A hundred years ago from today, the 'War to end all wars' came to a close, leaving in its wake 19 million dead and 23 million wounded. There were many culprits, including economic nationalism, but only one victim -- humanity, which was exposed to the horror of industrial warfare in those grim, meat-grinding trenches, only to face the same calamity again, magnified manifold, between 1939 and 1945 (Over 60 million people were killed in World War II). Are we seeing the economic drivers of that first great war re-emerge in today's world of growing protectionism and trade wars?
In a 2016 report, Deutsche Asset Management Chief Global Economist Josh Feinman writes that "we’ve seen this movie before", while referring to the rise of economic nationalism, reflected in Donald Trump's election to the White House, the political and popular backlash against globalisation, exemplified today by the US-China trade war, and the hardening of borders against immigrants, which is a driving force behind Brexit. "The first great globalisation wave, in the half-century or so before WWI, sparked a populist backlash too, and ultimately came crashing down in the cataclysms of 1914 to 1945," writes Feinman. He goes on to describe "protectionism and economic nationalism" as "culprits" that played a part in causing the two World Wars.
Of course, they were not the only, or perhaps even the most important, causes of the First World War. "While there is a pretty clear causation between protectionism and the era's trade wars, it is more difficult to prove that trade wars led to the First World War. There is certainly a correlation, but causation is much more difficult to measure," says Marc-William Palen, senior lecturer of imperial history at the University of Exeter.
However, while direct cause and effect may be difficult to prove empirically, Palen adds that for many critics of the war back then, protectionism was a factor that contributed to starting the armed conflict. "By the time of the First World War, practically every nation except Britain had embraced protectionism. Cosmopolitan critics of protectionism at this time believed there was a direct connection: that protective tariffs led to trade wars and trade wars led to geopolitical conflict, culminating in world war," he explains.
And, major European powers did certainly turn to protectionism in the run-up to the Great War. Palen points out that France embraced protectionism in 1892 with the passage of the Méline Tariff, which was the result of a decade-long "protectionist backlash" triggered by the global economic depression of the late nineteenth century and an ongoing tariff war with Italy that started when the latter turned to protectionism in the 1880s. The protectionist measure exacerbated the ongoing Franco-Italian trade war and trade between these countries fell considerably, pushing Italy ever closer to Austria-Hungary and Germany – The Triple Alliance — in the years before World War 1. Germany, the rising economic power in the Continent, too, had been building up its own tariff walls for decades. "The correlation between protectionism, trade wars, and geopolitical fallout is clear," adds Palen.
Given what history teaches us, are we seeing the portents of another global armed conflict? The similarities aside, there are key differences that define the world of today. Nuclear weapons and mutually assured destruction, for one, which make large-scale warfare between major powers a prohibitively costly endeavour, thereby acting as a powerful deterrent.
Biswajit Dhar, professor of economics at the Jawaharlal Nehru University, rules out the possibility of trade wars and economic tensions leading to an actual hot war today. Instead, he believes, "economic wars" will act as proxies for armed conflict. "There is a continuum between economic conflict and armed conflict. However, in today's world, major powers will hold back from pulling the trigger and entering armed hostilities. Instead, the political and ideological differences that often led to war will be manifested in economic conflict," Dhar explains. "The US-China trade war, for example, has a clear ideological element," he adds.
However, he warns, these economic wars will last longer than the armed conflicts of the early twentieth century. "Today, economic wars have become well entrenched. They will last long and solving them will be a long haul. There are no short-term solutions at hand because these are issues dealing with major economic gains and losses," adds Dhar.
Palen, for his part, says that while history can't tell us for certain that another world war is on the horizon, it certainly suggests that such a scenario becomes far more likely because of the economic conflict seen today. "We've seen all too quickly how Trump’s 'America First' protectionism has soured relations with America's largest trading partners and allies -- China, Mexico, Canada, and the EU. It is clear that the world is more insecure as a result of these trade wars, be it higher prices for consumers or mounting geopolitical tensions."
In his poem 'To Germany', Scottish poet Charles Hamilton Sorley, who fought in the First World War, defied the militant nationalism of his times when he wrote, while referring to the Germans, "You are blind like us." His words -- "And in each other's dearest ways we stand, / And hiss and hate. And the blind fight the blind" -- refused to assign blame to 'the other'. It is time we take a lesson from Sorley and his ilk -- in a war, of bullets and shells or tariffs and barriers, both sides are blind. Sorley was killed in the Battle of Loos, in France. He was just 20 years old.