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Jean Monnet: The Guerilla Bureaucrat

I have written about coordination problems from various points of
view in the past (biology, economics, sociology, political science)
but this time I am about to focus not on the theory, but on the
practice.

Jean Monnet was one of the founding fathers of the European Union.
One may even say that he was the architect of the European Union.
However, as founding fathers go, he was rather unusual. His
background was unusual: He was neither a political leader, nor a
lawyer, a philosopher or a military commander. He was a son of a
brandy merchant from the small town of Cognac near Bordeaux and
himself a merchant by trade. He dropped out of school at sixteen and
never got any extensive formal education.

[monnet]

But also his approach was unusual: He never held an elected position,
he has never put himself to the forefront, he almost never made big
speeches and is not known for memorable quotations. Rather, he was
always in the background, busy with the boring technical work,
hanging around politicians, showing them his famous balance sheets
and trying to convince them to do the sensible, if unexpected, thing.

He was, in fact, so undistinguished that, when Fortune magazine run a
story about him, they have given up on inventing a proper title for
him and introduced him simply as "Monsieur Jean Monnet of Cognac".
But whoever he was in his life - a trader, a banker, a civil servant
- the only description that truly fits is that he was a solver of
coordination problems.

The Monnet Method

This article will explore what Mario Draghi (former president of
European Central Bank, and now, quite unexpectedly, the Italian prime
minister) calls "the Monnet method", a bunch of principles that
guided the effort to unite the continent divided by centuries of
incessant wars and feuds.

But while Draghi is focusing on the lessons that may be relevant in
the current state of the European Union, my interest is a bit
broader: How does one solve coordination problems in general? And how
does to do it as successfully as Jean Monnet once did?

In this article we are going to examine that question. Yet, before we
begin, a warning is due. Monnet himself, in his memoirs, refuses to
write down his method:

    I might have written a series of practical maxims; but I distrust
    general ideas, and I never let them lead me far away from
    practical things. I have described the dramatic events I have
    lived through and the lessons I have learned from them, in the
    hope of preventing their happening again. My purpose is very
    practical. Some may call it a philosophy, if they prefer: but the
    essential point is to make it useful beyond the experience of one
    individual.

And that, I think, is not Monnet being modest. It's the core of his
approach. The only way to break out of inadequate equilibria, to
solve the coordination problems, is to take advantage of the
unexpected. Everything that is expected, after all, just feeds into
the equilibrium and makes it persist. And to take advantage of the
unexpected, one should not bind himself to a specific, predictable
method.

Bypassing the Hierarchy

One recurring theme in Jean Monnet's life was working outside of the
existing institutions. The common sense would have it that to change
how Europe works, he should have found a humble job at French
ministry of foreign affairs and work his way up the hierarchy until
he had enough say to push his ideas forward. Instead, it's 1914, the
beginning of the Great War. Monnet is 26 years old and has no prior
political experience:

    One of our friends at Cognac was a lawyer, Maitre Fernand Benon,
    who happened to know Rene Viviani, the Prime Minister, quite well
    [...] and he agreed to introduce me to [him].

    [...]

    Viviani said to me: "Sir, I gather that you have some interesting
    proposals. Tell me."

    "The problem lies in using to the full the decisive contribution
    of Britain's economic Power. At the moment, we don't know how to
    do it. And so long as we fail to allocate responsibilities
    according to the ability of each side, the Alliance will remain a
    mere juxtaposition of two separate Powers. At present, despite
    all the good intentions of those responsible, there are absurd
    instances of waste and unnecessary duplication."

    Viviani interrupted. "Can you give me some examples?"

    "The merchant fleets have not been fully requisitioned. There are
    good reasons for that, I know. But is there any reason why they
    should compete with each other, why they shouldn't charge the
    same freight rate and why their cargoes shouldn't be co-ordinated
    so that at least priority supplies get through quickly? You're
    worried at the moment because the price of oats has gone up. But
    it's not the price that's gone up - it's the cost of shipping
    them."

    "What do you propose?"

    "We need to set up joint bodies to estimate the combined
    resources of the Allies, share them out, and share out the
    costs."

    "But we already have machinery for inter-Allied co-operation, and
    I'm told that it works well."

