The Ukraine War In Historical Perspective: The Economic Foundations Of Today’s War In Europe – OpEd
The war Russia is waging against Ukraine is unlike any the world is used to seeing. It stands out in terms of its scale and who is participating. Every war that ever happened since the Second World War ended has taken place in some economically marginal part of the world and never have two powerful countries gone up against each other. That is a rule in our era no war comes as close to defying as the Russia-Ukraine war. Ukraine, the staging ground, is technically a developed nation and its foe Russia is (traditionally) a major power. This makes the war not only atypical but also of tremendous international consequence. What is happening on the battlefields of Ukraine will shape the future of the world. Hopefully, that won’t involve wars like this becoming common. But what even made this war possible in the first place?
Wealth is everything. That is the first thing to know about the world. And while wealth is good for war, war is bad for wealth, at least in modern times. Before industrialization existed, wealth was based on favorable environmental conditions, access to natural resources and raw materials, and control over human populations. But now, wealthy nations are those that assembled these assets into a vast machinery of industry, infrastructure, and organization which we call development. This machinery is very hard to rebuild if destroyed, has to continually keep running to prevent things from falling apart, and much is fixed to one location. This all applies, at least, to physical capital. Human capital is less likely to be lost to disruptions like war. But people who are “developed”, so to speak, are less inclined towards violence and better able to prevent conflict from breaking out. As a result, an essential characteristic of today’s world is the distancing of wealth and violence.
The creation of this order was not a fast and smooth process. Its origins can be traced to the end of the Thirty Years’ War, when France emerged as Europe’s leading nation-state (leading Europe, in fact, into an age of nation-states, rather than fiefdoms and clans prevalent earlier). France’s advantage was being surrounded by geographical barriers that offered protection from outside threats. Later, Great Britain, an island nation very difficult to attack, became the dominant nation in the world. Now, that position is occupied by the United States of America, whose geographical location places it very far from the global firing line. All three countries previously spent centuries building internal stability.
In the meantime, other advancing nations also acquired the habit of peacefulness. One would think that, by now, European nations once part of the Soviet Union would have moved completely beyond the specter of war. But what happened to Ukraine shows this not to be so. This is not completely surprising. From historical experience, we know modernization can actually make warfare a bigger risk than before. The monumental scale of the twentieth century’s world wars was not possible in previous centuries. One reason is that, as stated earlier, wealth fuels war. But also, modernization endangers and reshuffles long-established social orders, so that it becomes a question of who controls the new wealth and opportunities.
The underlying causes of every war can never be disentangled from economics, no matter the stated reasons for the war. Even the religious violence of the Reformation in early modern Europe was, at its heart, a struggle between two socioeconomic orders, one of the Catholics in which prosperity is based upon acquiring wealth through any means and spending it and one of the Protestants geared towards building up wealth and potential through hard work and saving. A crucial tenet of the Protestant struggle was gaining independence from the Catholic Church’s financial domination.
A war can therefore only be understood by looking at it through an economic lens. That refers not only to whatever commercial and financial affairs were transpiring at the time but also the material foundations of the societies involved and how the war affected those. Let us see how this applies to the biggest war that ever happened, the Second World War.
Like today’s war in Ukraine, both the First and Second World Wars were highly atypical of their era. That is because, in the last two hundred years, almost all armed conflicts took place away from industrialized and economically prospering societies. Even the American Civil War was staged in a very backward part of the nation. What was different about the world wars was that they followed the wealth. The brutal fighting of 1937-1945 was not only fueled by full participation of every major economy but also centered on the world’s most economically important areas (with one critical exception, as we are about to see).
The bulk of the Second World War, in which Germany led the offensive, was situated across Europe, the cradle of modern civilization. Only a handful of European countries were highly advanced back then, but the continent’s numerous countries and cultures were all part of an integrated economic and social network that drove modern growth over the course of preceding centuries. The war also had a sideshow revolving around East Asia, wherein Japan headed the offensive. This region had just begun growing and developing like Europe. Japan was highly industrialized, as was its colonies of Taiwan, Korea, and Manchuria, making the empire a big power. China, site of some of the war’s worst fighting, had vast labor resources that Japan tried to harness. Many Chinese also immigrated to and powered growth in Southeast Asia, where Japanese expansion followed. East Asia was not exactly a major economic powerhouse yet, but immense potential was recognizable.
One country contained the remainder of the world’s massed productivity, and it was, by then, the most advanced and powerful economy of all, the United States of America. Its productive capacity was huge, far outpacing all of Europe and East Asia combined. And it was oceans away from all the fighting taking place across the world and from any real threat of attack. This proved ultimately crucial in shaping how the war and subsequent events unfolded.
What is beginning to emerge is a basic economic profile of the Second World War (and of the world at the time, it being a global conflict). Three global economic hubs existed back then, one general, Europe, one emergent, East Asia, and one advanced, America. WW2 was really two wars, one engulfing Europe, the culmination of longstanding divisions and tensions, and another engulfing East Asia, fought to decide how the region would be ordered as it rose. But war did not touch the most important economy of all, America, which became the biggest contributor to the war effort. This allowed the global economy to survive the war mostly intact and made America the top power since. No doubt, America’s remoteness from geopolitical rivalries helped it become the most advanced nation in the world, and rivalries long existing in Europe and the Far East could not ultimately be resolved without fighting, and in tandem. So it was inevitable that WW2, as terrible and tragic as it was, would happen the way it did.
