In June 2023 Political Economy at the University of Sydney hosted a discussion on Jamie Martin’s new book, The Meddlers: Sovereignty, Empire and the Birth of Global Economic Governance (Harvard University Press). Jamie gave a presentation on the book, and Martijn Konings was the discussant. Today we are publishing a recording of the event, along with an edited transcript of Martijn’s contribution and Jamie’s response.
Martijn Konings
The Meddlers is an incredibly interesting book, and it’s also quite unusual in the sense that it is very much the book of a historian but at the same time has very far-reaching conceptual implications. It presents a ton of archival evidence and goes into a lot of detail on some very specific issues, but then especially towards the end of the book it becomes clear that this is all in the service of questioning an influential image of the past.
The book deconstructs the myth of Bretton Woods as a stable international order that existed from 1945 to 1973. A great deal of thinking about international order – in particular the kind of liberal institutionalism that tends to dominate International Relations as a discipline and International Political Economy as a subdiscipline – is organized around the idea that there is something special, in a good way, about the period from 1945 to 1973. This was an era of embedded liberalism, of a well-regulated capitalism. On the one hand this order enabled cross-border economic interactions; on the other it also allowed nation states some leeway from the discipline of global markets. So, the Bretton Woods conference is seen as the birth of modern international economic governance.
This conception of embedded liberalism is part of a broader periodization of capitalist history which goes as follows. The early twentieth century saw the disembedding of capitalist markets, which led to the collapse of the global economy during the 1930s and then the further fragmentation of world order with the rise of nationalism and fascism. Those in charge of post-WWII reconstruction understood what had happened during the interwar period and they put in place institutions that combined economic freedom with social protection. And then from the 1970s that arrangement breaks down. Markets start disembedding again, and the international organizations put in place during the early post-war period like the IMF start to function in a very different way, superintending a kind of predatory internationalism driven not by the common interests of nation states but by the predatory logic of capital.
This idea of embedded liberalism has been debated for many decades now, and it’s been qualified in different ways. Empirically it has been pointed out that the actual duration of this regime was much shorter than often assumed. Both realists and Marxists have criticized its idealism. But it remains a central point of orientation for thinking about international order. Compared to whatever it is that we have now, a meaningful shared commitment to collective global problem solving always seems preferable.
So here Jamie’s book does something very interesting. Probably recognizing the futility of engaging the issue head-on, he disengages from the problematic as it has been framed in IR and IPE. The book doesn’t focus on the post-1945 period itself, but instead tries to show that the things we think are unique about the post-1945 period were in fact not new at all. The book shows that attempts to construct institutions for international economic governance were a prominent feature of the interwar period. So, both collaborative international economic governance (which we tend to think first emerged after 1945) and then unwelcome meddling by IOs (which we tend to see as a post-1973 phenomenon) go back much further in time, at least to the aftermath of WWI. And the good and the bad always mix, are hard to separate (what some people see as an attempt at constructive collaboration will appear to others as uninvited meddling).
In this way, the book traces how mechanisms for international coordination and interference were constructed during a time that we tend to associate with the collapse of internationalism. This case is extremely well-made – it’s a very rich and compelling story, and the sheer amount of archival documentation really bolsters the case. It shows how conditionality (for many a 1990s phenomenon associated with the role of the IMF) was pioneered by the League of Nations, and how the push for central bank independence was an interwar phenomenon. So, in Jamie’s book the watershed moment in thinking about economic order is 1918, rather than 1945 or 1973.
This emphasis on the longue durée of globalization reflects a broader trend in the fields of global history / international history / history of capitalism. These fields have kept their distance from IR and IPE debates, and while that has been very productive, I also wonder if it has led to something of a blind spot. In a somewhat paradoxical way, it seems quite easy for a certain unspoken liberal internationalism to re-emerge and for the language of states and markets to take over. Jamie’s book is critical of the embedded liberalism concept that has always underpinned liberal internationalism. But from another angle the book could be read as saying that some kind of embedded liberalism has always existed since WWI, even if it’s never coherent and always shot through with tensions.
So, the following are some comments that might serve as invitations to position the book’s contribution vis-à-vis liberal internationalism as a way of thinking.
The book sees WWI as a turning point because that is when international economic arrangements started interfering with national sovereignty in ways that militated against existing norms of sovereignty. But I wonder if that overstates the internal solidity of nation states during the 19th century. Obviously, nation states had been around for a while, whether you date that back to 1648 or to another moment. But sovereignty is a spectrum ranging from formal to substantive, and economic policy – in the contemporary sense of being able to pulling levers to effect specific effects – was still very new. Part of what made meddling so attractive was that sovereignty in the sense of internal state capacity was on offer for the first time – there was something to be meddled with.
