Nicholas Mulder’s new book, “The Economic Weapon: The Rise of Sanctions as a Tool of Modern War,” remakes debates over European history between the two world wars. It rescues the League of Nations from the enormous condescension of posterity, arguing that the league was neither ridiculous nor doomed. However, it also demonstrates that the league’s actual and possible successes helped provoke Germany’s and Japan’s territorial ambitions. The league’s authority rested less on futile moral imprecations than on economic and financial sanctions. Those sanctions were more effective than most modern commentators have accepted, but they spurred a fierce counterreaction. Liberal politicians’ ambition to create a world that was safe from territorial aggression provoked illiberal states into greater aggression. Today—in a world in which sanctions have again come to play a crucial role in international politics—we need to understand why they went so very badly in the past.
The modern history of the “economic weapon”—sanctions, and their wartime cousin, the blockade—begins during World War I, when Britain and France tried to isolate Germany and its allies from the global economy. The global economy of the early 20th century—like the global economy of the early 21st—was complex and deeply interconnected. That allowed countries such as Imperial Germany, which had come to empire building relatively late, to draw on global trade for resources that it did not itself possess. Its industries depended on foreign minerals such as manganese, which it paid for through a global financial system centered on London.
The prevailing doctrine of free trade liberalism protected global trade from wartime measures, shielding countries such as Germany from efforts to target their foreign dependence. In Mulder’s description, 19th century wars “protected commerce and finance to a degree that is almost unbelievably generous.” Nations continued to pay loans to other countries they were at war with, almost as a matter of course, and signed treaties that rendered private property immune from seizure.
But economic vulnerabilities could still be exploited by a sufficiently ruthless adversary. As Mulder emphasizes, the new thinkers who opposed this artificial separation between war and commerce “were merely thinking the material realities of a globalized world through to their logical conclusions.” Once the veil of illusion was rent, an interdependent world offered irresistible opportunities for those powers that played a central role in the global economy, such as the United Kingdom (and, to a lesser extent, France).
As World War I came closer, officials began to consider how best to turn globalization against Britain’s enemies. The historian Nicholas Lambert has documented how British naval officials contemplated drastic measures to end the expected war quickly, cutting Germany and its allies out of the global economy. Their ambitions were never realized, but during the war, Britain and France blockaded Germany and its allies, seeking to starve their economies of resources and their citizens of food. Germany, for its part, used U-boats to cripple transatlantic shipping.
Henry Farrell, “The Modern History of Economic Sanctions, Lawfare, March 1, 2022.