The International Economy and Army Thinking

By Hawkins, William R. | Army, March 2009 | Go to article overview

The International Economy and Army Thinking


Hawkins, William R., Army


The U.S. Army War College put out a Key Strategic Issues List last sum- mer that pulled together research topics from a variety of military commands and organizations. It was intended to stimulate interest among both civilian and military thinkers about topics "of particular interest to the Department of the Army." Among the long list of sub- jects presented on behalf of the Army's Special Operations Command (SO- COM) was one that may have seemed out of place: "How high will fuel costs have to be and/or how low will fuel supplies have to be before the low costs of foreign labor are offset and produc- tion of goods made in the United States (clothes and electronics, for example) becomes economically feasible again? In other words, when will the costs and availability of transportation begin to work against a global economy and for a regional economy, and push the United States toward an isolationist policy?"

Since July 2008, the international economy has suffered hits far heavier than rising fuel costs. The financial crisis that started in the United States and spread to cripple banking throughout the Western system has now plunged the global economy into a recession. Ironically, the downturn in economic activity has reduced fuel costs. The real issue behind the SOCOM question is broader than the cost of oil or other commodities. The true questions are: To what extent does economics drive international relations, and what is the impact of trade on the risks of conflict?

The end of the Cold War inspired the notion that a new world was dawning, one built on international cooperation for material progress. Many thought that the triumph of capitalism over communism would open the door to global commerce and peace. This idea was based on the theories of classical liberalism, which emerged in the wake of another long conflict, the Napoleonic Wars.

The period of relative peace in the early 1800s following decades of war brought forth many idealists. The British activist Richard Cobden claimed that commerce was "the grand panacea" and that under its influence "the motive for large and mighty empires, for gigantic armies and great fleets would die away." The French economist Frédéric Bastiat asserted that "free trade means harmony of interests and peace between nations." Jeremy Bentham argued for the replacement of "offensive and defensive treaties of alliance" with "treaties of commerce and amity." Thomas Paine, believing that "man is not the enemy of man," proposed that all warships be converted into merchant vessels.

History was not kind to these proposals. The century following Cobden's claim that the days of empires, armies and fleets were over saw two world wars, a number of smaller conflicts within Europe and Asia, and nearly constant colonial wars as empires expanded throughout the world. Great Britain was home to the most prominent classical liberal thinkers. During the long reign of Queen Victoria (1837-1901), however, not a single year passed without British troops engaging in combat somewhere.

Paul Bairoch, the 20th-century postwar economic historian, found that economic growth was stimulated when the states of Continental Europe shifted back to protectionism from their flirtation with free trade in the early 1800s. During the era when protectionism was being restored (18771913), industry on the Continent grew at nearly triple the pace compared to the period when Continental growth was being suppressed by exports from a more advanced England. This European movement was supported by the same political alliance of "iron and wheat" now seen in India and China, Japan and South Korea, Brazil and South Africa. Trade in the aggregate continued to expand right up to the outbreak of World War I, but most governments understood it was a competitive world in which policy needed to shape economic flows in the national interest. None of them became isolationist-just the opposite, in fact.

Wars have always been limited by the resources that could be mobilized to sustain military operations. …

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