Disorder, page 27
Conscription did not survive the Vietnam War. As the Jacobins’ introduction of conscription had symbolized a decisive turn to political nationhood in legitimating state authority in Europe, so its effective end in the United States in 1973 proved symbolic for the American republic. Without any sense that the homeland was under military threat, the American federal government had used a conscript army to fight a war in Eurasia in a manner that selectively protected some citizens from the obligation to take up arms. The political fallout exposed all the other fragilities in the idea of American nationhood. But if terminating the draft was politically necessary, its absence would also leave few historically recognizable options for resurrecting American nationhood: the economic conditions that had underpinned the New Deal version were coming apart.33
The 1970s Juncture
During the 1970s, the American republic and the Western European democracies were plunged back into instability. Unprecedentedly, inflation accelerated without a prior war. Nearly everywhere, there was a palpable sense that politics could not be contained within the existing constitutional orders. Democracies were more violent and confrontational than they had been a decade earlier. There were secessionist movements in Northern Ireland and the Basque region in Spain. In West Germany and Italy, left-revolutionaries engaged in murderous campaigns against politicians and the business class. Some targeted Jews. Their violence was matched by that of neo-fascist paramilitary groups. In the United States, the violence had started earlier on the streets. It spilled into elections in 1968 and continued in domestic terror groups into the 1970s.
This instability led some to charge that democracies were in the grip of democratic excess that would destroy them.34 Shortly before his resignation, the West German chancellor, Willy Brandt, expressed his fear that Western democracies were sufficiently far down the path of temporal decay that they had only two or three decades left before they would slide through chaos into dictatorships.35 A belief that democratic nation states simply could not cope because they had become too democratic and too nationalistic was reflected in the Crisis of Democracy report published in 1975 by the Trilateral Commission, an influential forum established two years earlier to bring together politicians and business figures from North America, Europe, and Japan to contemplate the future. In his essay in the report, the American political scientist Samuel Huntington used the term ‘an excess of democracy’ to explain what he took to be the governability crisis unfolding.36
For all the report’s authors, democracy’s degeneration was inexorably tied to inflation. Indeed, Huntington described inflation as ‘the economic disease of democracies’ since ‘it becomes difficult if not impossible for democratic governments to curtail spending, increase taxes, and control prices and wages37.’ In the 1980s and 1990s, this argument was frequently deployed about monetary policy. Indeed, the whole intellectual foundation of the Eurozone articulated in the monetary–economic distinction laid out in the Maastricht Treaty was premised on the assumption that democratic control over monetary policy led to inflation.
But the perception that democratic excess expressed in inflation shaped the 1970s and a necessary reaction over the following two decades is a distortion of what happened. Economically, a change that fits the democratic excess thesis did occur in the 1970s. Wages as a proportion of national income increased in the 1970s, and corporate profits fell.38 Some trade unions in Western Europe did make it difficult for their governments to bring down inflation. Fearing more strikes, British, French, and Italian governments all at various times accepted wage demands from workers regardless of their consequences. In Italy, the government introduced a wage index, named the Scala Mobile, that guaranteed to trade unions that wages would increase with inflation. Since the Communist Party, which was politically strongest among the unionized northern industrial working class, was excluded from the Italian government, it proved impossible for Italian governments to reform the Scala Mobile without inviting an industrial and political confrontation. In the United States, independent, non-unionized truckers rebelled against gasoline shortages with wildcat strikes and blockades of interstate highways and bridges, using Citizens’ Band radios to coordinate their action. In 1974 the action turned violent and the highways became, in the words of historian Meg Jacobs, ‘zones of armed combat’.39
But the idea that it was the majoritarian dynamics of democracies that generated or then sustained inflation is problematic. The price and wage controls governments used to try to reduce inflation enjoyed widespread support, particularly among the working class and lower middle classes. Indeed, Richard Nixon was never more popular in his first term than when he introduced a wage and price freeze in 1971.40 It was big business, in the United States in particular, that had an interest in higher prices and pressed their case for them.41 Under Margaret Thatcher’s leadership, the Conservative Party in Britain easily won the 1979 general election by appealing to a backlash of working-class voters against the series of strikes that became known as the Winter of Discontent. The foreword to the Conservative manifesto that year cast the party’s purposes, of which reducing inflation was primary, in the language of ‘restor[ing] the balance of power in favour of the people’.42
The governments elected to office in the late 1970s and early 1980s that committed to restricting trade unions in the name of fighting inflation succeeded. Certainly, the changes in external economic conditions helped them, as did the immediate consequences of some of their own anti-inflationary policies. Much higher unemployment, largely afflicting industrial sectors that were already having to adjust to East Asian competition and some offshoring of production, made it harder for unions to press for wage hikes. Where service sectors eventually generated new employment, fewer workers were unionized. Even where they were, they did not possess the disruptive capacity that those once employed in indispensable industries like mining, steel production, and docking possessed. Nonetheless, far from rendering democracies ungovernable, these reforming governments, like Margaret Thatcher’s, stayed in power. Strike-restricting legislation in most Western European democracies passed without causing anything like the political instability that should have been expected if, as the Trilateral Commission suggested, ‘the demands on democratic government’ were growing ‘while the capacity of democratic government stagnates’.43 Under these policies and conditions, union membership in quite a number of European democracies, but certainly not all, fell, sometimes sharply. Even where union membership held up better, as in Germany and Sweden, national wage bargaining weakened.44
Oil, too, complicates any narrative where inflation is cast as a democratic disease overcome by capital-friendly politics in the 1980s and 1990s. In part this is because oil was an important cause of the 1970s inflation, and the fall in oil prices after the early 1980s generated by new supply had a significant role in bringing inflation down—as discussed in chapter four. But it is also because oil firms led those businesses that pushed for higher prices.