    "That's nothing more than a communications system. It doesn't
    take decisions or make choices. We're beginning to suffer from
    shortages, and we must devote our resources to the most rational
    ends - all our resources - all our joint resources. It's this, I
    believe, that's still not understood. Allied solidarity must be
    total. In other words, neither side must be free to use its men,
    its supplies, or its shipping in ways that haven't been agreed by
    both."

    "I see what you mean: but you must realize that we are talking
    about two Governments and two sovereign Parliaments. Can you
    imagine these joint decisions being taken simultaneously?"

    "I know the British well enough to be sure that we can reach a
    real agreement with them if we appeal to their loyalty and if we
    play fair. They know what a terrible burden the French armies are
    bearing for the common cause. They will agree to make the biggest
    contribution in the fields where they are supreme - in production
    and shipping."

    "I think so too, but it's hard to broach the subject at a time
    when we're asking them to send more troops. You seem to have some
    idea of how to go about it. Try. I'll tell Millerand [French
    minister of war] to expect you. Explain to him what you've just
    told me."

I've quoted the story in full because it captures the essence all the
later conversations Monet had with politicians. Both in its substance
- that is, coordination between countries - and its unexpected, bold,
almost cheeky style. A random nobody arrives from the blue and makes
grandiosely far-fetched proposals, which, nonetheless, often get
accepted by the people in power.

Here's what Monnet has to say on the topic himself:

    Although it takes a long time to reach the men at the top, it
    takes very little to explain to them how to escape from the
    difficulties of the present. This is something they are glad to
    hear when the critical moment comes. Then, when ideas are
    lacking, they accept yours with gratitude - provided they can
    present them as their own. These men, after all, take the risks;
    they need the kudos.

Or, hitting closer to the problem of inadequate equilibria, he
explains:

    However far-sighted they may be, Governments always find it
    difficult, and very often impossible, to change the existing
    state of affairs which it is their duty to administer. In their
    hearts they may wish to do so; but they have to account for their
    actions to Parliament, and they are held back by their officials,
    who want to keep everything just so.

In short: When it comes to coordination problems, always speak to the
most powerful person around. For it is they who, if anyone, have
enough power to break the existing institutions and thus escape the
existing deadlock.

The Better Nature of Men

As a side point to the previous section - and although Monnet doesn't
explicitly say so - speaking to a person, as opposed to dealing with
an institutional process, brings in considerations that don't exist
within the institution.

Here's how Monnet finishes the story above:

    Leaving Viviani's office, I found Fernand Benon waiting in the
    hall of the Faculty of Letters. He told me that Viviani had just
    that morning heard of the death of his two sons in the Battle of
    the Marne.

He puts it as dryly as that. He doesn't elaborate. But the reader is
left to wonder whether such a personal tragedy have made Viviani more
prone to act in unorthodox ways. Whether he was more prone to
disregard the business as usual and focus on efficiency, even if it
meant supporting a young man with ludicrously far-fetched proposals.

Similar point can be made about creation of European Coal and Steel
Community, the predecessor to the European Union. The people involved
may have come from different countries, often traditional enemies,
locked into inadequate equilibria, promoting their own interests at
the expense of the whole. But, on the other hand, each of them has
lost friends and relatives in the war and often it took as little as
to look out of the window to see the ruins and the destruction caused
by the malfunctioning system.

A casual visitor to the community offices in 1955 notes:

    The men who worked on the Treaty of Paris were men who had fought
    two wars, lived through two wars, and were determined to forge a
    future that would turn its back on that past. [...] In the General
    Secretariat there was Kohnstamm, who was Dutch and had been in
    the Resistance, and opposite him, there was a German called
    Winrich Behr. Winrich Behr had been on the staff of Field Marshal
    Paulus during the battle of Stalingrad and had had the task of
    bringing to the Fuhrer the news of the Stalingrad army's
    surrender; he was also on Rommel's staff in the Afrika Korps
    during the North African campaign. [...] So there was a German, a
    Frenchman, Rollmann, who was a Luxembourger, there were Belgians,
    and so on. [...] these men, who did not know one another and had
    even served in opposing armies, came together and a friendship
    sprang up among them. That is what I felt, and as a Swiss, it
    made a great impression on me. My conclusion was that these men
    who had fought were now closer to one another than we, who
    remained or found ourselves outside.

