History is not written as it was experienced, nor should it be. The inhabitants of the past know better than we do what it was like to live there, bu… - Tony Judt

Looking back, it is somewhat ironic that after fighting a murderous war to reduce the power of an over-mighty Germany at the heart of the European continent, the victors should have proven so unable to agree on post-war arrangements to keep the German colossus down that they ended up dividing it between them in order to benefit separately from its restored strength. It had become clear—first to the British, then to the Americans, belatedly to the French and finally to the Soviets— that the only way to keep Germany from being the problem was to change the terms of the debate and declare it the solution. This was uncomfortable, but it worked. In the words of Noel Annan, a British intelligence officer in occupied Germany, It was odious to find oneself in alliance with people who had been willing to go along with Hitler to keep Communism at bay. But the best hope for the West was to encourage the Germans themselves to create a Western democratic state.

The three quarters of century that followed Austria’s collapse in the 1930s can be seen as a duel between Keynes and Hayek. Keynes, as I was saying, begins with the observation that under conditions of economic uncertainty we would be imprudent to assume stable outcomes and therefore had better devise ways to intervene in order to bring these about. Hayek, writing quite consciously against Keynes and from the Austrian experience, argues in the The Road to Serfdom that intervention—planning, however benevolent or well-intentioned and whatever the political context—must end badly. His book was published in 1945 and is most remarkable for its prediction that the post–World War II British welfare state already in the making should anticipate a fate similar to that of the socialist experiment in post-1918 Vienna. Starting with socialist planning, you would end with Hitler or a comparable successor. For Hayek, in short, the lesson of Austria and indeed the disaster of interwar Europe at large boiled down to this: don’t intervene, and don’t plan. Planning hands the initiative to those who would, in the end, destroy society (and the economy) to the benefit of the state. Three quarters of a century later, this remains for many people (especially here in the U.S.) the salient moral lesson of the twentieth century.

The ‘European project’, in so far as it ever existed outside the heads of a few idealists, had stalled by the mid-nineteen-fifties. The French National Assembly had vetoed the proposed European army, and with it any talk of enhanced European coordination. Various regional accords on the Benelux model had been reached—notably the Scandinavian ‘Common Nordic Labor Market’ in 1954—but nothing more ambitious was on the agenda. Advocates of European cooperation could point only to the new European Atomic Energy Community, announced in the spring of 1955; but this—like the Coal and Steel Community—was a French initiative and its success lay, symptomatically, in its narrow and largely technical mandate. If the British were still as skeptical as ever about the prospects for European unity, theirs was not an altogether unreasonable view.