How peace causes war

It is a common reaction to warfare in the twenty-first century to express shock, or horror, or surprise. But war is not surprising, or historically shocking, though it is always horrifying, or morally shocking. Let me explain.

Alliance blocs of Europe, on the eve of war.

In peacetime, competition does not end. Indeed, competition among nation-states is temporally suppressed on the field of battle, but competition within and across states does not end. Competition is transferred from the military to the economic sphere. We go from war to trade. Trade has two effects: it reduces inequality between nation-states, allowing smaller countries to rise economically as they ‘catch up’ with the bigger countries, at least economically. It also increases inequality within countries, as it enriches the class that monopolises production and impoverishes the class that works for a wage, at least relative to the luxury of the rich. This is clear from the data. China has risen economically, but so has the wealth of the top 1% of people.

These two effects of trade are the paths to war. Lower inequality between countries obviously leads to war: just look at the rise of Germany at the end of the nineteenth century as it took advantage of the system of global trade that Britain had been establishing from the eighteenth century, only for Britain and Germany to go to war in 1914. The economically rising United States and the already established economic powerhouse of Great Britain nearly went to war over Venezuela in the 1890s, only to realise they had common interests and, as it turned out, a common enemy.

But that is not all that led to war in 1914. Inequality within countries was rising, especially in Britain, where the wealth of the highest income stratum was poured into overseas investment in the official and unofficial empire, as prospects for domestic investments were exhausted. This fuelled the competitive scramble for colonies and imperial investments in the late nineteenth century among European powers, and also bolstered the militarisation of colonies to defend investments from potential aggressors. Just look at any World War I textbook and you’ll find ‘imperialism’ and ‘militarism’ as dominant causes of the war. What you won’t find is the missing link between these processes: capitalism.

Peace itself doesn’t cause war, but what happens in peacetime does cause war. To be specific: peace, through trade, causes war. Trade, through dividing countries internally and uniting countries externally, leads countries to depend more on their internal classes and try to satisfy them through external competition. This intensifying economic competition inevitably spills over into military competition as the only means to defend capital investments and protect countries’ security from military antagonism. Thus, the virtuous circle of peace spills over into a vicious spiral towards war.

Trade today is like trade in the early twentieth century: global, intensifying, and complexifying. The nexus between internal division and external integration is not the engine of peace. Peace does not create itself. Indeed, war creates the conditions for peace, by leading to a postwar settlement that favours trade over war. But peace breaks down this settlement by undermining the political leadership that underpins peaceful trade. Just as Great Britain anchored trade with its leadership in the nineteenth century, so does America anchor world trade today. While the gold standard underpinned Britain’s leadership, dollar hegemony underpins America’s. Just as the gold standard came under threat from repeated financial crises, so is dollar hegemony coming under threat from rising inflation and alternative currencies, both from private markets (notably, the $1tn-dollar cryptocurrency market) and from the competitive states of the rising east (notably, China’s internationalising renminbi currency, which is increasingly attracting overseas private investment). And this is supported by the industrial might of China, enabled by China’s acceptance into the World Trade Organisation in 2001. Just as Britain, in allowing Germany to rise, unwittingly allowed for war to break out in 1914, so is America, in allowing China to rise, allowing for war to break out in the future. And just as Britain could not, or would not, reign in inequality resulting from trade, so is America entranced by its billionaire ‘geniuses’ who run the economic and, increasingly, political show.

This, in particular, is sinister. Hannah Arendt told the story of totalitarianism as one which was bridged by the ‘political emancipation of the bourgeoisie’, or the capital-owning rich, the leaders of industry and investment — or the masters of trade. Once the winners from the competitive game of trade take over the game of state power, the state ceases to be a responsible actor that prevents war from occurring, and instead blunders into conflicts at the whim of its billionaire blunderers. Trade doesn’t just lead to war. It also leads to tyranny. And this, in a time of peace, is not in the least surprising. The fact that it is surprising to many of us is proof that we have failed to secure the keys to peace — and have, unwittingly, opened the doors to war, and, perhaps, worse.

Leaders of the free world, take a bow.


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