Posts Tagged ‘Economic warfare’

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Fighting over Crumbs

In Economics on August 5, 2010 by AEG Tagged: , , ,

The world has not recently experienced the sort of cutthroat national competition for natural resources that was a relatively common source of conflict during the long first era of industrialization from the mid-19th to the mid-20th Centuries. As Europe and the United States developed into industrial economies, their governments quickly recognized that secure supplies of those resources vital to maintaining growth had to be found. For the U.S., this was not a problem: the vast and barely-tapped resources of the young country kept industry well-supplied with virtually all it needed to continue production. European states, however, did not generally have the luxury of ample supplies of the raw material of industry within their borders; the result was a major impetus behind late-19th Century imperialism. European governments raced each other to secure every unclaimed corner of the globe, whether or not they knew what economic value it held. The competition for Southeast Asian rubber and West African palm oil, Egyptian cotton and Arabian oil to feed the machines became a race between states whose governments believed that they must continue to grow if they were to survive in the face of their ever-expanding rivals. The European imperial powers were moving toward a collective corner of industrial demand outstripping supply by the early decades of the 20th Century.

One might be inclined to wonder if the European leaders had ever heard of simply trading for what they required rather than going to such extravagant lengths to gather it themselves. Indeed, the years preceding the First World War saw global trade rapidly expanding, as ever-larger numbers of steamships moved cargoes around the world to the massive factories of Europe and the teeming markets of Asia, Africa, and South America. Yet even as trade was providing for unprecedented economic expansion, governments worried increasingly about the potential disaster that loomed over every industrialized state: What if our supplies are cut off? Scattered pessimists argued that nothing short of an economic cataclysm would befall them, while even the more numerous optimists understood that the increasingly perilous international diplomatic situation could erupt into war, though many of the latter argued that such a conflict would be short enough that shipping would not be seriously disrupted.

Rising international tension and increasing concern for economic security among the industrial powers were two sides of the same coin, and each fed into the other. While Britain considered the merits of “imperial preference,” a system designed to create a great interlocking economic network in an era of increasing pressure for autonomy among its various imperial holdings, Germany argued that it must be allowed to pursue its rightful “place in the sun” among the world’s great empires, as befitted such an economically powerful and dynamic state. But for each, along with France and Japan, and even the free-trading United States, there was the growing realization that the existing order could only survive as long as the sources of economic stability – natural resources and access to markets – remained secure. In order to do that, military and especially naval strength had to be maintained, strategically important territories acquired, and every effort made to render trade uninterruptible in the event of war or shortage.

As it happened, the privations of the First World War were largely the result of the war itself, not the cause of its outbreak. Yet the effects were clear long before they began to tell. The Allies imposed a naval blockade on the Central Powers design to deprive both their war machine and their industries of the things they needed to survive and triumph. The Central Powers sought to isolate the European Allies from the American market that increasingly kept them supplied with the raw materials and manufactured goods that allowed them to continue the struggle. The British North Sea blockade and the German submarine offensives were the most prominent of these efforts, and the former was far more successful than the latter; the result was economic disaster for Germany, leading to the end of the Kaiser’s regime in 1918, civil disorder, insurrection, and more than a decade of political and economic instability, with complete collapse only forestalled by infusions of American cash to keep the Weimar government afloat.

The lessons were clear: those states that were able to keep open their lines of supply to those things that allowed their economies to continue functioning during war were victorious; those that could not were destined for isolation and eventual defeat. It should have come as no surprise then that when the cycle repeated itself several decades later, the new rising powers of Germany and Japan felt they had little choice but to claw their way into the first rank of Powers by force if they were not to remain forever economically, and thus politically, inferior. There would be little point in developing their economies if they could not ensure that they could be protected; another British blockade of Germany, a reduction in American supplies to Japan would be all that was needed to render them immediately vulnerable. The First World War had shown that these threats were not idle speculation; industry and trade would be targeted directly, and total economic warfare was now something with which every industrial power had to reckon. The onset of the Depression in 1929 and the tariff war that broke out soon thereafter did nothing to assuage concern.

