formed
earlier. Within the EDC context was the need to
rearm West Germany to counter the Soviet Union's
overwhelming superiority in military manpower.
Adenauer quickly agreed to join the EDC because he
saw membership as likely to enhance the eventual
full restoration of German sovereignty. The
treaties establishing the EDC were signed in May
1952 in Bonn by the Western Allies and West
Germany. Britain refused to be part of it, seeing
its armed forces as being more important to NATO,
the Commonwealth and the special relationship with
the US than to Europe.
Arguments arose over who
would have ultimate control over the army - would
it be the EDC or would it be the national
governments? The whole idea eventually fell apart,
although West Germany was welcomed into NATO and
the West European Union (WEU) was created.
Although the German Bundestag ratified the
treaties, the EDC was ultimately blocked by the
French National Assembly, because it opposed
putting French troops under foreign command. The
French veto meant that Adenauer's attempt to
regain German sovereignty through disguised
militarism had failed and a new formula was needed
to allay French fears of a strong Germany.
The
failed negotiations surrounding the planned
rearmament of West Germany through the creation of
the EDC nevertheless provoked a Soviet
countermeasure. After a second East German
proposal for talks on a possible unification of
the two German states failed because of West
Germany's demands for free elections in the German
Democratic Republic (GDR), the Soviet Union put
forth a new proposal to its wartime Western Allies
in March 1952. The Soviet Union would agree to
German unification if the Oder-Neisse border were
recognized as final and if a unified Germany were
to remain neutral. If the proposal were accepted,
Allied troops would leave Germany within one year,
and a united neutral Germany would obtain its full
sovereignty.
The offer, directed to the
Western Allies rather than Germany, which,
deprived of sovereignty, had no authority to
negotiate its own fate, nevertheless aroused
lively public discussion in West Germany about the
country's political future. Adenauer was afraid
that neutrality would mean Germany's exclusion
from US-dominated Western Europe and that without
US support, he and his conservative Christian
Democrats might not stay in power, in view of the
traditional strength of the Social Democrats or,
worse, the communists. Encouraged by the United
States, Adenauer demanded free elections in all of
Germany as a precondition for negotiations, a
demand he knew was unacceptable to both the
Soviets and East Germany, as Western-style
elections would be financed by money from the US
to ensure the defeat of communist and socialist
candidates, repeating the postwar political sham
in both West Germany and Japan. The Soviet Union
declined and abandoned its proposal. Adenauer was
harshly criticized by the opposition for not
having seized this opportunity for unification. By
allying itself with the US, West Germany
sacrificed its unification with East Germany for
half a century. A divided Germany provided a
balance-of-power arrangement between the two
superpowers all through the Cold War.
Adenauer's decision to turn
down the Soviet proposal left Germany divided for
the then foreseeable future. West Germany was then
expected to remain firmly anchored in the Western
defense community. Yet doubt remained in
Washington on whether Germans would kill other
Germans to protect US interests in Europe.
After plans for the EDC
failed because of the French veto, negotiations
were successfully concluded on the Treaties of
Paris in May 1954, which ended the Occupation
Statute and made West Germany a member of the
Western European Union and of NATO. NATO was the
vehicle to camouflage US geopolitical interests in
Europe with a common goal among the Western Allies
against Soviet communism. On May 5, 1955, the
Federal Republic of Germany declared its
sovereignty as a state and, as a new member of
NATO, undertook to contribute to the
organization's defense effort by building up its
own armed forces, the Bundeswehr. German
rearmament was to be camouflaged under the NATO
umbrella. West German soldiers could now be
counted on to fight East German soldiers to
protect Western Europe against communism.
Militarism was the price the United States
extracted for granting Germany a facade of
independent sovereignty, but not yet full
independence of foreign or security policy, as
NATO continued to be dominated by the US, with its
mission framed by US geopolitical interests.
The
buildup of the Bundeswehr met considerable popular
opposition within West Germany. To avoid isolating
the army from the country's civilian and political
life, as was the case historically up to the fall
of the Weimar Republic, laws were passed that
guaranteed civilian control over the armed forces
and gave the individual soldier a new social
status. Members of the conscription army were to
be "citizens in uniform" and were encouraged to
take an active part in democratic politics, in
contrast to the Junker tradition of a warrior
class. This was done to inject a measure of
consideration of German domestic politics into
US-dominated NATO decision-making.
