Europaische WirtschaftsGemeinschaft

BEING in Translation:
EUropean Economic Community

Von:
ReichsWirtschaftMinister u. President der Deutschen ReichsBank Funk;
Professor Dr. Jecht, Berlin; Professor Dr. Woermann, Halle;
Dr. Reithinger, Berlin; MinisterialDirektor Dr. Benning, Berlin;
Gesandter Dr. Clodius, Berlin, und GauWirtschaftsBerater Professor
Dr. Hunke, Berlin

Mit einer EinFuhrung von:
GauWirtschaftsBerater Professor Dr. Heinrich Hunke
President des Vereins Berliner Kaufleute und Industrieller

HerausGeGeben von dem
Verein Berliner Kaufleute        und der        Wirtschafts – HochSchule
Und Industrieller                                                                        Berlin

Published
BERLIN 1942
Second edition 1943
Haude & Spenesche VerlagsBuchHandlung Max Paschke

------------------------------------------------------------------------------------------------------------------------------
To assist non Germans, reading the above, certain letters have been capitalised for convenience ONLY
Pamphlet #02

Europaische WirtschaftsGemeinschaft

BEING in Translation:
EUropean Economic Community

Von:
ReichsWirtschaftMinister u. President der Deutschen ReichsBank Funk;
Professor Dr. Jecht, Berlin; Professor Dr. Woermann, Halle;
Dr. Reithinger, Berlin; MinisterialDirektor Dr. Benning, Berlin;
Gesandter Dr. Clodius, Berlin, und GauWirtschaftsBerater Professor
Dr. Hunke, Berlin

Mit einer EinFuhrung von:
GauWirtschaftsBerater Professor Dr. Heinrich Hunke
President des Vereins Berliner Kaufleute und Industrieller

HerausGeGeben von dem
Verein Berliner Kaufleute        und der        Wirtschafts – HochSchule
Und Industrieller                                                                        Berlin

Published
BERLIN 1942
Second edition
1943
Haude & Spenesche VerlagsBuchHandlung Max Paschke

------------------------------------------------------------------------------------------------------------------------------
To assist non Germans, reading the above, certain letters have been capitalised for convenience ONLY

Pamphlet #02
Being the SECOND of a series of Pamphlets being published on the internet at: www.SilentMajority.co.UK/EUroRealist/Germany1942
Greg Lance-Watkins, who has overseen this project for SilentMajority over the last few years would like to thank ALL those who have helped in tracking down the original full text in German, and the short term acquisition thereof, for photocopying., Also for the lengthy process of accurate translation and independent checking of the translation work.
The original copy is available for inspection at Glance Back Books in Chepstow.

The final pamphlet in the series will contain ALL the maps and relevant charts, together with a brief summary of the document.
The European Economic Community 

Mr. Funk, the Reich’s Economic Minister and President of the German Reichsbank

Professor Dr. Jecht, Berlin

Professor Dr. Woermann, Halle

Dr. Reithinger, Berlin, Ministerial Director

Dr. Beisiegel, Berlin

Secretary of State Königs, Berlin

Director Dr. Benning, Berlin

Ambassador Dr. Clodius, Berlin and Economics Committee Advisor

Professor Dr. Hunke, Berlin

With an introduction by

Economics Committee Advisor, Professor Dr. Heinrich Hunke, President of the Society of Berlin Industry and Commerce

Issued by

The Society of Berlin Industry and Commerce and the Berlin School of Economics

Second Revised Edition (Berlin 1943)

Haude and Spenersche Publishing House Max Paschke

Preface to the First and Second Edition

This text contains the lectures presented under the title “The European Economic Community” by the Society of Berlin Industry and Commerce at the start of 1942 in conjunction with the Economic Advisor to the Berlin Committee of the NSDAP and The Chamber of Trade and Industry.  The order of lectures was as follows:

•	Walter Funk, Reichs Economic Minister and President of the Reichsbank:
“The Economic Face of the New Europe”

•	Dr. Horst Jecht, Professor at The Berlin School of Economics:
“Developments towards the European Economic Community”

•	Dr. Emil Woermann, Professor at Halle University:  
“European Agriculture”

•	Dr. Anton Reithinger, Director of the Economics Department of I.G. Farbenindustrie A.G., Berlin: 
“The European Industrial Economy”

•	Dr. Philipp Beisiegel, Ministerial Director of the Reich’s Labour Ministry:
 “The Deployment of Labour in Europe”

•	Gustav Koenigs, Secretary of State, Berlin: 
“Questions About European Transport”

•	Dr. Bernhard Benning, Director of the Reich’s Credit Company, Berlin: 
“Questions About Europe’s Currency”

•	Dr. Carl Clodius, Ambassador of the Foreign Office:
 “European Trade and Economic Agreements’’

•	Professor Dr. Heinrich Hunke, Economic Committee Advisor of the NSDAP, President of Germany’s Economic Publicity Agency and the Berlin Society of Industry and Commerce: 
“The Basic Question: Europe - Geographical Concept or Political Fact?”

The lectures met with considerable interest and very strong agreement. On account of this, we feel we should make them available to a wider circle of people.
Berlin, September 1942

The Society of Berlin’s Trade and Industry - The President: Professor Dr. Heinrich Hunke, Advisor to the Economics Committee

The Berlin School of Economics - The Rector: Dr. Edwin Fels, Professor of Geography

