German trade policy in Eastern Europe, 1890-1990: Preconditions for applying international trade leverage

International Organization

Volumn 45, Issue 3, 1991, Pages 343-368

  Spaulding, Robert Mark ^a  

^a NONE

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EID: 84976156028     PISSN: 00208183     EISSN: 15315088     Source Type: Journal    
DOI: 10.1017/S0020818300033130     Document Type: Article

References (75)

1. In this article, I use a means-oriented definition of “trade leverage” that emphasizes the use of merchandise trade flows as a means of pursuing nontrade related foreign policy goals. Of course, the conceptually less challenging use of trade policy as a means of influencing other states’ trade policies also constitutes trade leverage. Employing Baldwin'S terms “economic statecraft” and “economic diplomacy,” I also refer to “trade-based economic diplomacy” and use that term interchangeably with “trade leverage,” distinguishing where necessary between trade-based economic diplomacy and forms of diplomatic pressure with other bases. See David A. Baldwin, Economic Statecraft (Princeton, N.J.; Princeton University Press, 1985), pp. 35 and 39–40.
2. Dean Acheson, Present at the Creation: My Years in the State Department (New York: Norton, 1969), pp. 139–40.
3. Putnam has developed the concept of “two-level games” to describe the dual frameworks in which policymakers of sovereign yet interdependent countries must respond to both domestic and international constraints and pressures. See Robert Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games,” International Organization 42 (Summer 1988), pp. 427–60.
4. See, for example, C. Fred Bergsten, Robert O. Keohane, and Joseph S. Nye, “International Economics and International Politics: A Framework for Analysis,” International Organization 29 (Winter 1975), pp. 3-36.
5. Baldwin, Economic Statecraft, p. 58.
6. Benjamin J. Cohen, “The Political Economy of International Trade,” International Organization 44 (Spring 1990), pp. 261–81.
7. As long as the “inadequacy of basic theoretical work” and the “lack of attention to history” remain two of the “major lacunae in the intellectual development” of security studies, historically based case studies with theoretical implications should be an especially valued type of contribution to the entire field of international relations. See Joseph S. Nye, Jr., and Sean Lynn-Jones, “International Security Studies: A Report of a Conference on the State of the Field,” International Security 12 (Spring 1988), pp. 5–27.
8. See Kaiserliches statistisches Amt, Statistik des deutschen Reiches (Statistics of the German Reich), new series, vol. 271, part 5 (Berlin: Puttkammer und Mühlbrecht, 1914), pp. 1–2. The volume also contains a useful commentary on the deficiencies of Russian trade statistics prior to 1914.
9. In 1929, German exports to Poland were 339 million marks, or 2.5 percent of total German exports (13,482 million); imports from Poland were 343 million marks, or 2.6 percent of total German imports (13,434 million). See Statistisches Reichsamt, Monatliche Nachweise über den Aussenhandel Deutschlands—Ergänzungsheft: Der deutsche Aussenhandel nach Erdteilen und Landem, 1929 (Monthly record of German foreign trade—Supplement: German foreign trade by continent and country, 1929) (Berlin: Reimar und Hobing, 1930), p. 5.
10. On the other side, Polish exports to Germany were 877 million zloty, or 31 percent of total Polish exports (2,813 million); imports from Germany were 850 million zloty, or 27 percent of total Polish imports (3,111 million). See B. R. Mitchell, European Historical Statistics, 1750–1970 (New York: Macmillan, 1975), pp. 496 and 547.
11. In 1929, Czechoslovak exports to Germany were 4,691 million koruna (with total Czechoslovak exports equal to 20,499 million); imports from Germany were 7,675 million koruna (with total imports equal to 19,998 million). See Mitchell, European Historical Statistics, pp. 493 and 513.
12. German exports to Czechoslovakia were 658 million marks; imports from Czechoslovakia were 480 million marks. See Statistisches Reichsamt, Monatliche Nachweise—Ergänzungsheft: 1929, p. 5.
13. The Weimar Republic'S economic potential for applying trade leverage is captured in Hirschman'S “index of preference for [trade with] small countries.” By this measure, Germany under the Weimar regime concentrated its trade on smaller countries to a greater degree than did either Britain or France. In 1925, this index of concentration stood at 126 for German imports and 158 for German exports, well above both Britain (111 for imports and 114 for exports) and France (93 and 93). See Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley: University of California Press, 1980), Table 1, pp. 92–93.
14. The international trade regime can be defined as the web of “institutions, fundamental assumptions, and rules of the game” governing trade practices and trade relations between states, according to Bergsten, Keohane, and Nye in “International Economics and International Politics,” p. 5.
