By Jeremy Lewis.
| Smith & Woolcock | Goodman | Lambakis | Dreyfus | Johns |
Smith, Michael, and Stephen Woolcock. Redefining the US-EC Relationship. New York: Council on Foreign Relations Press, for the Royal Institute of International Affairs. 1993. 121 pp. $14.95 (pb). ISBN 0-87609-145-1
Smith and Woolcock (with their seminar discussants) have made a brave attempt to help us see order in the chaos of a changing Europe, and if their work is already outdated in places, that is to be expected. They wrote when the EC had not yet nominally become the EU, the Maastricht agreement seemed promising, sterling was linked to the deutschmark, and the Uruguay Round of trade negotiations had stalled.
This thought-provoking monograph will be welcomed by scholars, practitioners and advanced graduate students on both sides of the Atlantic (undergraduates may find it too abstract and jargon-laden in places.) The authors argue that the tensions of fitting the U.S. and E.C. relationship into a rapidly changing world require "radical" and "structural" re-thinking of arrangements. Their book has a crisp introduction and conclusion to each chapter and a final chapter that ties the ends together on the Maastricht arrangements rather less optimistically than in the body of the text. (In the light of the collapse of the Lira and sterling, and of the Bosnian civil war, an after-word written in 1994 would be more somber on EMS currency measures and on EU foreign policy arrangements, perhaps.) Strong in analyzing the political and economic dimensions of transatlantic relations, the authors leave aside the military dimension, which has perhaps already undergone a radical, structural rethinking. Two general themes permeate their material: first, that underlying differences between the United States and Europe engender needs for reappraisal of the Atlantic political and economic alliance, and secondly that the European Community's process-oriented approach to resolving national differences over policy will become a positive model for institutions elsewhere.
Setting out in the introductory chapter a list of tensions between the erstwhile transatlantic partners, the authors highlight repeatedly the interdependence of nations but tend to ignore the shared transatlantic values which created a postwar community of interest for half a century. They rightly lament in the second chapter the constraints of domestic politics and economics upon international policy-making, although they tend to emphasize this in the American case while perhaps understating it in the European case. It is the U.S., after all, which led the Gulf coalition and has by appearances tried to lead the more reluctant Europeans in a military response to the destruction of Yugoslavia.
The third chapter, on economic relations, sets out the near balance between the U.S. and EC economies, the relative decline of the U.S. being emphasized along with the differences between the free market in the U.S. and the social democratic regime on the continent. It also discusses the difficulty of multilateral trade arrangements, regional blocs and policy coordination. The relative decline thesis of the U.S. ought perhaps to be offset with some consideration of the extraordinary vitality of sectors such as computer software, and Paul Kennedy's thesis of imperial overstretch ought to be offset with alternative views, since by 1989 it clearly applied more closely to the U.S.S.R. than the U.S..
A weakness is the all too brief discussion of differences between the U.S. consensus on liberal democracy and the European on social democracy, which tends to leave a caricature of contrast without the shading of comparison and shared values. This is closely followed by the language of capital and labor (p.41), as though there were only two monolithic actors ("social partners") in the economy. Avoiding a dimension of pluralism is like asking readers to forget that females have become consumers and workers; trade unions have declined to a minority of the work force; immigrants have been allowed to enter from the Caribbean, south Asia, Turkey and Africa; and homosexuals have protested their social standing and treatment. In short, that page of the book leaves no indication of the partial Americanization of European politics during the the 1980's. However, for American readers the emphasis on European social compacts may be a useful reminder that differential development of the welfare state does impact on international relations.
In the chapter on the changing political order, the authors discuss the tentative responses to rapid structural changes in Eastern Europe and the former Soviet Union, the new Germany, and the Gulf War as a difficult coalition-building exercise. They meet the difficult challenge of relating the complex events of the early 1990's with parsimony, but owing to the turbulence of mid 1992 (the time of writing) they are able to provide only open questions rather than predictions. They emphasize that interests can conflict not only across the Atlantic but also across the Channel, the Rhine, or the Pyrenees. On the "variable geometry" of new institutions used differently for each contemporary task, they fear overcrowding and lack of coordination. They also fear that there will be no consensus of policy for the new institutions to express.
