Blustein's "And the Money Kept Rolling in (and Out)": Other Notes
The Vengeful Gods of Monetarism

The Second Coming of Norman Angell

Matthew Yglesias also preaches the Second Coming of Norman Angell:

Matthew Yglesias: Norman Angell's Second Coming: Brad Delong quotes Thomas Barnett as saying: 'Yes, as far as the Core is concerned, you can think of me as the second coming of Norman Angell. But I am Norman Angell with nuclear weapons.' Praktike glosses that thusly:

Norman Angell, famously, predicted the end of war due to global economic connectivity ... and was promptly proven wrong in 1914. I guess what Barnett is saying here, based on my reading of his books, is that the prospect of nuclear annihilation is so terrifying that great power war is now a thing of the past, and interlocking flows will lead to a better world.

I think people tend to spend too much time thinking about the predictive content of Angell's work, when the important part is the prescriptive element. John Quiggin got into this in a good review of someone else's book a while back:

The classic refutation of international realism [MY: I don't think that's really what this is a refutation of, but nevermind] was put forward in Norman Angell’s The Great Illusion. Angell argued that in a modern economy no economic benefit could be generated even by successful wars of conquest. Writing for a British audience, Angell’s basic point was that, even if Germany succeeded in establishing political mastery in Europe, workers in the newly subjected countries would still have to be paid, goods would have to be purchased at market prices and so on. Hence, individual Germans would gain nothing from being part of a larger country.

Angell’s argument works even better for social democracies, where territorial expansion or even extension of hegemony produces an unpalatable choice. If the benefits and obligations that go with citizenship welfare state are extended to those under the control of the expanded state, existing citizens will almost certainly be worse off. On the other hand, any attempt to maintain a distinction between citizens and noncitizens is bound to be highly problematic.

Angell’s argument showed, beyond reasonable doubt, that war and territorial expansion are not, in general sensible policies. His views have often been derided on the basis that they were falsified by the outbreak of the Great War in 1914, which was pursued to the bitter end even though it destroyed the global market economy that had formed the backdrop to his analysis. But in reality the outcome proved him right. Of course, Germany, the power most influenced by the arguments of Clausewitz and his successors, reaped nothing but grief from the war. But the attempts of the victorious allies to exact reparations, extend their colonial influence and so on were also entirely futile, exactly as Angell had predicted.

That's the interesting thesis, that great power conflict is futile. The further thesis that an absence of great power conflict is inevitable just turns on the rather uninteresting question of whether or not leaders understand this. I by no means agree with Barnett about everything, but like him I would happily claim that 'as far as the Core [roughly, globalization's 'winners' -- the rich countries, India, China, Brazil, etc.] is concerned, you can think of me as the second coming of Norman Angell. But I am Norman Angell with nuclear weapons.' The point is that even though we are pre-eminent now, we have nothing to fear from the growth in Chinese, or Brazilian, or Indian power. Nor do we have anything to fear from the prospect that a unifying Europe will become a more coherent -- and therefore more powerful -- actor on the world stage. We call ourselves the second comings of Normall Angell not because connectivity makes conflict impossible, but because it makes it pointless. As Brad Delong put it on an excellent post on Angell a while back:

Norman Angell's argument is simple: It is that in modern industrial warfare between great powers, everybody loses. Losers lose. And the winners lose. Many of their fathers, sons, and husbands are dead. Much of their wealth has been blown up. And it is next to impossible to claim that these sacrifices are counterbalanced by any positive economic advantages. Straightforward plunder of the conquered country yields little. Confiscation of property and the imposition of reparations burdens damages the rule of law on which modern industrial prosperity rests. And even if you do manage to get the conquered country to ship you significant quantities of valued foodstuffs, automobiles, and radios, you then have to cope with mass unemployment among your own farmers and manufacturing workers.

To take a contemporary example, in recent memory Hong Kong was a kind of protectorate of the United Kingdom. Since then, it has fallen under the authority of the People's Republic of China. But since if citizens of the U.K. (or the British government) wished to purchase goods or services produced by the residents of Hong Kong they had to pay money for them in a reasonably free market, and since the citizens of the U.K. can still buy goods and services from the residents of Hong Kong today, the change in sovereignty has no impact on British well-being. Now, of course, when a territory passes from the control of a democray to that of a dictatorship, the residents of the territory may suffer from the change in various ways. Hong Kong, it's worth noting, was not governed democratically even during the British days (until some last-ditch efforts right before the handover) but contemporary Taiwan is a different sort of case and both pose certain moral issues.

As far as actual conflicts of interest are concerned, however, clashes can only bring disaster. Nuclear weapons are relevant because they make clashes less likely (a good thing!) but they also ensure that clashes might become much more disastrous (a bad thing!) The challenge is to try and ensure that the rulers -- and the citizens -- of the relevant powers understand we have much more to gain from working together than from fighting.