In the United States, which had a long-established domestic oil industry that had often invited charges of aristocratic excess, oil, more generally, had complex effects on the country’s democratic politics. For the four decades after the New Deal, there had been relatively little overt conflict in the American republic over oil, although the oil producers had continued to exercise considerable political influence, not least over how they were taxed. When, after American production peaked in 1970, prices started to rise and the first shortages appeared, democratic conflicts around oil reappeared, in a manner with some strong echoes of the first American Populists. The Democratic senator Henry Jackson led a political charge for more regulation to protect those he presented as the people. George McGovern, the 1972 Democratic presidential candidate, at times adopted similar rhetoric, declaring on one occasion that ‘Big Oil won out over the people.’45 Some within the party presented the oil shortages as a conspiracy. Lee Aspin, a Democratic representative from Wisconsin said: ‘There is little doubt that the so-called gasoline shortage in the Midwest is just a big, lousy gimmick foisted on consumers.’46 But the crucial change for American democratic politics in the 1970s was that the country became dependent on foreign oil and the Texas Railroad Commission lost the ability to set prices.
By telling some truths to both voters and American producers about the energy crisis, including that the American economy required OPEC imports to function, Jimmy Carter probably destroyed his presidency. When he tried to make conservation part of his move to restore energy independence, his critics, in his energy secretary’s words, ‘responded that conservation is not the American way; production is the American way’.47 This approach was Ronald Reagan’s solution to the energy crisis. He initially allowed higher prices to increase overall supply. This short-term response was paradoxically geared both to winning votes against Carter’s requests for sacrifice and to pleasing domestic producers who wanted energy inflation. For the medium term, by intensifying foreign energy dependency, it shunted oil out of the sphere of democratic political conflict into the geopolitical sphere, not least towards more American engagement in the Middle East. Notably, when the Reagan administration was caught having illegally sold arms to the Iranian government and diverting the profits to the Nicaraguan Contra rebels, Reagan reverted to the geopolitical argument that Iran’s oil and geographical situation on the Persian Gulf meant there was a ‘national interest’ in improving relations with the country.48
The response to the loss of relative energy self-sufficiency also had implications for nationhood. Nixon and Carter wished to make the energy issue a national project. In a televised address in 1973, Nixon declared that ‘we, as a Nation, must now set upon a new course…which will give us the capacity to meet our needs without relying on any foreign nation49.’ He compared this task to the United States’ founding as an independent state two centuries earlier. In what became known as his ‘malaise’ speech, Carter pronounced that the energy crisis ‘strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.’ He insisted that ‘the confidence that we have always had as a people is not simply some romantic dream or a proverb in a dusty book that we read just on the Fourth of July’. Rather it was ‘the idea which founded our nation and has guided our development as a people’ and which now had to be repaired through shared sacrifice to overcome the energy crisis and restore the American nation.50
But the energy crisis could not unite American citizens when the conflict between American producers and consumers within different geographical parts of the republic had become strongly zero-sum. The New Deal had protected oil producers without inflicting prices that provoked a political reaction from consumers. In the 1950s and 1960s, the Texas Railroad Commission had kept prices from going too high and too low. But when American supply had peaked and OPEC’s influence on prices was accelerating, there was no political equilibrium obtainable. In trying to manage the conflict, the federal government directly involved itself in the allocation of energy in ways that invariably fuelled sectional grievances. Under legislation Congress passed in December 1973, federal agencies controlled what was refined for gasoline and for heating oil, and to what industries and states the oil companies distributed supply for what use. The oil-producing states wanted to produce more at market prices. The non-oil-producing states, especially in New England where winter is cold, wanted prices controlled and more fuel allocated for heating. The Democratic Party divided on energy across these regional lines, and then again over oil’s environmental impact. Carter, who wanted higher prices to serve both reduced consumption and energy independence, was eventually abandoned by both sides.51
Although Reagan’s abolition of all remaining federal energy controls in 1981 ended the pressures energy allocation had heaped on the Union, these oil-generated divisions left a centrifugal legacy. This was temporarily disguised by Reagan’s landslide victory in 1984 on the back of the partial economy recovery that occurred after oil prices finally came down. But when, in the 2000s, it became clear that neither energy independence nor Middle Eastern foreign policy could solve the energy problem, those sectional fault lines would reassert themselves in new forms.