The setting for WW2 is established, thus far. There is more to the war, of course, like what drove the participants to fight, factors determining the course of fighting, and ultimate worldview of those fighting. But our focus here is understanding the material foundations of the current conflict in Ukraine. One of the profound ways WW2 changed the world is that similar wars never happened again. But now Europe is having its first big war since then. It is evident that changes over time and differences across regions of wealth and development brought it about, but how?
Ukraine is a country lying at the intersection of two differing economic environments. One is that of the West, highly advanced and developed. The other in Europe’s eastern reaches revolves around a single nation, Russia. Countries of Eastern Europe occupy a grey zone in-between, but generally orient themselves westwards. Russia has always lagged far behind the West, the economy often struggling amidst stagnant human and material development. Authoritarianism, corruption, divisiveness, instability, and violence are part of the landscape. Russia, especially before recent energy booms, never even amassed exorbitant wealth like Spain and Portugal did when they went overseas for gold, spices, and slaves. And yet, since its imperial age began, it has always been among the world’s biggest powers, wielding global influence. Russia’s geography is less favorable to growth than that of Western Europe and North America, having a colder climate, less access to global waterways, and more diluted geologic deposits, but its advantages derive from being situated in a uniquely strategic environment, possessing vast amounts of territory closely surrounded by literally the majority of Europe and Asia. Within its dominion, therefore, Russia’s development took a different pathway than the West.
There is a reason World War 2 ended with Britain and France falling in stature while the Soviet Union ascended to become a superpower, even though the Soviets suffered vastly greater material and human losses in the war than Britain and France did. Nations like Britain derived their power and prestige from what they painstakingly built up and maintained over the centuries, usually with long-term investment. The havoc done to this by the war meant a decline from which recovery was slow. The basis of Russia’s power, on the other hand, was the land and people it controlled and had access to, which no temporary bout of destruction and sacrifice could compromise. Though tens of millions of the USSR’s people died, their loss did not represent a population collapse, because women, who are a society’s reproductive (and cultural) base, got through relatively unscathed.
These circumstances mean the natural cost of war for former Soviet countries is low and also make war a natural incentive for Russia. While nations making up the West are largely distinctive societies that built themselves up towards the pinnacle of human achievement, Russia’s fundamental pivot is to be one huge nexus of humanity. This creates immense opportunities that allowed Russia to get ahead without doing things same as the West, such as achieving higher output in some industries with less efficiency, but also challenges that Russia had to meet with iron-fisted rule, subjugation, and military might.
To this day, Russia and its neighborhood is a place marked by struggle for power and wealth and a new player is arriving into this field. With both NATO and EU on the advance, Western power is pushing eastwards, carrying with it the potential to topple prevailing sociopolitical orders. It is no wonder those currently holding power are so perturbed. Russia’s experiment with liberalization failed under Boris Yeltsin. Putin successfully took the country in a more traditional direction and encroaching Westernization poses a grave threat to his vision, particularly if Ukraine comes under Western hegemony, given its close ties to Russia and great strategic relevance. Any sudden crisis or opportunity, like rising petroleum and wheat prices in early 2022, could prompt Russia to do something dramatic. Though post-Soviet Russia is nominally a capitalist democracy, its economy is highly dependent on extraction and export of its abundant natural resources and political power depends on who controls this. So while Russia, as part of Europe, made it into the community of developed nations, the need for power over people and access to resources and fertile environments still drives it.
Ukraine has all these in abundance. But it remains one of Europe’s most backward countries, likely because its growth over the ages was conducted in a dispersed and extractive manner. It would be very unrealistic for Russia to invade Poland, given how highly concentrated infrastructure and capital is there. During centuries of being ruled, Ukraine was designed to be an ideal Russian colony, and that means something very different from, say, what Japanese rule designed Taiwan to be (one reason to believe China won’t follow Putin’s example). Ukraine broke free of Moscow’s grip amidst Soviet collapse, but as a resurgent Russia and expanding Western blocs polarized the region Ukraine largely comprised, a clash was made inevitable sooner or later. Then it becomes a question of whether Russia can mobilize its socioeconomic structures to outpace any involvement the West commits to. Creating an economic profile of the current conflict may allow its future trajectory to become clearly predictable, like how American victory in WW2 was foregone. For now, I can only give one long view.
The irony is that Western influence created Russia, beginning with the Rurik Dynasty. Western contacts and immigrants guided and enriched the country throughout the Tsarist era, being instrumental to its economic emergence. Even the royal family was largely of German ancestry. Now that Western influence is making its way back to lands once united under the Russian empire, one would think Moscow would welcome this. The problem is that Westernized elements dominating Russia before 1917 had tense relations with the Russian masses, which contributed to the arrival of the Soviet era that eventually erased Western presence and established the civilization of the East as an independent player on the world stage. Though communism ultimately failed, the whole situation could come around full-circle if the West returns to Russia’s doorsteps.
The West created the modern world and the West reigned supreme for centuries. This undisputed hegemony began unravelling when the First World War broke out. Now, the war in Ukraine is just the latest of countless examples of global discontent with the Western order.
Raja Shahzeb Khan is a historian and political analyst based in Islamabad, Pakistan. He can be contacted at [email protected].