Proposal preview

DE-GLOBALISATION IN REGIONAL CONTEXT: THE CASE OF EAST CENTRAL EUROPE

Since Keynes’ famous pamphlet it is a commonplace in the economic history that the Great War of 1914-18 constituted a major rupture for the economies of Europe and even more for East Central Europe. It marked the end of a long period of peaceful economic development and set in motion a painful process of de-globalisation. The legacy of the war included the new political borders, animosity between successor states, highly politicised international economic relations, foreign indebtedness and fiscal imbalances. The interwar Great Depression had also its origins in those international dislocations that were caused by the war and remained largely unresolved until the end of the interwar period.
However, in the last decades, a new revisionist approach emerged that questioned the negative effects of World War I and of the new borders drawn during the Paris Peace Conference. According to them the economic development of East Central Europe showed a striking continuity between 1890 and 1938; per capita income continued to follow its pre-war trend, and the pattern of trade flows changed also little. Redrawing the map of Central Europe after the First World War was far less damaging economically than supposed earlier because the new borders followed a pattern of economic fragmentation that had emerged already during the late nineteenth century.
The session aims at exploring these ambiguities based on the historic experiences of the successor states. The session members will examine the long-term effects of war and peace on the region’s economy; the consequences of de-globalisation; the changes of the capital and money markets; the position of firms and banks in the region. The long-term perspective (from the late 19th century to World War II) will enable us to disclose new interconnections unknown until now.

The following scholars have already committed to the session:
Antonie Dolezalova (Robinson College, University of Cambridge & Charles University, Prague)
Irresistible Smell of Money: The Corruption and Lobbying on the Way of the New Economic Elites to Political Power. The Case of Czechoslovakia (1918-1938)

Mária Hidvégi (University of Konstanz)
Industry and High Tech in Hungary? New Strategies after World War One

Dagmara Jajesniak-Quast (Europa-Universität Viadrina, Frankfurt/Oder)
“Does the partition of Poland economical still matter?”

Judit Klement (Eötvös Loránd University, Budapest)
The new era after the Great War: the operation of the Siemens in Hungary and in the region

Zarko Lazarevich (Institute of Contemporary History, Ljubljana)
Interwar Period in Slovenia (Transformations and Reorientations)

Uwe Müller (University of Leipzig)
Equal partners, useful vassals and necessary evils? The German foreign economic policy towards its south-eastern neighbour states 1890-1938.

Ágnes Pogány (Corvinus University Budapest)
De-globalization and the Capital Market; the Management of the Foreign Debt Crisis in Interwar East Central Europe

Organizer(s)

  • Ágnes Pogány Corvinus University Budapest agnes.pogany@uni-corvinus.hu Hungary

Session members

  • Antonie Dolezalova, Robinson College, University of Cambridge & Charles University, Prague
  • Mária Hidvégi, University of Konstanz
  • Dagmara Jajesniak-Quast, Europa-Universität Viadrina, Frankfurt (Oder)
  • Zarko Lazarevic, Institute of Contemporary History, Ljubljana
  • Uwe Müller, Leibniz-Institute for the History and Culture of Eastern Europe, University of Leipzig

Discussant(s)

Papers

Panel abstract

The Great War of 1914-1918 constituted a major rupture for the economies East-Central Europe. It set in motion a painful process of de-globalisation. The legacy of the war included highly politicised international economic relations, foreign indebtedness and trade imbalances. The interwar Great Depression had also its origins in the international dislocations caused by the war. In the last decades, a new revisionist approach emerged that questioned the negative effects of the war. According to it the redrawing the map of Central Europe after the First World War was far less damaging than supposed earlier because the new borders followed a pattern of economic fragmentation that had emerged already during the late nineteenth century. The session aims at exploring these ambiguities based on the historic experiences of the successor states. Session members will examine the long-term effects of war and peace on the region’s economy and the consequences of

1st half

Equal partners, useful vassals and necessary evils? The German foreign economic policy towards its south-eastern neighbor states 1890-1938.