The conclusions chapter finds the problems discussed earlier as resulting from differential change on either side of the 'pond'. Given that the economics chapter dwells on the comparative sizes of the two economies, the politics chapter might well have contrasted the stages of political development (with the EU in the position of the U.S. in 1787, attempting to create a supra-state federal government over the argument for states' rights -- for which read "subsidiarity".)
In European nations, where hierarchical government with carefully crafted jurisdictions is highly prized, a plethora of European and now Euro-American institutions may cause concern for policy cohesiveness. These authors call for further policy coordination between the nation states and the EU. In view of the joint seminars held with the Council on Foreign Relations, it is disappointing not to hear the American pluralistic voice in the resulting book, for competing institutions (although messy) sometimes permit a diverse and turbulent union to be maintained indefinitely. While domestic constituencies such as the agricultural sector are rightly portrayed as often constraining international cooperation, there could be some discussion of the connection between interdependence and pressures for cooperation. Businesses engaged in international trade do not normally relish wildly fluctuating exchange rates, for example.
The conclusions point to three scenarios, with "competitive cooperation" likely to prevail over "policy integration" and "separate development." This in itself is hardly exceptional, since it extrapolates the trend since 1957. The particular course of competitive cooperation, however, is more interesting. They urge an EC "process" approach based on mutual recognition in multilateralism, rather than an American "results" approach, and call for coordination both in monetary and political matters. A further look at American values, for example in the workings of the congress or in the judiciary, would find a stronger emphasis on process over results than is found in Europe, and this sort of material would undoubtedly have deepened the monograph.
Despite its omissions, this provocative discussion which makes a substantial contribution to a contemporary debate. It combines a heavy layer of analysis with sufficient mention of events to help the reader digest the analysis. Its suggestions are couched in sufficiently general terms to be useful beyond the immediate months of European change. And it affords American readers a stimulating Eurocentric view of a changing relationship between two transatlantic continents.
Goodman, Anthony. John of Gaunt: The Exercise of Princely Power in Fourteenth Century Europe. New York: St. Martin's Press. 1992. xiii + 421 pp. $39.95. ISBN 0-312-08358-0.
John of Gaunt (1340-99) was the second son of a great English king (Edward III), the uncle and counsellor of an awkward young king (Richard II), and the father of Henry Bolingbroke (Henry IV). He was born in Flanders at Ghent ("Gaunt" in English). His first wife was one of the two richest sisters in England, his second a princess from Castile (an affiliation that made him pretender to the Castilian throne), and his third a cherished mistress (Chaucer's sister-in-law). He had his share of military life in his youth, but by circumstance and aptitude he was often trusted to maintain the kingdom while his father and elder brother played the role of knight. In his prime, he often served both as home secretary and as a peripatetic foreign minister for Richard II.
In the public eye, his work as diplomat and politician denied him lasting popularity and cast him frequently into odium. Meanwhile, his elder brother Edward, Prince of Wales, magnanimous victor of the siege of Calais and hero of the battle of Poiters, died early and slipped into legend as a medieval superman: the athletic, handsome Black Prince.
Anthony Goodman has followed Gaunt's life to assemble an engrossing study of royalty's political roles and personal lives in the latter half of the Fourteenth Century. This is a thorough historian's book, from a specialist of the medieval era (at Edinburgh University). Each chapter is followed by numerous Notes and References (over fifteen hundred for the sixteen chapters). There are pertinent maps of England and of the major medieval powers linked to it by marriage, diplomacy and war. Readers will benefit from a useful index, several genealogical trees, and an extensive bibliography (including a fascinating calendar of documents).
This volume is sufficiently concise to appeal beyond the academic community to the much wider audience of medieval history amateurs. Gaunt traveled extensively and one of the many attractions in this book lies in the historical travelogue. This reviewer (a scholar of politics) approached the book with heightened interest, having recently returned to the scene of his boyhood near Kenilworth castle, one of the many sites to which John of Gaunt is known to have retreated from medieval pursuers.
