Wandel durch Handel failed, but not for the reasons you think

The last time Europe had a radical idea on peace was in 1950

Wandel durch Handel is German for “transformation through trade”. The phrase was coined by German Socialdemocrats during the Cold War to argue for trade with the Soviet Union. It has subsequently been applied to relations with Russia and China.

The “Wandel” part (transformation) is vague and could be read in different ways. One is Russia becoming more just and democratic at home. There is not a little narcissism in this - “there’s something wrong with you, Russia, but if you sell us raw materials, buy our value-added industrial goods, allow our banks and retail chains to profit handsomely from Russian consumers, you might turn out alright”. No one ever laid out exactly how Handel would bring about Wandel. Through emulating Germany’s dazzling example? Because greater prosperity automatically generates rule of law and democracy (by now a soundly refuted theory)?

The second reading applies to Russia’s foreign policy: through trade and economic interdependence, Russia would become more peace-oriented or at least grudgingly reconciled to Western hegemony.

Wandel durch Handel was always a poor stand-in for a comprehensive foreign policy towards Russia. It had logical blind spots. I don’t know if anyone in a position to direct foreign policy - Germany’s or any other European state’s or the EU’s - actually believed it would work, or whether it was just a slick, optimistic slogan for an opportunistic reality. But recent cohorts of decision-makers were too shallow and smug to acknowledge the blind spots, let alone address them. Never mind that it was highly profitable.

Wandel durch Handel has, like so many institutions in contemporary Europe, a more ingenious and honorable predecessor: the European Community of Coal and Steel, the brain child of French foreign minister Robert Schuman in 1950. Just five years after the end of WWII, France and pretty much all of Europe might have been forgiven for resenting and fearing Germany and wanting to contain or weaken it. Instead, Schuman proposed something radical.

To make war, you need coal and steel. So to make war impossible, coal and steel production would be deeply, irrevocably integrated between France, Germany, the Benelux states and Italy. This demanded an unprecedented advance of trust. The founding states put their security into their recent enemy’s hands. From here on, zero-sum competition was unthinkable and security became truly indivisible. The rest is history. Whatever its contemporary challenges, the EU is the most successful model for building a positive, sustainable peace between former enemies.

Wandel durch Handel as a security strategy vis a vis post-Soviet Russia is a pale imitation of the European Community of Coal and Steel model. Yes, there is trade; there is even mutual dependence, although more by inevitability than design. But it is critically different in one aspect. In the European Community of Coal and Steel, there was no room for keeping your partners down. Member states didn’t with one hand trade essential materials and with the other pursue military and foreign policies that would undermine each other’s strategic position and national security.

Under Wandel durch Handel, Germany and a number of other European states allowed themselves to become dependent on Russian energy, while simultaneously challenging Russia’s national security, via NATO and later also the EU and a long list of pinprick indignities. These days they might all swear that they would never dream of it, that NATO expansion was not meant as a threat to Russia etc etc. But at the Budapest NATO summit in 2008 Germany and France put a panicked halt to US plans to offer membership to Georgia and Ukraine. They knew alright how Russia felt about it. After the events of 2014 in Ukraine at the latest, Wandel durch Handel continued, but the lack of good faith was now conspicuous.

Wandel durch Handel incorporated both sides’ malicious underestimation of the other. Europeans told themselves that they could encroach on Russia’s security perimeter and play zero-sum games in Ukraine and the South Caucasus, and that Russia would keep delivering gas anyway, because that’s what greedy, cynical, oligarchic, corrupt petrostates do. They sell out.

Russian leaders believed that Europeans are soft, overly beholden to their decadent and capricious electorates, that they could easily drive a wedge between European states, and that they had bought themselves enough influence in political establishments by giving retired leaders lucrative seats on Russian corporate boards. Germany, and by extension Europe, would cave if and when Russia had to insist on its strategic interests.

When this thinking was put to the ultimate test in February 2022, both sides were proven wrong. Utter disaster has befallen Ukraine as a result, causing trauma that will last for centuries.

I wish I could end on a brilliant recommendation for a better European security architecture once the war is over. But I can’t muster the optimism.