What profit is there in great-power war?

Craig Perry has written his eighth installment in our Emerging Fellows program. His entire series explores the potential for another Great-power War. This piece asks whether there would be any profit in a great-power conflagration. The views expressed are those of the author and not necessarily those of the APF or its other members.

In 1999, American journalist Thomas Friedman penned his notorious “Golden Arches Theory of Conflict Prevention,” positing that no countries with McDonald’s restaurants had ever fought a war against each other. Critics quickly noted that the presence of this ubiquitous American fast-food chain hadn’t stopped the U.S. invasion of Panama a decade earlier, nor would it preclude NATO from bombing Serbia (1999), the Kargil War between India and Pakistan (1999), Israel’s second Lebanon war (2006), or Russian incursions into Georgia (2008) and Ukraine (2014-present). But even if Friedman’s pop theory is bunk, it echoes an established maxim of international relations: globalization makes countries so economically interdependent, they can’t afford to wage war very intensely for very long.

English journalist Norman Angell popularized this argument nearly a century earlier, dismissing the supposed economic benefits of war as “the great illusion.” The commercial systems of Europe and America had become so complicated, Angell wrote in 1909, that it is impossible for one nation “to enrich itself by subjugating, or imposing its will by force on another.” The world was then experiencing a remarkable era of globalization, with freely flowing capital and labor producing unprecedented prosperity, and the European powers had few incentives to risk this arrangement through war.

Nevertheless, the continent soon plunged headlong into conflict—followed by an even more cataclysmic sequel a generation later—and it would be several more decades before international trade and finance fully returned to pre-World War I levels. Although Angell went on to win the Nobel Peace Prize for his idealistic views, it wasn’t until 1950 that Robert Schuman, the French foreign minister who championed the European Coal and Steel Community, offered a practical vision to “make war not only unthinkable but materially impossible.” The free movement of goods, services, capital, and people within what is now known as the European Union has indeed facilitated peace among its members ever since.

Of course, neither the EU nor its constituent states are counted among the world’s great powers nowadays, while those that are—the United States, China, and Russia—haven’t achieved anything close to this level of economic interdependence. Although the sheer volume of Chinese wealth invested in the U.S. economy, which is itself highly vulnerable to disruption by Beijing, ought to be sufficient to deter military conflict, there are worrying signs that this mutually profitable arrangement is breaking down. Washington has recently abandoned its longstanding support for globalization in favor of trade wars with its closest allies and fiercest competitors, while the Middle Kingdom’s commitment to build a world-class military by 2050 suggests its foreign policy ambitions will soon catch up with its global economic dominance. Russia, for its part, is far less integrated into the world economy, while its oil and gas customers can’t easily switch to other suppliers in the event of conflict, reducing Moscow’s incentives to curb its aggressive behavior.

As much as it may militate against great-power conflict, globalization can also disrupt the international order in ways that actually increase the odds of war. This paradox played out before WWI, when industrialization created enormous wealth whose uneven distribution simultaneously reordered societies and upset prevailing balances of power. Rising industrial giants like Germany aggressively pursued greater international influence, while rulers in Vienna and Istanbul struggled to keep their polyglot empires intact, and entrenched elites everywhere stoked nationalism to distract an increasingly restive proletariat. By upending traditional social and political arrangements, this previous period of globalization unleashed centrifugal forces that ultimately tore apart the old order.

A century later, globalization has again created winners and losers, both within and between nations. In the United States and Europe, populist politicians increasingly scapegoat immigrants and minorities, bankers and trading partners, and the very institutions that for generations heralded democratic progress and economic prosperity. China, which has profited handsomely within this established world order, now plays the part of spoiler seeking a larger slice of the geopolitical pie, while Russia’s leaders do what they can to exacerbate anti-establishment tendencies for their own short-term benefit.

Globalization has indeed made much of the world so economically interdependent that it renders war objectively unprofitable—yet it has also sown the seeds of potential future conflicts. Whether the great illusion of war will again deceive political leaders in the 21st century depends in large part on how effectively national governments and international institutions resolve the inherent contradictions of modern capitalism, and continue to leverage the more peaceful logic of mutual economic benefit.

© Craig Perry 2018