The China of Europe: Wilhelminian Germany and the Economic War

(To Filippo Del Monte)
17/12/21

(Article inspired by "The German Empire and economic warfare"Published in Pandora Magazine) In the globalized world, in interconnected markets, with the removal of all political-geographical and customs barriers, States - and in particular those that have or aspire to have an "imperial projection" - identify in economic war a fundamental tool for pursue its strategic objectives. A striking case of power devoted to economic warfare is the People's Republic of China which over the last twenty years has effectively dominated world markets by massively introducing products ranging from steel tohi-tech up to objects for the home and clothing. Not to mention the control of the extractive deposits of rare stones, essential for the construction of the components of smartphones and other electronic instruments (v.articolo).

In recent history, another power with an imperial vocation, ambitious and with the economic and military apparatus adequate to withstand the impact of its competitors, has used economic warfare to strengthen its position in the world: the German Empire of William II between 1896 and 1914. The historical-political and economic context within which the Empire Wilhelminus attempted the assault on world power was that of the age of imperialism (1870-1914), coinciding with the "second globalization", and therefore with an unprecedented opening of the markets and the possibilities it offers.

If the Realpolitik by Chancellor Otto von Bismarck (1871-1890) had laid the foundations to make Germany the hegemonic power in Europe, the center of gravity of continental diplomacy, a nation capable of "giving the cards" to the other players on the geopolitical table, especially after the collapse of France in the war of 1870-1871 against Prussia and the other German principalities, it was the expansionist swerve desired by the young emperor Wilhelm II that made Berlin a world economic power.

On the occasion of the 25th anniversary of the proclamation of the German empire, on January 18, 1896, William II gave a speech in which, taking stock of a twenty-five year period of foreign and economic policy of the Reich, as well as developing the themes of what would later become there Weltpolitik, declared: "The German Empire has become a world empire. Everywhere in the most distant regions of the globe live millions of our compatriots. German products, German science, German entrepreneurial spirit cross the oceans. Germany transports over the seas [...] "1.

Therefore, Germany was preparing in the last years of the 800th century to adopt that “reactive nationalism” which would have been the strategic-ideological pivot of its international action until the outbreak of the First World War. The main postulate of "reactive nationalism" - a definition coined by former Lyndon Johnson National Security Advisor Walt Whitman Rostow - is the close link that is created between a state's power politics and its industrialization process with two factors that feed each other2.

Geopolitical revisionism - supported by a formidable military apparatus - was accompanied in Germany by an aggressive commercial policy on foreign markets, not only in the "new" ones in Asia, Africa and South America, but also in those already consolidated (and with certain balances ) Europeans. A striking example of this was the policy of active support of the Berlin government for the initiatives of German entrepreneurs - and in this the public-private partnership became the basis of German investments abroad - in Europe through the commercial treaties stipulated between 1891 and 1894 with Austria-Hungary, Italy3, Belgium, Spain, Serbia, Switzerland and Russia which allowed Germany to become the leading exporting power of products in those countries many times over.

The commercial aggression, linked to the obligation of massive exports, had been determined by the crisis of internal overproduction unleashed in Germany starting from 1888 due to an industrial take-off not supported by high domestic consumption demand. The criticalities of the commercial situation of the German Empire were represented by the fact that 45% of imports were composed of raw materials and semi-finished products and that these raw materials included food imports which went from 28% in 1888 to 34% in 1896, as domestic production was not sufficient to cover the needs of the German population. On the contrary, the finished products were too many to be disposed of on the domestic market and the government was forced to sponsor an expansive policy on the international market. The deficit of the national trade balance of 1896 needed to be written off urgently and it was for this reason that the Germans began to "gnaw" market shares from rival powers, in particular Great Britain and France, thanks to their own overproduction which from an economic-commercial deficit became an instrument assertiveness4.

The change of pace of Germany in international trade policy is well represented by the "overtaking" made by Hamburg against Liverpool as the first world port for the quantity of incoming and outgoing goods which greatly worried the British Empire. As the French economic warfare scholar Ali Laïdi pointed out5, the episode determined the perception that the English market was literally flooded with products Made in Germany imported and then sold at significantly more competitive prices than in the UK.

Even the attempts by competing states to limit the German presence on their internal markets, for example through the increase in customs tariffs, did not have the desired effects, on the contrary they provided a further opportunity for the entrepreneurs of the Empire to exploit the inherent weaknesses of those systems. When France dramatically increased customs tariffs for German imports in 1892, industrialists from across the Rhine acquired French companies or established subsidiaries directly in the neighboring area. In the following years large sections of the French market were conquered, just think that the sales of German goods increased from 161 million francs in 1898 (i.e. at the beginning of commercial penetration in France) to 571 in 1913 and that about 17.000 hectares of mineral deposits, equal to 1/5 of the total on French territory, they were owned by German investors either directly or through purchased French companies. Not only did Germany become the third overall supplier to France, but it also succeeded in ousting it from second place among the European industrial powers by threatening British leadership.

