World Economic Expansion and National Security in Pre–World War I Europe

Abstract

Profound and rapid changes in the costs and risks of international trade are now widely acknowledged to be a potent source of domestic political conflict. By altering the relative prices of goods available from world markets, these changes alter the rewards that flow to different factors of production from different economic activities. These distributional consequences of changing levels of trade, in turn, alter the configuration of interests in the domestic political economy, strain existing political alignments, and enable the construction of new political coalitions. Thus, global changes in the economy, such as the transportation and telecommunications revolutions in the nineteenth and mid-twentieth centuries or the collapse of international trade and finance during the interwar years, will have global consequences as they reverberate within and through the domestic politics of all countries that trade on world markets.