Goodman starts with a chapter that reviews England's fortunes for the two centuries before Gaunt, followed by a chapter that covers the images that history and literature have attributed to the man. Five chapters treat Gaunt's life chronologically, six more relate him thematically to facets of society (such as warfare and the church), one characterizes him, and there is a short conclusion.
After sketching out historical views of Gaunt from the early and universally uncomplimentary accounts to Shakespeare's elevation of him to a wise and reasonable voice in cruel times, the author begins a painstaking examination of Gaunt's work. He reconstructs his subject, more as an ordinary man facing extraordinary tasks than as the Machiavellian genius a two-dimensional analysis might suggest. We see Gaunt succeeding and we see him making major mistakes, some of his own doing and some as as extension of Edward III's errors of extending the empire against the opposition of continental powers, beyond the reach of his resources. It was a challenging time to develop an empire, the population having been smitten by the Black Death and by agricultural depressions, and the crusaders having met their match in the muslim forces. The taxpayers wearied of the cost of fighting the French and Spanish, but Gaunt was flexible enough to negotiate when military action alone could not carry the day.
Early on his rude rebuffs in city and church politics sparked the Peasants' Revolt. They destroyed his great palace at the Savoy and endangered his family before they collapsed in his wine cellars and their passions literally burnt themselves out. News of the rebellion reached him in so exaggerated a form that, having concluded a peace with Scots warlords, he requested a safe conduct from them and was escorted into England by a battalion of Scottish spears.
He was badly distracted from English politics in his futile quest for the Spanish throne, seeking power beyond his reach. He formed an alliance with the minor Portuguese power, had dealings with the Low Countries, and continued the English military and diplomatic rivalry with the more proximate French, but they evaded his army, joined with the Spanish, wore him down to a draw and sued for peace, in which process he wisely negotiated. As a Christian he supported the great crusade against the Turks. However, he also committed a celebrated adultery with Catherine of Swynford (later his third wife) while enduring his second marriage, a dead-ended diplomatic liaison to a vengeful daughter (Constance) of a deposed Spanish monarch.
All in all, Gaunt probably expired as the most hated man in the kingdom, but this biography goes some way toward rehabilitating his reputation. Few statesmen have ever attempted so many and varied dealings in several principalities in one lifetime.
The author shows Gaunt as a man who enjoyed hunting, falconry, and the martial arts of knighthood. He made one unhappy marriage for political reasons and as a judge he sentenced a brother, but he seems to have been very observant of the needs of siblings and children. He collected fine tapestries and was a patron of the poet Geoffrey Chaucer and the theological Proto-Protestant Wycliffe.
As the first volume on Gaunt since 1904, this book is surely overdue. The interested reader will find joy in almost every page, whether in the perceptive analyses of the political motivations behind events or in the asides on the amatory attentions of courtly life. One emerges with the impression of a man who is straightforward, principled, capable at times of clumsy dealing, and faithful in adherence to the institution of chivalry (an advance for the times -- in this he outdid his nephew and son.)
He retained his stubborn belief in royal authority even when the monarch was his mediocre nephew Richard II, and his support and counsel of the boy Richard was indispensible. Ironically, he was probably both too wealthy and too powerful a grey eminence for the mature Richard to tolerate. In his youth, John displayed a dangerous arrogance to ordinary Londoners and to the church, yet he seems to have learned from witnessing a bloody naval battle at the age of ten, and in his maturity he channelled his energy into great diplomatic affairs of state. His inability to use his vast wealth and educated rhetoric to inspire more public approval through patronage, persuasion, and charity remains something of a mystery, and Goodman may be correct to leave him as an energetic and intense statesman of reasonable judgment charged with too great a set of tasks in a difficult period for the English throne.
Amid the modern tide of minor social history, this work on John of Gaunt is a welcome reminder of great political history and will prove a true classic.
Lambakis, Steven James. Winston Churchill: Architect of Peace. A Study of Statesmanship and the Cold War. Westport, CT: Greenwood Press. 1993. 208 pp. $47.95. ISBN 0-313-28833-2.
