Capitalism and War: Are They Linked?
Returning again to his evangelizing style of conversational encounter, earlier this week Pope Francis gave an interview with the Spanish magazine La Vanguardia (Spanish original here). Although covering a range of topics, such as Pope Pius XII’s role in the Holocaust and the possibility of his own retirement as pope, much attention has been given to another comment on the economy, in this case Francis’s linking of the global capitalist economy with war. Pope Francis states (This quotation is from the Catholic News Service story on the interview, which provides a better translation of the quote than the full text linked above):
We are in a world economic system that is not good. A system that in order to survive must make war, as great empires have always done. But since you cannot have a Third World War, you have regional wars. And what does this mean? That arms are made and sold, and in this way the idolatrous economies, the great world economies that sacrifice man at the feet of the idol of money, obviously keep their balance sheets in the black.
Like Francis’s earlier statements on the free market, both in his apostolic exhortation Evangelii Gaudium and in his more occasional comments, this statement provokes the conscience and asks us to ponder questions we might prefer to avoid: Does my own consumer lifestyle contribute to the death of others in violent conflict? Is the United States’ promotion of the free market abroad linked to its involvement in foreign wars? Also like Francis’s statements on the economy, however, what Francis’s statement gains in rhetorical power, it lacks in the careful distinctions and development needed for a full understanding of the relationship between capitalism and war. Perhaps Francis expects Catholics, duly provoked, to engage in this process of reflection, so this is my humble contribution.
A discussion of the relationship between capitalism and war can’t help but begin with the “founder” of capitalism himself, Adam Smith. Smith believed that state intervention in the market, and in particular preferential trade arrangements between nations and tariffs and quotas on foreign trade, made conflict between nations more likely. The elimination of these barriers, on the other hand, would help create more pacific relationships between nations. This connection between free trade and peace has been a recurring theme of economic liberalism ever since. Perhaps the most unfortunate advocate of this view was Norman Angell, who in his book The Great Illusion argued that the increasing economic interdependence of Europe had made war practically obsolete; his work was first published in 1909, a mere five years before the outbreak of the First World War.
Perhaps surprisingly, the most well-known critic of capitalism, Karl Marx, shared Smith’s belief that capitalism and peace between states were linked. Like Smith, Marx believed that increasing commerce would lead capitalist states to live in peace. Marx attributed the war-like behavior of the states of his own day, such as Prussia under Otto von Bismarck and France under Napoleon III, precisely to their failure to develop fully capitalist economies. Obviously, Marx believed that the conflict within capitalism, between workers and owners, was fundamental, but he did not believe that there was anything inherent within capitalism that would bring one capitalist state into conflict with another.
Interestingly, the seeds for the contrary opinion were sown within capitalist economics itself. In the nineteenth century, the minority opinion within capitalist economics was that underconsumption was a persistent feature of the capitalist economy, meaning that factories would consistently produce more than the working class could consume with their wages, leading to repeated bouts of economic stagnation. The first to link this supposed feature of capitalism with war was the economist John A. Hobson, who argued in his 1902 work Imperialism that the European powers’ pursuit of colonies, and the conflict amongst themselves over them, was the result of the pursuit of new markets for the consumption of the surplus goods produced in the home market. This idea was stolen (sorry, expropriated) and turned into a critique of capitalism by Lenin in his 1917 pamphlet Imperialism, the Highest Stage of Capitalism.
A quite different explanation of the relationship between capitalism and war that still drew on the theory of underconsumption was provided by the historian Charles A. Beard (better known for his 1913 book An Economic Interpretation of the Constitution of the United States). In his 1932 work The Devil Theory of War, Beard argued that capitalist states seek to overcome the problem of underconsumption by shifting civilian production to the production of arms, and by provoking war to provide a persistent demand for those weapons.
The problem with both ways of linking capitalism and war that draw on the theory of underconsumption is that underconsumption is not a persistent feature of capitalism. Although clearly building on underconumption theory, in his The General Theory of Employment, Interest and Money, the economist John Mayanrd Keynes showed that the other components of his new concept of aggregate demand, namely investment, government spending, and exports, can account for the consumption of products not accounted for by private consumption. Keynes agreed that a lack of private consumption could contribute to an economic downturn, but he decisively showed that this was not a necessary feature of capitalism, and therefore could not be an adequate explanation of war among capitalist states.
Despite their empirical problems, linkages of capitalism and war drawing on the theory of underconsumption had some purchase in the Catholic world. For example, in Loaves and Fishes, Dorothy Day argues that capitalists by necessity push for war because “our whole modern economy is based on preparation for war,” as the armaments industry compensates for underconsumption. Quite surprisingly, in his 1931 encyclical Quadragesimo Anno, Pope Pius XI mirrors some of Lenin’s criticisms of the link between finance capitalism, imperialism, and war. Francis appears to provide at least some echoes of these theories, claiming that capitalism is “a system that in order to survive must make war,” and that states make war to “keep their balance sheets in the black.”