By
1955, the Soviet Union had abandoned efforts to
secure a neutralized united Germany. After the
Four Power Conference in Geneva in July that year,
Adenauer accepted an invitation to visit Moscow,
seeking to open new lines of communication with
the East without compromising West German
commitments to the West. On the other side, Moscow
wanted to exploit German apprehension of being in
the front line of hostility to create a voice of
caution within NATO. In Moscow in September,
Adenauer arranged for the release of 10,000 German
war prisoners in the Soviet Union. In addition,
without having recognized the division of Germany
or the Oder-Neisse line as permanent, West German
negotiators also established diplomatic relations
with the Soviet Union.
The
Soviet Union recognized the German Democratic
Republic as a sovereign state in 1954, and the two
communist countries established diplomatic
relations. The Federal Republic of Germany (FRG)
had not, however, recognized the GDR. And to
dissuade other countries from recognizing East
Germany, Adenauer's foreign policy adviser, Walter
Hallstein, proposed that the FRG break diplomatic
relations with any country that recognized the
GDR. Anti-communism was the convenient decoy from
targeting the rise of neo-fascism in a society
that had won a permissive reprieve from its US
conqueror's de-Nazification program. As the
brilliant German filmmaker Rainer Werner
Fassbinder showed in many of his films, postwar
Germany turned out to be very much what it would
have been like if the Nazis had won the war.
The
Hallstein proposal was based on the West German
claim that as a democratic state, it should be
accepted as the only legitimate representative of
the German people. By contrast, East Germany
claimed to be the legitimate state of the German
people because it was a dictatorship of the
proletariat. Democracy was used as a justification
for legitimacy in the West. Israel would learn
from the former persecutor of its people to use
democracy to bargain for US acceptance of its
legitimacy in an Arab region, using anti-communism
as currency to secure US support, by purging the
left totally from Israeli domestic politics. The
Hallstein Doctrine was adopted as a principle of
West German foreign policy in September 1955 and
remained in effect until the late 1960s when the
idea of two German states became a reality, and
Germany remained divided until the dissolution of
the USSR in 1991.
Unfortunately, whereas
militarism under market capitalism stimulated
economic expansion by providing profit to private
enterprise, it operated to drain prosperity under
communism, which could not find a vehicle to
recycle financial energy consumed by the arms
race. Militarism then was co-opted by finance
capitalism as an effective weapon against
communism, which was an economic system that could
only be operative in peace. The reason war has not
ended even after the global war on communism has
ended with the dissolution of the USSR is because
militarism and capitalism have a mutual
dependency. The end of the Cold War, while marking
the failure of peaceful communism, marked the
triumph of capitalistic militarism.
Traditionally, European
integration and trans-Atlantic relations have been
the two key components of postwar German foreign
policy. German trans-Atlantic relations are a
euphemism for German acceptance of US dominance.
Both components were strategic necessities for the
Federal Republic of Germany after World War II,
and at the same time paved the way for West
Germany to rejoin the European community of
nations. Since then, the US had been Germany's
protector ally both in and outside Europe. This
relationship remained after German unification.
Today, while the US and
Germany continue to share similar views on a range
of global issues such as terrorism, WMD (weapons
of mass destruction) proliferation and regional
conflicts, there is increasing divergence on what
constitute proper policy responses to these new
threats and challenges. Germany subscribes to
multilateralism as a fundamental component of its
foreign policy in a multipolar world. Differences
on issues such as Iraq, Iran, the International
Criminal Court, the Kyoto Protocol and the Ottawa
Convention have surfaced between the US and
Germany as the latter regains more of its full
sovereignty and as its domestic politics turns
centrist as opposed to US unilateralism.
Strategically, German relations with China and
Russia are evolving along lines more independent
from US policies.
During the Cold War,
trans-Atlantic relations in the West were
dominated by the need to defend the US and Western
Europe jointly against the Soviet threat. This was
also the reason for US forces to remain in Europe
via NATO. With the end of the Cold War in 1989,
the threat posed by the Warsaw Pact and the Soviet
Union disappeared overnight. Since then,
trans-Atlantic relations have faced new challenges
devoid of a common thread.
Having contained domestic
terrorism on its own soil, Germany, like many
other nations, is being pressured by the United
States to join in the "global war on terrorism" as
a replacement of the threat from global communism.