Aristocratic Excess Renewed
For all the furore about democratic excess in the 1970s, it was the risks of aristocratic excess in democracies that turned out never to have gone away. The post-war international institutions fashioned the conditions for a much larger international political class than the pre-war central bankers and financiers who had run the gold standard and the Bank for International Settlements. The original Bretton Woods settlement was also significantly diluted in ways that allowed more space for international finance than Dexter White and Keynes had envisaged. The Eurodollar markets facilitated the growth of a dollar-based international banking system operating beyond the control of governments and central banks. These markets offered opportunities for democratic governments to fund political parties and conduct foreign policy beyond any scrutiny by legislatures or voters and, on occasion, for politicians to enrich themselves and their business associates in patronage networks. The French oil company Elf, created by de Gaulle out of the French state-oil agencies, used the Eurodollar markets to run a massive private banking operation, through which it provided funds to the primary French political parties and to bribe foreign governments and firms.52 In Germany, from at least the 1970s, both the Christian Democratic and Social Democratic parties used the offshore Eurodollar markets to protect donors from taxes, distribute slush funds, and evade party funding laws.53
The conjunction of the Cold War and decolonization, meanwhile, ensured that the relationship between elected governments on one side and militaries and intelligence agencies on the other generated threats to democratic government. In 1958, de Gaulle came to power through a disguised coup in which it was clear that the next French government had to be acceptable to the French army. After the French referendum on Algerian independence in 1961, de Gaulle would himself have fallen to a coup if he had not been saved by the refusal of conscript soldiers to follow orders. The following year, he survived a serious assassination attempt organized by renegade French military officers. In Italy in December 1970, retired army personnel and Mafia members joined together in an attempted coup.
In the United States, the Cold War produced what President Eisenhower described in his farewell address as a ‘military-industrial complex’ conjoining ‘an immense military establishment [to] a large arms industry’, which created ‘the potential for the disastrous rise of misplaced power’. Although less commented upon, Eisenhower also warned that the ‘technological revolution’ behind the ‘military-industrial complex’ risked the ‘danger that public policy could itself become the captive of a scientific-technological elite’. What was needed, Eisenhower suggested, was for American citizens to recognize the problem of political time. American democracy, two centuries old as it was, constituted ‘a political and spiritual heritage’ now at risk from ‘plundering for our own ease and convenience the precious resources of tomorrow’.54 The Cold War also fuelled what came to be called an imperial presidency in the United States. From Harry Truman through to Richard Nixon, presidents took decisions to use American military power with minimal if any congressional involvement, even though it was Congress that had the constitutional authority to declare war. Lyndon Johnson used a legislative resolution passed after a dubiously reported incident in the Gulf of Tonkin as the basis to send American troops to Vietnam. Nixon fought a war in Cambodia and Laos for two years without Congress even being notified of the action. Meanwhile, successive presidents used the Central Intelligence Agency to conduct interventions, including paramilitary operations, in foreign states. In this sense, a good proportion of the exercise of American geopolitical power after 1945 became detached both from its citizens in a genuinely national army and from citizens’ representatives.55
In Europe, the EEC, established in 1957, had weak democratic foundations. There was no initial democratic legitimation to authorize the EEC’s creation beyond parliamentary votes, even though both France and Italy had held referendums on their post-war constitutions. Those who identified as European federalists and cultivated a trans-European political network to push the EEC towards ever closer union often saw constitutional and cosmopolitan authority as a counter to democratic, national authority.56 The Habsburg Empire’s enduring influence on the Central European political imagination left its mark.57 Some on the right, like the Austrian-born Friedrich Hayek, who supported a federal Europe did so because they thought that it would strengthen international liberalism at the expense of democracy. For Hayek, negating any idea of a national people in a cosmopolitan economic union would make big welfare states politically impossible, protectionist trade policies much more difficult, and all together produce a less interventionist state.58 In France, there was relatively little support among French political parties for any site of supranational European authority, but French bureaucrats pushed that agenda anyway, ultimately successfully.59
Nor in practice did the EEC become more democratic. None of the EEC’s institutions was directly elected. The unelected European Commission had the sole authority to initiate legislation. The 1960 Dehousse Plan for direct elections to the European Parliament was rejected, as was de Gaulle’s counterproposal for member states to hold concurrent national referendums to legitimate EEC decision-making.60 In two decisions in 1963 and 1964, the European Court of Justice asserted that the EEC constituted a legal order that imposed obligations on national governments and citizens, and that Community law was supreme over national law by direct result of the treaty establishing the Community. The eventual common market created a legal order that made government intervention in a good number of economic sectors illegal.61 In the end, the EEC proved to be a rather limited supranational entity. Indeed, for the governments who created it, the attraction was in part that it strengthened the nation state’s capacity to act economically, including in regard to energy.62 Nonetheless it diluted democracy in its member states by insulating executives from democratic demands expressed in national legislatures without providing an alternative supranational outlet for democratic discontent.
