Richard Hamilton

The Origins of World War I

The dominant rationale of the business elites differs considerably from that of the dynasts or the party leaders. Putting profits ahead of national power or prestige and ahead of party advantage, they seek steady economic growth, extending their activities to wherever it appears to be to their advantage. That means they could manufacture, trade, or invest across borders. Other things equal, for them questions of power and prestige would be matters of indifference. Those 'other things,' however, are never equal, and where those 'larger' national issues come into play, most businessmen would be concerned. Both war and the rumors thereof would threaten their foreign activities, reducing profits or, in the extreme case, bringing confiscation of holdings. Increased arms expenditures in peacetime, moreover, would pose some threat to profits in that someone has to pay the costs. Tax increases are usually a source of domestic unrest. Those added taxes might be charged to the businessmen themselves. If charged to others, however, to the middle classes, workers, and/or farmers, higher taxes would mean a reduction of aggregate purchasing power that in turn would mean, for most businesses, reduced profits. The manufacturers of guns and ammunition might increase their profits, but other firms and the vast majority of businessmen would be among the losers.

Three coteries have been delineated to this point—the dynasts, party leaders, and business leaders—each operating with markedly different assumptions. Those operating assumptions have been given various names, mindsets, mentalites, or Weltanschauungen. In each instance, we are dealing with a logic or rationale. Some theoretical discussions, unfortunately, limit consideration of such questions by use of the singular, as if a given logic were the unique, patently obvious option. But here we see diverse rationales, each appearing plausible (or logical) to their bearers. Thus, rather than imposing or reading in an 'obvious' logic, the tasks for the analyst are to discover the rationales being used and to indicate the circumstances making them plausible.

The dynastic coterie—the monarch, ministers, and military—gives precedence to a distinctive conception of the national interest. This group's concern is with the nation's historic territory, with its defense and, perhaps, its extension. Its policies seek, in one way or another, to demonstrate that nation's prestige and power. In the view of this coterie, a threatening or competing 'upstart' must be 'put down.' Austria-Hungary's leaders in July 1914 provide the key example: It was obvious to them that Serbia must be 'taught a lesson.' Similar orientations were seen in the efforts of German and Russian decision-making coteries, who also recognized the urgent 'need' for the defense of the threatened empire.

There are some obvious correlates of this mindset. The dynasts give strong emphasis to autarchy; a proper defense of the territory requires self-sufficiency. Theirs, accordingly, is essentially a fortress mentality. They, understandably, give considerable emphasis to the military, viewing war (or the threat thereof) as proper and legitimate means for achieving their goals. The dynastic decision makers, civilian and military, see the nation's economy as serving the requirements of those higher goals of power and prestige. Their preferred design for the economy emphasizes autarchy as opposed to free trade and interdependence; the economy should provide ample and secure funding for the needs of the fortress. They would, at best, advocate a 'national liberalism,' as did Friedrich List, rather than the free trade and world markets commended by Adam Smith.