A Brief Summary of Role of Economy Prior to war

1. A Brief Summary of the Role of Economies Prior to War
Although economy often plays a role in war, it is almost always in combination with
politics. As, Globalization exists today developed when sovereign states were founded,
with clearly demarcated boarders and central authorities exercising national control.
During the mid-18th Century to half of the nineteenth century, the modern world arose
from the Industrial Revolution which began in Great Britain. The development of trade
and the rise of business were among the major causes of the Industrial Revolution
Because of this process, most of people of the nations were increasingly employed in
factories and mines, where technological inventions could be best applied.
Industrialization spread to, amongst others, Germany, Italy, Japan, USA, and Russia.
Other remaining countries relatively little industrialization but primarily they supplied
scarce resource to the industrialized countries. Thus, all the wars in previous years
were all about scarce resources. Most of the powerful and rich countries always want
to control the scarce resources in order to remain civilized and developed countries.
The following paragraphs are a non-exhaustive list of examples to illustrate the roles
that economies have played in development of war. In every case, however, politics
was a factor too.
Germany, Economic Events Leading to World War II
Following Germany’s loss of World War I, it was compelled, under the 1919 Treaty of
Versailles, to pay war reparations of $33 billion to the victorious allies. The amount and
terms of the debt were modified under the Dawes Plan of 1924, and the Young Plan of
1930, but the principle of war debt to cover civilian losses remained. Unlike the
majority of World War I combatants, Germany had neither raised taxes to pay for the
war, nor introduced new taxes. The lack of tax planning left the country with enormous
debts. When combined with war reparations, Germany suffered from crippling
hyperinflation in the 1920s. Furthermore, Germans felt deeply insulted, as a nation, by
the ignominy of war reparations. The troubled economy and the prevailing sense of
national insult led to the rise of the National Socialist Party, whose leader, Adolf Hitler,
attained the position of Chancellor of Germany in 1933.
Japan, Economic Events Leading to World War II
The Land of the Rising Sun was home to an infallible emperor and an ambitious army,
whose fanatical generals looked upon south-east Asia with a traditional Samurai
viewpoint regarding war and territorial gain. Japan itself was, and remains, resource
poor. Following the Sino-Japanese War of 1894, the Chinese appeased the Japanese by

2. agreement to cede Taiwan to Japan in 1895. Control of Taiwan enabled Japan to
oversee the island’s valuable copper and gold resources. The Shuinandong Smelter
Plant, also known as 13 Levels, in northern Taiwan, is a classic example of a natural
resources grab, and was even significantly staffed by enslaved prisoners of war during
World War II.
Iraq, Economic Events Leading to the 1990 Invasion of Kuwait
In 1990, Iraqi dictator Saddam Hussein sent his army across the southern border into
the tiny, but oil rich, country of Kuwait. The political excuse was that Kuwait had
historically been a part of the same Ottoman Empire as Iraq, and that the non-ratified
border between Iraq and Kuwait was an arbitrary decision by the British Empire at the
Anglo-Ottoman Convention of 1913. Realistically, there were 2 economic goals. Most
obviously, Iraq sought control of Kuwaiti oil reserves. Secondarily, Saddam sought to
cancel debt by conquest. Iraq had become indebted to Kuwait, whose money had
financed the 1980-88 Iraq-Iran War. Ultimately, however, this annexation proved to be
a costly mistake when the United Kingdom and United States used military force to
liberate Kuwait. This was the Gulf War of 1991.