The Economics of War; L. von Mises

The spirit of conquest does not acknowledge restraints other than those imposed by a power which resists suc cessfully. The principle of empire building is to expand the sphere of supremacy as far as possible. The great Asiatic conquerors and the Roman Imperators were stopped only when they could not march further. Then they postponed aggression for later days. They did not abandon their ambitious plans and did not considet"in{385 ] f'oependent foreign states as anything else than targets tIor later onslaughts. This philosophy of boundless conquest also animated 1herulers of medieval Europe. They too aimed first of all 'at fhe utmost expansion of the size of their realms. But the 'institutions of feudalism provided them with only "Scanty means for warfare. Vassals were not obliged to light for their lord more than a limited time. The selfish ness'"of the vassals who insisted on their rights checked the Iking's aggressiveness. Thus the peaceful, coexistence ~f "a number of sovereign states originated. In'the six teenth century a Frenchman, Bodin, developed the tbeory of national sovereignty. In the seventeenth cen tury a Dutchman, Grotius, added to it a theory of inter m.ational relations in war and peace.

Mercenaries With the disintegration of feudalism, sovereigns could 'no longer rely upon summoned vassals. They <'national 1:zed" the country's armed forces. Henceforth, the war Tiors were the king's mercenaries. The organization, 'equipment, and support of such troops were rather costly and a heavy burden on the ruler's revenues. The, ambi tions of the princes were unbounded, but financial con siderations forced them to moderate their designs. They no leDger planned to conquer a whole country. All they aimed at was the conquest of a few cities or of a prov 'ince. To attain more would also have been unwise politically. For the European powers were anxious not [386] to let anyone of them become too powerful and a menace to their own safety. A too impetuous conqueror must always fear a coalition of all those whom his big ness has frightened. The combined effect of military, financial, and political circumstances produced the limited warfare which pre vailed in Europe in the three hundred years preceding the French Revolution. Wars were fought by compara tively small armies of professional soldiers. War was not an affair of the peoples; it concerned the rulers only. The citizens detested war which brought mischief to them and burdened them with taxes and contributions. But they considered themselves victims of events in which they did not participate actively. Even the belligerent armies respected the CCneutrality" of the civilians. As they saw it, they were flghting the supreme war lord of the hostile forces, but not the noncombatant subjects of the enemy. In the wars fought on the European continent the property of civilians was considered inviolable. In 1856 the Congress of Paris made an attempt to extend this principle to naval warfare. More and more, eminent minds began to discuss the possibility of abolishing war altogether.

Abolition of War Looking at conditions as they had developed under the system of limited warfare, philosophers found wars useless. So they reasoned as follows: Men are killed or maimed, wealth is destroyed, countries are devastated [387 ] f:or the sole benefit of kings and ruling oligarchies. The peoples themselves do not derive any gain from victory. The individual citizens are not enriched if their rulers expand the size of their realm by annexing a province. For the people wars do not pay. The only cause of armed oonRict is the greed of autocrats. The substitution of representative government for royal despotism will abolish war altogether. Democracies are peaceful. It is no concern of theirs whether their nation's sovereignty stretches over a larger or smaller territory. They will treat territorial problems without bias and passion. They will settle them peacefully. What is needed to make peace durable is to dethrone the despots. This, of course, can not be achieved peacefully. It is necessary to crush the mercenaries of the kings. But this revolutionary war of the peoples against the tyrants will be the last war, the war to abolish war forever.

This idea was already dimly present in the minds of the French revolutionary leaders when, after having re pelled the invading armies of Prussia and Austria, they embarked upon a campaign of aggression. Of course, under the leadership of Napoleon they themselves very soon adopted the most ruthless methods of boundless ,expansion and annexation until a coalition of all Euro pean powers frustrated their ambitions. But the idea of durable peace was soon resurrected. It was one of the main points in the body of nineteenth-century liberalism as consistently elaborated in the much abused principles of the Manchester School. These British liberals and their continental friends [388 ] were keen enough to realize that what can safeguard durable peace is not simply government by the people, but government by the people under unlimited laissez faire. In their eyes free trade, both in domestic affairs and in international relations, was the necessary prereq uisite of the preservation of peace. In such a world without trade and migration barriers no incentives for war and conquest are left. Fully convinced of the irrefu table persuasiveness of the liberal ideas, they dropped the notion of the last war to abolish all wars. All peoples will of their own accord recognize the blessings of free trade and peace and will curb their domestic despots without any aid from abroad.