Securing the economic basis of the nation’s prosperity and power was among the foremost considerations of the interwar period for the rising powers. The status quo Powers were focused on maintaining the system as it existed; Britain had worked to focus on securing their overseas trade (though “imperial preference” did not materialize as state doctrine) and the United States was able to thrive for years with only domestic supplies of raw materials and an ever-expanding domestic marketplace (though this slowed considerably with the closing of the frontier in 1890). While not entirely self-sufficient, American and British (and to a lesser extent French) dominance of the global economy meant that their industries were relatively safe from international disruption. For the totalitarian states of the 1930s, however, the status quo meant perpetual weakness. Without directly challenging the Powers that controlled the world’s trade, there was little hope that they too could ensure their economic survival when it came under threat. They saw security in autarky, building empires that were beyond the reach of their rivals, empires that would stand the test of war.

Hitler saw both the strength and weakness of Germany in its continental position. In order to fulfill his vision of a secure Third Reich, he looked to establish a contiguous Eurasian empire, safe from the maritime dominance of the Royal Navy and the distant United States. The vast reaches of Soviet Russia held the key to Germany’s long-term economic security; Hitler viewed it as analogous to the way that the British looked to India as the cornerstone of their global empire (in Hitler’s own words, “Russia will be our India”), and drew heavily on American westward expansion in his conception as well. He knew that Germany must be able to feed its people, supply its factories and arm its soldiers if it were to resist the challenges that lay before it. Before colonization and settlement could occur, however, Germany’s continental rivals had to be eliminated as threats, and more vital resources secured. Only then could the building of a secure empire begin in earnest.

Japan, as an island state, held its naval strength as the first precondition of securing an empire that could feed its industry, but that introduced challenges of its own: a modern navy needed steel and oil in regular supply and prodigious quantities, neither of which Japan had. The push in to mainland Asia began early, with the Sino-Japanese War at the end of the 19th Century and the Russo-Japanese War in the first years of the 20th establishing Japan as the dominant regional power. But these were merely strategic maneuvers that facilitated acquisition of the the real prizes: the mineral and agricultural wealth of China. Beginning with the Manchuria Incident in 1931, and the invasion of China in 1937, Japan moved to actively secure access to the commodities increasingly vital to its industrial growth. The attack on the United States and Britain in December of 1941 was intended primarily to cover the drive to the south to secure the petroleum supplies of the Dutch East Indies, made all the more urgent by the disruption of oil supplies from America caused by the Roosevelt Administration’s increasing concern over Japan’s activities in China.

In both cases the conundrum is obvious: rising Powers must secure the resources they need to continue to grow, but in doing so they are very likely to threaten the interests of the existing Powers. This is particularly problematic in times of global economic difficulty, as well as when shortages of particularly important commodities loom. The Cold War saw very limited competition for most resources, and the peculiarity of the bipolar power structure rendered what competition there was relatively one-sided; for all the Western conflict with the Middle East during the Cold War, there was never any serious question as to which side was the more powerful, or that oil must continue to flow to Western markets. The self-imposed exclusion of the Soviet Union from much of the global economic system rendered inappropriate the experiences of traditional competitive relationships between Great Powers.

All that has changed. With the collapse of the Soviet Union, the end of the Cold War, and the rise of China and India, the resurgence of Russia, and even the (ponderous) movement toward an actually unified European Union, the competitive nature of the international system looks poised to return with a vengeance. The only truly status quo Power remaining is the United States, and it is far less economically secure than it once was. Meanwhile, China is acquiring huge mining concerns in Australia and investing in African oil and Russia is leveraging its ample energy supplies for political advantage. Conflicts over the mineral wealth of such obscure places as the Spratly Islands (claimed by several Southeast Asian states as well as China, and thought to have significant oil deposits) are beginning to emerge as points of tension. Rising middle classes in developing states will demand greater access to manufactured goods, increasing economic pressures on their own governments as well as demand for production, and thus raw materials. Global economic development is not without risk; indeed, history suggests that the movement of states toward economic parity with the leading Powers will invariably lead to conflict. In difficult times, when there are more parties competing for limited supplies and limited markets, the pressure for success may escalate quickly and dramatically, as the alternative is not seen as anything short of existential national defeat.