15. Charles Lipson refers to “rules, norms, principles, procedures, [and] expectations” when discussing trade regimes in “The Transformation of Trade: The Sources and Effects of Regime Changes,” in Stephen Krasner, ed., International Regimes (Ithaca, N.Y.: Cornell University Press, 1983), pp. 233–71. See also Krasner'S own contributions in the same volume.
16. While Lipson, Krasner, and others have turned their attention in part to the question of how international regimes are constructed, this study takes the international trade regime as exogenous and offers explanations of how existing regimes influence national trade policies. For a discussion of the benefits and drawbacks of “upward-looking” and “downward-looking” analyses of system management, see Cohen, “The Political Economy of International Trade.”
17. Despite recent challenges to the hegemonic model, it continues to dominate explanations of economic regime change and stability. See, for example, Charles Kindleberger, The World in Depression, 1929–1939 (Berkeley: University of California Press, 1974).
18. Peter Katzenstein, “Introduction: Domestic and International Forces and Strategies of Foreign Economic Policy,” in Peter Katzenstein, ed., Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University of of Wisconsin Press, 1978), pp. 3-22.
19. Robert Gilpin, “Economic Interdependence and National Security in Historical Perspective,” in Klaus Knorr and Frank Trager, eds., Economic Issues and National Security (Lawrence: Regents Press of Kansas, 1977), pp. 19–66.
20. Robert Gilpin, U.S. Power and the Multinational Corporation (New York: Basic Books, 1975).
21. Stephen Krasner, “State Power and the Structure of Foreign Trade,” World Politics 28 (April 1976), pp. 317-47.
22. Robert Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton, N.J.: Princeton University Press, 1984).
23. Duncan Snidal, “The Limits of Hegemonic Stability Theory,” International Organization 39 (Autumn 1985), pp. 579–614.
24. For a critical review of the structural, game-theoretic, functional, and cognitive approaches to regime analysis, see Stephan Haggard and Beth A. Simmons, “Theories of International Regimes,” International Organization 41 (Summer 1987), pp. 491–517.
25. For thoughts on how an international economic regime corresponds to the international political power system in a given period, see Akira Irye, “The Internationalization of History,” American Historical Review 94 (February 1989), pp. 1–10.
26. Lipson, “The Transformation of Trade,” p. 241.
27. Domestic factors such as the late unification, the federal structure of the Reich, and the almost exclusively aristocratic character of the upper levels of the civil service also played important roles in the noteworthy underdevelopment of the central Reich bureaucracy before 1914. See Friedrich Facius, Wirtschaft und Staat: Die Entwicklung der staatlichen Wirtschaftsverwaltung in Deutschland vom 17. Jahrhundert bis 1945 (Economy and state: The development of state economic administration in Germany from the 17th century to 1945) (Boppard: Harald Verlag, 1959).
28. Joseph Rothschild, East-Central Europe Between the Wars, vol. 9 of A History of East-Central Europe (Seattle: University of Washington Press, 1974), p. 22.
29. League of Nations, Commercial Policy in the Interwar Period: International Proposals and National Policies (Geneva: League of Nations, 1942), p. 70.
30. One line of this thinking culminates in the questions surrounding the costs and benefits of conquest versus trade. An early discussion of this issue can be found in Benjamin Constant'S De l’esprit de conquête et de l’usurpation dans leurs rapports avec la civilisation europeenne, part 1, chap. 2, as cited in Hirschman, National Power and the Structure of Foreign Trade, p. 14. For more recent thoughts on this question, see Alan Milward, The New Order and the French Economy (Oxford: Clarendon Press, 1970), especially chap. 1.
31. Richard Rosecrance, The Rise of the Trading State: Commerce and Conquest in the Modem World (New York: Basic Books, 1986).
32. This “separatist” view was not unique to Bismarck; it can be traced back through the first U.S. president at least to Machiavelli. In his farewell address, Washington declared that “the great rule of conduct for us, in regard to foreign nations, is, in extending our commercial relations, to have with them as little political connection as possible.” Machiavelli offered the following argument: “Fortune has decreed that as I do not know how to reason … about profits and losses, it befits me to reason about the state.” For further discussion, see Felix Gilbert, To the Farewell Address: Ideas in Early American Foreign Policy (Princeton, N.J.: Princeton University Press, 1961).
33. Baldwin, Economic Statecraft.