International terrorism, which also put a new
dimension on the problem of WMD proliferation,
created a demand from the US for German military
projection beyond German borders, along with
regional conflicts that allegedly had
supra-regional destabilizing effects, eg the
Balkans, the Middle East, Congo, Afghanistan,
India-Pakistan. This definition of supra-regional
stability can involve Germany in distant conflicts
around the globe, since no regional conflict can
remain isolated in an interconnected global
security network. The process of greater European
integration has spilled beyond historical European
borders into the Crimea and the Balkans, the
Middle East, Africa and Asia. Yet domestic threats
from international terrorism can be intensified by
a country's military involvement beyond its
borders, as demonstrated by the terrorist bombing
of trains in Spain in response to deployment of
Spanish troops in Iraq.
As
early as 1990, the European Union and the United
States agreed in the Transatlantic Declaration to
establish a closely meshed network of twice-yearly
summit consultations. The terrorist attacks of
September 11, 2001, showed that security policy
and trans-Atlantic cooperation have not been
removed with the end of East-West conflict. Yet
the nature of the cooperation has undergone a
fundamental change: comprehensive security implies
that internal and external security threats are
interconnected. There is also a historical legacy
that set German relations with Islamic nations
apart from the Anglo-US legacy. Competition for
the hearts and minds of Islamic peoples had been a
focus of the contest between Germany and the
Western Allies in the two World Wars.
With
the US drifting toward a policy of relying on its
super-power to impose a global geopolitical,
economic and financial architecture to its liking,
a critical divergence has emerged between the US
and its NATO allies over the need for conflict
prevention and the most effective paths of
conflict resolution. US responses to terrorism
threats, as manifested in its invasion and
occupation of Iraq, if not Afghanistan, have
created policy rifts between the EU and the US.
With the end of the Soviet
threat to Western Europe, US planners began to ask
whether the United States would always have to
deploy troops and equipment to sort out Europe's
problems. Consequently, the US was looking to
Western Europe to take more responsibility for its
own defense and security. It has also become
harder for US policymakers to justify spending
considerable amounts of money on overseas
deployments. Equally, the US remains hesitant over
overseas deployments because of experiences and
lessons from the Vietnam War. Despite being the
main contributor to Operation Desert Storm in the
Persian Gulf during 1991, the later debacle of
Operation Restore Hope in Somalia only reinforced
US objections to its their ground forces in
international hotspots.
For
the United States, modern warfare or military
operations have to be conducted with minimum risk
to US lives. When the US refused to deploy
peacekeepers to UN operations in Croatia and
Bosnia-Herzegovina during 1992-95, or make the
ground-force option available during Operation
Allied Force in Kosovo in 1999, many Western
European governments wondered whether the United
States could always be counted on if military
intervention were needed in an international
crisis. Many were now asking the same questions as
the French had asked years before: Why should an
economically and politically powerful Western
Europe not take more responsibility for its own
security, especially as there was no longer the
threat from the USSR and the Warsaw Pact?
As a
result, Western Europe had begun to develop a
European Security and Defense Identity (ESDI)
since the early 1990s. In 1993, the EU decided to
embody parts of the Petersberg Tasks into the
Treaty on the European Union. This gave the WEU,
Western Europe's own security apparatus within
NATO, a clear defined role in humanitarian and
conventional operations. The WEU was strengthened.
Among other changes, this included the appointment
of a secretary general and a planning cell that
were responsible for assessing and planning for
operations as they arose. The number of troops
available to it was also increased. If necessary,
the WEU could call on other NATO units such as the
UK/Netherlands Landing Force. It also had its own
rapid-response unit, EUROFOR, which was made up of
troops from France, Italy, Spain and Portugal. It
was envisaged that the WEU would act independently
or as part of a UN force in humanitarian
operations in which the US would not want to
become involved. In other operations, it would act
as part of NATO. Both the US and Western Europe
believed that the proposals would strengthen NATO
by providing better cooperation and coordination,
a problem NATO had suffered from in multinational
operations.
In 1999, however, the EU
decided to revise the WEU plans. It decided to
adopt the crisis-management and
conflict-prevention elements itself. The WEU would
remain as an organization but would mostly
concentrate on being a contribution to NATO during
a conventional war. At the European Council's
Cologne Summit in June 1999, the EU launched the
Common European Security and Defense Policy
(CESDP). A later summit at Helsinki built on
Cologne and defined new EU structures to undertake
the crisis-management role. Both summits also
proposed an EU Rapid Reaction Force that would
draw mostly on the member states' commitments that
had already been made to the WEU after the
Petersberg Tasks - the force levels being agreed
at the Military Capabilities Conference in
November 2000.