Lambakis, in this reworked PhD dissertation, returns us to a time when great statesmen strode the world stage in defense of great ideas of government: sovereignty, free elections, and individual liberties. He seeks to overturn the Waltzian trend in international relations towards systems theory, in favor of a return to the Churchillian view of nation states as seething organisms with their values, traditions and history. There are more references to Aristotle than to Kissinger, and the author clearly intends that we should see international politics as in part a struggle for virtue with Churchill as our champion.
The book focuses on the necessary shift in Churchill's strategy from the Grand Alliance to a fraternal relationship with Truman in the face of Stalin's designs on Eastern Europe. The centerpiece of course is Churchill's Fulton speech, "The Sinews of Peace," better known as the Iron Curtain speech and the precursor of the Truman-Dulles containment policy. The author leads us up to the cold war with a discussion of the wartime relations with Stalin and their deterioration from Teheran and Yalta to Potsdam and beyond. Responding to criticism that Churchill was inconsistent on the location of the second front (France, Italy or the Balkans) and in his views of the reliability of Stalin, Lambakis takes a sensible view that he was obliged to let wartime exigency overrule his realistic antipathy of a worse-than-Machiavellian ally. Lambakis tends to dismiss American fears that Churchill aimed to construct an Empire in the Balkans, preferring that he was concerned to contain Soviet expansionism there. On Poland, Churchill chose to sacrifice borders to bargain with Stalin for Polish freedom and sovereignty, but in the end got neither. His apparently cynical listing to Stalin of the percentage of control of each Eastern European country that the western allies would share with the "master of Russia" is deemed by the author an offhand note about certain realities, given Soviet power in the region.
In discussing Churchill's surprising call for a new western Europe and (in preference to a "Versailles" solution) an alliance of France and Germany, the author lets Churchill explain this as a Europe of concerted nations rather than one with supranational (or federalist) institutions. Churchill's European army would likewise have been one of nation states. (To use today's terms, Churchill would not have approved of the Single European Act and Maastricht agreement; and his shadow is still cast over the Conservative party.)
The strength of the work lies in its attention to Churchill's own writings and speeches, which are extensively noted at the end of each chapter. The Fulton speech is paraphrased over several pages. Martin Gilbert's official history is constantly referred to, and AJP Taylor's classic but quirky complaints about Churchill's dealings with the Soviet Union are dropped in to be rejected by Lambakis. Had the evolving views of Churchill and his critics been explained and contrasted early in each chapter, to be followed by author's view in each commentary, the discussion would have flowed more easily. Each major strategic decision could have been laid out for the reader analytically rather than pragmatically as events unfolded.
A Great Man theory of politics becomes ethrereal if it shuts out the character and beliefs of the men around the subject. We do not emerge here with an understanding of the goals and methods of de Gaulle and Roosevelt as they contrast with those of Churchill. For all we learn of Churchill's magnificently eccentric character, he might have been an austere ancient Greek orator rather than a brandy drinking aristocrat who dictated books in his second bath of the day. (There are also some minor irritations such as the appearance of "DeGualle" [sic] three times on page 47.) We gain little more than a glimpse of Colville, Macmillan, Eden and others who surrounded and presumably influenced Churchill. The Labour party critics of Churchill are listed but discussion is limited to their then ministerial positions -- we do not learn why they felt any kinship with the workers of Russia after the bitter years of war and those desperate North Atlantic convoys pressing their way through to Murmansk.
A "Life and Times" approach to statesmanship should also remark on the domestic factors of international politics, not just endorse the organic theory of foreign policymaking. The author might have briefly explained the electorate's desire to reward Churchill's wartime service by replacing him with a man Churchill despised (Labour's Attlee) in the postwar election that ushered in the modern welfare state. To this end, Paul Addison's book, The Road to 1945, could certainly have made an appearance. Labour's foreign policy 1946-50 is not explained in contrast with Churchill's: why did they feel he was too hard on Stalin postwar, when other critics felt he was too soft on Stalin in wartime?
While the book discusses Churchill's desires for individual freedom under law, it glosses over what is to Americans the less attractive side of his political goals, the maintenance of a declining empire. (In Churchill's wartime speeches, now released by the BBC in audiotape collection, his upholding of the empire is just as striking as his knowledgeable references to the Balkans, a region wretchedly confusing to modern western statesmen.) The loss of India, the jewel in the crown of Churchill's beloved Empire, is not mentioned. Yet this loss -- predictable during the war when assets were mortgaged and Indian troops were needed for foreign expeditions -- rendered his principal long-run strategy quixotic.