In the British case such internal state capacity was also deeply bound up with the empire, and I wonder if that aspect gets enough attention in your account. For example, when it comes to US isolationism, you say that it was a “normal” response (by the sovereignty standards of the time) to what were radical British designs for international cooperation. But here I wonder if the lens provided by the question of how sovereignty is respected or compromised really produces more insight than the language of imperialist rivalry.
It was only during and after WWII that the US was in a position to force Britain to dismantle the imperial system. But even that was a gradual movement. The US pushed for strong conditionality after WWII, but Britain and other European countries won quite strong protections from excessive meddling. What exactly was the significance of this? It may not have been the implementation of an ideal model of balanced market-state relations, and placing it in the longue durée of the secular tension between economic governance and national sovereignty is a useful way of deconstructing the fantasies we have about it, but I still think this needs a more “positive” answer.
The book emphasizes that embedded liberalism was only a reality for a limited number of Western nations. But I wonder if we should look at this not as indicating the limitation of the arrangement (and the theory) but rather as the point of the arrangement. However short-lived it was, embedded liberalism was a real thing in the sense that particular constituencies were positioned in the overall framework of global capitalism in a way that permitted the local and temporar resolution of the democracy/capitalism tension. If we think of such selectivity as being at the core of embedded liberalism, then we might think of liberal institutionalism as merely a polite way to talk about imperialism. Cf Keynes’ comment about the need to “distinguish between the case of a developed country managing its affairs prudently, so as to avoid recourse to the Fund, and that of an irresponsible small country anxious to exploit a new source of borrowing.” (p.229).
These points have relevance for how we view the present. If embedded liberalism was a way of cutting select Western constituencies in on the benefits of global capitalism, neoliberalism signifies the end of that arrangement as a stable institutional option. And that has involved quite a major rebalancing of the relationship between state sovereignty on the one hand and global markets and institutions on the other. A fortification of the nation state and a restoration of boundaries always appears to be one of the most readily available ways to fight back against neoliberal globalism. Such solutions appeal to both the right and the left, and these lines are becoming increasingly blurry. That can drive conscientious lefties back to idealizing institutional collaboration; Habermas is always looking for some cosmopolitan aspect of European integration, and we’re occasionally hearing calls for a new Bretton Woods, etc – all proposals which seem driven more by despair than by discerned opportunity. How might we navigate these dilemmas in the present, if – as Jamie’s book clearly shows – “bracketing” the international dimension is never an option?
Jamie Martin
On your question of the First World War as a turning point: you’re right to suggest that one of the things that makes the politics of “meddling” so salient at this point is the fact that sovereignty itself has transformed and that what is being meddled with is itself quite new – namely, a bounded national space of economic policy. Even if we date modern sovereignty back to 1648, or earlier, we’re nonetheless speaking, in the realm of economic policy, about something relatively novel at the turn of the twentieth century. There are of course earlier mercantilist visions of economic sovereignty and trade. But what I’m speaking about here is a dynamic of the nineteenth and early twentieth centuries, when a cascading set of economic policies were affirmed as the exclusive prerogatives of sovereign states – not yet expansionary monetary or fiscal policy, which come later – but tariffs, public finance, taxation, and so on. All of these are said to be matters of domestic policy alone.
Part of this growing concern about the exclusively domestic nature of these policies stems from an anxious recognition of the increasing number of countries that are losing control over these policies at the hands of foreign actors during this era. Whether it’s China, Greece, or Egypt – more and more countries are forced to cede control, to varying degrees, over trade policy, sources of national wealth, and public finance. At the dawn of the twentieth century, being truly sovereign means being able to exercise control over these policies. And at the end of the First World War, when so many new states are being born, making a convincing claim that you are a bona fide sovereign state is possible only if you can plausibly demonstrate your freedom from this kind of unwanted external compulsion. This is what makes any threat to a state’s economic autonomy so politically explosive: at the very moment when self-determination is taking off around the world, it’s being indexed to a specific set of economic policies.
Now, what is and isn’t meddling is obviously always in the eye of the beholder; but making the case that you merit recognition as fully sovereign involves differentiating yourself from the kinds of states that you don’t want to be – ones that have sacrificed power, autonomy, and standing to representatives of their foreign creditors like a China or a Latin American republic or a post-Ottoman Balkan state like Serbia.
Now, this relates to the question of whether sovereignty or imperialist rivalry is what we should be speaking about here. I see the two as closely related, certainly when it comes to the question of which states, in practice, are able to enjoy what sovereignty, formally, is supposed to provide. Sovereignty is theoretically supposed to grant a shared set of privileges to any state that enjoys this legal status. But, in practice – to put it rather bluntly – how sovereign you are clearly depends on how powerful you are. In this way, the proof of real power in a highly competitive world order is the freedom to meddle in the affairs of others while enjoying immunity from it yourself. Sovereignty, then, is also indexed to imperial power.
