The League of Nations and International Trade in the Interwar Period: Interview with Madeleine Dungy

The First World War marked a turning point in the legal and geopolitical order that had shaped international trade since the nineteenth century. In the decades that followed, the interwar period became a time of experimentation and transition – bridging the decentralized system of bilateral trade treaties that had sustained the first wave of globalization with the more institutionalized frameworks of global economic governance that emerged after the Second World War.

In Order and Rivalry: Rewriting the Rules of International Trade after the First World War (Cambridge University Press, 2023; paperback edition 2025), historian Madeleine Dungy offers a compelling account of how multilateral trade structures were forged around the League of Nations. Through detailed archival work and a focus on the individuals who navigated these shifting institutional landscapes, Dungy traces the foundations of international trade governance and reveals the enduring legacies of the interwar era in shaping global trade throughout the twentieth century.

I spoke with Madeleine Dungy about her book, the evolving role of international organizations, and the often-overlooked history of failed projects, contested norms, and institutional improvisation in the making of the global economy.

– Mirek Tobiáš Hošman

MTH: Congratulations on this wonderful book on a very topical issue. Could you give us a background about this project? How did Order and Rivalry come about?

MD: I first started working on the League of Nations during my master’s studies with Patricia Clavin. At the time, I was focused on finance rather than trade, because finance – perhaps unsurprisingly – was the area of League economic policy that had the most direct impact on market activity. It is also the part that has drawn the most attention from scholars working on the League.

Specifically, I was looking at a credit cooperation scheme in Central and Eastern Europe – a debt relief program for farmers that was developed in the late 1920s and early 1930s. What struck me as particularly interesting was that everyone involved in this initiative – people working at the League but also political and economic leaders from the region – saw financial cooperation as just the first step. What they saw as the ultimate goal, was trade cooperation. Essentially, they were envisioning something akin to what we would now recognize as the Common Agricultural Policy: a system of trade preferences for agriculture. Trade mattered to them not only because of the potential benefits for domestic producers, but even more so because of the geopolitical stakes they associated with it.

They believed that such a system could help reduce their economic dependence on Germany, strengthen political alliances with France, and potentially draw Britain more deeply into the European political system. In other words, I was seeing very complex political ambitions being channeled through the language and mechanisms of trade policy. For the officials working at the League of Nations and also for people interacting with the League from a national base, trade policy was an important conduit for the world ordering impulses that were coming out of the First World War. So that is why I became interested in trade policy and then ended up focusing my Ph.D. research on trade instead of finance.

MTH: In the recent years, there has been a growing interest among historians in the interwar period, particularly in the operations and legacy of the League of Nations. You already mentioned Patricia Clavin (Securing the World Economy, 2013), but others like Susan Pedersen (The Guardians, 2015), David Ekbladh (Plowshares into Swords, 2022) and Jamie Martin (The Meddlers, 2022) have explored different facets of international politics and economics, challenging the long-standing narrative that the League – and, by extension, the broader multilateral system – was essentially a failure that had to be rectified after the Second World War. How does your work engage with this scholarship?

MD: That narrative of failure has traditionally been most closely associated with the League’s work on collective security and disarmament – its overarching mission to prevent another world war. But much of the recent scholarship over the past 10 to 15 years has shown that the League was far more active in other areas beyond just collective security. It played a significant role in health policy, economic coordination, and, as Susan Pedersen has shown, in managing various systems of attenuated sovereignty. That included overseeing transitions from empire to nation-state structures through the mandates system. The League helped facilitate and supervise those processes in ways that are now receiving much more historical attention.

My work connects to this growing body of research in a couple of ways. First, I have benefited from the foundational scholarship that mapped out the League’s core technical and institutional structures. That made it possible for scholars like me to step back and look at how different actors engaged with the League from the outside-in.

Second, a lot of the initial revisionist scholarship focused on showing that the League did more than we previously thought—it was not just a failure, but actually had a significant practical impact, for example in areas like finance, health, transportation, and economic statistics. And I agree with that. But what is interesting about the area I study – trade policy – is that the record is much more mixed. In fact, there were many failed treaty initiatives and unfulfilled ambitions in the realm of trade.