Monnet expresses the same sentiment in a less poetic way:

    Werner Klaer and Roger Hutter, one German and the other French,
    sat opposite each other in the same office. They recognized and
    confessed the ways in which, in their national rail systems, they
    had both manipulated freight-rates to distort free competition.
    Together, in the closest collaboration, they now spent months
    undoing a skein of national discrimination.

Crises are Opportunities

    At this most fateful moment in the history of the modern world
    the Governments of the United Kingdom and the French Republic
    make this declaration of indissoluble union and unyielding
    resolution in their common defence of justice and freedom against
    subjection to a system which reduces mankind to a life of robots
    and slaves.

    The two Governments declare that France and Great Britain shall
    no longer be two nations, but one Franco-British Union.

    The constitution of the Union will provide for joint organs of
    defence, foreign, financial and economic policies.

    Every citizen of France will enjoy immediately citizenship of
    Great Britain; every British subject will become a citizen of
    France.

    Both countries will share responsibility for the repair of the
    devastation of war, wherever it occurs in their territories, and
    the resources of both shall be equally, and as one, applied to
    that purpose.

    During the war there shall be a single war Cabinet, and all the
    forces of Britain and France, whether on land, sea, or in the
    air, will be placed under its direction. It will govern from
    wherever best it can, The two Parliaments will be formally
    associated. The nations of the British Empire are already forming
    new armies. France will keep her available forces in the field,
    on the sea, and in the air. The Union appeals to the United
    States to fortify the economic resources of the Allies, and to
    bring her powerful material aid to the common cause.

    The Union will concentrate its whole energy against the power of
    the enemy, no matter where the battle may be.

    And thus we shall conquer.

After this message was dictated over telephone on June 16th, 1940
there was a short silence on the French side.

Had the text been approved by Churchill himself?

Churchill picked up the telephone and said: "Hold on! De Gaulle's
leaving now: He'll bring you the text... And now, we must meet quickly.
Tomorrow morning at Concarneau."

Full irreversible political union of Britain and France would have
been inconceivable at any other moment. However, given the grave
military circumstances, Monnet was able to persuade both Churchill
and De Gaulle to support the proposal.

To give some context, Churchill was generally in favour of European
integration, but he imagined it as a continental matter, with Britain
standing benevolently on the side. However, in 1940 the matters
looked grim indeed. If France had signed an armistice - which was
almost certain to happen - Britain would be left fighting Germany all
by itself. (At the time neither the US, nor the USSR have been
involved.) So, Churchill swallowed his disgust and put his weight
behind the proposal.

De Gaulle, on the other hand, was a nationalist. In the postwar era
he single-handedly hindered the progress of European integration more
than anyone else. He rejected two British applications to join the
block, caused the "empty chair" crisis and so on. Yet, facing the
immediate prospect of France surrendering to Germany, he was willing
to support the full unification of the two countries.

Unfortunately, the proposed meeting at Concarneau never happened and
France has signed the armistice with Germany on June 22nd.

This anecdote brings in a new point. Speaking to the people in power
may not, by itself, solve a coordination problem. Often, a crisis is
needed to make them more willing to break the mold and act in
unorthodox ways.

In practice, this means that the business of breaking the inadequate
equilibria often boils down to waiting for the crisis, building
social networks in the meantime and preparing solutions that could be
put on table once the crisis hits.

Monnet:

    I can wait a long time for the right moment. In Cognac, they are
    good at waiting. It is the only way to make good brandy.

Of course, the method is not guaranteed to work. It's a gamble. You
can only win be trying over and over again.

The proposal for Franco-British union, as already said, has failed.
So did the European Defense Community, an attempt in early fifties to
establish a common European army.

The crisis that triggered the effort hit in 1950 with the outbreak of
Korean War. The feeling at the time was that the same may happen in
Europe. Recall that half of Europe, most significantly the east part
of Germany, was occupied by Soviet forces and that the relations were
everything but friendly. (The truly medieval siege of Berlin has
ended just a year ago.)

On the one hand, there was a strong pressure to rearm West Germany,
so that it was not an easy prey to Soviets. But at the same time and
quite understandably, the prospect of the resurrected German army
caused quite a lot of uneasiness in France and Benelux countries.

