Nicolas J.T. MULDER (Columbia University): The Rise of the Economic Weapon: A History of Economic Sanctions, 1914-1927

Contribution to the Summer university “Cultures an knowledge of economy (18th-20th c.)” at the GHI Paris, June 21-24, 2016.

My research project, ‘The Rise of the Economic Weapon: A History of Economic Sanctions, 1914-1945’, is a historical study of the origins of economic sanctions and their development in the early twentieth century as an international enforcement and pressure instrument. Why was the ‘economic weapon’ (or arme économique, as it was known at the time) so eagerly embraced by the victors of the First World War as an effective and appealing substitute to war, and how did they go about making this idea a reality? These are the central questions that my dissertation investigates.

My research shows how the construction of the ‘economic weapon’ was about much more than merely creating a new policy instrument for statesmen and diplomats. Crucially, it was bound up with new ways of using state power to control economy and society. In my presentation I will focus on the crucial early history of sanctions between 1914 and 1927. During the First World War, Britain and France developed a complex administrative machinery in which foreign ministries, blockaders and military staff cooperated to intervene in global networks of goods, shipping, raw materials, energy, money and communication. This wartime experience and expertise animated the advocates of sanctions, men such as Robert Cecil, Arthur Salter, Jan Smuts, Léon Bourgeois, Jacques Seydoux and Jean Goût. However, a number of rival conceptions of the economic weapon emerged after the Versailles Treaty was signed.

My presentation then sets out the emergence of two of these competing models in the postwar years; on the one hand, a British ‘comprehensive blockade’ version based on deterrence; on the other, a French ‘pacific-disciplinary’ form with automatic and general implementation. These models about economic sanctions developed in a process of contestation between Britain, France, neutral countries, the United States, Germany, Italy and the Soviet Union. I also examine the conditions of possibility of sanctions, in particular the ‘blockade knowledge’ – a mix of intelligence, administrative data and statistics – that enabled the international use of the economic weapon.

Altogether, I will explore why economic sanctions proved both very promising and highly troublesome during the interwar period. The main reason is that sanctions occupied the boundary between law and grand strategy. Even though they were intended as an instrument of peace, they were always in danger of lapsing into a fearsome form of economic warfare, involving government interdiction in markets, state control over infrastructure, maritime blockade, administrative embargoes, financial controls, and even outright military occupation — like in the Ruhr crisis of 1923. Moreover, sanctions were disputed by domestic actors, from business interests to the general public. The struggle over their form and conditions of use was also a collision of different social visions: between a classical liberal homo economicus and a social-liberal solidarisme, and between a strategy of overwhelming force that targeted civilians and a narrow juristic logic of policing and punishment applied to governments. These debates have particular resonance today, as the use of sanctions has grown enormously since the 1970s.

Nicolas J.T. Mulder is a PhD student at Columbia University specialised in modern European economic and political history. He studied history, economics and philosophy at University College Utrecht, where he received his BA in 2012. In 2013, he obtained a Master of Philosophy from the University of Cambridge.