Despite this, the League still managed to build considerable authority in trade debates. Even though the League did not achieve many of its immediate goals in trade, people continued to look to Geneva for guidance on a whole range of legal and institutional questions as they formulated national policy.

That gets to what I think is a fascinating paradox in the history of international institutions: they often fail to deliver on their stated objectives. Most of the time, they accomplish far less than what we ask of them. And yet, seen from the baseline of the 1920s, today’s international organizations like the EU or the WTO have accumulated quite a lot of authority and institutional capacity. So even when international governance falls short, it can still have a sizeable impact, although this often happens through indirect channels that can be pretty jumbled and opaque. Already in the League era, that dynamic was starting to cause some public concern about accountability in international institutions. Trade policy at the League is, I think, a revealing case study of how that process unfolded.

MTH: A question I have sometimes received myself when working on initiatives that did not lead to tangible outcomes is: why should we care? In other words, why study failure if nothing practical came out of it? Where do you see the value for historians in engaging with these unrealized or unsuccessful visions and projects?

MD: That is a really important question. I think one of the key reasons to study failed projects is that they help us understand the shifting boundaries of political ambition. When we look at successful initiatives, they are often the ones with relatively modest or achievable goals. But the failed projects tend to reveal the outer limits – what people hoped international organizations might be able to accomplish, even if they ultimately did not succeed.

In the context I am studying, for example, you see highly ambitious attempts to use trade policy to reshape the European political and economic order after the First World War. These projects often linked trade to broader geopolitical goals – realigning markets away from Germany, consolidating alliances with France, integrating Britain into continental affairs. Even though these initiatives did not always succeed in practical terms, they show us just how much was being asked of trade policy in that period.

There is also a second, more internal dimension. These ambitious, though ultimately unrealized, initiatives often had a major impact at the national level. Precisely because they were pushing the envelope, they sparked political debate and mobilized public opinion. For example, efforts to build European unity in the interwar period did not produce lasting institutions at the time, but they did give rise to pan-European movements that engaged both popular and elite audiences across the continent.

So, if we only focus on the projects that were implemented and had measurable outcomes, we miss a lot of the political energy, imagination, and contestation that surrounded these bigger ideas. Studying failure, in that sense, allows us to understand not just what international institutions did, but what people wanted them to do – and what they were willing to fight for, even when success was not guaranteed.

MTH: In your book, you adopt a rather refreshing analytical approach that closely follows individuals working within the complex institutions of multilateral governance. Who are the main characters of your story and why did you choose to focus on them? Where do you see the advantages and challenges of this approach?

MD: I chose to focus on individuals because the period I study is fundamentally one of transition – moving from the bilateral trade treaty system of the nineteenth century to the more multilateral structures we recognize today. During this time, institutional forms were in flux: organizations were constantly being created, renamed, disbanded, or restructured. So rather than trying to follow specific institutions, I thought it made more sense to explore the organizational environments in which people operated. And the best way to do that, I felt, was by closely tracing the careers of key individuals who moved through and helped shape these shifting spaces.

One of the main figures I follow is Hubert Llewellyn Smith, a senior official at the British Board of Trade and the most influential early member of the League’s trade section. He represents what I call mainline trade policy – the formal, state-centered negotiations happening within ministries of commerce.

I also looked at the world of policy advocacy NGOs, especially those involved in the European unity movement. One central figure there is a French trade lawyer, Lucien Coquet, who led efforts to promote a European customs union. He was not a prominent public figure, but rather a skilled behind-the-scenes negotiator, which I found particularly revealing for understanding how these movements actually worked.

Then there were think tanks, which played a different role. They were not necessarily pushing for specific policy outcomes but were instead focused on data generation, expert analysis, and building intellectual frameworks for policy. The institution I examine most closely here is what we now know as the Kiel Institute for the World Economy, and the central figure is its founder, Bernhard Harms.

Finally, I wanted to capture the intersection of business interests and international law, so I looked at Richard Riedl, an Austrian who represented the International Chamber of Commerce in League trade negotiations. He had a hybrid identity, straddling both the Austrian state administration and the business community as head of the Vienna Chamber of Commerce. That dual role made him particularly effective – and representative of how private actors engaged in public international governance during this time.

