During the Franco-Prussian War, German philosopher (and General) Carl von Clausewitz said: “War is politics by other means, and at it’s most violent.” There is nothing untrue about that statement, even in today’s world. However, the Franco-Prussian War, the short-lived war that resulted in Germany being recognized as a nation, would prove to be a pivotal moment in history for politics, economics, and warfare. It would set the stage for the greatest political and economic war ever fought in the history of man, which would kill and starve millions over decades worldwide, with economic motives, and economic means. It would cause John Maynard Keynes to predict the rise of Fascism in Germany, and it would make people re-think about the entire purpose of economics both as a discipline, and as praxis.
Aside from the historical and political events, which ignited World War I, there were several economic issues plaguing the nations of Europe. Nearly land-locked, and little trade, Germany found that the only way they could build an industrial economy was by building a war machine, which put millions of people to work. However, once war broke out, Germany’s trade was blockaded, and they could not maintain their war machine. What no one in Europe expected was a protracted war, for which no nation was economically prepared for.
Previously, warfare was about conquering, politics, land grabs, and sometimes even about commerce. Nations fought each other, and those with the best tactics won. World War I would turn the victors into those with the most economic clout. Kaiser Wilhelm surrendered for two main reasons: 1) he lost too much of his population, and 2) he no longer had the economic means to continue the war.
World War I would prove to be expensive for everyone, in both millions of lives lost and billions of dollars spent. At the same time, World War I not only industrialized warfare, but produced the greatest innovations in the economics of killing: the tank, the airplane as a combat weapon, hand grenades, land mines, barbed wire, chemical weapons, fully-automatic machine guns, the flame thrower. All of these were products of the industrialization of warfare, which put millions to work, increased the GDP of the U.S., Canada, and Great Britain, and slaughtered millions of others. While it wouldn’t be until 40 years later that C. Wright Mills would conceive his theory of a military industrial complex, it was already in existence.
John Maynard Keynes, seeing the devastation of Europe, summed it up best, eluding to a new mandate for political economy, which never really came to fruition:
“The war had so shaken this system as to endanger the life of Europe altogether. A great part of the Continent was sick and dying; its population was greatly in excess of the numbers for which a livelihood was available; its organization was destroyed, its transport system ruptured, and its food supplies terribly impaired. It was the task of the Peace Conference to honor engagements and to satisfy justice; but not less to re-establish life and to heal wounds.” (Keynes, Economic Consequences of the Peace 1920, p. 37).
Economics, both as a discipline, and as praxis, has never really lived up to the idea of saving lives and healing wounds.
War was now, and would forever be, economics by other means, and at its most hideous.