	Index	Page	
Preface		  2	
Hunke	Introduction	  8	
	The Discussion So Far and its Results 	  8	
	Economic Practice	  9	
	Problems Related to Economic Community of Continental Europe             	 10	
PAMPHLET #01			
Funk	The Economic Face of the New Europe    	 15	
	Real and False Economic Freedom 	 15	
	Co-operation in Continental Europe	 18	
	Europe’s Resources and Completion 	 20	
	Directing of the Economy by the State and Work 
                     between the States of the Community	 22	
	The Movement of Payments between the States and European Currency Issues	 24	
	Securing the Area and Economy of Europe	 27 	
	The Will for Co-operation in the Economic Community               	 28	
PAMPHLET #02			
Jecht	Developments towards the European Economic Community 	 30	
	The European Economic Community and its Enlargement    	 30	
	The Problem of the European Economic Area in Late Antiquity and 
                                                                                            the Middle Ages	 31	
	Recent Changes to the Problem of the Area of Europe 	 33	
	The Formation of the Nations and Independent Economies  	 33	
	Overseas Expansion and its Consequences for Europe       	 34	
	The Release of England from the Continent and the Formation of the 
                                                                                  “Free Global Economy”	 35	
	Europe’s Economic New Order: The Present Task                             	 37	
	Collapse of the Previous World Economy	 38	
	Means and Objectives of the European Economic Community        	 39	
	Outlook                                                  	 41	
PAMPHLET #03			
Woermann	European Agriculture                           	 42	
	The Development of Agricultural Enterprises and 
                                             the Structure of  Europe’s Food Economy 	 42	
	The Formation of the Division of Labour in World Agriculture                  	 47	
	Production Increase in Germany and Italy                                       	 49	
	The Supply Situation under the Influence of Economic Restrictions and Change                                                                    	 50	
	Political Consequences for Production                                               	 52	
	Possibilities of Increasing Europe’s Food Production 	 53	
PAMPHLET #04			
Reithinger	The European Industrial Economy                                   	 59	
	The Development of Industry in the 19th Century                              	 59	
	Stages of Technical and Economic Development                             	 60	
	Socio-Political Effects                                                                       	 60 	
	The Loss of Europe’s Hegemony in the World War                        	 61	
	The Transition to State Direction and Planning                              	 62	
	New Europe and its Shared Features                                             	 64	
	Regional Differences in Europe                                            	 66	
	The Major Powers at War - A Comparison of their Capabilities                 	 68	
PAMPHLET #05			
Beisiegel	The Deployment of Labour in Europe                           	 71	
	Population Density, Number and Structure of the Employed  	 71	
	People - The Wealth of Europe                                                                       	 72	
	Worker Exchange on the Basis of Inter-State Agreements            	 75	
	Adaptation of the Organisation for Labour Deployment      	 78	
	Employer Action and Order Switching   	 79 	
PAMPHLET #06			
Koenigs	Questions about European Transport                               	 81	
	“Technical Unity” in the Railway System	 82	
	The Magna Carta of Europe’s Internal Riverboat Traffic	 84	
	Motorways’ Contribution to the European Transport Community	 87	
	Community Work in Shipping                                                             	 88	
	Joint Work in Air Traffic                                                                    	 89	
PAMPHLET #07			
Benning	Questions about Europe’s Currency                                   	 91	
	Currency’s Two Sides                                                                         	 91	
	The Internal Economic Situation of Europe’s Currencies  	 92	
	Managing Foreign Exchange and Bilateral Settlements   	 92	
	Development of Multi-Lateral Settlements                                           	 94	
	The Problem of the Clearing Balances                                              	 95	
	Adjustment of Europe’s Exchange Rates                                          	 96	
	Future Formation of the European Currency System    	 97	
	Europe’s Future Currency Relationship to the Currencies of Other Major Nations 	 99 	
	What about Gold?                              	100	
	The European Currency Bloc                                                              	101 	
PAMPHLET #08			
Clodius	European Trade and Economic Treaties                                  	102	
	The Period of the Old Trade Policy                                                        	102	
	German Economic and Trade Policy since 1933                                      	103	
	Changes to Trade Policy Caused by the War                                          	105	
	The Reversal of the Law of Supply and Demand                                   	106	
	The Question of Labour Deployment in Europe                                         	106	
	The Problem of Traffic                                                                             	106	
	Effects of the English Blockade on Europe                                               	106	
	Principles of European Co-operation                                                           	107	
	The European Regional Principle                                                                 	107	
	Europe’s Economic Independence                                                               	107	
	Europe and the Global Economy                                                                	108	
	Internal Preconditions of a European Economic Community                  	109	
	Ways to Achieve European Co-operation                                                     	111	
PAMPHLET #09			
Hunke	The Basic Question: Europe – Geographical Concept or Political Fact?      	113	
	New Learning and Thought                                                                            	113	
	Starting Point for European Task 	114	
	Three Eras                                                                                                        	114	
	The Character of the Global Economy                                                          	114	
	Political Weakness of Continental Europe due to the Idea of 
                                                                         English World Superiority      	116	
	Britain’s Dominant Theory about the Modern National Economy	117	
	The Foundation of the European Economic Community                                     	118	
	Categories within the European Economic Community                                              	119	
	Three Principles                                                                                               	119	
	A New Era                                                                                                        	121	
	Taking a Look Back to the Past and to the Future               	123	
PAMPHLET #11
	The Illustrations – Maps, Charts etc. Summary of the series and Comments
	Request for help locating further FACTS
		Including Reinhard Heydrich’s 1942 Reichs Plan for The Domination
of EUrope – published in Berlin in 1942 believed to have been November.
ALSO – details of the Berlin Conference of 1944 Titled ‘How Will Germany Dominate The 
Peace, When It Loses The War.’ & details of the massive amounts of cash moved 
out of Germany during the war to safeguard the future of German domination against the economic collapse of losing the Second World War against EUropean Union. AND connections with organisations like The Bilderbergers, Council for Foreign relations, Tri Lateral Commission and other arms of the New World Order.

Introduction - by Professor Dr. Heinrich Hunke, Economic Committee Adviser to the NSDAP, President of Germany’s Economic Publicity Agency

Around the end of 1939, most of Europe was either consciously or unconsciously under the influence of the economic concept of England.  Over recent years, however, it has been swept out of European countries, politically, militarily and economically.  Politically the three-power pact has given honour once again to the ancient figures of life, people and room.  It has also established a natural order and a neighbourly way of co-existing as the ideal of the new order.  The foundation of English economics, which is the basis of the balance of powers, has been militarily destroyed.  And economically, a change has come about following the political and military development, the shape of which is easy to describe, but whose final significance is very difficult to evaluate.  I can only repeat, that the changing order that is happening now has to be ranked as one of the greatest economic revolutions in history.  It signifies a reversion of the economy of Europe to a time before the English concept of building an overseas Europe, i.e. an awareness of one’s own country.