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Rearranging the Deck Chairs on the Gaza Blockade

In Politics on June 17, 2010 by AEG Tagged: , ,

Israel has announced that they will loosen the blockade on Hamas-controlled Gaza, allowing in more civilian goods via land checkpoints, while the naval blockade will remain in force. Although the updated list of allowed items includes a range of household items, the real change is that Israel will now allow the delivery of construction materials such as cement and steel, which had previously been prohibited as dual-use commodities that could be utilized for the construction of fortifications as well as more mundane civilian projects. The caveat that these items will only be allowed in “for civilian projects that are under international supervision” is rather weak, as the power of the international entities in Gaza to prevent Hamas from appropriating such supplies for its own purposes is virtually nil.

The obvious reason for this shift is an attempt to limit the long-term international consequences of the “Freedom Flotilla” debacle last month. By very publicly opening Gaza to increased goods traffic, Israel is trying to assure the international community that it is merely providing for its own security, not imposing a sort of collective punishment on the 1.4 million people living in the Gaza Strip. It is unlikely that such an approach will work broadly; only Israel’s staunchest allies will accept this action as sufficient cause to let their public outrage slip quietly away and move as quickly as possible toward forgetting the whole incident. For everyone else, Israel’s blockade will still be characterized as inhumane and arbitrary, with public pressure for continued isolation of the Jewish state remaining firm. This, in turn, will only serve to confirm Israel’s sense of isolation, which will compel its government to maintain strong security measures.

The more interesting question raised here regards the blockade itself; precisely what is its objective? Historically, blockades have been employed for a variety of purposes, in peace and war, sometimes successfully and sometimes not. The Israel effort represents what is in practice a very limited peace-time, or pacific, blockade, with the declared intention of preventing military supplies from reaching Hamas. The problem, of course, is that the inclusion of dual-use items like construction materials means that many Gazans are inadvertently caught in the effects of the blockade, and the overall economic effect severely limits Gaza’s already extremely limited potential.

What is not entirely clear is what Israel expects to achieve by maintaining the blockade. Past peacetime economic warfare efforts have been effective, to an extent, only when they have imposed sufficiently severe economic harm to compel a rival to resolve a situation expeditiously, and even these efforts take a significant amount of time to have any hope of success, though this is far from assured; the Israeli blockade of Gaza certainly does not fit this classification in any case, and time is on the side of Hamas. In its current form (both before and after the recent modifications), it is clearly a political compromise between doing nothing and allowing Hamas to become better-armed than it already is and perhaps forcing yet another politically costly military incursion, and imposing far greater restrictions in the hope of causing the Hamas administration to collapse under the weight of its inability to cope with public demands before Israel succumbs to what would obviously be greatly increased international pressure. Both of these represent high-risk approaches; the current implementation of the blockade is lower-risk, but also has little chance of accomplishing anything beyond maintaining what is a rather unfavorable status quo. Israel’s strategic position is very poor, as are its options for changing it, so it is limited to rearranging the furniture while Hamas waits for the boat to sink.

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New Sanctions on Iran. Again.

In Economics on June 9, 2010 by AEG Tagged: , , , ,

With yet another round of U.S.-backed sanctions adopted by the U.N., the fiction that something meaningful is being done to curb Iran’s nuclear ambitions continues. The loud protestations of Iranian president Ahmadinejad further enhance the illusion that these sanctions might actually have an effect. Despite the outward appearance of action, it is not the United Nations nor the United States that is determining the pace and course of events; it is the Iranians who hold the strategic initiative and are able to manipulate the situation to their best advantage. The Iranians have learned a lot about how to effectively oppose the United States by evaluating the experiences of those that have done so before. There are four vital concepts they have learned from history, and, in combination with a clear set of strategic objectives, they are applying these to good effect in the current situation. The West, by contrast, has not developed the sort of sophisticated appreciation of the strategic situation in the Persian Gulf that is necessary to effectively counter Iran’s efforts to dominate the region, nor does it appear to have considered how the Iranian leadership might view the lessons of recent history.