Although the endnoting is thorough, there are no maps (one of the Balkans should certainly be included) and the Index is severely limited to names and places. Indeed, one searches the Index in vain for such terms as Balance of Power, Realpolitik (or realist politics), or nuclear parity. Considering the familiarity of Churchill with traditional balance of power politics, as well as his creation of the idea of the balance of terror, these are significant omissions. Finally, the writing of this volume -- as a life and times approach -- might enjoy a more colorful, Churchillian touch than it does. This book overall, is carefully grounded in Churchill documentation and the subject's search for democratic virtue and world peace, but it remains more the chrysalis of a solid dissertation than the butterfly of a well-rounded work.
Dreyfus, Francois, Jacques Morizet, and Max Peyrard. France and EC Membership Evaluated. New York: Printer Publishers Ltd and St. Martin's Press. 1993. xv + 253 pages. $49.95. ISBN: 0-312-09977-0.
This work by a team of French authors is itself part of a monumental series of books evaluating the impact of European Community membership on each member state. Funded by German foundations, the series involved a collaborative effort by a large multinational team of scholars. The difficulties of harnessing such varied groups to one agreed-upon academic approach required international academic summits to compromise on the various national approaches, with some success.
Mirroring the EC debate between federalism and subsidiarity, the series authors had to reconcile a cross-national approach with a desire to market national volumes. The compromise was to produce a volume on each country's relationship with the EC, but with a common approach and common categories and sub-categories of policy in each chapter. Remaining interests specific to one country have been given their own space, for as the series editor puts it, fisheries policy does not mean the same thing to Britain as it does to (landlocked) Luxembourg. Quantitative and non-quantitative methods are used in different chapters, depending on the subject material, but while the qualitative judgments are often newly arrived at, the statistics are derived from earlier sources.
This volume in the series is a collective effort of twenty-two scholars and scholar-practitioners (including six women) primarily from the Universities of Paris, Strasbourg and Nancy. Many have law, political science or management degrees, or indeed all three. Several are professors of management, several are government consultants, and most have published extensively. One is a former airline pilot instructor, one a former Member of the European Parliament and EC civil servant, one a former ambassador of France to West Germany, and one professor also manages the family cognac business.
The Editors' Introduction stresses the long standing contributions made by France to the EC, beginning with de Gaulle in wartime and Monnet and Schuman in the development of the ECSC in 1951. Europhiles from all parties sought supranational institutions, but after the failure of the European Defense Community they learned to join de Gaulle in pressing for cooperation with a minimum of supranational institutions in the Treaty of Rome, 1957: the EEC and EURATOM. The Community case law of the European Court was recognized as supreme by France's highest court in the mid 1970s, but not by the Constitutional Council until 1989. The French joined the German government in calling for European Monetary Union in the 1970s and subsequently. The editors remind us that at each stage when enthusiasm for developing the Community flagged, it was French Presidents of both major persuasions who reinvigorated the process.
Part I covers Economics on a grand scale, with chapters discussing the impact on France of European policies on the single market, industry, R&D, energy, transport, agriculture, environment, regions, financial system and monetary system. The authors share acceptance of the values of EC policies over the past fifteen years, that is, they do not question the growth of federalism. In general they support Statist regulation although the chapter on financial markets endorses the radical reform of the French stock and secondary mortgage markets and the incipient European stock market (simultaneous trading of the largest multinationals in several financial centers.) The diplomatic, homogenized approach taken means that one has to read between the lines to find the grand dialogues between markets and Statism, and between European federalism (EC directives) and subsidiarity (nation states' rights).
In the transport chapter, following discussion of the French success in public investment in infrastructure, there is a clarion call for federal institutions, understandably perhaps in view of the international nature of much modern transport. In chapters on research and development, and on industrial policy, there are also unabashed cries for federalism on grounds of externalities and the need to compete with Asian countries.