Uwe Müller

This paper discusses the extent to which Germany's foreign trade policy was marked by continuity and change over breaks like the First World War and the Great Depression. The relevance of this question for a panel that challenges the thesis of de-globalization becomes clear when you consider that German entrepreneurs were among the most important protagonists of economic globalization before the First World War. Efforts to create a German-dominated “Großwirtschaftsraum” in East Central and Southeastern Europe during the 1930s, however, are often interpreted as an essential proof of the dominance of de-globalization. This interpretation is based on a misunderstanding of globalization as a general increase in entanglements and de-globalization as unbundling or foreclosure. With the project of the “Großwirtschaftsraum”, the foreign trade policy of a (former) export nation responded to a general increase in protectionism during the Great Depression by creating a larger market. Similarly, during the so-called first globalization...

This paper discusses the extent to which Germany's foreign trade policy was marked by continuity and change over breaks like the First World War and the Great Depression. The relevance of this question for a panel that challenges the thesis of de-globalization becomes clear when you consider that German entrepreneurs were among the most important protagonists of economic globalization before the First World War. Efforts to create a German-dominated “Großwirtschaftsraum” in East Central and Southeastern Europe during the 1930s, however, are often interpreted as an essential proof of the dominance of de-globalization. This interpretation is based on a misunderstanding of globalization as a general increase in entanglements and de-globalization as unbundling or foreclosure. With the project of the “Großwirtschaftsraum”, the foreign trade policy of a (former) export nation responded to a general increase in protectionism during the Great Depression by creating a larger market. Similarly, during the so-called first globalization (1870-1914), German foreign trade policy sought to mitigate the social consequences of increased competition in e.g. agricultural markets. In both cases of a dialectical relationship of globalization and de-globalization economic relations with the southeastern neighboring states played a central role in German foreign trade policy.

Irresistible Smell of Money: Between Protectionism, Self-sufficiency and Collaboration. The Case of Czechoslovakia (1918-1938)

Antonie Dolezalova

The recurring fluctuation of interest in the discussion on the relation between protectionism, self-sufficiency and collaboration over time resembled a sine wave with several peaks. On the most general level, it can be said that supporters of international economic cooperation were at the same time opponents of protectionism, and advocated the primacy of economic over political relations. By contrast, opponents of economic cooperation persisted in the opinion that everything stands or falls by political support. In my paper, the topic will be analyzed on both the theoretical and the practical level. Firstly, the paper will focused on the theoretical discussion about the necessity of economic cooperation for a small open economy and secondly, on the so called nostrification - the process of transformation of the ownership structure and executive and administrative functions in industry.

The recurring fluctuation of interest in the discussion on the relation between protectionism, self-sufficiency and collaboration over time resembled a sine wave with several peaks. On the most general level, it can be said that supporters of international economic cooperation were at the same time opponents of protectionism, and advocated the primacy of economic over political relations. By contrast, opponents of economic cooperation persisted in the opinion that everything stands or falls by political support. In my paper, the topic will be analyzed on both the theoretical and the practical level. Firstly, the paper will focused on the theoretical discussion about the necessity of economic cooperation for a small open economy and secondly, on the so called nostrification - the process of transformation of the ownership structure and executive and administrative functions in industry.

Transformations and Reorientations of International Economic Exchange – Interwar Period in Slovenia (Yugoslavia)

Zarko Lazarevic

The creation of new national economies and new trade agreements altered the conditions of international trade after WWI in Central Europe. Yugoslav and, consequently, Slovene international economic exchange was focused only on some markets in neighboring countries. It can be said that the economic flows did not significantly change the traditional direction in the 1920s. Despite the separation of state borders, the complementary economic structure of industrialized and agrarian areas of the former Habsburg monarchy continued to determine economic trends and directions of business cooperation after the WWI. A real turning point was brought about by the 1930s, when during the Great Depression the redistribution of foreign trade began. This was most evident from the share of Austria in the international exchange of Yugoslavia. At the beginning of the 1920s, trade with Austria represented even 42%, at the end of the 1920s 17 %, and in the thirties only 10%.

