Free trade and war part 1

 Back in the 1990s, when the Cold War was melting away, we were repeatedly told that the ties of trade will make it impossible for new great wars to break out again. The proposed mechanisms were mainly two: that free trade would have a "softening" effect on manners, making people less warlike (doux commerce), and that powerful business interests would not allow wars to cut them off from important supplies or valuable markets. 

Branko Milanovic reviews a new book by Avner Offer which proposes that the original Great War was caused by free trade, when countries specialized as a result of the larger markets, they felt a need to arm themselves to ensure that essential supplies were not threatened by rivals. This led to an arms race which eventually caused a war. 

Britain was not alone in this. 

The above mechanism explains why countries felt that they needed to arm themselves- as they increasingly specialized in manufacture, they had to build up powerful armed forces to make sure that they could feed their populations. As the COVID pandemic showed us, highly efficient supply chains may be less than resilient. 

Another route to war was when countries realized that their rivals were also vulnerable to starvation, that blockades and U-boat warfare could be used to cut off the supplies which the "enemy" needed. 

This is exactly what the British Navy did to the Germans in World War 1, leading to starvation in Germany, who then struck out towards the East, seeking grain from Ukraine. The Brest-Litovsk treaty gave them what they sought, but too late to save Germany from defeat on the Western Front. 

Today, we are seeing another war in Ukraine, and the USA is practicing a new kind of Trade War against the Russian Federation. We have been expecting a war between China and the USA over Taiwan, but I am sure that the Chinese leadership are watching and learning what the Americans have been able to do to the Russians by attacking the trade ties which bind the Russians to the rest of the World. 

Below is a Twitter thread which an example of what can be done to the Russian airline sector by denying them access to Insurance and spare parts.