On the agricultural support and car pollution questions, though, national differences of interest are discussed appropriately. In the energy policy chapter, the French rejection of the EC consensus in favor of massive development of nuclear power is endorsed in principle -- owing to lack of other resources -- but criticized for buying too much independence from the middle east at excess cost and with increased risk. (One wonders whether the French might not have used more oil for three decades and then developed more advanced nuclear reactors -- the current ones will undoubtedly be decommissioned by the time world oil supplies dwindle.)
France's net benefits from the EC have turned into net contribution as the EC has been enlarged with less developed nations. In particular, the discussions on regional policy and on the Common Agricultural Policy both take this theme. (Discussion of agriculture emphasizes the development of French average farm size into the second largest, rather than the scandalously inefficient and costly subsidies to over-production caused by the CAP.) France is now one of the better-off nations in the EC, not the lumbering peasant of the British caricatures of the 1960s. Indeed, the chapter on monetary systems shows that up to 1990 the French economy enjoyed increasing growth and decreasing inflation through being pegged to the Deutschmark while the Pound remained aloof. This chapter (written in June 1991) is conspicuously outdated by events including the collapse of the EMS: it needs figures to 1993.
EC environmental directives have generally stimulated monitoring in France and lead-free gasoline, although they paradoxically retarded negotiations over reduced-lead gasoline, a more far-reaching reform. EC directives have encouraged maximum pollution limits (command and control method) rather than transferable pollution permits (currently being considered in the US, as a more market-oriented method.) This chapter is perhaps more conscientious than most in comparing policy under the EC to that which the nation would have developed without it, but most do not delve deeply into this question of hypothetical comparison.
Part II covers foreign policy, with chapters limited to foreign trade, Third World relations, and French attitudes on foreign policy and the defense of Europe. On international trade, after citing French popular misgivings about perfidious American and Asian competitors who manage trade and try to impose one way advantages, the author calls for political union of the EC to ensure the benefits of regional trade as a prelude to generalized world free trade. He points out incidentally that France has been the greatest beneficiary of the reunification of Germany, since it has been the greatest investor in the eastern part. On relations with the Third World, the author is strongly in favor of France maintaining independent aid efforts to Africa through non-governmental organizations, since its aid is greater than that of Britain or Germany and government to government aid flows through inefficient and corrupt offices which have more interest in military and civil service strength than economic growth. The chapter on foreign and defense policy points out the long history of French exceptionalism from NATO and the country's preference for European solutions independently of the US, and for keeping defense union separate from the EC institutions, all of which moderated substantially under de Gaulle's successors. More recently President Mitterand joined Chancellor Kohl in proposing to link the WEU to the EC, when the other partners were more interested in linking the WEU to NATO. The author hopes that the easing security situation in Europe will reduce this tension.
Part III is likewise limited to three chapters covering the impact on French sovereignty, the legal order, and politics. On sovereignty, the chapter finds that supranationalism was removed from the early drafts of the 1950s Treaties of Rome (the EEC) and Paris (the ECSC). So, the EC has had no law on which to base the principle of going beyond federalism and confederalism. But the author concludes that the flexibility and pragmatism of mingling these concepts with subsidiarity has enabled the EC to develop in the absence of alternative models. The chapter on the effect of the EC on France's legal order finds that the principle of monism (acceptance of EC law directly rather than dualism, through a statute incorporating it, as in Britain) has led to effective assumption of EC law by French judges and a major change in the acceptance of irreversibility. There have been some differences between the High Court and the Constitutional Council, but EC supremacy is now firm. On the impact of the EC on French politics, there has been an ongoing theological debate dividing each party, city from countryside, young from old -- comparable historically to the Dreyfus affair. The 1992 referendum on the Maastricht treaty passed by a bare majority.