The creation of new national economies and new trade agreements altered the conditions of international trade after WWI in Central Europe. Yugoslav and, consequently, Slovene international economic exchange was focused only on some markets in neighboring countries. It can be said that the economic flows did not significantly change the traditional direction in the 1920s. Despite the separation of state borders, the complementary economic structure of industrialized and agrarian areas of the former Habsburg monarchy continued to determine economic trends and directions of business cooperation after the WWI. A real turning point was brought about by the 1930s, when during the Great Depression the redistribution of foreign trade began. This was most evident from the share of Austria in the international exchange of Yugoslavia. At the beginning of the 1920s, trade with Austria represented even 42%, at the end of the 1920s 17 %, and in the thirties only 10%.

2nd half

Do the Partitions of Poland still matter economically?

Dagmara Jajeśniak-Quast

For a long time, the thesis about multiple and long-term negative consequences of the Partitions of Poland has prevailed especially in the Polish historiography. This talk provides analysis of this thesis based on today’s economic development. It shows current regional economic disproportions which are almost identical to the three former partition regions (Prussian, Austrian and Russian), and how much the former partition period has been and still is present in the Polish economy. In this respect, the western regions of Poland have been developing well, whereas the situation is much worse in the East. The current Polish Prime Minister, Mateusz Morawiecki, tries to improve this situation with his “Program of Responsible Development” which follows the economic program of the Polish Government after 1918 – another continuity which is discussed in the talk.

For a long time, the thesis about multiple and long-term negative consequences of the Partitions of Poland has prevailed especially in the Polish historiography. This talk provides analysis of this thesis based on today’s economic development. It shows current regional economic disproportions which are almost identical to the three former partition regions (Prussian, Austrian and Russian), and how much the former partition period has been and still is present in the Polish economy. In this respect, the western regions of Poland have been developing well, whereas the situation is much worse in the East. The current Polish Prime Minister, Mateusz Morawiecki, tries to improve this situation with his “Program of Responsible Development” which follows the economic program of the Polish Government after 1918 – another continuity which is discussed in the talk.

De-globalization and the Capital Market; the Management of the Foreign Debt Crisis in Interwar East Central Europe

Ágnes Pogány

The evolution of the severe financial crises of the interwar period is fairly well researched, their management is far less known however. The paper presents the foreign debt consolidation efforts of Hungary after 1931 based on archival research. In order to reach an international compromise the Hungarian government put forward a proposal at the London Conference of July 1933 which did not prove successful. The London conference was unable to find co-operative solutions to the world Depression. Heavily indebted countries were left alone with their problems; as a result, foreign exchange controls and bilateral trade agreements remained subsistent in the following years delaying return to normalcy in world trade and international finances. Hungary began negotiations with its creditors on its own. An agreement was reached in 1937 according to which Hungary started to redeem its debts in convertible currency, but the outbreak of the war has made it futile again.

The evolution of the severe financial crises of the interwar period is fairly well researched, their management is far less known however. The paper presents the foreign debt consolidation efforts of Hungary after 1931 based on archival research. In order to reach an international compromise the Hungarian government put forward a proposal at the London Conference of July 1933 which did not prove successful. The London conference was unable to find co-operative solutions to the world Depression. Heavily indebted countries were left alone with their problems; as a result, foreign exchange controls and bilateral trade agreements remained subsistent in the following years delaying return to normalcy in world trade and international finances. Hungary began negotiations with its creditors on its own. An agreement was reached in 1937 according to which Hungary started to redeem its debts in convertible currency, but the outbreak of the war has made it futile again.