Hans F. Sennholz’s How Can Europe Survive? is a single-author Austrian political-economic pamphlet about the ideological foundations of postwar Europe’s crisis. It asks why Europe remains economically fragile despite reconstruction, foreign aid, and new international institutions, and it answers that the problem is not insufficient administration but the administrative mentality itself. For Sennholz, planning, welfare-state expansion, protectionism, exchange control, and cartelized integration are not separate errors. They are symptoms of one anti-market doctrine.
Policies of government planning and welfare and the disintegration of the world economy into heterogeneous national units are two aspects of the same phenomenon.
This claim supplies the pamphlet’s organizing logic. Europe’s closed national economies are not merely wartime residues; they are the external form of domestic interventionism. Once governments manage prices, currencies, industries, and welfare claims at home, they also restrict trade and payments abroad. The European problem is therefore not solved by moving authority from national ministries to supranational agencies if those agencies preserve the same philosophy of control.
Sennholz’s argument is sharply Austrian in its account of market failure. He denies that capitalism requires planning to overcome its own defects. When markets work badly, he attributes the disorder to previous obstruction of exchange, not to exchange itself. Controls distort calculation, prices, production, and payments; the resulting difficulties then become excuses for additional controls.
There is only one reason for an unsatisfactory operation of the market economy: it is government intervention.
From this premise, the pamphlet judges postwar institutions by a single standard: do they restore voluntary international exchange, or do they regularize restriction? Sennholz is skeptical of monetary stabilization schemes when they accommodate exchange controls, and he treats managed integration as no substitute for free markets. Thus the International Monetary Fund and the Coal and Steel Community are criticized less as failed technical devices than as embodiments of the wrong principle.
The Fund sanctions and brings about exchange restrictions.
His treatment of the Coal and Steel Community follows the same pattern. What many contemporaries viewed as a seed of peace and unity appears to Sennholz as public cartelization of basic industry. If coal and steel are allocated through political authority rather than competitive exchange, “integration” becomes another name for monopoly and planning.
The Community is a monopoly of coal and steel supply.
The pamphlet’s positive alternative is not nationalist withdrawal but cosmopolitan liberalism. Europe, in Sennholz’s view, cannot prosper as an autarkic bloc because its dense population and industrial structure depend on the widest possible division of labor. Nor can it achieve durable peace through bureaucratic unification while retaining economic nationalism. The central obstacle is intellectual and moral: Europe must abandon the doctrines that made restriction seem necessary.
Only the system of individual liberty and the unhampered world economy can provide the enormous advantages of the international division of labor and provide the milieu for nations to live in peace.
The work’s lasting interest lies in its critique of European integration from a free-market rather than nationalist standpoint. Sennholz does not oppose cooperation among Europeans; he opposes cooperation organized through planning, monetary manipulation, and monopoly privilege. How Can Europe Survive? thus argues that Europe’s fate depends less on institutional architecture than on the economic philosophy animating it. A continent may appear to unify while deepening the habits of control that divide it; genuine survival requires liberty, sound money, private property, and open world commerce.
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