The Discussion so far and its Results

Discussions about questions relating to Europe started as the power of the NSADP grew.  At the Congress of Europe in Rome from 14th to 20th November 1932, Alfred Rosenberg developed, for the first time in front of an international forum, thoughts and ideas that have moved us since.  No one, who fights for a new economic order in Europe, can ignore these perceptions and conclusions.  The economic and political wheel was set in motion, when the NSDAP declared the militarisation of the German economy.  It is to the credit of the journal ‘Germany’s Economy’ that it first seized these questions in 1932, kept on bringing them up and stuck doggedly to those original perceptions.  The idea of German economic self- sufficiency in the new political sense and the German economic militarisation are synonymous with this journal.  Besides this, Daitz, the ambassador, has earned the special credit of being the first to have related German economic history to the present time.  Part II of his selected speeches and essays, which appeared in 1938 under the title ‘Germany and the European Economy’, summarizes his concepts formed between 1932 and 1938.  The Italian, Carlo Scarfoglio, delivered with his book ‘England and the Continental Mainland’, a decisive historical contribution to the consciousness of the European continent.  Meanwhile German and Italian economic policy drew the political consequences from the historical lessons that were learnt during the blockade and learnt again during the sanctions.  The speech made in Munich in 1939 by the leader of the Reich’s farmers, R. Walther Darre, at the 6th Great Lecture at the Commission of Economic Policy of the NSDAP, takes a special place in the discussion at that time.  Its theme was “The market order of the National-Socialist agricultural policy - setting the pace for a new foreign trade order.”

While our leader maintained the hope of reaching a peaceful agreement with England, the route for European economic unity remained problematic.  The end of 1939 was a decisive point and it was natural that the years 1940-1941 heralded the new economic and political order.  The writer, in particular, developed and extended in speech and writing the intellectual fund of the new economic policy, which has been translated into most languages, so that today everywhere the great constructive texts are known.  These contexts revolve around the following issues:

1.	Theory about the Reich and the European economy.

2.	The historic, cultural, and economic significance of the German economic order.

3.	The foundations of the future economic relationships between the states.

4.	The nature of the European economic community.

On 25th June 1940 the Reich’s Economic Minister, Funk, publicised in his official capacity his thoughts, which underlined the development so far and thus gave them state sanction.  In October, the journal ‘German Economy’ summarised for the first time the principles of European co-operation, the fundamental principles of German foreign trade, Germany’s export economy and ways and means of promoting export.  It did so in a popular review “About A New Europe”, providing an overview of the important problem of European economic fusion.  Around the end of 1940 the Berlin historian Fritz Rorig finally outlined in his book “Hanseatic Essence” the historical foundations of the greatest economic and political achievement by the Germans.

I am clear in my mind that total clarity is to be found in the principle questions: The necessity is recognised for a political order for the economic co-operation of the people.  The nature of the new order which is: awareness of tradition, using up one’s own economic resources, long term economic agreements and fair relations, is affirmed.  The economic inter-dependence is underlined by fate.  The economic unity of Europe is thus evident.

Economic Practice

Even practical economic life has increasingly allowed entry to new thoughts.  I am able to see the decisive steps in the start and realisation of the following points:

1.	In the increasing payment traffic through Berlin.

2.	In the exchange of experiences in various areas of economic life.   Thereto belong also the statements of ministers and business people, the calls made by special advisers and the collective tackling of important tasks relating to the economy.  Even the specialist is surprised, once he has taken the trouble to put together all the connections.  Today they are already legion.

3.	In the signing of long term economic agreements between the Reich and the other European states, which the public is aware of.  There can be no doubt that such agreements are those of the future.  

Of course, that cannot prevent unclear points and new problems from arising, which become evident at the time when the situation is reviewed.

Problems Related to the Economic Community of Continental Europe

These unclear points primarily relate to the concept of economic direction, the extent of solidarity and neighbourly attitude, the development of one’s own powers, the care to maintain the standard of living and the question of raw material purchase from foreign countries. It is natural that one or another issue will take priority of interest, depending on the set of conditions that prevail.  It should be attempted at this point to give a reply, albeit a summary one.

There can be no doubt that the concept of direction of the economy, or rather its leadership, is as novel as it is revolutionary.  Its classification is all the more important, as the fate and consequence of European co-operation depend principally on a new consistent form of economic understanding.  The Anglo-Saxon view of economics is dead: consequently, even the so-called ‘classical’ national economy is no longer classical, but it has survived.   So what it comes down to is that a new understanding arises to do with ideology and terminology, which represents a sound basis for agreement and co-operation.  Relating to this, one must point out the following in detail:

1.	Economic direction is not a momentary emergency solution, instead it forms the core of new theory and practice.  First of all, it takes the place of individual egotism and the automatic autonomy of the Anglo-Saxon precept.

2.	Economic direction is not identical to the tendencies of a centrally planned economy.  It does not seek to cancel the individual or to administer through the state operators.

3.	Economic direction really means the following: the new instruction of the creative and constructive power of the individual in relation to the whole system; the creation of a consistent economic view and an attitude towards the economy; the selection of important tasks through political leadership and the state’s final decision on all questions about economic power.  Beyond this, the economy is free and responsible to itself.  

The degree of solidarity of the individual economies and their neighbourly attitude is characterised by three guidelines: 

Firstly, it is limited in regard to its own economic development by the recognition that the utilisation of individual resources represents not only a requirement of the new economic precept, but is the very foundation for economic activity.  The European economic community has no interest in leaving any abilities or possibilities unutilised.  

Secondly, it contains the obligation that, because of Europe’s freedom, consideration is given firstly to continental Europe regarding any matter related to economic activity.  Not only should the shared fate of the European people be emphasized, but the fact should also be stressed that the supplementation of the European economies beyond their borders is possible and sought after.

Thirdly, it must be maintained that, above all else, the spirit of the individual economies may not be allowed to go against the spirit of neighbourly co-operation.

The question of developing one’s own powers refers to the problem of monocultures, of industrialisation of the agrarian south-east and the awakening of new needs.