Another common way of linking the capitalist economy with war is to point out the role of “war profiteering.” For example, President Franklin Roosevelt was accused by isolationists of entering the Second World War at the behest of war profiteers in the armaments industry. Similar arguments were made about the role of “Big Oil” and corporations such as Halliburton in the Iraq War. Pope Francis also hints at this theory with his criticism of the arms trade, a constant object of condemnation in papal statements on war going back at least to Pope John XXIII.
Although it is certainly the case that many industries, and in particular the arms industry, profit from war, this theory fails for one crucial reason: The number of businesses and industries that will suffer as a result of war will always far outnumber those who profit from it, through the disruption of trade, the destruction of capital, and the loss of consumers through war-related deaths. This theory provides no good explanation for why war profiteers would have more influence on government decision-making than the much larger number of businesses who will lose out as a result of war. Of course, a government might give inordinate influence to corporations that benefit from war, but precisely because they are drawn to war for other reasons.
Is there in fact a link between the capitalist economy and war? In their 2001 book Triangulating Peace, the political scientists Bruce Russett and John R. Oneal provide empirical evidence that the presence of the thick economic ties between nations fostered by global capitalism (as well as democratic governance and shared participation in multilateral institutions) greatly decreases the likelihood of war between those nations. Therefore, to an extent, Adam Smith was right. Worldwide, the incidence of war and the number of war casualties has declined over the past few decades, precisely during the time of U.S. liberal political and economic hegemony. This decline can partly be explained by the commercial peace described by Russett and Oneal, although other factors certainly play a role, as well.
So is Pope Francis simply wrong about the link between the capitalist economy and war? Not so fast. First, note that what Russett and Oneal have found is relative peace between states already deeply embedded in the capitalist economy; this says very little about how prone a capitalist nation is to go to war with a non-capitalist one. Political scientists have found that while democracies tend to live in peace with one another, democracies can in fact go to war with their non-democratic neighbors, and wage war more vehemently, than non-democracies; perhaps something similar is true of capitalism. More importantly, although the United States has created a relative zone of peace under its liberal hegemony, history shows that the United States has not hesitated to use force to create and maintain that hegemony. Particularly during the Cold War, the United States fomented or became involved in conflicts throughout Latin America, Africa, and Asia against nations or movements that challenged the liberal capitalist order. The roll call is familiar: Argentina, Nicaragua, El Salvador, Congo, Angola, Mozambique, Nigeria, Vietnam, and more.
Admittedly, conflicts such as these have been far less common in the post-Cold War world. Many recent conflicts have centered on failed or weak states, either as part of the War on Terror (Afghanistan, Yemen, Somalia) or in various civil wars in Africa (Burundi, Congo, Côte d’Ivoire, Liberia, Central African Republic, etc.). In at least some of these cases, the governments of these nations have been weakened through U.S. and Western support of governments who have guaranteed access to important raw materials, rather than more broadly-based movements, or by International Monetary Fund policies that weakened governments in the fruitless attempt to pay back massive foreign debts. Pope Francis suggests that, even apart from direct U.S. involvement in these conflicts, our neglect of these conflicts itself reflects aspects of a capitalist mindset: profiting off the conflict through the sale of arms while neglecting the people themselves as having little value as consumers or producers.
While it is worth noting that Francis is on solid ground in linking capitalism with war in recent decades, it is also important to note that for Francis this linkage with war is not unique to capitalism. After all, what he ascribes to capitalism is what “great empires have always done.” Likewise, it would be a mistake to attribute to Francis a reductionist explanation linking the capitalist economy to war, such as the theories outlined above, despite the traces of these theories in his comments. As I have suggested elsewhere, Pope Francis, like his predecessors, believes that the economy is ultimately grounded in culture, and his brief comments here linking the economy and war reinforce this point. His comments on war are part of a broader commentary on his consistent theme of the “throwaway culture,” which Francis has in the past linked with the issues of consumerism, immigration, and abortion, as well. I think what Francis is getting at is similar to Pope John Paul II’s criticism of the neocolonialism of the capitalist world (and the communist East) in his 1987 encyclical Sollicitudo Rei Socialis, linking the exploitation of the developing world with the “super-development” and consumerism of the developed capitalist nations (##21-22, 28). Precisely because capitalism, as an economic mindset, leads us to value “having” over “being,” we tend to value people based on how they can contribute to our own having rather than on their very being as persons, and in which poorer nations “become parts of a machine, cogs on a gigantic wheel.”
Although in need of further development in light of the historical record, Pope Francis’s comments linking the capitalist economy and war challenge us to consider the relationship between our economic mindset and behavior and the conflicts we see nightly on the news, or perhaps even more so, those we don’t.