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Open Access Publications from the University of California

Imperial Institutions: The Soft Power of German Economic and Cultural Diplomacy in Southeastern Europe 1920-1940

  • Author(s): Gross, Stephen Gerard
  • Advisor(s): Connelly, John
  • et al.

The two decades following World War I witnessed the collapse of the international trade, capital flows, and migration that had united much of world in the late 19th century. Germany lay at the center of this global economic crisis, which in many ways led to National Socialism and the Second World War. As Adam Tooze has illustrated, rather than meekly accepting its place in a global order dominated by Great Britain and America, the “originality” of Nazi Germany was to mount an epic challenge through the conquest of territory in Eastern Europe and Eurasia.

Formal empire in the east, however, was only one solution to the de-globalizing world that German elites pursued during the 1920s and 1930s. My dissertation shows how a diverse group of German businessmen and academics used the economic crisis to shift their nation’s commercial ties away from America and the West and toward Central and Southeastern Europe. They created a continental economic bloc dominated by Germany, one that in many ways had more in common with the liberal imperialism of Great Britain and France than with the highly racist agenda of National Socialism.

My research helps us re-conceptualize Germany’s place in Europe in two ways. First, it demonstrates how German businessmen used soft power to make their nation’s hard, economic preponderance legitimate to the commercial elites of Southeastern Europe. Scholars conventionally use this term to describe the foreign policy of liberal states like America, but I show how authoritarian regimes like Nazi Germany have also deployed soft power. German area studies institutes, trade fairs, and business associations operated through a network of agents in Southeastern Europe to cultivate personal contacts with local elites, train local merchants, lobby local governments, advertise for German products, and ease the flow of information between the commercial centers of Southeastern Europe and Germany. By centering my study of German imperialism on private institutions instead of the state, I argue that imperialism rests as much on webs of co-opted sociability as raw military or political power.

Second, I show how a German-led European economic bloc remained a policy pursued by German leaders until late into the 1930s. Historians usually frame Nazi Germany’s foreign policy as a tense combination of Pan-German Nationalism and the drive for Lebensraum in Eastern Europe. Yet in the 1920s German business elites designed a third path—Grossraumwirtschaft, or large area economy—that would bring stability to their industries during this period of crisis. This strategy represents a clear line of continuity between the Weimar Republic and Third Reich, since many business elites in both periods believed a continental bloc offered a better long-term strategy for Germany than either free trade or autarchy and war. And in contrast to Eastern Europe—the heart of Nazi Germany's radical plans for re-population and genocide—these businessmen planned to develop the economies of Southeastern Europe by fashioning them into a complementary economic space that would serve German industry.

I conclude my dissertation by recounting how this alternative imperial vision succumbed to the allure of the Nazi’s more radical re-ordering of Europe after 1938. By then Germany's private organizations progressively lost their freedom to maneuver, and tacked with the wind by adopting certain aspects of National Socialist ideology. They helped remove Jewish merchants from German-Balkan commerce, and they eventually used their expertise to use Southeastern Europe for the Nazi war machine.

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