Within a few years the trade balance between France and Germany was on the latter's side; and Paris did not succeed despite the tightening of the administrative measures and customs duties of 1892, to settle the situation until the First World War.

The aggressiveness of private entrepreneurship on foreign markets was directly sponsored by the German government which had established a series of bodies, departments and founded public-private companies devoted to economic propaganda and industrial espionage on the example of what has been achieved since the early years 80s of the XNUMXth century by the Association of Textile, Metallurgy and Chemistry Industrialists of Saxony-Thuringia, a regional trade union of industrialists with an international vocation and which brought together companies active in the main sectors of the market in which the Berlin government had interests direct. The aim of the Berlin executive and German industry - in one of the best historically successful examples of concordance of interests between the state and private individuals - was to learn about the technologies, production methods and financial systems of rival states, as well as to provide entrepreneurs with the most accurate economic information was preparing to open new markets for Germany outside its borders.

The German spy-propaganda system was also "copied" by the French with the founding ofOffice national du commerce extérieur (ONCE) in 18986. In addition, from Paris it was decided to carry out anti-dumping policies towards German goods, both those coming directly from Germany and those produced by French companies with German capital.

It is still Ali Laïdi who explains that the German system was based on the coordination between the commercial, industrial and financial apparatus that could easily receive long-term credit. The German strength lay in the ability of the economic actors to act collectively in a spirit of solidarity, thus allowing a continuous transfer of knowledge and information obtained thanks to a well-organized espionage network.

One of the most important and modern military thinkers of Wilhelminian Germany, the Prussian general Friedrich von Bernhardi (in the opening photo, left), was among the first to think of "economic warfare" as an instrument capable of deeply damaging a state. enemy even in times of peace, sanctioning, in a sort of overturning of the Clausewitzian postulate, that politics was the continuation of the war by other means.

In 1911 the Prussian general published his main work: "Deutschland und der Nächste Krieg"7 (Germany in the next war), the one that made him known as one of the precursors of the "Spirit of 1914" and of the convinced supporters of the inevitability of the war against France and Great Britain. He wrote: "On a territory roughly equal to that of France, Germany is home to 65 million inhabitants, while 40 million live in France. This enormous Germanic population is increasing by one million a year. Soon it will be impossible for agriculture and agriculture. industry of the mother country to ensure profitable occupations to this ever-growing mass of men. We therefore have the need to extend our colonial rule, not being able to admit that German emigration will increase the population of our rivals. Now, given the distribution. current land policy, we can only acquire territories at the expense of other states, through war or agreements ".

In short, Friedrich von Bernhardi was above all concerned about the difficulties that Germany had in absorbing the growing demographic weight and industrial overproduction within its borders. For von Bernhardi the opening of new markets was a priority and the demographic emergency was an urgent problem to be solved, not necessarily militarily but in any case with muscular politics because, as he himself had written, the European war was essentially inevitable and almost necessary.

Su Geopolitica.info An article was published emblematically entitled "China and its naval strategy: a new Wilhelminian Germany?" (v.articolo) which compares the political-military strategic choices of the Chinese Navy and the Flottengesetze (the German naval laws of 1898, 1900, 1906, 1908 and 1912). If one leaves the "conventional" military field to enter that of contemporary total wars and compares the commercial policies of the German Empire and the People's Republic of China, once again there are considerable similarities. The Chinese dragon and the Prussian eagle are similar animals.

History teaches that the powers that adopt trade policies attributable to the "economic war" - moreover obvious as in the case of the Chinese - have revisionist temptations of a strongly assertive nature and therefore linked to hegemonic ambitions.

There is a border that once crossed transforms a commercially competing state into a politico-military enemy. It remains to be seen whether China has already crossed this border, as Germany did at the end of the 800th century or is ready to do so in the short term.

1 R. Poidevin, The Allemagne et le monde au XXe siècle, Masson, Paris, 1983, p. 13

2 WW Rostow, The World Economy: History and prospect, Austin & London Texas University Press, Austin, 1978

3 On the presence of German capital in the Italian economy between the end of the 800th century and the beginning of the 900th century see RA Webster, Italian industrial imperialism. Pre-Fascism Study (1907-1915), Einaudi, Rome, 1975

4 M. Kitchen, The political economy of Germany 1815-1914, Taylor & Francis Ltd, New York, 2019 (ed.or. 1978)

5 A. Laïdi, World history of the economic wars, Perrin, Paris, 2016

6 F. Segner, La création de l'Office national du commerce extérieur (1883-1898): maîtrise de l'Information compétitive internationale et stratégie française de puissance, Lille Thèses, Lille, 2015

7 F. Von Bernhardi, Deutschland und der Nächste Krieg, JG Cotta, Berlin, 1911

Photo: web / Ministry of National Defense of the People's Republic of China / Xinhua