Economic warfare

Economic warfare, also known as “white war,” refers to the strategies and tactics nations employ to weaken the economic base of an adversary’s power to coerce change in national policy. The purpose of economic warfare is to eliminate or reduce the enemy’s war-making ability by blocking or even just threatening to block access to allies, arms, financial assets, food, markets, and raw materials.

The weapons of such warfare include blacklisting, blockades, boycotts, embargoes, quotas, sanctions, and sieges. The term “boycott” was coined in 1880 in connection with Captain Charles Boycott, an English estate manager in Mayo, Ireland, whose ruthless rent-collection policies so enraged his impoverished Irish tenants that they refused to harvest his crops. The boycott thus became a means and symbol for expressing disapproval or economic coercion by refusing to buy, sell, or use certain goods.

Economic warfare can be fought alone, in which case the actions are called sanctions, or in concert with military action. As a means of exerting influence, sanctions are often more effective and powerful than diplomatic mediation and are below the threshold of military intervention. The test of whether an economic war is effective is whether the adversary bends to the will of the other government. Economic warfare often has limited utility in achieving foreign policy goals that are dependent on compelling the target country to take actions it stoutly resists. Sanctions such as those imposed on South Africa (1948–1994) for its policy of apartheid are essentially symbolic. They are designed to demonstrate to the people at home, the enemy, and to the world at large that action is being taken to correct perceived wrongs. Sanctions are often imposed to avoid the appearance of impotence. Economic warfare works best when waged in concert with credible military force.

History

Sieges, dating to ancient times, are perhaps the oldest form of total warfare. Invading armies tried to defeat their enemies in a city by starving the army into submission. With the exhaustion of food and drinkable water, defense of a walled city became virtually impossible and surrender the only option. A frequent by-product of sieges has been the starvation of soldiers as well as civilians, often called “useless mouths,” a reference to the children and old men and women in the stronghold.

In 432 b.c.e., the Athenian statesman and general Pericles imposed a decree that barred Megara, a member of the Peloponnesian League, from trading with the Athenian Empire. The sanctions eventually led to the Peloponnesian Wars (460–404 b.c.e.) fought between Athens and Sparta, an ally of Megara. Sparta and its allies blockaded and then defeated Athens.

Large-scale economic warfare was first used during the Napoleonic Wars (1803–1815). France and England repeatedly stopped and searched neutral ships on the high seas, which provoked countries such as the United States to take military action to protect their own shipping. During the American Civil War (1861–1865), President Abraham Lincoln blockaded Confederate ports to deny the South access to foreign goods.

Twentieth Century Wars

Beginning in World War I (1914–1918) economic warfare has been fought on a grander scale. Germany was willing to start a war in 1914 because it believed Britain was shutting it out of the oil-rich Middle East and resource-rich Africa. In addition, the French were threatening Germany’s access to iron ore. German leaders were concerned that without geographical expansion, Germany’s independence, prosperity, and survival would be in jeopardy. The British successfully negotiated with neutral nations so they would not trade with Germany. Germany countered the blockade with submarine attacks on merchant shipping. Many historians believe the blockade played a significant role in Germany’s defeat.

During World War I, sieges stretched across continents, with whole armies laying siege to each other from within vast networks of trenches. The advent of tanks and armored personnel carriers later diminished the number of sieges. From 1920 to 1946, the League of Nations relied on economic sanctions to deter or repel aggression by isolating aggressor nations to promote peace and cooperation. Soon after the start of World War II (1939–1945), the Allies launched the United Nations as an international organization to keep peace in the postwar world.

Before World War II, economic warfare was usually waged in concert with military force. After it, however, economic warfare became an alternative to military intervention. Both the United States and Britain used blockades during the two world wars to seal off enemy ports and thus bar neutral ships from bringing food and war-making material to the aggressor states. The Allies also blacklisted companies trading with the enemy.

During the Berlin Blockade (1948), which was one of the first major events of the Cold War (1945–1991), the Soviet Union denied the United States, Britain, and France access to the city. No food could be delivered to West Berlin. On June 28, 1948, the Western powers began airlifting supplies to the beleaguered people of West Berlin. The Allies countered with an embargo of goods to and from East Berlin. Negotiations led to resolution of the blockades on May 12, 1949.

In 1950, when the Korean War (1950–1953) started, the United Nations imposed sanctions on North Korea, a communist state. The United Nations attempted to raise the cost of being a pariah state by forcing it to adhere to behaviors deemed appropriate by the organization. Such punishment included imposing quotas on how much of a particular product could be imported or exported, embargoes on certain products to be sold to other nations, and boycotts on the products of enemy nations. The imposition of economic warfare sometimes results in the confiscation of financial assets and the withdrawal of financial aid and credit.

Sanction Frequency

The United States imposed seventy-seven unilateral sanctions between the end of World War I and 1990. During 1960, the United States imposed an all-out embargo on Cuba and the regime of Fidel Castro. In 1978, the United States unilaterally imposed sanctions on Libya in retaliation for alleged Libyan support of terrorists. The 1989 Tiananmen Square massacre of protestors by Chinese troops and other continuing human rights abuses prompted the United States to impose sanctions on China to pressure it to become more democratic. By 1998, one study suggested that two-thirds of the world’s population was subject to some sort of U.S. sanction. Many in the U.S. Congress regarded sanctions as a low-cost and relatively painless way to achieve U.S. foreign policy goals. The United States resorted to unilateral economic warfare to manage growing threats to U.S. national security and to prevent the development of weapons of mass destruction and the spread of terrorism.

The history of economic warfare shows that the nation waging economic warfare frequently suffers along with the target country. The price comes in the form of lost income. In 1990, for example, after the United States imposed an embargo on Iraq in response to its invasion of Kuwait, world oil prices rose steeply.

The record also shows sanctions work best when the sanctioning nation backs the sanctions with the real threat of force. This situation is also true when the target suffers high costs from the sanction while the sanctioner endures low and sustainable costs such as being shut out of markets. In addition, the preponderance of evidence indicates sanctions work better against relatively friendly states rather than against less friendly ones. Authoritarian governments such as that of Saddam Hussein in Iraq could resist multilateral and unilateral sanctions by finding alternate suppliers for much-needed weapons, food, and medical supplies.

Even for a great power, economic warfare in the form of coercion and punishment of a target state may not lead to the desired outcome. In this case, nations sometimes pursue other persuasive options, including a war of words; symbolic gestures, such as withdrawing ambassadors; violent confrontation; and negotiation.

The evidence, however, shows that if the circumstances are right, economic warfare may shorten conflicts by weeks or even months. Economic warfare is designed to bring about changes in national behavior. In an increasingly global economy, economic warfare will continue to be used to persuade nations to change their national policies.

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