I finally read Margaret MacMillan’s magnificent The War That Ended Peace (a book big enough that I waited for the paperback).
For obvious reasons, looking at the rise of nationalism and populism now, people are doing comparisons between the 1930s and now, but this book makes it clear there are some parallels as well with the first decade or so of the 20th century. Differences too – thankfully, we have the opposite of a military spending arms race at the moment. But MacMillan underlines the lack of comfort to be derived from the argument that nationalism is too costly in economic terms to get out of hand: “Trade and investment between many of the belligerents were increasing in the year before 1914. Britain and Germany indeed were each other’s largest trading partner. … Bankers and businessmen involved in exports and imports generally looked at the prospect of a major war with dismay; it would bring high taxes, disrupt trade, and cause them severe losses.” Few thought it would come to that. As Keynes famously wrote, in The Economic Consequences of the Peace:
“The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.”
The War That Ended Peace is a wonderful book. Although there were many places and times at which people could have made different choices, it shows the first world war to have been a true tragedy, a disaster almost bound to happen given the history and context of Europe at the dawn of the 20th century, even though almost all Europeans found it hard to believe a generalised armed conflict would happen.
Historical parallels can and are overdone, but they are still important because every statement, every choice, made about Europe and its nations is shaping the history and context of the future. I am one of the 90% of economists believing Brexit would be damaging for the UK economy, for years. But it isn’t all about the economy, unfortunately.