Be Careful What You Wish For:

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1 Be Careful What You Wish For: Gambling on War and Economics In an Age of Catastrophe Roger L Ransom Professor of History and Economics, Emeritus, University of California, Riverside

2 An Age of Catastrophes On July 28, 1914 A Serbian Nationalist Assassinated The Crown Prince of The Austrian Hungarian Empire A Month of Frantic Diplomatic Efforts Failed To resolve the Crisis By the First week in August Austria, Russia, Germany, France, and Great Britain Were All Engaged In Major European War

3 An Age of Catastrophes The War to End All Wars Was the followed by A Global Depression and Another World War Historians have termed the period An Age of Catastrophes

4 European Wars, An Age of Catastrophes European Wars,

5 An Age of Catastrophes European Wars,

6 An Age of Catastrophes European Wars,

7

8

9 Be Careful What You Wish For The Fruits of Victory May Not Be What You Expect Wars Tend to Create New Problems Without Resolving Old Problems Wars are Very Expensive Memory On Both Sides Makes Keeping the Peace Difficult

10 Explaining The Puzzle of World War I World War I Was Not an Accident or Random Event! Politicians and Generals Made Conscious Decisions That War Was The Best Strategy to Deal With The Crisis of 1914 These Decisions Were Made: Under Pressure to Do Something Right Away In Response to Rapidly Changing Conditions With Imperfect Information and Exaggerated Emotions Without Really Knowing What They Were Getting Into

11 Explaining The Puzzle of World War I World War I Was An Economic War as Well as a Military War The Demand for War Needs Dominated the Economy There Was Shortage of Labor There Was Shortage of Food International Trade Collapsed War expenditures as a Percent of Gross National Product

12 How Did They Pay For the War? The Inflation Tax! Explaining The Puzzle of World War I Inflation Is An Index of Dislocation Caused By The War In France and Britain Prices Doubled German Prices Rose by a Factor of Four Russia and Austria had Hyperinflation

13 Explaining The Puzzle of World War I Wars Involve a Gamble With a High Level of Risk and Uncertainty What Encouraged Leaders to Gamble In 1914? Germany and Austria Felt Threatened by Russian Expansion More Likely To Gamble On All In Strategies Germany Had A Plan for War More Likely to Choose War as Policy The Kaiser Saw the 1914 Crisis as an Opportunity to Defeat BOTH France and Russia With A Two Front War that Germany Could WIN!

14 The Schlieffen Plan Alfred von Schlieffen was Chief of the German General Staff from 1891 to /3 of the German Army will be on the Right Wing 2/3 of the German Army will be on the Right Wing His Plan called for the Germans to Invade France and Then Russia Schlieffen Was Replaced by Helmut von Moltke Who Was NOT a Gambler Right Wing Swings West of PARIS French Army will be trapped EAS`T pf PARIS

15 Schlieffen s Gamble: The Road to War July 28: Austria Declares War Against Serbia Russia Prepares to Mobilize Their Troops July 29 31: The Kaiser and Tsar Nicholas of Russia Exchange Telegrams In an Unsuccessful Effort To Avoid a War Between Russia and Germany August 1: Germany Declares War on Russia France Begins to Mobilize their Troops August 3: Germany Declares War on France German Troops invade Belgium August 4: Britain Declares War on Germany

16 Things Don t Go According to The Plan Schlieffen s Gamble Fails The Battle of the Marne Ends the German Advance The Western Front Becomes A Stalemate Its time to Recalculate! BEF and French 6 th Army Attack Von Kluck French 5 th and 9 th Armies attack Kluck and Bulow

17 Be Careful What You Wish For What Were the Leaders Wishing For in ? VICTORY! The Pursuit Of Victory Becomes an End In Itself Keep Fighting Keep Gambling Don t LOSE this War!

18 Keep on Gambling The Germans Expected to Win the War And Schlieffen's Plan Came Close But Not Close Enough The Allies Managed to Check the German Advance But the Germans Now Controlled All of Belgium and Part of France Neither Side Was in a Position to WIN The WAR Both Sides Struggled to NOT LOSE THE WAR

19 Keep on Gambling Major Gambles Include: 1915: German Offensives Against Ypres [Eric von Falkenhayn] Gallipoli Offensive [Winston Churchill] 1916: Battle on the Somme [Douglas Haig] Verdun [Eric von Falkenhayn] 1917: Passchendaele [Douglas Haig] Nivelle Offensives [Robert Nivelle] Brusilov Offensives [Alexsie Brusilov] German Offensives Against Russia [Eric von Ludendorff] 1918: German Offensives Against Allies [Eric von Ludendorff] Final Allied Offensives [Ferdinand Foch] Every Battle is a Gamble Note That All of These Gambles are Battles That Were the Idea Of a Particular General

20 The Aftermath of World War I One of the Most Obvious Lessons of World War I Was the Importance of Economics The Central Powers Lost the WAR Because Their Economies CouldSupport Their War Effort Military Strategy Was Now Linked to Economic Reality All of The Major Powers Took Steps to Make Sure The Next Time Would Be Different Everyone Became Engaged in a New Arms Race

21 Great Disappointments No One Was Very Happy With The Outcome of World War I The German Empire The Austria-Hungarian Empire The Russian Empire The Ottoman Empire Were All Replaced by New Nation States The Allies Were Exhausted And in to Position to Enforce the Treaty of Versalles Germany Was Convinced It Should Have Won The War

22 Follow The Leaders A Final Point to Note In Our Quest For The Causes Of Wars Is the Tendency of People to Accept The Judgment of A Relatively Small Group of Leaders Almost All of the Decisions We Have Discussed Were Proposed and Enacted By a Few Politicians and Generals At The Top of the Command Structure That may be the most significant reason WARS ARE SO HARD TO PREDICT!

23 Is War Worth The Gamble? The Twentieth Century has seen several instances of first strike gambles to win a war In Gambling on War I examine two other military gambles that resulted in major wars: Operation Barbarossa: The German invasion of the Soviet Union in June 1942 Pearl Harbor: The Japanese Attack against the United States in December 1942

24 Is War Worth The Gamble? All of these episodes involved an element of desperation which made a gamble on war seem worthwhile The key to their plan was a first strike that would annihilate the enemy s military capabilities They almost succeeded! When they failed to achieve their initial objective they kept on gambling

25 Coming This Summer: At your local book store

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