Most historians entirely fail to recognize the factors which replaced the "limited" war of the "ancien regime" by the «unlimited~~ war of our age. As they see it, the change came with the shift from the dynastic to the na tional form of state and was a consequence of the French Revolution. They look only upon attending phenomena and confuse causes and effects. They speak of the com position of the armies, of strategical and tactical prin ciples, weapons and transportation facilities, and of many other matters of military art and administrative techni calities.1 However, all these things do not explain why modern nations prefer aggression to peace. There is perfect agreement with regard to the fact 1 The best presentation of the traditional interpretation is provided by the book, Makers of Modern Strategy, Military Thought tram Machiavelli to Hitler, ed. E. M. Earle (Princeton University Press, 1944); cf. especially the contribution of R. R. Palmer, pp. 49-53.

[389 ] that total war is an offshoot of aggressive nationalism. But this is merely circular reasoning. We caIl aggressive nationalism that ideology which makes for modern total war. Aggressive nationalism is the necessary derivative of the policies of intervention and national planning. While laissez faire eliminates the causes of international conflict, socialism and government interference with busi ness create conflicts for which no peaceful solution can be found. While under free trade and freedom of migra tion no individual is concerned about the territorial size of his country, under the protective measures of economic nationalism nearly every citizen has a substantial interest in these territorial issues. The enlargement of the ter -ritory subject to the sovereignty of his own government means material improvement for him or at least relief from restrictions which a foreign government has im posed upon his well-being. What has transformed the limited war between royal armies into total war, the clash between peoples, is not technicalities of military art, but the substitution of the Welfare State for the laissez-faire state.

Lebensraum If Napoleon I had reached his goal, the French Empire would have stretched far beyond the limits of 1815. Spain and Naples would have been ruled by kings of the house of Bonaparte-Murat instead of kings of another French family, the Bourbons. The palace of Kassel would have been occupied, by a French playboy instead of one [390 ] of the egregious Electors of the Hesse family. All these things would not have made the citizens of France moree, prosperous. Neither did the citizens of Prussia win anything from the fact that their king in 1866 evicted his" cousins of Hanover, Hesse-Kassel, and Nassau from their' luxurious residences. But if Hitler had realized his plans,. the Germans expected to enjoy a higher standard of liv ing. They were confident that the annihilation of the' French, the Poles, and the Czechs would make every member of their own race richer. The struggle for more~ Lebensraum was their own war.

Dnder laissez faire peaceful coexistence of a multitude" of sovereign nations is possible. Under government control of business it is impossible. The tragic error of Presi dent Wilson is that he ignored this essential point .. Modern total war has nothing in common with the lim ited war of the old dynasties. It is a war against trade and migration barriers, a war of the comparatively overpopulated countries against the comparatively under populated. It is a war to abolish those institutions which prevent the emergence of a tendency toward an. equali zation of wage rates all over the world. It is a war of the:' farmers tilling poor soil against those governments which bar them from access to much more fertile soil lying fallow. It is, in short, a war of wage earners and farmers who describe themselves as underprivileged "have-nots'=" against wage earners and farmers of other nations whom~ they consider privileged "haves."

The acknowledgment of this fact does·not suggest that: victorious wars would really do away with those evils [391 ] about which the aggressors complain. Neither does it mean that there can be any question of appeasing the aggressors by removing migration barriers. As conditions are today, the Americas and Australia in admitting Ger man, Italian, and Japanese immigrants would merely open their doors to the vanguards of hostile armies. It is futile to place confidence in treaties, conferences, and such bureaucratic outfits as the League of Nations and the United Nations. Plenopotentiaries, office clerks, and experts make a poor show in fighting ideologies. The spirit of conquest cannot be smothered by red tape. What is needed is a radical change in ideologies and economic policies.... If an economically self-sufficient man starts a feud against another autarkic man, no specific problems of 4'war economy" arise. But if the tailor goes to war against the baker, he must henceforth produce his bread for himself. If he neglects to do this, he will be in distress sooner than his adversary, the baker. For the baker can wait longer for a new suit than the tailor can for fresh bread. The economic problem of making war is therefore different for the baker and for the tailor.