EDC has been an attempt to solve the problem by creating a common
European army. In Monnet's words:

    First soldier placed under arms in Germany should be a European
    soldier.

However, by the time when the treaty was voted on it the French
parliament, the window of opportunity has already closed. Korean war
was over and the treaty was rejected.

Given that the proposal for Franco-British union failed, it may not
be the best illustration for the principle. However, Monnet didn't
sit idly during the war. He tried to solve the problem by focusing on
the US instead of on France. This is what Maynard Keynes has to say
on the topic:

    When the United States of America entered the war, Roosevelt was
    presented with an aircraft production programme which all the
    American experts thought would require a miracle. Jean Monnet was
    bold enough to find it inadequate... The President came to agree
    with this point of view. [...] This crucial decision may well have
    shortened the war by a whole year.

Little steps

There were, in the inter-war period, European federalists, people
like count Richard von Coudenhove-Kalergi, trying to push for
immediate establishment of the United States of Europe.

Coudenhove-Kalergi was an interesting character. A child of an
Austro-Hungarian diplomat and a Jananese mother (their wedding photo
is too awesome to not to link to) he was the founder of the
Pan-European movement. His adventures during the war also served as a
basis for Victor Laszlo, a character in the movie Casablanca.

I don't claim to fully understand what the Pan-European movement was
about. From the brief look it looks like they were aiming at some
kind of improved version of former Austria-Hungary. The fact that
Coudenhove-Kalergi was succeeded as the president of the movement by
Otto von Habsburg definitely points in that direction.

That being said, Coudenhove-Kalergi did managed to get support from
some politicians (French prime minister Aristide Briand) and
intellectuals (Einstein, Freud) and so the movement wasn't totally
irrelevant.

But: The Pan-European project would have required immediate giving up
of most of the national sovereignty of the concerned nations. And, as
became apparent during the later unification of the continent (and
also, more recently, during Brexit) the nations would engage in all
kinds of disruptive behaviour before letting go even a a smallest
piece of their sovereignty. In short, the Pan-European project was a
political non-starter.

On the other hand, there were attempts to establish peace in Europe
without nations giving up their sovereignty. This is the line of
thought represented by the League of Nations and later by the United
Nations as well as by the Council of Europe. (Not to be confused with
European Council or Council of the European Union, which are EU
institutions!)

And while Monnet had nothing to do with the federalists, he was
personally involved in the League of Nations. He was the deputy
secretary-general of the organization while it was still in its
beginnings, when the secretariat has done the most work and consisted
maybe of twenty people.

And the importance of these organizations should not be downplayed.
League of Nations managed to solve tricky problems like the Problem
of Silesia, the problem of Danzig or to prevent a full economic
collapse of the newly established Austria. These organizations also
provide the institutional backing for the modern international law
(e.g. International Court of Justice in the Hague). And having a
common international discussion forum, such as UN, even if it had no
real power, is still worth it.

But Monnet has also seen the problems first hand. As he explains,
where the League of Nations succeeded (e.g. Silesia) it was only
because the allies didn't want to rock the boat so early after the
war and so they handed the problems they didn't agree on to the
League, along with the power to solve them.

    Bringing Governments together, getting national officials to
    co-operate, is well-intentioned enough; but the method breaks
    down as soon as national interests conflict, unless there is an
    independent political body that can take a common view of the
    problem and arrive at a common decision. I became convinced of
    this twenty years later. What success we had in Geneva is mote
    simply explained. The important agreements that were reached
    there became possible in so far as the Great Powers, in
    particular France and Britain, thought it to be in their interest
    to avoid a dispute. When this only was the case, we were free to
    seek solutions.

But this only works for a while. Once the memories of the war wane
away, there are no more incentives to hand problems to the common
institutions and national sovereignty reigns supreme once again. This
is, more or less, the state of affairs we can see in the UN security
council in the present. Any proposal by the US or the UK get vetoed
by Russia and China. Any proposals by Russia or China are shot down
by the US and the UK. In the end, nothing gets done.

