Understandably, 2014 has seen (and will yet see) many reflections on the 'Great War' of 1914-18. In a lecture given to the Economic History Society Annual Conference on 28th March, Mark Harrison¹identified a number of widely-held myths about that tragic event. This is a shortened version of that lecture, which is available at: http://warwick.ac.uk/cage/research/wpfeed/188-2014_harrison.pdf.

Perceptions of the Great War continue to resonate in today’s world of international politics and policy. Most obviously, does China’s rise show a parallel with Germany’s a century ago? Will China’s rise, unlike Germany’s, remain peaceful? The Financial Times journalist Gideon Rachman wrote last year:

The analogy [of China today] with Germany before the first world war is striking … It is, at least, encouraging that the Chinese leadership has made an intense study of the rise of great powers over the ages – and is determined to avoid the mistakes of both Germany and Japan.²

The idea that China’s leaders wish to avoid Germany’s mistakes is encouraging, certainly.³ But what are the ‘mistakes’, exactly, that they will now seek to avoid? The world can hardly be reassured if we ourselves, social scientists and historians, remain uncertain what mistakes were made and even whether they were mistakes in the first place.

In this lecture I shall review four popular narratives relating to the Great War. They concern why the war started, how it was won, how it was lost, and in what sense it led to the next war.

An inadvertent war
When the Great War ended, much discussion on the allied side centred on ‘who was to blame’ and advice to ‘hang the Kaiser’ was widespread. Historians continue to debate the question of moral responsibility (BBC, 2014).

From a social-science perspective the underlying issue is less moral than empirical: Was the Great War truly an ‘inadvertent’ conflict, one that started when no one was looking? When the actors decided on war, to what extent did they calculate their actions and intend the results? The economist’s standard model of strategic interaction demands evidence of individual agency (rather than of unconscious collective drives), of unbiased ‘rational’ expectations, and of backward induction of one’s own best choice based on the expected best choice of the adversary.

It is a myth that such calculations were absent from the decision for war. On the contrary the record shows that the war was brought about very largely by design, and among those that designed it there was realistic foresight of the scale, scope, character, duration, and even outcome of the war. In fact the historical record has left clear evidence of agency and intention.

In every country the decision for war was made by a handful — literally — of people at the apex of each political system (Hamilton and Herwig 2004: 238-241). Their councils were ‘saturated with agency’ (Clark 2013: xxvii). The cliques themselves were not united, so that there were also waverers in every country including the German, Austrian, and Russian emperors, the German premier Bethmann Holweg, and the British finance minister (later premier) Lloyd George. At crucial moments, however, those that favoured war were able to sway the others.

What ruled the calculation in every country was the national interest as they perceived it. But on what was the ‘national interest’ based? As everywhere, on shared beliefs and values. These began with national identity, in which the well-being of the nation was commonly identified with persistence of the ruling order. They extended to shared values of power, status, honour, and influence, and then to shared beliefs about the forces underlying the distribution of power in the world. Strikingly, the decision makers in every country were subscribers to a virtual world where the zero-sum game of power was being played out, not the positive-sum game of commerce and development.

There is clear evidence that some of the actors had a specific intent to bring about a war. They understood how others would respond and that a wider conflict would probably ensue and they either took the chance or welcomedit as an opportunity. In Vienna, chief of the general staff Hötzendorf and foreign minister Berchtold intended war with Serbia in order to assert the integrity of the Austro-Hungarian Empire, knowing that the Russians might intervene and so widen the conflict. In Berlin chief of the general staff Moltke and war minister Falkenhayn planned war with Russia before the Russian rearmament would be completed, knowing that this would also entail war with France. To bring war about, they also encouraged each other: when the Germans encouraged the Austrians to make war on Serbia in July 1914 among them were those that expected this would provide the best opportunity to attack France and Russia (Hamilton and Herwig 2004; Fromkin 2007). Similarly, the Russians and French egged each other on, although the Russians had their eyes on Austria and the French on Germany (McMeekin 2011: 54).

In fact, the key decisions that launched the Great War were highly calculated with clear foresight of the possible wider costs and consequences. There was little overoptimism. The spirit of those that gave the orders is usefully defined as ‘rational pessimism’: they feared their enemies but they feared the future more.

Needless slaughter
Attrition was a reality; was it pointless? That idea was founded on two rates of exchange: lives for lives, and lives for territory. Lives for territory: In most battles on the western front until 1918 only a few yards changed hands for thousands or tens of thousands of casualties. Lives for lives: When the Allied armies traded with the enemy, they consistently came off worse. Two things are clear. First British losses rose greatly with the forces deployed. Second, British losses consistently exceeded those of the adversary in the same sector: by nearly two to one in the period before the Somme and still by 1.5 to one after it. At that rate, the Allied policy of attrition was irrational. Did the Allied generals see this?