34. See also Hirschman, National Power and the Structure of Foreign Trade, p. 54.
35. Hirschman notes that before 1914 even those contemporary scholars who warned specifically about the dangerous growth of German exports—such as E. E. Williams, author of Made in Germany (London: Heinemann, 1896)—saw “foreign, and in particular export trade… as an end in itself and not as a means to political penetration and economic subjugation.”
36. See Stenographische Berichte des deutschen Reichstages (Stenographic report of the German Reichstag), 27 February 1894, p. 1451. Assessing the success of Caprivi'S reversal of Bismarckian practice is complicated by the asymmetry between Caprivi'S use of trade treaties as foreign policy incentives (“carrots”) and Bismarck'S policy of withholding treaties as disincentives (“sticks”).
37. Stresemann, speech to the Central Committee of the Deutsche Volkspartei, 22 November 1925.
38. reprinted by Henry Turner in Vierteljahrshefte fur Zeitgeschichte 15 (October 1967), pp. 412–36. Hans Posse, the influential undersecretary in the Economics Ministry, privately arrived at the same conclusions, as indicated in his unpublished manuscript of 1924–25, “Denkschrift zur Politik der Regierung” (Memorandum on government policy), Bundesarchiv Koblenz, Nachlass Posse/2.
39. An early exploration of these issues can be found in Stephen Krasner'S “Domestic Constraints on International Economic Leverage,” in Knorr and Trager, Economic Issues and National Security, pp. 160–81.
40. Gilpin touches on this issue in a discussion of the costs of negative economic sanctions. See Robert Gilpin, “Structural Constraints on Economic Leverage: Market-Type Systems,” in Gordon H. McCormick and Richard Bissel, eds., Strategic Dimensions of Economic Behavior (New York: Praeger, 1984), pp. 105–28.
41. For classic pluralist writings, see David B. Truman, The Governmental Process: Political Interests and Public Opinion (New York: Knopf, 1952).
42. Robert A. Dahl, Who Governs? Democracy and Power in an American City (New Haven, Conn.: Yale University Press, 1961).
43. For “neopluralist” variants, see Grant McConnell, Private Power and American Democracy (New York: Knopf, 1967).
44. Theodore J. Lowi, The End of Liberalism: Ideology, Policy, and the Crisis of Public Authority (New York: Norton, 1969).
45. On social corporatism, see Phillippe Schmitter, “Still the Century of Corporatism?” Review of Politics 36 (January 1974), pp. 85–131.
46. For recent Marxist theory, see Ralph Miliband, Marxism and Politics (New York: Oxford University Press, 1977).
47. Nicos Poulantzas, Political Power and Social Classes (Atlantic Highland, N.J.: Humanities Press, 1975).
48. Gourevitch'S coalition-based interpretation of foreign economic policy has been a valuable recent addition to societal actor explanations. See Peter Gourevitch, Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca, N.Y.: Cornell University Press, 1986).
49. Liberal and Marxist theorists of democracy deny that the state has the ability to act autonomously from society. Even when expanded to include the role played by the “intermediate agents” (the interest groups and political parties) of private economic actors, the liberal and Marxist frameworks still do not allow a role for the state in which state agents themselves habitually act as autonomous forces in the process of formulating policy. See Eric Nordlinger, On the Autonomy of the Democratic State (Cambridge, Mass.: Harvard University Press, 1981).
50. Michael Mann, “The Autonomous Power of the State: Its Origins, Mechanisms, and Results,” in John A. Hall, ed., States in History (New York: Basil Blackwell, 1987), pp. 109–36.
51. The literature on state-society relations, particularly on the role of private sector interest groups (Verbände), in these four German regimes is voluminous. For good coverage of the entire period, see Kurt Jeserich et al., Deutsche Verwaltungsgeschichte (German administrative history), vols. 3–5 (Stuttgart: Deutsche Verlagsanstalt, 1983–88).
52. For valuable individual studies, see Thomas Nipperdey, “Interessenverbände und Parteien in Deutschland vor dem ersten Weltkrieg” (Interest groups and parties in Germany before the First World War), Politische Vierteljahresschrift 2 (September 1961), pp. 262-80.
53. H.-J. Pühle, “Parlament, Parteien, und Interessenverbände, 1890–1914” (Parliament, parties, and interest groups, 1890–1914), in M. Stürmer, ed., Das kaiserliche Deutschland (Imperial Germany) (Dusseldorf: Droste, 1970), pp. 340-77.
54. Charles Maier, Recasting Bourgeois Europe: Stabilization in France, Germany, and Italy in the Decade After World War I (Princeton, N.J.: Princeton University Press, 1975).
55. T. W. Mason, “The Primacy of Politics: Politics and Economics in National Socialist Germany,” in H. A. Turner, ed., Nazism and the Third Reich (New York: New Viewpoints, 1972), pp. 175-200.