In the aftermath of the First World War, this dynamic does not only involve the European great powers meddling in the affairs of states on the so-called peripheries of the world economy outside of Europe; one of the clearest demonstrations that Germany, Austria, Hungary, and Bulgaria have lost the war – and, as a result, have lost standing and status – is the fact that, during the 1920s, they all face extensive interference by outside actors in their domestic economic policy-making. This is something that makes early experiments in global economic governance by the League of Nations so politically controversial: they are first, by and large, only brought to the losers of the First World War. Many contemporaries thus see them not as truly liberal internationalist endeavours but as forms of victors’ justice, meted out by the victorious Allied empires on the defeated Central Powers.
On the points about embedded liberalism: is its non-universality a limitation of the concept or something that adheres in it as a matter of course? Is it a feature or a bug? People often speak about embedded liberalism as if it were a universal condition of the postwar period, even though John Ruggie himself, who coined the term, admitted in a very telling footnote that it was a bounded concept that wasn’t applicable to all states. My question is why, if we take this footnote seriously, does this concept nonetheless have such a strong hold on us? Why not foreground the fact that it was a status enjoyed by a minority of states? This isn’t to say that embedded liberalism didn’t exist at all; but if we redescribe it as an anomalous and quite short-lived financial counterpart to NATO, or something like that, then I think the concept loses some of the allure it has long enjoyed. Being part of essentially a military alliance for a brief period in the Cold War gave you some breathing space for experiments with domestic arrangements. If you put it this way, though, I just don’t think this is a very moving political vision. Again, I’m not saying that embedded liberalism never existed. But I do think it has become mythologized. So in that sense you’re right and I agree: actually existing embedded liberalism didn’t represent much of a break from imperial arrangements and great power politics at all.
Now, this is helpful to understand why Western European states, in the immediate aftermath of the Second World War, are not meddled with to the extent that Keynes and others worried they would be at the hands of the Americans. The British, French, and Dutch are all concerned that the Americans are going to turn around, after Bretton Woods, and start demanding they do this and they do that, and there is some relief when this doesn’t happen to the degree that it might have. But there really isn’t anything particularly remarkable about this fact; there are always immunities that exist among coalitions of powerful states that traditionally recognize each other as enjoying certain privileges. And there isn’t anything surprising about the fact that it is in Latin America, the traditional site of US dollar diplomacy, where a US-dominated IMF begins to intervene in domestic fiscal and monetary decisions – in Argentina, Chile, Mexico and elsewhere. This is simply how imperial orders work: hierarchy and status – and the privileges that come from them – are highly differential. The playing field is always uneven.
So, the book should really be read as foregrounding empire. It’s true that some liberal internationalists attempted, at moments, to chip away at older imperial arrangements or to redescribe them as less coercive; some of these efforts we might find sympathetic and some quite distasteful. But the driving force of the book is ultimately empires that are redefining themselves during an era in which the challenges to empire are multiplying rapidly.
Now, you’re right that I don’t want the book to be read as embracing a sovereigntist solution. Given this fact, what does this history offer to current problems? One point would simply be diagnostic: I would hope the book is helpful in providing a way to think about how shifting balances of power in the global economy are changing which states enjoy real autonomy from external compulsion and the strategies they use to achieve and protect this autonomy. I think this is enormously relevant for current debates about de-dollarization, for example, or sovereign debt. As China has become the world’s largest official creditor, it has made loans in ways that tend to have quite different political implications to loans from traditional multinational institutions or the Paris Club of lenders. But the jury’s still out on what China’s status as a leading global creditor is going to mean, politically, over the longue durée and whether this will really transform now global capital markets and national politics interact.
Another point would be to look at how this history offers a kind of immanent critique of the concept of embedded liberalism. Even if this sounds like a nice idea, we’ve never had it as anything approaching a universal regulative ideal. So, one upshot of this history would be to say, well, why don’t we try to have it, for the first time? Some have read in my book a kind of sympathy for a Dani Rodrik-style moderate globalization based on this principle. But as a historian, my instinct is more to point out, regardless of the desirability of such an arrangement, that it simply hasn’t ever existed in a way that we could or would want to easily recreate today. I’m particularly frustrated with the idea what we need is simply a “new Bretton Woods,” as is so frequently called for. Why root one’s vision for the future in arrangements from the 1940s? This doesn’t make sense to me.
The alternative would be to think of something else – something more ambitious and open-ended that would involve moving beyond a framework of embedded liberalism to build something entirely new. This would involve a kind of historical thinking that is more sceptical than embracing of the political horizons of the twentieth century. This is extremely challenging, of course – but I actually think there is good reason to be optimistic today about the possibilities for such a creative and open-ended rethinking of global political economy.
Author: Martijn Konings
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