Part IV considers social and cultural policies with four chapters on industrial relations, gender equality in the workplace, consumers, and the mass media. The chapter on industrial relations suggests that the social chapter will have an impact on French employers, but that it is so far little more than an idea, and largely limited to consultations with workers' representatives. The chapter does not emphasize the opposite effect, international competitiveness as a cause of declining interest in social democratic institutions, including trade unions. The chapter on gender equality cites considerable advances in the number of French women in the work force, and major advances in law (particularly the Roudy law of 1983 which placed the burden of proof on employers in sex discrimination cases) which entails criminal -- rather than civil -- sanctions in France. This reflects and exceeds EC directives. The author takes the view that these advances are insufficient because of a lack of compliance in the workplace, and because of other protective statutes which limit the work women may do in hauling loads, or taking night shift. On EC consumer protection, the original Treaties made little mention of the consumer, but the Maastricht Treaty included a formal paragraph (129-A) to that effect just before the chapter was written. French consumer protection laws made a startling turnaround in 1992, limiting alcohol and tobacco advertising and adopting British style truth checks on comparative advertising.
In general, any statistics are rudimentary tables involving indexed figures or percentages, without the analytic statistics which would be expected in an American volume. The research is best viewed as contemporary history with intelligently descriptive essays. It is extraordinarily broad for one volume, at the expense perhaps of depth.
Overall, the balance of the project tends toward the economic, like the European Union itself. It is also pro-European Community on the whole, the exceptions being the chapters on aid to the Third World and perhaps those on transport and energy. The EC is sufficiently pluralistic that those on right (finance) and left (consumerism, feminism) seem to find it in harmony with their perspectives. That in itself is an important conclusion to be derived.
Although translation of the set of essays is up to a fine standard, oddly used words suggest that the final copy has not been edited by native English speakers. The flavor of French thinking does come across, but perhaps at a price in comprehension. The French essay style of considering various ideas and events and then surprising the reader with a conclusion is very much in evidence. Some French concepts are left undefined: "cabotage" (p.48) seems to mean subcontracting, while "colbertism" (p.124) is undefined until (p.228) another author couples it with state intervention. "Importation of Japanese videoscopes" is banned (p.189) but not identified (televisions, computer monitors or LCD panels?) The ambiguous word "offensive," presumably intended to mean an aggressive policy, instead may be read in the sense of distasteful. The oxymoron "quasi-identical" (p.63) presumably means "similar." The editors have, however, inserted comments to indicate the British equivalent of a French institution; for example, the cour de cassation is compared to the House of Lords as the High Court. In the hope of reaching beyond the academic audience, endnotes to each essay are Spartan and each essay has been kept very brief.
Johns, R.A., and C.M. Le Marchant. Finance Centres: British Isle Offshore Development Since 1979. London and New York: St. Martin's Press. 1993. xiv + 306 pp. $69.00. ISBN 0-86187-799-3.
This fact-filled volume is the product of a collaboration between a meticulous scholar of international finance and one of his former graduate students, a financial regulator in Guernsey, which is now one of the offshore banking havens in the English Channel. The book's timing is fine. Those of us who are expatriates have certainly been alerted to the growth of British offshore banking by a flurry of brochures from banks installed in the Channel Islands advertising high interest rates free of local taxes. With global electronic transfers replacing human tellers in local branches, the age of the virtual bank has arrived.
The book claims to be the first solid record of British Isles offshore banking developments since the suspension of UK monetary exchange controls with the onset of the Thatcher government in 1979. Its predecessor volume by Johns (1983) appeared before the full globalization of offshore finance in the mid-1980s. This new volume successfully tells the story of the local development of British offshore banking in the context of the strait jacket of Labour's 1947 Sterling exchange controls, the imposition of new controls by Labour in the 1960s and 1970s, and the abandonment of controls in 1979 by the Conservatives. It combines this with a global perspective on the growth of liquidity markets, making a well rounded volume of the specific and the general.
An introductory map locates (usefully, for American readers) the islands of Jersey and Guernsey (off the coast of northwest France) and the Isle of Man (off Liverpool). An introductory chapter explains the origins of their quasi-independent governmental systems.
In the 1960s and 1970s, national political systems constrained onshore banking to a degree that gave offshore banking its chance to prosper. Pages 5 - 11 detail the onshore problems and the reasons for banks going international at the retail and wholesale levels. The main business of offshore banking, borrowing and lending to nonresidents, is accompanied by services that shift income so as legally to avoid taxation, often via a conduit company.