An answer can easily be given to the first question.  Monocultures are the result of the same economic precept that made the world market price the determining factor in the economy.  According to that precept, people and land are the vestiges of some by-gone age.  Europe is well on the way to destroying these monocultures with initiatives ranging from land improvements and growing new crops to discovering new local resources.  All these have the same aim, which is to develop the economy and broaden its basis.  Germany and the whole of Europe can only greet these efforts with gratitude.

The industrialisation of the south-east poses a particular problem regarding these questions.  As I am unable to handle this problem - like all other problems - here in a comprehensive and exhaustive manner, because the industrialisation of economies is theoretically a difficult problem, I can only say as follows:

1.	Just as it is in the nature of things that each country will strive to utilise its available resources for its own production, so will there will be a knock-on effect for other economic partners.

2.	If, as is the case in the South-east European countries, there is heavy 
over-population in the countryside, then there are only three possibilities to solve it: itinerant workers, a permanent emigration and an ‘intensivisation’ of the local economy, a term correctly created by Dr. Ilgner for the problem of industrialisation.  Itinerant workers can only form a part solution.  Besides, it only applies to agricultural and construction workers and gone on for ages.  Permanent emigration from Europe is just as false as impossible.  There just remains the intensivisation of the economies of south-east Europe as the way to self-help.

3.   The economies should make it possible for an independent life according to the modern economic view.  The intensivisation of their economies therefore is right for the time.

4.   The old features of industrialisation, which evolved from the price collapses in countries with agriculture and raw materials, have to now belong to the past.  Europe is a communal living area.  Only through a joint development of economies - and not through independence from one another - can protection against crises be achieved.

5.    The tasks that have to be solved in Europe are so big that the powers needed to do so have to be released by an intensivisation of the individual economies.  This can be easily done by employing the workers that have been liberated in new branches of the economy.

Without affecting the difficult questions of purchasing power, it can be regarded as proven that the joint work to build up Germany’s and the south-eastern states’ in the area of industrialisation lies in the direction of the intensivation of interest of the whole continent.  

One important and until now completely overlooked task in this regard exists and that is the awakening of new needs in the south-eastern countries.  It is because, in those countries, wealth has grown and will gradually continue to grow, as a result of the reliable purchase of agricultural products and available raw materials at adequate price levels.  According to the principle in economics that giving equals taking, peoples’ living habits there will have to change, otherwise one day the process will come to a halt.  Germany’s ability to absorb the products from the south-east is practically infinite, whereas creating a demand for German goods there is not only a matter for economic intensivation but also one of modifying the people so they consume more.  This task is of such importance that it has to be considered from the very outset, so that the south-eastern European economies are elevated after the war.

Equally important as the industrialisation of south-east Europe is the question of the standard of living in the north.  Their economic development and high standard of living, which underpin their lives though all economic conditions, should not be mistaken.  This standard of living has grown considerably during the 19th century and around the time of the world war due to free trade, so that various circles view world economic events with particular concern.  From a German viewpoint, only the following points can be made:

Firstly, a higher standard of living is also the aim of the German government. The German people not only understand this well, but also through its fight wants to ensure European civilisation and culture.  This fight will benefit the whole of Europe, and with it the north.

Secondly, despite being connected successfully to England and its economic system (one should not ignore the countless economic troughs that feature there), the economies of the north whose fate and greatness are very closely linked to Germany.

Thirdly, the northern states’ difficulties are going through a temporary phase of adjustment.  In the long term, this will bring about a lasting advancement, rather than destruction, for their economies’ foundations.

Maintaining a high standard of living is not an insoluble problem.  To finish, I now come to the problem of purchasing raw materials from overseas markets.  A leading south-east European economist once wrote about this principal question: “Unlike the war, we were in the following situation: in order to import raw materials from overseas countries, we bought goods from west European countries with foreign exchange.  In the area of continental Europe there is no gold.  Everything had to pass through the system of clearing - goods sold against goods. We have no product that can be sold to North or South America.  That means that the leading nations are obliged to acquire and distribute to us the raw materials that we need.  The leading nations of Europe can supply, with its capacity, enough products to overseas countries with which to acquire raw materials.  The one question is whether exchange will ever happen… Even before the new order is introduced, and without even joining in with the Axis powers, we stand in solidarity outside Europe with its traffic of goods…”

We can only agree with this view, leaving the matter open, as the Reich’s Economic Minister Funk described, how large the direct sources of help will be and whether raw material acquisition from overseas will take place through the system of clearing or free flow of currency.  With the introduction of the multi-lateral clearing system, on a practical level there is no change from the pre-war time.  As this learned person said, “All the benefits of the method of paying are regained from the system of free currency.”  Nor can it be realised - contrary to him - that this system of clearing through Berlin should function without those countries outside the European system. But the decisive factor is the way in which the continent is bound to Germany and Italy by one fate.

Since 1940, therefore, we are faced with an unparalleled economic and political revolution.  The problems created for us are large but can be solved.  Their solution will give Europe the peace it yearns for and will bring a great era of joint development.  It is worth fighting and working for this. 

 The following discourses should contribute to helping us to broaden and deepen our understanding of the tasks and nature of the European economic community.

Developments towards the European Economic Community
by Dr. Horst Jecht, Professor at the Berlin School of Economics

The European Economic Community and its Enlargement

Europe is about to gain economic unity and independence as a result of fighting this war.  My task is to demonstrate the historic development which has led to the present position over the past thousand years or so, which we probably all agree is the turning point in Europe’s fate.  It could actually appear as if the magnitude and singularity of the decision being faced make such deliberations unnecessary.  But to appreciate the special situation today one has to understand the past and this applies to the European economic community.

Its concept is expressed in the creation of an enlarged economic community.  Even with a retrospective look at things, we need to demonstrate whether and how such an enlarged economic community has existed before in European history.  I consciously use a word here, which is freely used in modern literature and bears a truly undefined character, in order to draw on notions familiar to us.  Firstly, though, I want to describe where I find the identity of such an enlarged economic area.

Managing any economy requires the availability of room to form a basis.  The nature and characteristics of that area, its abundance of agricultural and mineral products and its transport situation are as influential as the effects of economic activity on the formation of economic life.  We can talk about economic landscapes in regard to the close relationship between economy and room, in the sense of a uniform creation of an economic life in a defined geographical area.  The term ‘enlarged economic area’ we understand to mean the combination of economic processes over a wide area of the world, which go to create this advanced form of economic unity.  In figurative terms then, the formation of economic entities in an area, which differ significantly from other economic ones.