The advantage of this approach is that it captures the dynamic, overlapping nature of international politics in this period. These individuals often operated across national and institutional boundaries, which helps us understand how ideas and influence circulated. The challenge, of course, is that it is a bit messier – you have to piece together careers from scattered archives, and you are constantly negotiating between biography and institutional history. But for this particular story, I found it to be a very revealing lens.

MTH: You mentioned think tanks and this is another fascinating part of your book where you describe how the growing demand for data and information led to the emergence of independent, private economic information services like the Institute for Sea Traffic and World Economy (now the Kiel Institute for the World Economy). As you put it, these institutions provided a bridge between science and practice. Could you tell us more about this aspect of your research?

MD: Yes, I focus primarily on the Kiel Institute, and the figure of Bernhard Harms, its founder. What first drew me to the Institute was the fact that, even before the First World War, it was performing market research functions that in other countries were typically handled by state ministries of commerce. In that sense, the Kiel Institute had a kind of hybrid, para-state identity – it was not formally part of the government, but it was doing work that was very close to state economic administration.

After the war, there was actually an attempt to fold some of these functions into the German state apparatus, but it did not succeed. Still, that effort highlights just how closely linked the Institute's activities were to state-level commercial governance.

In the 1920s, you see the Kiel Institute playing a somewhat similar role in relation to the League of Nations. It was not generating data for the League per se – the League had its own internal statistical office – but the Institute became an important clearinghouse for economic information. It gathered and organized ideas that were being produced by many other institutions around the world and then redistributed this material through a number of influential channels: its periodicals, a regular seminar series, and special-purpose publications aimed at both League officials and the wider policy-watching public.

So, the Institute helped shape what I would call the elite public sphere around the League of Nations. It served an important function for people who were observing and engaging with the League’s trade negotiations and economic work. But by the late 1920s, you begin to see some skepticism creeping in. Policymakers and observers alike started to question the limits of this data-driven, technocratic approach.

The realization was setting in that markets are not just numbers. There are also questions of national security, social stability, and political legitimacy – factors that can’t easily be quantified. So, while these institutions like the Kiel Institute were invaluable for building new forms of economic knowledge and expertise, they also revealed the constraints of relying too heavily on technical data in what were ultimately deeply political decisions.

MTH: One principle that plays a prominent role in your story is the so-called most favored nation (MFN) principle. You show that this principle – commonly associated today with General Agreement on Tariffs and Trade (GATT) and later the World Trade Organization (WTO) – has a much longer and more complex history. You also show that the MFN served as both a step toward freer trade and integration, but also a tool of protectionism and rivalry. In this sense, your research offers a notable parallel to the contemporary debates about preferential trade agreements within the WTO regime. Could you elaborate on how the MFN maintained this Janus-face character in practice, and how the interwar understanding of the principle differed from its later version under GATT?

MD: It is important to start by recognizing that the MFN principle was already central to the nineteenth-century bilateral trade treaty system. At its core, MFN is a principle of non-discrimination: it is a commitment not to privilege any single trade partner above the others because they are all treated as ‘the most-favored nation’. In practice, that means if you grant a concession to one country, you automatically extend that same concession to all other countries with whom you have MFN agreements. So, by the early twentieth century, there was a diffuse, decentralized network of trade treaties linked through this principle.

What changed in the 1920s – especially through the work of the League of Nations – was that you saw an effort to standardize and formalize this principle at a multilateral level. While in the nineteenth century there had been no central body to define or enforce MFN rules, the League began to play that role in the 1920s. It conducted a major survey of global treaty practice, and, in 1929, it published a model formulation of the MFN clause. That international norm then filtered out into bilateral treaties, including in the United States. When the United States began to shift towards a more open trade policy in the 1930s, Cordell Hull – the key figure behind that change – drew on the League’s MFN clause to frame his trade agreements.