56. Jürgen Weber, Die Interessengruppen im politischen System der Bundesrepublik Deutschland (Interest groups in the political system of the Federal Republic of Germany) (Stuttgart: Kollhammer, 1977).
57. Theodor Eschenburg, Herrschaft der Verbände? (Dominion of the interest groups?) (Stuttgart: Deutsche Verlagsanstalt, 1955).
58. Theodor Eschenburg, Das Jahrhundert der Verbände: Lust und Leid organisierter Interessen in der deutschen Politik (The century of interest groups: Pleasures and pains of organized interests in German politics) (Berlin: Siedler, 1989).
59. For an illustrated notion of “nonexistent, weak, moderate, strong, and dominant” levels of state power, see Stephen D. Krasner, Defending the National Interest: Raw Materials Investments and U.S. Foreign Policy (Princeton, N.J.: Princeton University Press, 1978), p. 57.
60. For similar views, see Gourevitch, Politics in Hard Times, pp. 61-62.
61. Joel S. Migdal, Strong Societies and Weak States: State-Society Relations and State Capabilities in the Third World (Princeton, N.J.: Princeton University Press, 1988).
62. On the frustrations of two leading interest groups, the Central Association of German Industrialists and the Union of German Iron and Steel Industrialists, see the Union'S own unpublished history by C. Klein, “Geschichte des Vereins deutscher Eisen- und Stahlindustrieller, 1874–1934” (History of the Union of German Iron and Steel Industrialists), Bundesarchiv Koblenz, Union of German Iron and Steel Industrialists (R 13 I), files 12 and 13.
63. The U.S. Congress granted the executive branch similar powers in the Trade Expansion Act of 1974 and in the “fast track” legislation for the Uruguay Round of GATT negotiations. In exchange for diminished legislative control, Congress established a network of private sector committees to communicate directly with U.S. negotiators before and during treaty negotiations. In the case of Imperial Germany'S system, however, there were no analogous networks. For a detailed discussion of ratification procedures and international negotiations, see Putnam, “Diplomacy and Domestic Politics.”
64. Hirschman, National Power and the Structure of Foreign Trade, p. 15.
65. Ernst Trendelenburg, Weltwirtschaftskrise und Aussenhandel (Economic crisis and foreign trade) (Berlin: Deutschen Hochschule für Politik, 1921).
66. The Federal Republic currently employs over 200 trained professionals in the upper level of its principle export control agency and 2,350 “export controllers” in its customs service. See “Bonn Maps Controls on Arms Exports,” Boston Globe, 16 February 1989, p. 6.
67. “Bonn verschärft Exportkontrollen” (Bonn sharpens export controls), Deutschland Nachrichten, 8 February 1991, P.1.
68. In Economic Diplomacy and the Origins of the Second World War (Princeton, N.J.: Princeton University Press, 1980), pp. 74 and 79–80.
69. David Kaiser explained how changes in the international trade regime after 1931 allowed for the German penetration of Eastern Europe. However, in view of the agricultural obstructionism that plagued the Weimar regime, any explanation of Nazi success must also include an account of the policies and developments that solved the problems of domestic opposition. One of the best treatments of Nazi economic activity in the Balkans can be found in John R. Lampe and Marvin R. Jackson'S Balkan Economic History, 1550-1950: From Imperial Borderlands to Developing Nations (Bloomington: Indiana University Press, 1982).
70. For a study that views Nazi economic expansion as serving capitalism as much as the state, see Alice Teichova, An Economic Background to Munich (London: Cambridge University Press, 1974).
71. Gerhard Weinberg, The Foreign Policy of Hitler'S Germany: Diplomatic Revolution in Europe, 1933–1936 (Chicago: University of Chicago Press, 1970), p. 73.
72. Philipp Fabry, Der Hitler-Stalin Pakt, 1939-1941: Ein Beitrag zur Methode sowjetischer Aussenpolitik (The Hitler-Stalin pact, 1939-1941: A contribution to the method of Soviet foreign policy) (Darmstadt: Fundus Verlag, 1962), pp. 190–94.
73. See “Genscher: Rasche Hilfe für Polen” (Genscher: Quick aid for Poland), Deutschland Nachrichten, 10 May 1989, p. 2.
74. See “Genscher: Rasche Hilfe für Polen.” We should also recall the detente version of this reform-seeking use of commercial policy, which was summarized in the Social Democrats’ slogan “Wandel durch Annäherung” (change through rapprochement). After 1970, both the United States and the West European nations sought to expose Eastern societies to the “Western life-style” and the productive powers of the West by exposing them to Western products. In this way, they hoped to encourage Eastern regimes and elites to recognize the need for greater concern to their own consumers and to soften their domestic structures.
75. See “Deutsche und EG-Hilfsmassnahmen für Polen und Ungarn” (German and EC aid measures for Poland and Hungary), Deutschland Nachrichten, 28 September 1989, p. 2.