In fact, commanders on both sides made repeated efforts to escape the logic of attrition. The problem was that every attempt at escape seemed to come to nothing. In the category of efforts intended to save lives on the Western front fell the artillery preparations with which Allied commanders preceded major attacks (ineffective more often than not), Churchill’s attack on the underbelly of the Central Powers via the Dardanelles (a costly failure), the Allied blockade of Germany (slow acting at best), and German submarine attacks on Allied and neutral shipping (arguably ineffective and certainly counter-productive in bringing America into the war).

Based on manpower alone, a strategy of attrition was self-defeating: the Allies could have expected to lose the war. Kitchener’s ‘last million’ (men) turned out to come from America, which no one anticipated in 1914. During the war, however, the solution to attrition presented itself, and the Allies were better able to grasp this solution than the Central Powers. The stalemate would be broken not by manpower but by firepower. Additional firepower was supplied by the Allied economies, which were tremendously richer than those of the Central Powers (Broadberry and Harrison 2005) First to grasp this was Lloyd George, who echoed Kitchener in 1915 by claiming that Britain would raise the ‘last million’ (pounds) that would win the war (Macdonald 2006: 403).

To conclude, in the Great War, despite material advantage, the Allies could not escape the war of attrition. Attrition meant slaughter. Some of this slaughter was the kind of pointless, wasteful killing that happens in every war. The rest of it was the killing demanded in both world wars by mass warfare. Attrition was not only slaughter, however. There was an economic dimension as well as the military one. It was the combined attrition in two dimensions that defeated the Central Powers.

The food weapon
The belief that Germany was starved into submission by the allied blockade has considerable historic significance. It was used after the war by Hindenburg and Ludendorff to bolster their view that Germany had been defeated not militarily but by a collapse of the home front.. It also formed Hitler’s strategic orientation towards food security and colonization of the farmlands to the East.

The idea that Germany was defeated by denial of trade would have struck contemporaries as unlikely, since Britain imported 60 per cent of calories for human consumption while Germany imported only 25 per cent at most. Yet three quarters of a million Germans died of hunger and hunger-related causes, while the British population survived relatively unscathed.

One problem for Germany was that she went to war with the very countries that were supplying the bulk of these imports. To this extent no blockade was needed. The Allies simply stopped trading with Germany.

That Germany’s food imports would be severely reduced was well-anticipated. Prewar plans for wartime autarky assumed that German farmers would farm more intensively to feed the nation (Lee 1975). A bigger problem here was the supply shock from war mobilization, which stripped German farms of young men, horses, and chemicals.

Of these two shocks, the one from trade affected at most one quarter of Germany’s food supply (less, in fact, because not all trade was suppressed). The shock from mobilization affected the three quarters that was home produced. It is implausible to give priority to the former over the latter. In other words, decisions made in Berlin are a much better candidate for causes of the German nutritional collapse than those taken in London.

The Folly at Versailles
Keynes (1920) strongly criticized the Versailles settlement on two grounds: it violated the terms of the Armistice (which limited German reparations to making good civilian damages arising from the war) and the resulting burden on the German economy was intolerable and would be counterproductive. Like the myth of the food blockade, the idea that Versailles helped lay the foundations for another war twenty years later, is reinforced by the extent to which Nazi leaders campaigned against it to mobilise support. More recently, George Soros (2014) blamed the French insistence on reparations for the rise of Hitler as a preliminary to warning, ‘Angela Merkel’s [similar] policies are giving rise to extremist movements in the rest of Europe.’

The burden of German reparations determined in 1921 was certainly heavy and probably unwisely so. The evidence is plain to see in the better outcome of 1945, when the victors based retribution on evidence of personal culpability, not collective responsibility. Still, the mistakes of 1919 to 1921 should be kept in perspective.

The role of reparations can be seen through the prism of hyperinflation. There was a war of attrition (now in the sense of Alesina and Drazen 1991) between the Allied and German governments over the distribution of postwar burdens and this is part of the story of the German 1923 hyperinflation. But reparations were not a necessary condition for this, because there were many hyperinflations at this time across central and Eastern Europe in countries that did not face reparations but did suffer from domestic wars of attrition over the burdens of postwar adjustment. Rather, the German war of attrition was unusual only because external bondholders played such a salient role.

If the economic implications of the Treaty have been oversold, the same is true of its political consequences. The electoral history of the Weimar Republic shows a brief period of radicalization in the aftermath of the Versailles Treat. After that the moderate parties of the centre and left regained strength with every election. During the period when reparations were most heavy, political moderation had a firm grip. It was not until the hammer blow of the Great Depression that conditions were laid for violent polarization and the breakthrough of the radical right to national significance and power (Van Riel and Schram 1993; King et al. 2008).