The EU force is not a
European Army in the sense of a standing army. It
follows a similar character to NATO's Allied
Command Europe (ACE) Rapid Reaction Corps (ARRC)
in which certain elements of member states' armed
forces are earmarked for rapid deployment if the
need arises. Only one part of the force could be
considered a standing army. In 1987, France and
Germany decided to create a Security and Defense
Council (SDC) that would allow for better
coordination on joint Franco-German operations as
part of the WEU and later NATO. In 1991, both
countries decided to back up the SDC with a joint
Franco-German brigade directly responsible to the
EU and the WEU (and NATO from 1993) - this became
known as the Eurocorps. Spain, Belgium and
Luxembourg then went on to join, allowing the WEU
to call on a sizable force for immediate
deployment. With its headquarters in Strasbourg,
the Eurocorps has since deployed to Bosnia and
Kosovo and is likely to feature in the new EU
force.
Germany goes its own
way
The EU created the
European Security and Defense Policy (ESDP) to
ensure independent control of its security policy.
The United States views the ESDP as an attempt to
replace NATO by creating a security and defense
system free of US dominance if not involvement.
Changing its Cold War role of an economic giant
and a geopolitical pigmy, drawing on the lesson of
Iraq, Germany, the dominant component in the EU,
has taken on the task of trying to prevent a
military confrontation between the US and Iran.
The European initiative, led by Germany, France
and an ambiguously European Britain, proposes to
give Iran substantial economic benefits in
exchange for Iranian commitment to cease efforts
to become a nuclear power. This initiative has
received little support either from Iranian
domestic politics or from the US. Washington views
the European initiative with skeptical contempt.
US hawks want "regime change" and/or a "surgical
strike" against Iranian nuclear facilities. The EU
views both options as ineffective, based on what
has transpired in Iraq, since Iranian nuclear
facilities are both dispersed and hardened, and
since the US faces a severe shortage of troops
because of its aggressive foreign policy, a
problem that NATO is not at all keen to help
resolve with its own troops.
German officials point out
that their country's Iran initiative is a
breakthrough, since for the first time in recent
memory the leading European powers are united and
proactive, as well as independent from Washington,
on a major issue that threatens peace. There is
sober concern about Iran playing off the US
against Europe. German officials see their role as
demonstrating that there are diplomatic
alternatives to a repeat of US Iraq policy in
Iran. If the EU approach to Iran should break
down, the EU, being still economically dependent
on the US, would have no choice but to join the
United States in economic sanctions against Iran.
Diplomatically, the EU would still be in a
position to dissuade the Bush administration from
pursuing a military option or seeking Security
Council action that Russia and China could be
expected to oppose.
Since the end of World War
II, nothing major has happened on the world stage,
good or bad, unless the United States has
orchestrated it. The only two notable exceptions
are chancellor Willy Brandt's efforts more than
two decades ago to engage the Soviet Union and
East Germany, and British and French diplomatic
efforts that helped produce the deal to trade an
end of Libyan terrorism for an end to economic and
diplomatic sanctions.
Washington at first reacted
negatively to both of these initiatives. European
involvement in world affairs beyond continental
borders has been welcomed by Washington only when
Europe served as a docile junior partner to US
geopolitical designs. On Iraq, most of Europe
refused to accept this subservient role. The Iraq
war is immensely unpopular in Europe, similarly to
other regions around the globe, even in Britain,
which has happily accepted the role of
geopolitical water boy for US foreign policy since
the end of World War II. German domestic politics
does not give Chancellor Gerhard Schroeder an
option to support the Bush administration's Iraq
policy. The blatant ineptitude of recent US
foreign policy, particularly in the Persian Gulf
and the Middle East, has provided a window of
opportunity for European independent activism in
world affairs.