Two things are necessary for the creation of such a uniform economic area.  Firstly, a certain degree of economic integration within a given area.  Put another way, the way in which it has governed its economic life for hundreds and thousands of years has to be overthrown and has to be left behind.  Secondly, a certain unity of political order, in particular, has to bring together all economic features of this area.  This does not mean in every case the subjection to the uniform, single will of the state.  Such communal order is quite possible in the form of voluntary co-operation between independent nations while recognising the political leadership of one people and state whether Europe has ever created, is creating or will ever create an economic area, is only now becoming a hotly debated issue.

The Problem of the European Economic Area in Late Antiquity and the Middle Ages

Let us start our consideration at the point where, for the first time in European history, a truly significant economic area, in the way we understand one, was seen.  This was in the time of Late Antiquity in the Mediterranean area.  The Roman Empire of the first centuries of our chronology represents an enlarged economic area which spanned far and wide and generated a significant amount of economic traffic, stretching from the Atlantic Ocean to the Black Sea, from North Africa to the north of the British Isles.  The various parts were held together by a high degree of free trade and political unity of the Roman state.  This area was self-sufficient in all of the important basic commodities and stood only loosely connected to the other areas known then, particularly the ancient civilizations of India and China, central Africa, Northern and Eastern Europe.  The intensity and extent of economic activity in the Roman Empire of the first few centuries remained constant and of such a nature that one can already mention the term European economic area.  Not Europe, rather the region of the Mediterranean basin which includes important areas of the north-east and North Africa, was brought together into the framework of the Roman Empire.  Even from the 4th century AD, long before the collapse of the western Roman Empire, this Mediterranean economic form had started to decay, as autonomy became granted to the various regions and a natural economic way of living was reverted to more and more.

The historical nature of the so-called Middle Ages is seen as different as the areas of central and Western Europe lose their characters as peripheral zones and start to assume influence over European development politically, economically and culturally.  This is the first time one can talk of a ‘European’ economic history.

Politically, the basis for the formation of a uniform economic area up to the High Middle Ages was not favourable at all.  The Carolingian Empire gave powerful expression to the idea of unity in large areas of Europe, as it was then, and even the entire christian Occident.  The German Empire, though, restricted to an immediate region over the centre of Europe (Germany and Italy), assumed political leadership of the Occident even in its hey-day.

But in these centuries of uniform political European order, the preconditions for a closer economic consideration were not yet met.  As recent research has revealed, important vestiges of a barter and transport economy have been preserved, particularly in the 
western and southern regions of Europe.  However, they lacked the strength to alter significantly the mainly parochial and inconsistent character of economic life.

It is not possible to talk of an intensive economic integration of large areas of Europe then until after the crusade movement had started and the spread of urban settlements and economic entities.  At the same time, political unity in Europe started to fall apart.  The whole European order that had existed crumbled with the split of Germany and Italy after the later Staufer period and the recent internal disintegration of the empire.  The following centuries see the arrival firstly from the West, in this political vacuum, of new and independent bodies of the developing nation system of Europe, which to the present day have formed the biggest obstacle to a European economic community.

In these centuries of gradual decay of the old political order and of the first, though faltering, beginning of the new nation system we see in the north and south of Europe, the golden age of two trade and transport systems over a wide area which in no way represent a pan-European economic order.  Yet they serve our interest today as attempts at an economic area formation in particular areas of Europe.

The Italian cities, first of all, drew rich benefits from the intensivation of trade with the east as a result of the Crusades.  These cities became the supporters of the important global trade in products such as spices, silk, etc. from the Near and Far East.  Venice rose to become the richest city in Europe at that time. The area around the eastern Mediterranean hitherto ruled by Arabs and the Byzantine became part of the Italian cities’ trade and economic area in the late Middle Ages.  These cities incorporated the areas both commercially and to an extent politically into their area of rule with the help of a disparate system of trade colonies.

Under German leadership in the area north of the Alps, a similarly intensive trade and transport network developed.  On the one hand, it was already engaged in intensive trade with northern Italy due to the trade with the East, but its real activity and lasting historical achievement reaches in to the east of Europe.  The areas furthest to the east were connected to the European economic culture for the first time.  It was then that people settled again in areas of east Germany and, which became incorporated into the system of trade governed by the cities.  The German businessman then reached further beyond his borders into Poland and Russia.

It is necessary, in this regard, to recall the special achievements of the Hanseatic cities.  This alliance of northern German cities shows most impressively what the German entrepreneurial spirit is capable of achieving where large areas are brought together into an economic entity.  The boundaries of the Hanseatic area were marked by Novogorod in the east, Bergen in the north, Brugge and London in the west and its centre in the Baltic area was in Lübeck.  Its economic function was to bring together those countries in east Europe bearing surpluses of raw materials and cereals and the commercial areas of Flanders, France and western Germany.  It will be difficult to appreciate the achievements of the Hanseatic League if one only considers its raison d’être in the commercial field as a trading monopoly.  Rather the Hanseatic businessman encouraged and organised production in those countries with which he traded.  Moreover, he was the supplier and disseminator of German culture - a coloniser in the best sense of the word.  All that through the peaceful means of trading.  No foreign lives were lost, as happened when the colonial policy of the western Europeans, especially Great Britain, entailed both political and military subjugation.

Recent Changes to the Problem of the Area of Europe

The dawning of the modern age, bringing with it a multitude of far reaching changes, led the economic life of Europe gradually but inexorably down new avenues.  In relation to our problems, one can speak of almost a revolution taking place at that time in the way areas for living were regarded.  This was most clearly expressed by the extension of the natural scientific world following the great voyages of discovery.  Equally important are the effects of the changed idea about living area both in terms of nation and economy.  There were three major changes:

1.	The formation of the European nations into a geographically defined area both in a political and economic sense.

2.	The development of a transport system from a European one into an inter-continental one.

3.	The growth of the British Isles into a predominantly sea power and the related, so-called free, world economy.

The Formation of the Nations and Independent Economies

Now to the formation of the world of the European nations!  Here we are talking about the internal and external sovereign power structure, which had determined European history to the present today.  The process of change has decisive importance for the continuation of economic development.  The traditional system of a pan-nation and supra-nation economic organisation, as embodied by the Hanseatic League, can no longer be reconciled with the will for independence of the new nations.  The clash with governmental power led to the loss of the most important foreign trade privileges, as was the case with the Hanseatic League.  This process was seen most clearly in the suppression of German businessmen in London.  In 1598 we finally see the closure of the Stal Court, one of the most important Hanseatic bases in London.

