revisionism realistically “thinkable” and ethnic xenophobia, especially anti-Semitism, psychologically “respectable.”
But the East Central European dictatorships would not or could not emulate the totalitarian dynamism of Hitler’s example. Their commitments were essentially bureaucratic and conservative, at most technocratic and oligarchical. Projecting no mass ideology, they either failed or refused to elicit mass support. Despite their sonorous rhetoric of “the strong hand,” they proved petty, brittle, often irresolute, and generally demoralizing.
Various Right-Radical movements, drawing their political elan even more emphatically from the Nazi example, atavistic in their ideology but modern in their methods, claimed to supply the dynamism, the commitment to radical change, and the capacity to mobilize the masses, that these authoritarian regimes lacked or spurned. Noisiest in the countries with prominent and vulnerable Jewish minorities, the Right-Radical leaders, while themselves usually educated and urbanized, appealed to the supposedly primitive, instinctive, and healthy revulsion of the peasant and proletarian “folk-masses” against the allegedly decadent, “judaized,” secular culture of their bureaucratic and bourgeois exploiters. Indeed, the appeal and the appeals of Right-Radicalism nicely reflected the contemporary condition of interwar East Central Europe as an agricultural society in a crisis of transition and fragmentation: though not yet sufficiently developed and integrated to have moved beyond this demagoguery, it no longer was adequately stable and patriarchal to remain immune to it. The local Right-Radical movements were, however, inhibited in their political offensives by the very fact that the authoritarian regimes which they sought to challenge already embodied a number of their professed ideological values, i.e., were already undemocratic, ultranationalistic, and militaristic, and often mouthed Right-Radical rhetoric even while repelling Right-Radical bids for power. An even greater irony was the fact that Hitler’s regime, eager to extract maximal economic resources from East Central Europe for its own projected war effort, eventually endorsed the local forces of order and rationality, i.e., the authoritarian governments, against the counterproductive, albeit ideologically closer, enthusiasts of turmoil and upheaval, i.e., the Right-Radicals.
8
To the extent that the area’s dictatorships scored any permanent successes, it was in the limited, albeit important, area of etatist economic investment, which did not, however, extend into radical social change or political mobilization. In all cases, excepting Poland and Czechoslovakia, this was achieved through Nazi German assistance in the form of bilateral exchange of local agricultural surpluses and raw materials for industrial equipment, investments, and technical support. While such German economic aid was scarcely altruistic and was clearly designed to achieve regional hegemony and supplement the Reich’s war economy, neither was it utterly exploitative or negative. Contrary to frequent allegations at the time and since, Germany did not flood East Central Europe with cuckoo clocks, aspirin, and thermometers in exchange for grains, minerals, and timber; rather she supplied capital goods for industry, encouraged the diversification of vulnerable one-crop agricultures, and supplied a steady market at reasonable prices. Nazi Germany’s economic policy and behavior thus effectively supplemented her ideological, political, military, and diplomatic prowess in attracting Danubian and Balkan Europe to herself in the second half of the 1930s. Though the Serbs recoiled at the last moment, the Yugoslav governments had also climbed on this bandwagon.
In Poland, the equivalent etatist economic success was scored in the late 1930s without German assistance, through enforced local savings and investments. Czechoslovakia, on the other hand—or, more precisely, its western provinces of Bohemia and Moravia-Silesia—had already reached a substantial industrial plateau and made no analogous economic leap.
Though promising and perhaps indispensable, these etatist investment successes of the late 1930s were too little and too late to absorb more than a puny fraction of the surplus rural population into industrial employment or to spark self-sustaining economic growth. Hence they failed to transform the general economic physiognomy of interwar East Central Europe as an area of low industrialization, poor urban-rural imbalances, acute shortages of capital, and chronic agricultural poverty. Furthermore, as these etatist policies were generally predicated on attitudes of economic nationalism, they also aggravated the understandable but nevertheless irrational craving for state-autarky and thus contributed to the further fading of the fragile flower of intra-area cooperation, already withered by the arid winds of ethnic and irredentist enmity.
The searing trauma of the depression had, of course, been the catalyst of the twin decisions to industrialize and to pursue “beggar-my-neighbor” economic policies. It is difficult, even in retrospect, to appreciate and impossible to exaggerate the tremendous impact of this experience on the peoples and governments of interwar East Central Europe. As the world prices of agricultural commodities fell earlier, more steeply, and remained longer at deeper troughs than the prices of industrial products, the depression taught the dire lesson of the economic impotence of agricultural-exporting countries relative to industrial ones. Particularly hard hit were those extensive regions of East Central Europe that practiced an exclusive cultivation of grain for export, for grains are a commodity for which demand is notoriously inelastic while its supply is highly variable. Hence, as prices dropped, the peasants desperately sought to compensate by increasing production, thereby merely further depressing prices to their own impoverishment. In combination with governmental protection of infant native industries, with absurdly deflationary fiscal and monetary policies, and with exorbitant indirect taxes on necessities such as salt, matches, and kerosene, purchasable only from state monopolies, this price trend put virtually all industrial commodities—plows for production as well as textiles for consumption—out of the reach of the peasants and pushed them into bare subsistance and often into outright starvation. Economic despair then prompted political radicalization which, in interaction with the judiciously orchestrated German drive for hegemony in the area, reopened the whole question of East Central Europe’s international, domestic, political, and economic order. Apropos the author’s earlier judgment of the futility of the Green International, one may note that on no occasion did the area’s agrarian countries negotiate as a bloc with any industrial grain-importing country.
The agricultural price disaster was paralleled and compounded by the West’s abrupt, and probably unnecessary, withdrawal of all its capital credits to East Central Europe in the midst of the depression. Unnecessary—because, while the sums involved were critical for the area’s stability (even though they had often been applied unwisely), they were a relatively small fraction of the Western creditors’ total international investments. Industrial output, capital formation, and employment now all fell precipitously, with calamitous political repercussions. This politico-economic myopia of the West, which had already been foreshadowed by France’s earlier and persistent refusal to support her alliances in the area with adequate trade relations, virtually invited Nazi German penetration. Germany, in turn, did not intend to integrate East Central Europe into the world economy, but the reverse: she wished to tie it to her own and thus create a large and autarkic Grossraumwirtschaft supplementing and facilitating her projected political and military conquest of Europe.
A particularly powerful instrument of this economic strategy was the blocked currency device, whereby the high prices paid by Germany for her huge purchases of agricultural goods and raw materials from East Central European countries were held in blocked accounts at the Reichsbank and could only be “cleared” by East Central European purchases of German commodities. Though sometimes the local governments grumbled at being obliged to take German equipment when they would have preferred being paid in convertible currencies, on balance they appreciated being rescued by Berlin from the economic and political disaster of otherwise unsaleable agricultural surpluses. Nazi Germany thus acquired control over the area’s economy by first dominating its exports, then through these its imports, and finally rendering it utterly dependent on continuing German purchases, supplies, spare parts, and infrastructure. In this way she achieved a position approaching both monopsony and monopoly. By 1939, on the eve of World War II, Germany’s economic hegemony over East Central Europe was more categorical than it had been in 1913, demonstrating that the political advantages that accrued
