Fighting the Forces of Gravity - Seapower and Maritime Trade between the 18th and 20th Centuries

Abstract

Do conflicts among naval powers hurt international trade? In theory the commercially relevant aspects of aggressive naval power can either thwart trade (through blockades, embargoes, commerce raiding, and guerre de course strategies) or facilitate trade (through control of trade routes and protection of shipping). Thus the question must be empirically addressed. Using a panel gravity model, we investigate the interactions of war, naval power and merchant trade from the 18th to mid-20th centuries. Whether looking at English trade during the 18th century, or at a wide range of trading partners during the 19th and 20th centuries, wars involving naval powers considerably limit inter-state commerce. Further, we split this effect on trade between an extensive effect (the effect on a country's trade when fighting a naval power) and an intensive effect (the effect of that power gaining more naval strength). We conclude that the intensive effect is a powerful one - that is, naval strength has historically been a destroyer of trade when mobilized to combat.