The shaping of economic life - the other side to this development - now comes from the state.  Just as it put the army and civil service into service in order to achieve its political ends, so it did also with the economy.  Economic life in Europe breaks down into a row of adjacent, but independent economic bodies, just as happened in the political arena.  This position should not be understood as complete autarchy for this ‘mercantile’ state framework.  Trade between nations now starts to intensify and a hostile attitude in the economic field becomes decisive, turning into what we call the on-going economic war, which continued at that time between the individual powers.  The trade policy of the time also represents the continuation of war by other means.  The decisive factor in all this is that an all-embracing principle of order is missing from the relationships between the economies of Europe. 

Overseas Expansion and its Consequences for Europe

At the same time as this development of adjacent governmental economic bodies, we see the second fundamental change, which is the development of inter-continental trade transport.  Its foundation lies in the expansion of the European economy overseas following the discovery of America and new sea routes.  In relation to this economic and mainly political conquest of overseas territories, the term ‘europeanisation of the world’ has been coined.  The equilibrium, which previously existed between the continents, seemed to be displaced by European superiority.  In reality, this rarely peaceful exploitation of the world had nothing to do with a common European process, such as the Crusades, which were, in a way, an expression of a certain European solidarity.  Rather it was all about the isolated and egotistical action of individual European powers.  The fiercest wars were waged in order to gain possession of the colonies.  One can say that all the important European wars in that century were simply the European analogy of these battles to divide up the world.  One after another, the two nations of the Iberian peninsular, then Holland, France and finally the eventual victor Great Britain rose up from these wars as leading colonial powers.  Both in war and peace the individual nations watched this exploitation of the colonies full of distrust and enmity, which were bent on gaining a trade monopoly with its colonies.  The colonial powers’ relations with overseas areas grew more important than their relations within Europe.

This only applies, though, to the leading Atlantic powers in Western Europe.  A parallel to this development is the nascent expansion of Russia towards Siberia and on to the Pacific, thereby confirming its identity as a half-Asian power.  Middle Europe, on the other hand, at first had no share in this economic exploitation of the world due to political weakness and in spite of being the natural centre point of the continent in the Middle Ages.  Moreover, she was dealt a hefty setback by the competition from the new overseas countries.  Our linen industry is a well known example, which used to be the most important export industry in early times and whose collapse was finally sealed by the advance of foreign cotton.  The outbreak of World War I meant changes to production, as well as consumption.  In southern Europe those nations that had been based on rice, cotton and sugar production since the Middle Ages fell victim to competition from western India.  Italy’s economic regression, caused by the change in sea routes, accelerated by the shift of production overseas.

Overall this extension of inter-continental trade, which started after the modern age, represents a process for Europe that demolishes the traditional European economic order and strengthens the development that arose from the formation of the nations of Europe.  The 19th century, especially the middle part of it, only brought to an end what has started in the previous centuries.  This age has been called ‘The Age of the Global Economy’ when attempting to experience again a late hey-day in the years between 1925 and 1929.  During this time economic relations between continents reached their peak.  European trade especially between the developed industrial nations of western and central Europe increased considerably, none moreso than in the direction of the outer regions of Europe. The title used (Age of the World Economy) is justified when one considers the profound change in economic relations between Europe and overseas.

On the one hand, western and central Europe only now attain that technical superiority that transforms it the world’s workshop.  On the other, at the same time it meant that Europe became dependent on imports from overseas regions, more than ever before in the past.  Until the 19th century European imports consisted of goods from the colonies i.e. precious metals and then, as far as eastern Asia is concerned, commercially produced luxury goods i.e. goods that are not essential for living.  Where food and raw material supply is concerned, though, the European nations, at least the largest ones, were self sufficient until the start of the 19th century.  For the nations in western and central Europe, imports of food and raw materials start to grow from this point, upon which a strong dependence on imports from overseas develops.  This development ends up with production of food and raw materials in the agricultural regions of eastern and central Europe falling to a very low level.  All those reserves and opportunities available to Europe go almost totally unused.  This is a further sign of the continued decline of the European economic community.

The Release of England from the Continent and the Formation of the “Free Global Economy”

This recent transformation only becomes complete with the third change, which I earlier described as fundamental, and that is the special development undergone by the British Isles at time.  Until then they had not become the predominantly maritime power that they are today despite their insular position, one whose land extends far into overseas territories.  The big difference between the British Isles and the nations of continental Europe (even those with large overseas colonies) only becomes apparent now. Despite the latter’s increasingly important economies outside Europe, they never lost their identity as European land powers.  As if proof for this was needed, it can be seen in 1940 when Marshall Petin refused to relocate the French government to a place outside Europe.  We can recall, in contrast to this, various deliberations on the part of the English concerning a shift of the core of the British Empire to an overseas location.

The foundation for this remarkable development of England was laid back in the period between the 16th and 18th centuries where maritime superiority was gained and a global colonial empire acquired.  By the end of this period, countries outside European accounted for 40% of England’s export trade.  This development continued until World War I.  In 1913 these countries accounted for 56% and 65% of England’s imports and exports respectively. Foreign capital investment levels in these countries also started to grow significantly.

Since modern times England’s economy has developed more and more away from Europe and not only during the period of English free trade.  It became even more pronounced when there was protection and closer economic and political union with the nations of the Empire, particularly at the time of the Ottawa agreements of 1932.  British trade became even more concentrated overseas and, like the figure of 1913, in 1937 British exports outside Europe reached 64%.  Hence the shift away from Europe of its imported goods and in 1937 67% of its imports came from outside Europe.  Let us look at, above all, the effect of the preferential treatment given to the nations of the Empire regarding supplies of raw materials and foodstuffs.  Because the basis of England’s foreign trade was linked to its traditional economic and political considerations and to the primacy of the nations of the Empire, she is incapable of absorbing the surpluses of the agricultural areas of Europe especially the south-east.  Large purchase orders made in more recent years were only intended to damage Germany and not to meet any real demand.