So, on one level, the League’s intervention represented a move toward integrated global markets – a kind of proto-WTO logic, where all concessions would be universally extended. But at the same time, this new formalization also created a baseline against which exceptions could be defined. In other words, the very clarity of the MFN rule made it easier to conceptualize and defend departures from it – such as regional or imperial preference systems. So, MFN had this dual nature: it enabled market convergence while also providing the legal scaffolding for selective protectionism. The idea of allowing for structured exceptions to MFN rules really begins in this period. While it was not widely implemented in practice during the interwar years, it did become part of treaty law in several European countries, and the U.S. State Department picked up on it later. Ultimately, this idea was absorbed into the GATT framework.

So, what you start to see in the 1920s and 1930s is the blueprint for today’s multilayered system of trade governance: a core principle of non-discrimination, combined with legally sanctioned zones of preferential treatment. And I think this structure emerged in part because the interwar system was so fragmented and multipolar. There were powerful, conflicting visions for regional and imperial economic blocs – visions that often clashed with the idea of a single, integrated global market.

MTH: How would you compare this interwar framework with what emerged in the aftermath of the Second World War?

MD: That is a crucial question. I do not want to overstate the continuity – there are some very significant differences between the interwar period and the post-1945 system. The biggest one is probably geographic scope. In the 1920s and 1930s, the League’s trade negotiations were primarily focused on continental Europe. This was largely due to the lingering instability after the First World War and a widespread concern – especially in diplomatic circles – that the next war would begin in that region.

After 1945, however, the picture broadens dramatically. Already during the war, countries in the British Commonwealth began playing a more active role in international trade negotiations, and during decolonization, a growing number of newly independent states began entering the system and making broader claims about economic sovereignty. In the League of Nations, there had been debates about what the end of empire would mean for trade policy, but they usually focused on fairly specific objectives.

Another major change relates to social policy. After the war, there was a much more explicit commitment to full employment and social welfare as core goals of international economic governance. This is something I discuss in the conclusion to the book. It is not that interwar figures like Hubert Llewellyn Smith were not committed to social protection—he was, in fact, a key architect of the British system of unemployment insurance. But at the time, those concerns were seen as domestic matters, and not something to be built into the architecture of international trade law.

In contrast, after 1945 there was a stronger effort to coordinate social and economic policy across borders – especially in the plans for the International Trade Organization. There was also an important push to integrate monetary and trade policy, something that had remained largely separate in the League era. Figures like Keynes were central in pushing for this deeper integration, recognizing that trade cooperation was closely tied to macroeconomic stability.

MTH: One of the crucial themes in international trade policy is the regulation of commodity markets. How did the League approach this issue in the 1920s and 1930s and how did the onset of the Great Depression reshape thinking about political and economic interventions in these markets – especially in relation to existing private cartel arrangements?

MD: In the League of Nations, early discussions about commodity markets were largely driven by concerns about supply security – a legacy of the First World War. These debates were initially framed more from the perspective of commodity consumers than producers. The dominant concern was: how could the major industrialized powers in Europe ensure stable access to raw materials in the event of future conflict? In the 1920s, this led to a push for liberalization – a free trade approach to raw materials. The idea was that if major powers all had secure access to international commodity markets, their incentives for military conflict would be reduced. This was a kind of peace-through-trade logic, based on open access and interdependence.

At the same time, though, there was also a significant level of private regulation happening through international cartels. These cartels – especially in key commodity sectors like chemicals, timber, and metals – were attempts by producers to manage supply and stabilize prices. But what is striking is that there was not much coordination between the League’s free trade agenda and these private cartel arrangements. They operated largely in parallel, sometimes in tension, and often with considerable gaps between them.

That changed with the Great Depression. One of the most acute features of the early Depression was the collapse in commodity prices—which fell far more sharply than prices for processed goods. This shifted the focus of commodity policy from consumers to producers. Governments began to worry about the social and political fallout of collapsing agricultural incomes and unstable export revenues, especially in primary-producing countries. That led to a proliferation of intergovernmental commodity agreements – efforts by states to intervene directly in markets to stabilize prices and manage supplies. These were attempts to build formal, public-sector frameworks for commodity regulation, often mirroring or replacing earlier cartel structures.

