It’s the Economy, Stupid: European Edition

I wrote this paper for HIST 421: European International Relations with Prof Vanessa Ogle.

In examining three periods of IR (multipolarity in the interwar years, bipolarity in the Cold War, and unipolarity since 1990), this paper analyzes two variables in European IR: economics and Europe’s centrality within the international system.  It’s not a perfect study, but it is an intriguing model for understanding why violence breaks out between and even within countries.

I. Introduction

In the very first lecture of this course, Professor Ogle summarized how European engagement with International Relations changed dramatically from the time period of 1918 up to today.  At first, the system was multipolar with all of the poles residing in Europe: centrality within the international system was very high.  After the Second World War, Europe’s role in the world became less central in the face of the bipolarity of the Cold War between the USSR and US.  Finally, Europe’s move away from centrality has continued in the modern era of American unipolarity in the international sphere, seeing as Europe is neither the geographic nor political center of international relations.[1]  Across these time periods, it can generally be said that Europe has become more peaceful.  But this begs the question – is less centrality truly the cause of stability?

While the author certainly agrees that less centrality has helped to foster peace, this paper hopes to finesse the argument by introducing another variable: the economy.  This paper will focus on two competing variables that have impacted Europe’s level of stability over the three time-periods mentioned: economic prosperity and Europe’s centrality in the international system.  These variables are further broken down into their dual-natured impact on peace in Europe as contrasted by the following matrix:

Strength of the
European Economy

Europe’s Centrality in the International System

Less Central

More Central

Economic Prosperity

Most Peaceful

Economic Hardship

Most Violent

In other words, this paper hypothesizes that when Europe’s centrality in the international system is high and the economy is poor, there will be violence.  The author also expects to find the inverse: less centrality and a good economy imply relatively high levels of peace.  It is through this lens that this paper will analyze the time periods of 1918-1945, 1945-1989, and 1989-Present, with the hopes of categorizing them into one of the quadrants laid out by the foregoing matrix.

II. 1918-1945: The World Fights in Europe

In the aftermath of the First World War, European leaders came together for the Paris Peace Conference of 1919 to set up a blueprint for a new world order.  Woodrow Wilson and his Fourteen Points played a crucial role in this conference, not least of all for the principle of self-determination and the creation of the League of Nations.[2]  However, America’s ultimate rejection of the League meant that the victors in Europe remained at the heart of international relations.  The remaining members of the Big Four (Britain, France, and Italy) were thus left with the charge of leading the new world order.[3]  We can therefore conclude that Europe’s centrality was very high during this time period.

Economically speaking, this decade was not good.  In deliberating the Treaty of Versailles, France sought revenge against Germany for the economic and human tolls wrought upon France from WWI.[4]  Germany was saddled with the brunt of the reparations: an immediate $5 billion, a subsequent $7 billion, and future pensions for war victims.[5]  At this time in Eastern Europe, economies broke down due to “the absolute falling off of…Europe’s internal productivity, the breakdown of transport and exchange…and third the inability of Europe to purchase its usual supplies from overseas.”[6]  Millions of Eastern Europeans became unemployed and millions more went hungry, especially in the former Empire of Austria-Hungary.[7]  Ethnic minorities like Jews and Ukranians in Poland were scapegoated for Europe’s economic woes.[8]  As the depression worsened, Hitler and the Nazi Party capitalized on a platform of “rescuing the German economy” with increasingly xenophobic and anti-Semitic rhetoric.[9]

World War II followed, and once again Europe found itself engaged in total war.  Human casualties and capital destruction was at an all-time high, and the Nazi Final Solution resulted in the death of millions more.  As the war dragged on, occupied nations were economically exploited until the war ended,[10]  And as the war drew to a close, “Soviet troops rampaged through Poland and Eastern Germany and triggered a massive program of ethnic cleansing in Eastern Europe that led to the death of another two million ethnic Germans and the expulsion of perhaps 12 million people from their homelands.”[11]  We can thus conclude that the period of 1918-1945 saw incredibly high levels of violence at a time of both high centrality in the international system and a depressed economy.

III. 1945-1989: Europe Cools Down

With the end of the Second World War came the beginning of the Cold War between America and the USSR.  Right at the outset, these two countries were resolved not to make the previous mistake of failing to join the new world order.  As such, they both signed onto the United Nations Charter and assumed leadership positions in the Security Council and started to actively shape the international system.[12]  This held ramifications for Europe on both political and economic levels.