England’s re-orientation to overseas is significant not just because it led to an increasing estrangement from the European continent.  More importantly, British economic theory became more singular as it lacked any real parameters.  Furthermore, it grew to become the prevailing ideology of the world economy while under British rule.  Its most notable feature was its lack of attachment to any defined economic area, unlike that of the powers of this continent, which was previously taken for granted.  In the development of economic political ideologies lies the same difference between the ideas of the British Isles, which had no boundaries, and the geographically defined views of continental Europe’s powers.  Carl Schmidt described this difference as decisive for the history of legal theory.

Let us now shed light on those principles, which had a determining effect on the world economy that stood until then under English control.  The precept of free trade shaped the external economy in a way, which rode over all the natural factors of the individual areas of the world.  In this regard, it was a useful principle for an island which continued to dispense with any real territorial foundation, unlike for the large powers in continental Europe.  England’s transition to free trade only happened around the middle of the 19th century after it attained industrial supremacy.  Even the most favoured nation clause (generally recognised as the basis for foreign economic relations in the age of Liberalism) originates from the reservoir of Britain’s boundary-less theories.  What it did was to make it impossible to conclude regional economic agreements designed to create a closer economic union between powers bound geographically together, thus making all economic and political partners equal.  The fact that the use of gold led to similar consequences in terms of currency and politics can only be briefly referred to here.

All these principles are nothing other than an expression of the peculiar British solution and mentality.  One can only conclude with amazement how skilfully British policy understood the way to convince other countries of the universal validity of these typically British principles.  Friedrich List’s works contained the occasional remark about this, saying that the English sent a copy of Adam Smith’s book with every export consignment, which became the bible of free trade for that whole period.  That is not supposed to be taken literally but it accurately describes the relationship between free trade ideology and where British interests lay.  Appearing to represent so-called general human principles of the free economy concealed England’s real ambition, which was to prevent any coalition in Europe.  The aim was to ensure Europe’s economic and political fragmentation and to keep its individual nations dependent on essential goods imported from overseas.  It is possible that the blockade, Britain’s most effective weapon during the war, lost its effectiveness as the economic unit of Europe of grew.  

The parallel of the theory of European equilibrium, which actually was not a discovery made by British policy, is clear.  Yet it is extremely interesting to read what the influential English geographer, Mackinder (from whose school many British diplomats came) said back in 1904 about England’s attitude to Europe.  To him, Europe was like a ‘hall of mirrors’ wedged in between the powers of the British Isles and the then Russian Tsardom and whose fate it was to be dragged back and forth between the thieves of the land and the sea.  To prevent itself from one day being pushed off the continent and into the sea, England’s interest lay in keeping this area as weak as possible.  A truly illuminating remark referring to the present moment.

Europe’s Economic New Order: The Present Task

We have studied the three fundamental changes, which have prevented the formation of an economic area in Europe since the start of modern times and furthermore have led Europe away from the aim of a true economic community.  Only from this historical background is it possible to appreciate the significance of the economic new order of Europe, which has taken place over the last few years at almost breathtaking pace.

Collapse of the Previous World Economy

The starting point is the collapse of the old model for the world economy.  After the short episode of superiority of the liberal trade policy, important nations had renounced free trade since the 60’s and 70’s and embraced industrial protectionism.  The progressing industrialisation of the old agricultural and raw material bearing countries at about the turn of the century allowed the seed of doubt to grow among the old industrial nations of Europe in the future prospect for the hitherto global economic division of labour.  In addition, references were made especially in Germany to the threat of being cut off from imports of raw materials and food in the event of a war.  This became a reality over the course of this world war.  

One can conclude, in retrospect, that in 1914 the old world economy finally collapsed despite some late attempts to revive it.  The world war promoted the ambitions of the overseas nations, on the one hand, with the continued suppression of exports of industrial goods by important European nations.  On the other hand, in Europe it led to economic difficulties following the partitioning of land by the Treaty of Versailles and following the excessive protectionism of the new successor states.  Its lifting and the subsequent return to the principles of free trade proved to be politically impossible.  The biggest setback for the rules of the old system was the setting of the German reparation payments.  Before the war Germany was a creditor nation without equal but was robbed of almost its entire overseas investments.  Not only that, but it was turned into a debtor nation forced to pay reparations and denied the possibility of exporting to the creditor nations, particularly the USA, who were not willing to open up their market to imports.  It is known that this contradiction was covered for a while by American credits, thus giving the impression of the resurrection of the old world economy.  This ‘bridging’ was, however, not possible in the long term and one will be able to say that a totally hollow system folded as soon as the global economic crisis occurred.

We now stand at the threshold of a new period in the history of the world economy.  It is identified by the efforts of numerous nations to grasp their own economic fate regardless of the position in the world’s economic trade cycle.  Quite logically the aim of creating a better balance among the various local economic branches is combined with these tendencies to form an ‘autonomous trade cycle policy’.  Other aims are an increase in output for the agricultural economy and for the production of industrial raw materials in the old European industrial nations, and a further extension of their own industry.  These effects can be partly achieved by a reduction in the agricultural surpluses in the overseas countries.  This policy is most strongly expressed in the axis countries of Germany and Italy.  Their special geographical position and moreso their experiences during the world war and during the sanctions where they were denied access to world markets must have made the need to raise their self sufficiency status seem an urgent requirement.  Behind these efforts stands a definite, political will, one intent on gaining greater economic independence!

All these efforts have nothing at all to do with insularity in the sense of total self-sufficiency.  For many reasons this is just impossible and even if it were possible, it would go against the founding aim of stronger economic powers following the increasing limitation of workers and capital and the subsequent impoverishment.  This is the real starting point of the new theory on enlarged living areas.  If division of labour ceases to be possible in the future in the same way, then it is going to be necessary to concentrate on encouraging economic co-operation with the surrounding countries.

