Desperate Measures: The Effects of Economic Isolation on Warring Powers

Abstract

Does a state’s access to the international economy affect its strategy to prevail in war? This question bears on some of the most important international challenges facing the United States. North Korea maintains a national ideology of self-sufficiency and does its best to isolate itself from the world. China fears the U.S. Navy could block the Strait of Malacca and disrupt its supply of oil. Some U.S. strategists see such a plan as an alternative to an “AirSea Battle.” Japan fears China could use its reclaimed islands in the South China Sea similarly. The United States has justified tariffs on steel and aluminum on national security grounds. Surprisingly, the traditional scholarly answer is no: industrial economies are sufficiently robust and economic isolation is sufficiently difficult that states facing economic isolation can easily adapt except in extraordinary circumstances. This paper challenges that claim. While economic isolation alone may not lead directly to defeat, it places or removes important constraints on a power’s strategic decision making. Economically isolated powers pursue riskier strategies, often launching attacks that expand the conflict. These broader conflicts often end in defeat. When powers have access to outside economic support, they have more strategic options, easing the challenges their armies face. This effect holds regardless of a state’s pre-war level of economic integration. This article reviews the principal arguments about pre-war economic integration and security and economic isolation in war. It then develops of theory of how economic isolation induces risky decision making. It briefly discusses case selection before exploring three critical cases in which great powers underwent different combinations of pre-war economic integration and war-time economic access: Germany in the First World War; Germany in the Second World War; and Russia in the Second World War. It concludes with a discussion of the implications of its analysis.