The Great Illusion

The Great Illusion by Norman Angell

A work of political economy published in 1910, this study challenges what its author identifies as the foundational axiom of European statecraft: that a nation's prosperity, security, and commercial success depend upon its military and political power. The book systematically dismantles this assumption, arguing that it constitutes a profound and dangerous illusion distorting the foreign policies of all major powers and driving a ruinous arms race. The opening sections document how thoroughly this axiom pervades European thought across the political spectrum. Militarists, pacifists, journalists, statesmen, and academics alike accept without question that conquest yields tangible material advantage, that naval supremacy underwrites commercial dominance, and that defeat in war would mean economic catastrophe for the vanquished. The author quotes extensively from British and German sources to establish that this is not a fringe view but the universal premise of international politics. Against this consensus, the author advances a series of interlocking propositions. First, in the modern credit-based economy, wealth is fundamentally intangible and cannot be seized by military force. Unlike ancient booty or medieval land grants, the wealth of an industrialized nation resides in contracts, credit, financial instruments, and the productive capacity of its population. An invader who attempts to confiscate such wealth destroys the very mechanisms that generate it. The interdependence of modern finance is so complete that a catastrophic disruption in one major economy immediately reverberates through all others, meaning that a conqueror who ruins a conquered nation simultaneously ruins himself. Second, when a territory is annexed, its population is annexed along with it. The inhabitants remain the actual owners of the wealth within that territory. Germany's annexation of Alsace-Lorraine yielded not a pfennig to ordinary German citizens, because the annexed population continued to own its own property and paid taxes on the same per capita basis as other German states. The apparent acquisition of wealth through conquest is an optical illusion produced by counting the multiplication of territorial extent while forgetting to divide by the corresponding multiplication of population and obligations. Third, trade cannot be captured or destroyed by military means. Commerce depends on the productive capacity, industrial skill, accumulated expertise, and market relationships of a people, none of which can be transferred by force. Switzerland, possessing no military power whatsoever, successfully competes with and often defeats Britain in British colonial markets. Norwegian shipping, unsupported by any significant navy, rivals British shipping in relative scale. The factors that actually determine commercial success, such as efficiency, adaptability, price, and quality, have no connection with Dreadnoughts or army corps. Fourth, the prosperity and security of small nations refutes the entire thesis of military power as the foundation of economic wellbeing. Belgium, Holland, Switzerland, Denmark, Sweden, and Norway, possessing negligible military forces and exercising no weight in the councils of Europe, enjoy standards of living, savings rates, and credit ratings equal to or exceeding those of the great military powers. Belgian government bonds trade at 96 while German bonds trade at 82. Norwegian securities yield less because they are considered safer. The financiers of Europe, guided purely by calculations of profit and security rather than political theory, consistently rate the obligations of undefended small states as more secure than those of heavily armed great powers. This market judgment constitutes a practical daily refutation of the claim that military power protects wealth. Fifth, the British colonial empire illustrates that political possession of territory yields no exploitable economic advantage. Britain does not own its self-governing dominions in any meaningful sense. Canada, Australia, New Zealand, and South Africa set their own tariffs, control their own foreign relations, and are under no obligation to support Britain militarily. They exclude British subjects from entry, erect tariff barriers against British goods, and must be treated by Britain with more deference than Britain would show to foreign nations, since force cannot be applied to them. Britain emerged from the Boer War having spent enormous treasure to conquer territories it then found itself unable to govern on its own terms. A hypothetical German conquest of the British Empire would produce identical results, as colonial history universally demonstrates that the only viable relationship between a mother country and developed colonial communities is one of free cooperation on terms set by the colonies themselves. The study then addresses the broader historical record. The Franco-Prussian War indemnity, commonly cited as proof that war can be made to pay, is examined in detail. The evidence shows that the receipt of the French indemnity produced a speculative boom and catastrophic financial crisis in Germany, that prices rose and German export competitiveness fell, that emigration surged, that socialism expanded dramatically, and that within a decade France was financially stronger than the victor. Bismarck himself acknowledged before the Reichstag that Germany was in worse economic condition than vanquished France. The nominal value of the indemnity was more than offset by the costs of military preparation, the subsequent obligation to maintain enlarged armies against a war of retribution, and the general distortion of European economic life that the war and its consequences imposed on all parties, including Germany. The later sections address the argument that war persists not from economic miscalculation but from moral, psychological, and biological imperatives. The author engages seriously with the claims of military philosophers, evolutionary theorists, and statesmen who argue that war disciplines nations, expresses the struggle for survival, builds national character, and reflects impulses too deep in human nature to be removed by rational argument. He contends that the biological analogy is misapplied, that man's struggle is fundamentally with nature rather than with other men, and that the historical record shows a progressive shift away from physical force as the mechanism of human cooperation and social organization. The work concludes by examining how Germany actually expands in practice, not through colonial conquest but through trade, investment, and the exploitation of markets in countries it has never attempted to own. More Germans live productively in the United States than British subjects in all the self-governing dominions combined. German industry penetrates British colonial markets more effectively than British industry does. The real colonies that feed Germany's growing population are Brazil, Argentina, the United States, Russia, and Britain itself, all countries toward which Germany has no political claims. The enormous diplomatic and military effort devoted to competing over equatorial territories whose entire trade would not justify the maintenance of a single battleship represents a colossal misdirection of national energy, driven entirely by political imagery inherited from conditions that no longer exist.

By Norman Angell · First published 1913 · Genre: Political Philosophy, Economics, International Relations · 18 chapters · 101,473 words

First lines

Where can the Anglo-German rivalry of armaments end? -- Why peace advocacy fails -- Why it deserves to fail -- The attitude of the peace advocate -- The presumption that the prosperity of nations depends upon their political power, and consequent necessity of protection against aggression of other nations who would diminish our power to their advantage -- These the universal axioms of international politics.

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international relations · pacifism · war and peace · economic interdependence · political science · pre-World War I · anti-militarism · globalization · diplomacy · European politics · imperialism · nationalism

Contents

More by Norman Angell