Means and Objectives of the European Economic Community

This now raises the question of the new order for Europe in the economic field.  Here on the European continent with its numerous small nations, its dense population and the heavy industrialisation of the central and western areas, it must have seemed unbearable to consider a continuation of the traditional border duties around each nation.  It stands in direct contradiction to the demand for an extension of commercial markets, as is now the case with the present day requirements related to technical production.  References are repeatedly made to the parallels between today’s European situation and that of Germany before the formation of the customs union.  One hundred years ago it produced a solution to an untenable situation, created the conditions for the industrialisation of Germany nascent at the time and above all, turned Germany into an economic entity equal to any western European country.  One should remember though today that it was the same Friedrich List, who in his early days was one of the most important proponents of the political unification of Germany, who passionately dreamt of a plan for the extension of the customs union to become an economic alliance of central European countries, including in particular Hungary and the Balkan nations.  He is the spiritual ancestor of all the recent plans for a ‘Central Europe’ as well as the failed plan for an Austro-German customs union in 1931 and the unrealised plans for a finalisation of preferential agreements with Hungary and Romania.  If he limited his proposals to the economic coalition of Central Europe, this was just the result of the prevailing political situation, which must have made a pan-European solution seem impossible.

The political situation of Europe today is ready for greater control on account of the military successes of Germany and the pressure applied through the British blockade.  If a special rôle falls to Germany in this new order, then it will simply be to recreate a natural situation whereby Europe’s natural focus is the centre of the continent, which is then strengthened by the arrival of Italy as the second Axis power.  It is not only due to its central location, but also Germany’s external economic structure, making it the absolute antithesis of England, that makes it perfectly suitable for the rôle. 54% and 75% of Germany’s imports and exports respectively were with Europe in 1913.  This facet of Germany’s external economy developed further up to the next world war, particularly following the import switch to areas away from the blockade in south east Europe.  Over 50% of the Reich’s imports and exports were with the nations of south-east Europe at the outbreak of the war.  From that point, the tendency developed even more quickly.  

But even after the re-introduction of peace, the German Reich with its 10m plus inhabitants will be capable of absorbing the surplus production of the agricultural regions of Europe, taking into account the present yield increases, without being restricted - like England - by export interests with the dominion.  Germany is able with its very wide range of industrial products to meet all the requirements of the countries of Europe where industrial goods are concerned.  None more so with the predicted growth in demand for machinery and other means of industrial manufacture, which will serve to create new industrial entities in the hitherto predominantly agricultural regions of Europe.  Germany is just as interested in such industrialisation as those countries concerned, because this is the only way that purchasing power can be increased - an essential foundation for the creation of trade relations and the raising of the standard of living for the population of Europe.  The country of Friedrich List would be untrue to itself if it did no show understanding for the industrial development aspirations of other nations.

As with the case of Anglo-European relations, it would be wrong to justify this spreading economic new order of Europe with figures to do with the mutual economic involvement.  What is decisive is that the new means of attaining European economic co-operation have become clearly visible in more recent developments, which is fundamentally different from the means used in trade.  The fact that it is nothing to do with a customs or currency union in the foreseeable future has been frequently stressed by influential figures.  Furthermore, political perspectives argue against any far-reaching standardisation.  There is the respect to be accorded to the desire for independence of the nations concerned.  The most important means of attaining European co-operation will in future be through the signing of long term economic treaties.  

Unlike the trade treaties signed in the liberal age, these would not limit themselves to a general control of trade, particularly regarding duty questions.  Instead they would rather have influence over the economic structure of those nations bound to the treaty in the sense of a mutual objective.  The German-Romanian economic treaty of 1939 remains a valid example of this.  In 1940 this was extended into a 10-year plan, which in January 1942 was brought to completion by an additional agreement.  These treaties control not only the type and amount of goods to be exchanged, they also provide for the setting up of a production programme based on the needs of the two countries.  Romania would gain in particular from the assistance of the German economy in developing its agriculture, oil drilling and industry.  A credit worth 600m reichsmark granted by Germany will enable this programme to be carried through.  This system of economic control, which has been successfully tested in Germany, will convert into a future co-operation in Europe thanks to such economic treaties - that is the significant point in these proceedings.  Even the inter-state trade with its decisive significance for the predominantly agricultural nations and the fate of their largest social classes will no longer be exposed to the vagaries of the free market.  Instead everything will be thought out and controlled according to a carefully laid plan.

Outlook

During these years of war, the new economic Europe will be born as a community sharing one destiny in the same way as a new political solidarity among the powers of Europe, which transcended all traditional grudges, set out to fight Bolshevism.  The common need, created as it was by the pressure of the British blockade, is hastening the coalition of the countries of Europe, in fact more quickly the longer the war goes on.  Europe will remain an independent economic area even after the war and the present state of emergency has been called off.  This will happen because the people of Europe will not want to subject themselves to the stranglehold of the British blockade and the present development of the other large economic areas leaves Europe with absolutely no other option than to assert its own existence by developing its own economic resources.  On the other hand, it can be seen today that the discovery of barely used reserves of raw materials and food in east Europe will make it possible to be self-sufficient in all the essential things.

Europe’s attitude towards the rest of the world therefore changes.  The new Europe will turn towards the eastern parts of the continent and away from overseas.  In future there will be a far greater commercial traffic between the various economic areas. Due to its geographical requirements, Europe is dependent on this kind of economic trans-continental integration.  Its varied coastline and wealth of ports also play a role.  This intercontinental economic traffic will be fundamentally different to the previous one.  It will not be an exchange of essential goods, the blockading of which jeopardizes independence, but it will be an exchange of products that enhance life - products from tropical areas, industrial surpluses etc.  Due to its manufacturing quality, Europe will play an important future role in the new world economy.

Spiritual powers are a decisive factor for humans in the economy.  One could even suggest that managing an economy represents a spiritual task.  Seen this way, the creation of a European economic area that is immune to europhobic influences and relies on the co-operation of its people, also represents an act of European self-determination.  Only 
on the foundation of such a European economic area can Europe really win the battle against Bolshevism and Americanism.  This is the battle presently being waged and the spiritual one of the future.

THE END OF JECHT’S essay.

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