Concluding remarks
Myths are not necessarily baseless, but here their truthful elements are often relatively small. Why did the Great War break out? Because key persons intended it, with full appreciation of the possible consequences, and were not deterred. The conflict became a military war of attrition, to which there was no real alternative despite many attempts to escape from it.

How was the Great War won? From the Allied standpoint the war of attrition on the Western front looks scarcely rational because the rate of exchange of casualties was always adverse. The forgotten dimension was economic: The Allies outproduced the Central Powers in firepower (and everything else) and this was the basis of victory.

How was the Great War lost? The fighting ended with German economic collapse. This was and often still is ascribed to Allied use of the food weapon to starve Germany out of the war. But this is implausible. German civilians did suffer greatly, and the denial of trade played a role, but it seems likely that Germany’s own actions hurt more. These actions included the decision to attack her main trading partners and the impact of Germany’s economic mobilization on the internal food market.

In what sense did one war lead to the next? Finally, the Treaty of Versailles, which formally concluded World War I, did not lay the foundations for World War II. While Allied behaviour over the Treaty would seem to fail the test of enlightened self-interest, it was the Great Depression, not the Treaty or reparations, that set Germany on a course to violent extremism.

Notes:

1. Mark Harrison is Professor of Economics at the University of Warwick and a research associate of Warwick’s ESRC Centre on Competitive Advantage in the Global Economy. He is also a research fellow of the Centre for Russian and East European Studies at the University of Birmingham and of the Hoover Institution on War, Revolution, and Peace, at Stanford University. He is co-editor and co-author of The Economics of World War I (Cambridge U P, 2005) and The Economics of World War II(Cambridge U P, 1998); author of Accounting for War: Soviet Production, Employment, and the Defence Burden (Cambridge U P, 1996), awarded the Alec Nove Prize; and co-author of ‘Great War, Civil War, and Recovery: Russia’s National Income, 1913 to 1928’, Journal of Economic History71:3 (2011), awarded the Russian National Prize for Applied Economics.

2. ‘The shadow of 1914 falls over the Pacific,’ Financial Times, February 4, 2013.

3. While much attention has been focused on China’s rise and the German parallel, less has been given to Russia's decline, which in some ways resembles that of the Austro-Hungarian Empire and has no less disturbing implications: two sprawling, multi-national empires, struggling to manage a fall from past greatness, rising ethnic tensions, and external rivals competing for influence in bordering states.

4. We are grateful to Major and Mrs Holt, Bairnsfather’s biographers, for permission to reproduce this image.

References:

Alesina, A, and A Drazen.1991. ‘Why are Stabilizations Delayed?’ American Economic Review81(5), pp. 1170-1188.

BBC. 2014. 'World War One: 10 Interpretations of Who Started WW1'. BBC News Magazine, 11 February. Available at http://www.bbc.co.uk/news/magazine-26048324 (accessed 13 February 2014).

Clark, C, 2013. The Sleepwalkers: How Europe Went to War in 1914. (London: Penguin).

Fromkin, D, 2007. Europe’s Last Summer: Who Started the Great War in 1914? (New York: Doubleday).

Hamilton, R F, and H H Herwig, 2004. On the Origins of the Catastrophe. In Decisions for War, 1914-1917, pp. 225-252. (Cambridge: Cambridge U P).

Keynes, J M. 1920. The Economic Consequences of the Peace. (London: Macmillan).

King, G, O Rosen, M Tanner, and A F Wagner. 2008. ‘Ordinary Economic Voting Behavior in the Extraordinary Election of Adolf Hitler’, Journal of Economic History 68:4, 951-994.

Lee, Joe. 1975. ‘Administrators and Agriculture: Aspects of German Agricultural Policy in the First World War’, in War and Economic Development: Essays in Memory of David Joslin, pp. 229-38. Edited by Jay M. Winter. (Cambridge: Cambridge U P).

Macdonald, J, 2006. A Free Nation Deep in Debt: The Financial Roots of Democracy. (Princeton: Princeton U P).

McMeekin, S, 2013. July 1914: Countdown to War. (New York: Basic Books).

Soros, G. 2014. The World Economy’s Shifting Challenges. Project Syndicate, 2 January. Available at http://www.projectsyndicate.org/commentary/george-soros-maps-the-terrain-of-aglobal-economy-that-is-increasingly-shaped-by-china (accessed 2 January 2014).

Van Riel, A, and A Schram. 1993. ‘Weimar Economic Decline, Nazi Economic Recovery, and the Stabilization of Political Dictatorship’, Journal of Economic History 53 (1), pp. 71-105.

From issue no. 165, APril 2014, pp.17-19