    During this time I was busy between London and Paris, winding up
    the units of which I had been in charge, and I had no hand in the
    drafting of the Hague Covenant. Those who did draft it were
    careful to avoid setting up a genuine authority independent of
    the member States, or even a first nucleus of autonomous
    international power. The whole of the League depended on the
    Council, which alone was empowered to take decisions, and even
    then by unanimous vote. The Assembly could issue only opinions,
    resolutions, and recommendations. The role of the Secretariat was
    to assist the Council in its work. Quite obviously such an
    organization was incapable of expressing and imposing a common
    will. That, at least, is the conclusion I came to later. But at
    the time I did not see the pooling of sovereignty as a way of
    solving international problems. Nobody did, even if their words
    seemed to imply an appeal to some authority that would be above
    nations.

And:

    One scene among others sticks in my memory: it was a meeting of
    the Council to discuss the world distribution of raw materials.
    The Italian representative, Marchese Imperiale, was pressing for
    a certain decision to be taken. As usual, the British
    representative, Lord Balfour, looked if he were asleep. Then his
    turn came, he got up and said simply: 'His Majesty's Government
    is against.' Then he returned to his doze. The question was
    settled.

We can already see the problem that comes up in many, if not all,
coordination problems. Either the parties in question get full power
to decide for themselves, that is, power to veto any common decision
(League of Nations), or their ability to decide for themselves is
constrained, which they would never agree on in the first place
(Pan-Europa). The former option means that they will never agree, the
latter option means that they will never even get to the negotiation
table.

In the early 50's in Europe, the problem was solved by the method of
"small steps". The states were not asked to relinquish all their
sovereignty in one go. Rather, a very specific area of interest was
singled out (coal and steel industry) and the delegation of
sovereignty was limited to that area.

But this is a hard trick to pull of. One needs all the following at
once:

  * The area of interest must be limited enough not to scare
    individual actors away.
  * There must be a crisis serious enough to override all the
    remaining fear of the sovereignty loss.
  * The proposal must by done at the right time, by the right actor.
  * The chosen area must be impactful enough to be worth the effort.

The idea that Europe can be somehow made more peaceful by increased
economic cooperation was floating around for a long time. What
required political genius was to meet all those preconditions at
once.

In that particular case, the crisis was caused by French fear of
revived Germany on one side and German desperation of being caught
unarmed and occupied in the center of conflict of the great powers.
Maybe a contemporary cartoon explains the mood better than I can do.

[eu1]

The solution was to internationalize the coal and steel industry,
which in effect, meant giving French fair access to the coal from the
Rhine-Ruhr region. Coal and steel at the time were the most important
resources needed to wage a war, similar to the oil today. The common
market in coal and steel not only meant that one country can't easily
get a large military advantage simply by owning a specific
coal-producing region, but also made the market much more
transparent, allowing the participants to closely watch each other.

For Germany, on the other hand, the solution meant that it was, for
the first time since the end of the war, invited to an international
organization as an equal among equals. By making it less dangerous,
it lowered the pressure to keep occupation regime in place and paved
a way back to the normal. And returning to the normal was the
priority number one. In the hunger winter on 1946/47, the average
calorie intake per day per person in Germany is believed to have been
around 1000. People were starving. Archbishop of Cologne gave his
blessing to those who stole to feed and warm their families. But at
the same time, German industry was being disassembled. Things had got
somehow better by 1950, but getting out of the deadlock and
restarting the German economy was still of utmost importance.

At the same time, economic cooperation is impactful, in the sense
that once you start doing it it naturally expands. Having a common
market for coal and steel may be great, but if the freight costs are
unfair, then you are back to your original problem. To solve it, you
need common transportation policy. And indeed, in the subsequent
decades the economic cooperation expanded until we've got the full
common market of today.

Who made the proposal was also important. Just few months before
Schumann declaration (the proposal by French to form the steel and
coal community) similar idea was floated by German prime minister
Konrad Adenauer. But he got laughed down in the political circles as
well as in the press. Germany was not in the position to make
proposals at the time.

But, in the end, even all of that would not suffice if the procedure
of the negotiations were not what it was.

Two-layered approach

The problem there, you see, is that if the participants don't agree
to the solution of the crucial coordination problem in advance it
will become a bargaining token in the subsequent negotiations on the
technical issues. That way, it will get gradually watered down if not
completely removed.

