Richard Schüller’s Joint Review of Nicholas Clarion and Frederick Hertz (1949)

Richard Schüller’s joint book review examines two accounts of political dependence and economic disorganization in Central and Eastern Europe. Nicholas Clarion’s Le Glacis soviétique analyzes the tensions within the Soviet satellite system; Frederick Hertz’s The Economic Problem of the Danubian States reconstructs the economic consequences of the dissolution of Austria-Hungary. Schüller treats the books sequentially, devoting most of his attention to Clarion’s account of contemporary Soviet domination before assessing Hertz’s historical and statistical argument against economic nationalism. Their connection lies in the damage wrought by political arrangements that obstruct economic cooperation, although Schüller does not turn them into a single explanatory theory.

The review opens by questioning Clarion’s conceptual distinction between socialism and supposedly “bourgeois” features of Soviet society. Clarion associates socialism with government ownership and direction, while assigning inequality, bureaucratic privilege, and chauvinism to a contradictory bourgeois principle. Schüller challenges the classification:

These latter characteristics cannot be adequately defined as "bourgeois," and we may well ask why a large bureaucracy should be considered a contradiction to socialism.

This objection separates the institutional problems Clarion identifies from the ideological vocabulary used to explain them. For Schüller, the governing difficulty is the maintenance of an equilibrium among workers and peasants, party and police, bureaucracy and army. The ruling group shifts its support among these forces as circumstances require, often through violent purges. The instability therefore concerns the organization and exercise of power, not simply a contradiction between two social principles.

Schüller then follows Clarion’s account of how that system operates beyond Russia:

Russia's domination is achieved by prefabricated revolutions that establish communist oligarchies; these wield absolute power within their own countries but are absolutely dependent on the Politbureau in Moscow.

The sentence captures the central asymmetry: domestic coercive power coexists with external dependence. Yet control does not eliminate conflicting interests. Peasants resist threats to their holdings, agricultural price ceilings, and requisitions. Workers support industrial nationalization in principle but resent reduced living standards, police restrictions, and the loss of independent trade-union activity. Schüller presents these conflicts as material pressures that ideological allegiance cannot dissolve. The reported compromise with Chinese landlords further illustrates how communist practice can accommodate existing property interests when political circumstances require it.

Industrial nationalization introduces another difficulty: ownership by the state does not itself supply managerial competence or investment capital. The departure or expulsion of industrialists requires new managers, while losses in nationalized enterprises and the expense of government administration constrain accumulation. Schüller’s question about financing ambitious industrial development exposes a gap between the regime’s objectives and its available resources. Repression of peasant parties and social-democratic organizations answers opposition politically without resolving these economic pressures.

The review also distinguishes communist objectives from Russian state interests. Moscow sometimes prevents nationalization to preserve assets acquired through war booty and reparations. Schüller reports Soviet holdings in German industry and mixed corporations elsewhere in the bloc, drawing out the resulting reversal:

Thus, for the first time in history, Russia has big foreign investments.

This observation makes ownership and extraction central to the account of Soviet predominance. Russia possesses substantial interests abroad while supplying few capital goods and obstructing its neighbors’ recovery of Western trade and access to foreign credit. Dependence is thus sustained partly by restricting alternative economic relationships. Popular resentment can extend to communist governments themselves, but their reliance on Moscow limits their freedom of action.

Territorial disputes, population expulsions, and Soviet vetoes of customs unions or federations complete this picture. Schüller records disagreements involving Germany, Poland, Czechoslovakia, Hungary, and Yugoslavia, showing that incorporation into the Soviet sphere has not abolished national antagonisms. Tito’s defiance qualifies the picture of obedience without overturning the general dependence of satellite governments. Clarion’s conclusion, as presented here, is that both their internal conditions and their relations with Moscow remain deeply strained.

The shorter discussion of Hertz shifts from contemporary political control to the historical measurement of economic fragmentation. Schüller praises Hertz’s statistical collection, objectivity, and lifelong familiarity with the Danubian countries. His findings indicate substantial growth in Austria-Hungary’s national income between 1902 and 1913, followed after 1918 by decline and heavy unemployment in the successor states. Schüller emphasizes their loss of an extensive internal market, a regional division of labor, and the former empire’s currency and credit arrangements.

His endorsement nevertheless includes an explicit methodological reservation:

The methods which Hertz applies and the figures at which he arrives imply the large margins of error common to national income estimates.

Hertz’s checks against production, consumption, and investment make the estimates valuable despite that uncertainty. Schüller accepts their support for the argument that economic nationalism severely damaged the successor states and helped prepare the conditions for Hitler and war. The review’s broader significance lies in its juxtaposition of two failures of regional economic organization: fragmentation after imperial dissolution and coercive dependence under Soviet domination. Its judgments remain differentiated—critical of Clarion’s categories, receptive to his account of tensions, and strongly appreciative of Hertz’s qualified empirical case.