First, Iran’s government understands that the biggest ally they have when dealing with a hostile Western government is time; simply hold out for a few years and the people will lose interest, or grow tired of the effort, or the leaders will change. Even if the new leadership appears overtly hostile, the shift buys time for opponents to maneuver, and public hostility serves to reinforce the raison d’etre of the regime. North Vietnam played this game with the U.S. and the French and won. If the new Western leadership offers an olive branch, the opportunities to gain expand, as the typical form of such an offer involves financial or material support in exchange for promises to desist from certain behaviors. Of course, no mechanism actually capable of enforcing these promises can be included, but this is easily avoided by insisting that trust must be demonstrated by both parties. North Korea has managed to manipulate several American administrations this way, accepting aid while breaking the unenforceable agreements made in exchange for it. Each new U.N. secretary general and U.S. president seems to believe that they can make the North Koreans comply; it has not happened yet, for the simple reason that the leaders of the North are far better off in their current circumstances.

This raises a second important point that Western leaders (and the U.N. leadership in included in this, as the organization is fundamentally Western in its objectives) have failed to understand, but of which the Iranians are very much cognizant: peace is not an end in and of itself. The West does not appear grasp that the sort of settlement they propose would badly weaken the Iranian government; after all, why would the Iranian people support an oppressive regime unless it was the only thing keeping their enemies at bay? Totalitarian governments learned long ago that external enemies are vital to maintaining their hold on power (see George Kennan’s “Sources of Soviet Conduct” for a highly cogent discussion of this). More disturbingly, it is possible that some Western leaders actually do realize that their proposals would undermine the Iranian leadership, but somehow think that the Iranians will accept them anyway. Given that the U.S., the rest of the major Western democracies, and the U.N. are collectively the least Machiavellian political entities in the world, it is entirely possible that such delusion exists at the highest levels. This sort of misapprehension suggests that utopian optimism, expressed in the assumption that all the world seeks free markets, openness and democracy, is still the predominant characteristic in Western strategy. The Iranians would likely reject this assertion.

More recent history has demonstrated to Iran a third simple truth: nations without nuclear weapons may be attacked with relative impunity; those with nuclear weapons can survive indefinitely. This is an oversimplification of the strategic value of limited nuclear capability, but the positive example of North Korea is once again in the forefront, along with the counterpoints starkly provided by Iraq and Afghanistan (both of which of course border Iran). Here Iran has gone to great lengths to avoid the enforcement of non-proliferation as applied to Iraq and Syria in 1981 and 2007 respectively by the Israeli Air Force, burying its facilities in hardened underground complexes and dispersing them widely. The result is a more survivable program, one which is likely to be more survivable than any military weapons it might produce (surreptitiously-delivered weapons are another matter). The value of these weapons is strictly as a deterrent, but this raises obvious questions about first-use, particularly against countries like Israel or the United States, both of which have large nuclear arsenals. In the end, the deterrent value of nuclear weapons to Iran is likely to be considerably less than its leaders think – nonetheless, any factor that complicates the strategic calculations of its opponents is viewed positively, and nuclear capability certainly accomplishes that goal.

Finally, there is the question of sanctions themselves. The current Iranian regime has been subject to international sanctions of various sorts virtually since its inception in 1979. The fact that the government not only still exists, but has in fact consolidated its hold on power in the intervening years suggests that the sanctions have not achieved their purposes, whatever they might be. The watered-down nature of sanctions regimes developed as the result of a collective process certainly does not help to create real pressure. The fact remains, however, that there have always been countries willing to trade with Iran despite the sanctions, and the unwillingness of those applying the sanctions to unilaterally enforce them (when this is even possible) has been one of the few consistent elements in the Western effort.

The problems underlying Western sanctions efforts are easy to explain: the sanctions applied against Iran (and most other nations that have been subjected to similar treatment) have often been without specific purpose, and even when they have had a direction (as in the case of nuclear technology), they have been too weak to actually compel changes in behavior and have not been effectively enforced. Here again Western understanding is at odds with the strategic realities of history. Sanctions have historically worked (i.e., forced a change in behavior on the part of the country subject to them) only when they have caused consequences so damaging that to continue to exist under them was even more distasteful than complying with the wishes of those who implemented them. There are very few examples of sanctions working in that fashion; the fall of South Africa’s apartheid regime (which, it should be noted, had and voluntarily gave up indigenously-produced nuclear weapons) might be one of the best recent examples, and certainly the one that offers hope to proponents of sanctions as a peaceful means to alter an undesirable situation.