Consider a modified version of the prisoner's dilemma. This time, the
prisoners are allowed to communicate, but they also have to solve an
additional technical problem, say, how to split the loot. They may
start with agreeing on not betraying each other to the prosecutors,
but later one of them may say: "I've done most of the work. I want
70% of the loot, otherwise I am going to rat on you." It's easy to
see how the problem would escalate and end up in the prisoners
betraying each other.

Similar dynamics could be observed in the League of Nations:

    At every meeting, people talked about the general interest, but
    it was always forgotten along the way: everyone was obsessed by
    the effect that any solution would have on him - on his country.
    The result was that no one really tried to solve the actual
    problems [...]. This was inevitable in a body subject to the
    unanimity rule.

The European coal and steel effort avoided this problem by making the
agreement on the coordination problem (that is, delegating the
national sovereignty) a condition to participate in the negotiations.
Both France and Germany were willing to do so and the project started
as a Franco-German endeavour. However, other countries were invited
to join.

French memorandum sent to London, Rome and Benelux countries:

    The Governments of ... are resolved to carry out a common action
    aiming at peace, European solidarity, and economic and social
    progress by pooling their coal and steel production and by the
    institution of a new High Authority whose decisions will bind ...
    and the countries which may adhere to it in the future.

And the British reply:

    His Majesty's Government have received the French Government's
    Memorandum [...] It should [...] be realized that if the French
    Government intend to insist on a commitment to pool resources and
    set up an authority with certain sovereign powers as a prior
    condition to joining in the talks, His Majesty's Government would
    reluctantly be unable to accept such a condition. His Majesty's
    Government would greatly regret such an outcome.

There you go. National sovereignty is now called out by name.

In the end, Italy and Benelux countries accepted the offer. Britain
did not. The coordination problem was solved, albeit at the cost of
sacrificing Britain's membership in the new project.

Tribalism

The previous discussion begs a question. The founding fathers of the
EU took for granted that people assigned to supranational European
organizations would work for the good of Europe as a whole rather
than for the benefit of their native countries. But that's far from
obvious. Would a person abandon their tribe an join a super-tribe
just because their job descriptions tells them to do so? If so, then
tribalism is less of a problem than we thought.

And looking at concrete examples, we observe that it can go both
ways. American congresspeople, for example, clearly work for benefit
of their party, not for the benefit of the whole. On the other hand
Swiss Federal Councilors, despite being from different parties, work
for the benefit of the entire Switzerland.

My first guess would be that allegiance to a tribe follows the
accountability. If US congresspeople are primarily accountable to
their parties (in the sense of being nominated by the parties) they
will split into tribes along party lines. If Swiss Federal Councilors
are accountable to the parliament (by being elected by the majority
of parliamentarians and thus needing support from multiple parties)
then they'll work for the common cause.

However, European Commission seems to defy that rule. The members are
nominated by the national governments, yet, they seem not to give
unfair advantage to their native countries.

The alternative explanation would be that the common sense outcome of
the Robbers Cave experiment applies: If people are put in a single
room, working to solve common problems, they will eventually form a
coherent tribe.

But again, the US case seems to contradict that conclusion. There is
certainly more to think about here.

Instead of Conclusion

While this article has been mostly about breaking old inadequate
institutions, I would like to finish with a quote paying homage to
institutions as such.

Monnet, at the first meeting of the European Council, remarks:

    The union of Europe cannot be based on goodwill alone. Rules are
    needed. The tragic events we have lived through and are still
    witnessing may have made us wiser. But men pass away; others will
    take our place. We cannot bequeath them our personal experience.
    That will die with us. But we can leave them institutions. The
    life of institutions is longer than that of men: if they are well
    built, they can accumulate and hand on the wisdom of succeeding
    generations.

And if I am allowed to expand on that thought, the institutions of
the European Union accumulate not only the wisdom imparted on us
during the world wars, but, by the virtue of its gradual expansion,
also the wisdom of decades of living under Franco or Salazar, the
lessons learned during the Troubles in Northern Ireland, the wisdom
of balancing the contradictory influences from the West and the East
in neutral Austria, the wisdom of living under communist regimes
everywhere from Estonia to Bulgaria and, with accession of Croatia
(and soon, hopefully, other Balkan countries) the lessons painfully
learned in the wars of former Yugoslavia.

March 20th, 2021

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