Free Trade and Peace The international division of labor was developed under the assumption that there would no longer be wars. In the philosophy of the Manchester School free trade and peace were seen as mutually conditioning one another. The businessmen who made trade international [392 ] did not consider the possibility of new wars ansmg. Nor did general staffs and students of the art of war fare pay any attention to the change in conditions which international division of labor brought about. The method of military science consists in examining the experience of wars fought in the past and in abstracting general rules from it. Even the most scrupulous occupa tion with the campaigns of Turenne and Napoleon I could not suggest the existence of a problem which was not present in ages in which there was practically no international division of labor. The American Civil War The EUl'opean military experts slighted the study of the American Civil War. In their eyes this war was not instructive. It was fought by armies of irregulars led by nonprofessional commanders. Civilians like Lincoln inter fered with the conduct of the operations. Little, they believed, could be learned from his experience. But it was in the Civil War that, for the first time, problems: of the interregional division of labor played the decisive· role. The South was predominantly agricultural, its pro cessing industries were negligible. The Confederates depended on the supply of manufacturers from Europe ..

As the naval forces of the Union were strong enough to· blockade their coast, they soon began to lack needed equipment. The Germans in both World Wars had to face the same situation. They depended on the supply of foodstuffs and [393 ] raw materials from overseas. But they could not run the British blockade. In both wars the outcome was decided by the battles of the Atlantic. The Germans lost because they failed in their efforts to cut off the British· Isles from access to the world market and could not themselves safe guard· their own maritime supply lines. The strategical problem was determined by the conditions of the inter national division of labor .... Advantages of Cooperation What distinguishes man from animals is the insight into the advantages that can be derived from coopera tion under the division of labor. Man curbs his innate instinct of aggression in order to cooperate with other human beings. The more he wants to improve his ma terial well-being, the more he must expand the system of the division of labor. Concomitantly, he must more and more restrict the sphere in which he resorts to mili tary action. The emergence of the international division of labor requires the total abolition of war. Such is the essence of the laissez-faire philosophy of Manchester.

This philosophy is, of course, incompatible with sta tolatry. In its context the State, the social apparatus of violent oppression, is entrusted with the protection of the smooth operation of the market economy against the on slaughts of antisocial individuals and gangs. Its· function is indispensable and beneficial, but it is an ancillary function only. There is no reason to idolize the police power and ascribe to it omnipotence and omniscience. [ 394] There are things which it can certainly not accomplish. It cannot conjure away the scarcity of the factors of pro duction, it cannot .make people more prosperous, it ·can not raise the productivity of labor. All it can achieve is to prevent gangsters from frustrating the efforts of those people who are intent upon promoting material well being. The liberal philosophy of Bentham and Bastiat had not yet completed its work of removing trade barriers and government meddling with business when the counterfeit theology of the divine state began to take effect. Endeavors to improve the conditions of wage earners and small farmers by government decree made it necessary to loosen more and more the ties which connected each country's domestic economy with those of other countries. Economic nationalism, the necessary complement of domestic interventionism, hurts the in terests of foreign peoples and thus creates international conflict. It suggests the idea of amending this unsatis factory state of affairs by war. Why should a powerful nation tolerate· the challenge of a less powerful nation?

Is it not insolence on the part of small Lapputania to injure the citizens of big Ruritania by customs, migration barriers, foreign exchange control, quantitative trade re strictions, and expropriation of Ruritanian investments in Lapputania? Would it not be easy for the army of Ruritania to crush Lapputania's contemptible forces? Such was the ideology of the German, Italian, and Jap anese warmongers. It must be admitted that they were consistent from the point of view of the new "unortho[395 ] dox" teachings. Interventionism generates economic na tionalism, and economic nationalism generates bellicosity. If men and commodities are prevented from crossing the borderlines, why should not the armies try to pave the way for them? . . . Modem civilization is a product of the philosophy of laissez faire. It cannot be preserved under the ideology of government omnipotence.... To defeat the aggressors is not enough to make peace durable. The main thing is to discard the ideology that generates war.

[396 ] TWO KINDS OF INFLUENCE MOST persons have some notion of their dependence on others. Most of us realize that we cannot by ourselves build the houses in which we live, raise the foods we eat, make the cars we drive, create the opportunities con stantly presented to us, originate the knowledge and ideas by which we live, gamer the fuel we burn, fabri cate the clothes we wear, construct the telephones over which we talk-indeed, few among us could in a thou sand years produce what we consume in a single day! Anyone who is aware of the extent to which he is dependent on others is, or should be, familiar with his stake in the proficiency of others. Let all others fail, and I shall perish..Let all others become increasingly creative, and I shall in all likelihood receive more in exchange for the little I can create. No doubt about it, most of us do concern ourselves with others. Every law is an attempt to do something to others. Wars are aimed at others, as are strikes and all coercive hassels. Sermons, lectures, schooling, pamphlets, books, statements like this-all are communications to others.