Politically, Stalin created an ideologically united Eastern Bloc as a buffer zone against future invasions.[13]  This bifurcation of the continent was acknowledged in the 1946 “Iron Curtain” speech by Churchill[14] and formalized by the North Atlantic Treaty Organization and the Warsaw Pact.  That America and the USSR were so easily able to split up Europe demonstrates that Europe couldn’t even control its own destiny.  Consider too the severe loss of empire in this time period: from British India to French Africa, colonies took advantage of Europe’s weakened position in the international sphere to assert their independence.[15]&[16]  During the 1956 Suez Crisis, when President Eisenhower prevented Western Europe from retaliating against Egypt’s nationalization of the canal, Europe’s fall from global political might was publicized for all to see.[17]

That all notwithstanding, Europe continued to be the geographic center of international relations; the battleground, if you will, for the Cold War.  As Stalin continued to implant communist puppet governments and secret police throughout Eastern Europe, Truman struck back in Greece and Turkey, declaring the right to defend people from coercion (i.e. democracies) worldwide.[18]  The ideological strife between communism and democracy was defined by Kennan as Containment.[19]  And yet, for all this tension (highlighted over the years by the Berlin Airlift and the Cuban Missile Crisis), the battlefield of Europe never became hot, so to speak.

Economically, America and the USSR again pursued radically different policies.  The former sought a strategy of integration through the Marshall Plan, which sent huge amounts of aid to Western Europe and further integrated them into America’s capitalist system.[20]  Exports and industry rose, unemployment fell, and even the Franco-German rivalry gave way to economic cooperation (hence the 1950s in Western Europe being termed ‘the miraculous decade’).[21]  So while in this time period Western Europe’s centrality in the international system fell, its sharp economic rise produced pronounced peace and cooperation.  In fact, this peace went so far as to cause some in Europe like France’s de Gaulle to push back against ‘Americanization’ and consolidate European culture and economies even more.[22]

Eastern Europe, on the other hand, saw no such economic prosperity because it was treated vastly differently by the USSR, which sought to “plunder the resources of the Soviet zone as a means of aiding Soviet internal reconstruction.”[23]  From 1965-85, the Soviet economy’s growth rates either plateaued or fell from year to year.[24]  Stalin forced Eastern Europe to mimic the Soviet model and invested in the military, steel mills, coal mining, and collectivized agriculture.[25]  By the time that Khruschev assumed authority, he saw the need for change and decided to loosen the iron grip on the satellite states.  Once this happened, however, economically frustrated populations across Eastern Europe – from East Germany in 1953 to Poland and Hungary in 1956 – began to riot and resort to violence against communist control.[26]  Hungary proved to be the most resistant, eventually rising up in rebellion: at least 2,000 Hungarians died.[27]  And when Gorbachev implemented a similar policy of granting flexibility to allow the satellite economies to adapt, those same countries who had rioted three decades before stood up once more to the Soviet Union, this time holding elections and successfully asserting independence.[28]

All in all, both Eastern and Western Europe exhibited far less violence during this time period than in 1918-1945.  And they both were less central to the world order than in 1918-1945.  However, Eastern Europe saw nothing like the economic prosperity of Western Europe, and also saw more violence than did the West.  We can thus identify the variable of economic prosperity as overriding that of centrality, for even though Western Europe was more central than the East in this time period (i.e. they had colonies to lose), their much better off economic status allowed peace to prevail.

IV. 1989-Present: The End of the Honeymoon

After the USSR broke up in December 1991 under Yeltsin, the two halves of Europe were tasked with the unification and ultimately a model of “pre-fab” integration was adopted.[29]  At the same time, new states (e.g. Estonia, Lithuania, Ukraine, Moldova, Slovenia, etc.) entered the scene in Eastern Europe as old Soviet republics broke down.[30]  As these Eastern European countries transitioned away from communism, some had a harder time adapting to “Shock Therapy” than others.  The vast majority of Europe continued its positive economic and peaceful trends in this time period, culminating in the Maastricht Treaty which was signed on the foundations of international cooperation laid by the Coal and Steel Community, the Treaty of Rome, and the Single European Act.[31]  Of the transitioning economies, the former East Germany arguably had it the best because West Germany agreed to finance their recovery (much like the Marshall Plan of decades prior).[32]

But the former Yugoslavia remained mired in an economic crisis from the 1980s, and its various ethnic groups were more and more ready to point the finger of blame at one another.[33]  The bad economy coupled with evil nationalist leaders like Milosevic and Tudjman produced the worst of all possible outcomes.[34]  In 1992, large-scale violence began, and three and a half years later 200,000 people were dead.[35]  Here again, we see the undeniable impact that the state of a country’s economy can have on peace.  Yugoslavia mirrored past examples in European history such as Nazi Germany, when economic depression fuels nationalism which causes the scapegoating and persecution of ethnic minorities.