But I would also make a broader point about these various approaches – whether it was liberalization, cartelization, or intergovernmental regulation. All of them were, in essence, status quo strategies. Their goal was to stabilize existing market positions and protect established political institutions. This is an important contrast with what happened later, particularly in the 1970s under the New International Economic Order (NIEO). The NIEO’s push for international commodity agreements was much more sweeping – and in many ways more radical. There, the goal was not just stabilization but redistribution: to reconfigure the terms of trade and rebalance power between commodity producers and consumers. That kind of ambition for broad structural change was largely absent from the League’s commodity agenda in the interwar years.

MTH: Continuing with the theme of public-private interaction, your book also explores the role of business in shaping interwar trade policy – particularly through the International Chamber of Commerce (ICC). How did the ICC emerge as a relevant actor in your story, and how did it interact with the League, for example on the issue of commercial arbitration?

MD: Yes, the ICC plays a really important role in the book, especially in two areas: commercial arbitration and the regulation of commercial networks – things like foreign direct investment and foreign commercial agents. What is striking in both cases is how hybrid these regulatory frameworks became. You see the ICC, a private business organization, stepping into areas that were traditionally the preserve of national economic sovereignty.

Take foreign direct investment, for example. The ICC actually drafted model regulations that addressed how states could govern foreign capital within their borders. Richard Riedl, an Austrian representative of the ICC and a central figure in my book, was directly involved in writing these proposals, and his drafts were then taken up by the League of Nations. So, you have a case of private-sector actors shaping the rules that were meant to guide public regulation – an early and quite significant example of public-private regulatory entanglement.

But you also see this dynamic working in the opposite direction with commercial arbitration. The ICC developed a private, business-led system of dispute resolution – one that operated largely outside of national court systems. But to make that system viable and enforceable internationally, they needed the backing of public law. This is where the League – and later the United Nations – came in. These intergovernmental bodies sponsored international treaties to give legal force and judicial recognition to private commercial arbitration systems.

So, what you got was a kind of mutual dependency: a private regime of economic ordering that is underpinned by public international law, and public institutions incorporating private expertise to shape transnational regulation. That hybridity runs throughout the book.

What I do not cover in detail – but where I think we will see a lot of exciting new research in the coming years – is the purely private side of economic regulation, especially the cartel arrangements of the interwar period. There is growing interest among historians and legal scholars in how these informal but powerful private regimes functioned and how they intersected with international law and policy. It is a field that is really opening up.

MTH: Congratulations again on this wonderful book. It is a great achievement, and it contains an impressive amount of knowledge and historical insight. Could you tell us a bit about your current research? What are you working on now?

MD: Thank you! Yes, I am still working on the history of international organizations, but I am shifting focus a bit on terms of both chronology and theme. My new project looks at European integration after 1945, with a particular emphasis on migration policy. And compared to the book, which focused on the formulation of policy, this new research is more about implementation – how policy was actually put into practice on the ground.

Specifically, I am interested in how the European system of free movement was first operationalized during the 1960s and 1970s. What is striking is that, despite the term “freedom of movement,” the system was in fact highly structured and regulated. You saw the emergence of new institutional mechanisms to manage the recruitment of workers, the provision of social services for migrants, and the transfer of pensions and other entitlements across national systems.

So, a large part of the project is about tracing the institutional “plumbing,” so to speak – the administrative infrastructures that made movement between Europe’s tightly regulated labor markets possible. And there was a lot of debate during this period about how that system should be organized and what it was meant to achieve.

This is part of a larger research project funded by the European Research Council. I am working on my own monograph, and I am also part of a team with colleagues who are focusing on specific national case studies. Together, we are trying to build a more detailed picture of how European free movement policies evolved – not just in Brussels, but across different member states and administrative contexts.

Madeleine Dungy is a historian of international organizations at Norwegian University of Science and Technology. She previously studied at the University of Wisconsin, the University of Oxford, and Harvard University, and held post-doctoral positions at the European University Institute, the New Europe College, the École Polytechnique Fédérale de Lausanne, and the Basel Institute for European Global Studies. She is currently leading an ERC Starting Grant on the history of the European freedom of movement between 1950 and 1980.