Abstract

"A Private World Economy? International Cartels & Business-Led Globalization in the Interwar Era of Deglobalization"

Liane Hewitt, Princeton University (lhewitt@princeton.edu)

World War I ushered in a deglobalization of the world economy that persisted until the end of the Bretton Woods capital controls in the 1970s. Or so most historians have argued. This paper suggests an alternative framing. If intergovernmental efforts failed to reconstruct the pillars of the pre-1914 global economy—namely free trade and the gold standard—businessmen continued to pursue internationalism. During the 1920s and 1930s, states increasingly closed their borders and pursued varieties of national economic planning. Meanwhile, international cartels and other private business agreements proliferated like never before. This paper argues that we should interpret this “golden age” of international cartels as an attempt to build an alternative, private global infrastructure for cross-border trade and business transactions, when states were failing to do this job. The paper focuses on the first World Economic Conference organized by the League of Nations in Geneva in 1927 which discussed in detail the question of international cartels in the context of world economic reconstruction. Many economists, statesmen and industrialists at the conference promoted private business agreements as an alternative to inter-state trade treaties, which had failed to arrest trade wars. These voices also looked to international business cooperation, not to intergovernmental diplomacy, to build a United States of Europe, secure world peace, preserve international trade, and regulate unstable markets. The paper concludes by arguing that it is more accurate to read the interwar years as shaped by a co-dependent dynamic of state-led economic deglobalization and business-led globalization propelled by international cartels, and other forms of private international business diplomacy, including private arbitration tribunals and private transnational business legal services proviced by the International Chamber Commerce.