After reviewing the the constitutional framework for fiscal sovereignty in the British Isles, the second chapter then examines the development of the financial sector between 1960 and 1979. For example, it briefly narrates the colorful history of the Isle of Man's Tynwald parliament (p.45), which dates from the tenth century when it was under the control of the Kings of Norway before being ceded to Scotland and thence to English and Scottish lords. The Channel isles, which were part of the Norman Duchy annexed to England in 1254 following the collapse of the Norman Empire in England were granted measures of privileges and immunities from that time forward.
The third chapter examines both globalization and onshore deregulation of banking, leading to an effective reorganizing of international business finance. We learn (p.60) that the take-off period for growth in Jersey, Guernsey and the Isle of Man was 1972-75 (during the Conservative government of Edward Heath.) The exchange decontrol of the Thatcher government took place in October 1979.
The leading country in onshore deregulation (p.70) was of course the United States, with policy changes in the Carter (1978, 1979, 1980) and Bush administrations (1989). But investigation of excesses is often the twin brother of deregulation. The Reagan administration was marked by investigation of offshore funds in the Gordon Report (1981), of the nexus between crime and secrecy in offshore funds (1983) and of the Caribbean tax havens (1984). The Offshore Group of Banking Supervisors was established in 1980, covering fifteen centers (p.89).
There follow three chapters on the island case studies: consolidated development in Jersey, spectacular development in Guernsey, and following teething trouble the successful and diversified growth in the Isle of Man in the 1980s.
A conclusions chapter places offshore banking in the two contexts of the global market and government regulation efforts. This chapter illustrates the rapid pace of globalization with the example of the first offshore country, Kuwait's national bank having moved almost instantly to London upon the invasion of Kuwait by Iraq in 1990. It also cites the BCCI affair as demonstrating three serious omissions in the global supervision of international banks: the lack of a requirement for a lead regulator for each international bank; the lack of standards of evaluation of the supervision of international banks; and the lack of requirement of a sole auditor for each bank. The conclusions chapter also functions as an afterword made necessary by startling changes in global politics: the demise of the second world in eastern Europe, the rise of free trade agreements in the expanding European Community (or Union) and EFTA, North America (NAFTA), and Asia (AFTA). It does not neglect Dublin, Madeira (Portugal) and Gibraltar as free trade zones. It briefly mentions the other small European countries which provide tax havens, but warns that in this current round of competitive liberalizations among larger centers, the advantages of being a tax haven may disappear. The development of the European Currency Unit -- should it continue despite recent difficulties for the lira, peseta and sterling -- might force these small havens to recognize a universal currency.
Appendices reprint official documents on British tax avoidance rules and the UK Treaty of Accession to the EC with respect to the Channel Islands. There follows an extensive bibliography and a valuable index.
Key terms and concepts have been italicized throughout the text, increasing its value as a handbook for professionals. However, some terms perhaps should have been defined where they occur: for examples, international friction matrix (p. 69) and captive insurance companies (p.18.)
In terms of style, the book has the common British vices as well as virtues. It is extremely scholarly and orderly, especially in stepping through paragraphs of the complex banking control laws, and employing extensive quotations while displaying considerable grasp of the material. But Chapter 1 also scatters multiple Latin phrases like so much confetti: in situ nestles up against in loco parentis and inter alia on one page, inter alia against sine qua non (pp.32 and 33), per se against inter alia (p.35), and parens patriae against ad hoc (p.44.) Inter alia is found, well, among everything else.
It is not a book for everybody. Those who are professionally involved in this specific field will find the book thoroughly researched and perhaps path-breaking: a handbook of the field that may stand until it is overtaken by the rapid pace of events. American scholars of international finance will probably prefer a volume covering Bermuda and the Bahamas in combination with the British Isles, and perhaps such a work is being developed. But those who are undergraduates or scholars merely browsing in this particular field will certainly be put off by the steep price and the turgid prose.
The general reader will derive an understanding that as water finds its own level, so globalization of the liquidity market leads to money seeking havens from tax and regulation. Capital in this neoliberal world market seems to know no nationality, defying traditional conservatism. For Labour supporters, no doubt, the lesson drawn will be the difficulty of establishing socialism in one country when international capitalism stands hungrily at the gates.