History offers another, considerably less desirable example, however: it was in large part the effectiveness of American sanctions against Japan in 1940-1 that led that government to conclude that it had to act decisively to protect its national interest or surrender to the will of its opponent. It is the potential of a similar outcome in the Middle East that strikes fear in the hearts of Western leaders; ironically, it is knowledge of this fear that the Iranians have used so successfully to avoid becoming the target of more direct action. Franklin Roosevelt’s government recognized that Japan had to be stopped before it became a regional hegemon in East Asia, too entrenched and too powerful to stop without enormous cost, if it could be stopped at all. The current governments of the West do not seem to appreciate that the rise of Iran to similar hegemonic status in the Persian Gulf would be every bit as dangerous to their strategic interests, if not moreso.

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Greater East Asian Co-Prosperity Sphere Redux? (Part One)

In Economics on June 2, 2010 by AEG Tagged: , , , , ,

Writing in June of 2009, The Economist’s correspondent, having attended a security conference in Singapore, noted that “(f)or China‚Äôs strategic planners, securing sea lanes against hostile powers has become perhaps the chief preoccupation.” (The Economist, “Chasing Ghosts”, 11 Jun 2009) It is no wonder – China’s continued economic growth is utterly dependent on the seaborne importation of huge quantities of of oil, coal, iron ore, and other raw materials necessary for continued industrial expansion. The quantities of these required, especially those fulfilling China’s burgeoning energy needs, are only expected to rise in coming years. China’s strategists would be foolish to think that securing these supply routes was anything short of a necessary precondition of China’s continuing rise.

Interestingly, the aforementioned author notes that the predominant influence on current strategic thought in maritime Asia – not just China, but India and other concerned nations as well – is the American naval theorist who contributed so much to the strategic developments of the first half of the 20th Century, Alfred Thayer Mahan. Captain Mahan’s The Influence of Sea Power upon History, 1660-1783, published in 1890, was enormously influential, positing that command of the sea, which was of vital importance for the survival and success of empires which aspired to global power, was best obtained by effecting the destruction of the enemy fleet. When the time came to do so, the fleet must be ready, able and concentrated; the time necessary to build such a fleet and train its crews being measured in years if not decades, Mahan argues that such a fleet must be maintained at all times, not just when war appears imminent. Having achieved decisive victory, the ability of one’s opponent to meaningfully interdict what are referred to as “lines of communication” will be severely impaired, ensuring the security of the geographic and material sources of one’s own economic power while starving rivals of theirs.

Perhaps more important, however, is the tantalizing promise Mahan offers: that naval power and success are the key to national greatness on a global scale.Though intended primarily for an American audience, and utilizing the successes of the British Royal Navy (mostly at the expense of the French) as evidence to support its conclusions, The Influence of Sea Power upon History was and is often seen to be offering a set of truths far more universal than is perhaps the case; note, for example, Mahan’s linkage of success with a representative system of government supported by a free commercially-active populace: “History has proved that such a purely military sea power can be built up by despot, as was done by Louis XIV; but though so fair seeming, experience showed that his navy was like a growth which having no root soon whithers away.” Such distinctions were and are easily glossed over (Mahan, like Clausewitz, is often paraphrased to the point of non-recognition) when the prospect of a formula for success on the scale of the 18th and 19th Century Britain or the United States in the 20th Century presents itself. For ascendant maritime powers, this is a difficult lure to resist.

This is not the first time Mahan has contributed to the strategic thought of a rising and resource-dependent Asia industrial power: Japan’s early 20th Century navy was home to many of Mahan’s committed disciples. The foundations of Japan’s naval strategy at the height of its power were at least as much the product of Mahan’s theory as they were of conditions particular to Japan and of the experiences of the Sino-Japanese War (1894-5), the Russo-Japanese War (1904-5), and the First World War (1914-8). Aspiring to greatness, the Japanese Navy took Mahan’s ideas and used them to attempt to focus the attention of the nation on the sea, with all the prospects for success that it seemed to offer, and away from the Asian mainland (primarily China and Far Eastern Russia), which was the primary objective of the rival Japanese Army faction. The lessons of history were clear: focus on the land offered only limitations and resistance; the sea promised abundance and power, if control of its vital routes could only be secured. It is not hard to see how modern Chinese strategists might draw the same conclusions.

Part Two will examine the specific influence of Mahan on Japanese strategy, as well as the importance of resource availability on the economy, and the extent to which these elements combined to move Japan inexorably toward conflict with the United States.