The re-election of Schroeder
as chancellor of Germany with the help of the
Green Party in September 2002 symbolized the end
of an era in close, albeit unequal, postwar
relations between the US and Germany. Schroeder
held on to power after his SPD
(Sozial-demokratische Partei Deutschlands, or
Social Democrat Party), ran an intensely anti-US
campaign based upon opposition to US policy on
Iraq. The SPD was tied with the conservative,
pro-US CDU-CSU (Christian Democrats), each getting
38.5% of the votes in an election in which 80% of
eligible voters took part. But with the support of
the Green Party's 8.6% vote, Schroeder defeated
Edmond Stoiber, the CDU candidate, by fewer than
9,000 votes over the conservative coalition,
giving the SPD-Green coalition 306 seats in the
603-seat parliament. The generally conservative
German press referred to the winning coalition
derogatorily as the Red-Green Coalition. The
German Greens are a party of ecology and used to
be a pacifist party until their chairman, Joschka
Fischer, won a battle between the realists and the
fundamentalists and got the party to back German
troops going into Kosovo.
The
re-election of Schroeder has been tremendously
damaging to the carefully nurtured five-decade-old
US-German alliance. After Schroeder's victory, a
curt statement from the White House did not
congratulate him, or even mention him by name. It
was a marked contrast to a statement
congratulating French President Jacques Chirac,
with whom Washington also has serious diplomatic
problems, on his May re-election. The White House
also declined to arrange a personal telephone call
between Schroeder and Bush. In the view of the US,
Schroeder and key members of his cabinet played to
anti-US sentiment in Germany over foreign-policy
issues during the final weeks of the campaign
beyond election politics to the point of personal
attacks on the US president.
Politically, the Bush
administration at the time leading up to the Iraq
invasion wanted Germany to join its international
coalition to support its disastrous policy on
Iraq, with diplomatic backing at the UN, and to
grant the "coalition of the willing" complete
access to German airspace and allow the US and
Britain full use of their bases on German soil for
offensive operations against Iraq. The White House
also wanted Germany to support more fully
Washington's "war on terrorism", especially with
regard to the extradition of terrorist suspects on
German soil, even those with German citizenship,
and the release of crucial evidence that could be
used to help convict them in US courts. It also
wanted Germany to increase defense spending, which
had fallen to just 1.5% of its GDP, and to pay for
costs associated with increased terrorism security
at US bases in Germany. The US has warned that if
the German government continues to hinder US
policy toward Iraq and elsewhere, such as Iran and
in the UN, Washington may conclude that Berlin is
reneging on its defense-treaty obligations, which
would have serious political consequences, beyond
being labeled the "old Europe". US support for
German membership in the UN Security Council hangs
in the balance.
With the creation of NATO in
April 1949, the US and Germany formally became
military allies. It was a turning point for both.
For the first time in its history, the United
States had signed on to a permanent alliance that
linked it to Europe's defense; and for Germany, as
for Italy, membership in NATO signaled a new
acceptance internationally, an important political
legitimacy for a nation with an embarrassing past.
It was an alliance relationship that remained
solidly operative throughout the decades of the
Cold War, as a succession of German leaders, from
Konrad Adenauer to Helmut Kohl, remained
determinedly pro-US in their policies. The US
views Schroeder as having placed in jeopardy this
historically close relationship for shortsighted
political gain.
Germany, on the other hand,
merely sees itself as finally acting as an
independent nation with full sovereignty
responsive to its social-democratic heritage. The
new independent Germany will support US policies
that converge with German national interests and
values and opposed those that diverge from them.
From this point on, no German politician can
afford to play the role of collaborator to US
occupation on the Adenauer rationalization that it
would buy better treatment from the occupier. The
Germans have been occupiers and they know from
first-hand experience that collaborators enjoy no
respect from anyone, least of all from the
occupiers.
Schroeder has stated
unequivocally that Germany would not participate
in US-led military action in Iraq. In his first
successful election campaign in September 1998, he
declared that "this country under my leadership is
not available for adventure". In reference to
Germany's $9 billion contribution to funding the
first Gulf War, Schroeder warned that "the time of
checkbook diplomacy is over once and for all".
During the Cold War, checkbook diplomacy for West
Germany meant to give money in place of sending
German troops. It remains unclear if the end of
checkbook diplomacy according to Schroeder means
acceptance of a revival of German militarism or
merely refusal to pay the bill for US militarism,
something Saudi Arabia has never dared to do. To
buy their precarious security, the Saudis have
been forced to pay all sides in complex Mid-East
politics.
The first months of
Schroeder's chancellorship were marked by policy
disputes with his more strongly socialist finance
minister (and Social Democratic party chairman)
Oskar Lafontaine, | | | |