Since then, Europe has continued to recede from prominence in the international system.  This isn’t to say that Europe’s role isn’t important, but rather that other regions like the Middle East and powers like India, China, and Brazil are on the rise and demand ever greater attention from America, the global hegemon.  However, as this paper has established, the economy overrides centrality in determining peacefulness.  Given the current economic crisis in the Eurozone, this does not bode well for the future of Europe.  Greece in particular seems to be following the pattern established in this paper: the poor state of the economy has caused a rise in xenophobic rhetoric and far right political parties advocating a “clean Greece, only for Greeks.[36]  So while the author concludes that as it currently stands, this modern time period is overwhelmingly categorized by high economic prosperity, less centrality in the international system, and therefore peace (Bosnia was, after all, an isolated incident), the evidence in this paper also suggests that if economic trends continue, Europe could be headed towards a more violent future.

Strength of the
European Economy

Europe’s Centrality in the International System

Less Central

More Central

Economic Prosperity


Western Europe 1945-1989

Economic Hardship

Eastern Europe 1945-1989


[1] Vanessa Ogle, Lecture, University of Pennsylvania, January 11, 2012.

[2] Woodrow Wilson, Fourteen Points, January 8, 1918.

[3] Henry Kissinger, Diplomacy. (Simon & Schuster, 2011): pg 230-232.

[4] Margaret MacMillan, 1919: Six Months that Changed the World. (Random House Trade Paperbacks: 2003) pg 191.

[5] Kissinger, Diplomacy, pg. 240.

[6] John Keynes, “The Economic Consequences of the Peace.” (1919): pg. 231.

[7] Ibid., pg 232.

[8] Ogle, Lecture, February 6, 2012.

[9] Ibid., February 8, 2012.

[10] Mark Mazower, “Hitler’s New Order: 1939-1945.” Diplomacy and Statecraft 7 no. 1, pg. 158.

[11] William Hitchcock, The Struggle for Europe: The Turbulent History of a Divided Continent, 1945 to the Present. Anchor Books, (New York: 2004): pg. 10.

[12] “Charter of the United Nations,” June 26, 1945.

[13] Ogle, Lecture, February 20, 2012.

[14] Ogle, Lecture, February 20, 2012.

[15] Ibid., March 14, 2012.

[16] For a detailed case study of French Algeria, see Matthew Connelly’s A Diplomatic Revolution: Algeria’s Fight for Independence and the Origins of the Post-Cold War Era. Oxford University Press, (Oxford: 2002).

[17] Katie Hickerson, Guest Lecture, University of Pennsylvania, March 11, 2012.

[18] Harry Truman, “Truman Doctrine,” President Harry S. Truman’s Address before a Joint Session of Congress, March 12 1947.

[19] George Kennan, “The Sources of Soviet Conduct,” Foreign Affairs 25 no. 4 (July 1947): pg. 566-582

[20] Alex Hazanov, Guest Lecture, University of Pennsylvania, February 22, 2012.

[21] Ibid. and Hitchcock, The Struggle for Europe, pg. 127.

[22] Hazanov, Guest Lecture, February 22, 2012.

[23] Hitchcock, The Struggle for Europe, pg. 26.

[24] Ibid., pg. 351.

[25] Hazanov, Guest Lecture, February 22, 2012.

[26] Ibid. and Hitchcock, The Struggle for Europe, pg. 195-200; 203-213.

[27] Hitchcock, The Struggle for Europe, pg. 213.

[28] Ibid., pg. 359-362.

[29] Ogle, Lecture, April 2, 2012.

[30] Ibid.

[31] Ibid., April 9, 2012.

[32] Ibid., April 2, 2012.

[33] Hitchcock, The Struggle for Europe, pg. 385.

[34] Richard Holbrooke, To End a War. (Random House: New York), pg. 24.

[35] Holbrooke, To End a War, pg. 392.

[36] Rachel Donadio, “Hard Times Lift Greece’s Anti-Immigrant Fringe.” The New York Times, April 12, 2012.