4 things the world in 2014 shares with 1914

4 things the world in 2014 shares with 1914

There are striking parallels between the world in 1914 and 2014. While we may not see another world war break out, the various challenges confronting the world today and the risks they starkly hint at should serve caution to those seeking to do business in the international arena.

June 28th of this year marked the centennial of the assassination of Archduke Franz Ferdinand in the streets of Sarajevo, an event which many regard as the final spark that set off World War I. The bloody conflict lasted over four years, by conservative estimates left over 16 million dead and 20 million wounded (civilian and military alike), ruined empires and created nations. As one famous historian has remarked when describing the impact of the First Great War on the 20th century, “It is the calamity from which all other calamities sprang.”

The anniversary of the shooting of the archduke has witnessed a renewed interest in the conflict in both its causes and its impact. Some have argued that the present state of global affairs bears a marked similarity to the world then, while others seem to dispute these assessments as overblown. Yet, upon closer examination the past offers some important parallels to the present, which may be useful when assessing political risk challenges and opportunities.

1. Rapidly changing energy markets

Political sands and fortunes were not the only thing shifting on the eve of World War I. Energy markets were quickly changing as well with many developed economies continuing a shift from coal to crude. The war accelerated the dominance of oil for the next century, including then First Lord of the Admiralty Winston Churchill’s long-sighted decision to switch the British Royal Navy away from coal and onto petroleum.

On a macro level, the decision remade the global map by increasing the importance of oil-producing countries in geostrategic considerations. On a micro level, the decision transformed Britain’s economy as it moved away from Welsh coal and went abroad for petroleum. It also helped in the rise of the United States, which for a time dominated as a major exporter of crude oil. In 1914, the U.S. produced 266 million barrels of oil. By 1917, that amount had risen to 335 million barrels – fully 67 percent of the world’s supply.

2014 is witnessing comparably large changes in the global energy market. Many developed economies have continued to shift away from non-renewable energy sources. Owing to price and demand considerations, both developed countries and many that are rapidly developing like India and China have increasingly sought to look past crude. Yet, modern technology and the revolution of shale and fracking may not only illustrate the staying power of oil, but once again make the United States a net exporter of oil.

2. Great powers not acting all that great

In popular knowledge, World War I is often depicted as a battle of great powers. While this is certainly the case, perhaps ironically one contributing factor in the conflict’s duration and scope was some great powers having narrowly defined national interests that failed to correlate with their outsized economic global influence.

By some estimates, the United States surpassed Great Britain in terms of GDP as the dominant economic power by as early as 1890. Yet, the U.S. continued to remain chiefly concerned with events in its own hemisphere, effectively eschewing growing unrest in Europe as it relied on ‘dollar diplomacy’.

Once war did in fact arrive, ‘the war over there’ was to many Americans not a concern. The President of the United States, Woodrow Wilson, narrowly won re-election in 1916 in large measure on the promise not to intervene. Wilson’s promise and the vast desire of the majority of American people to not take part in the conflict proved to be untenable as the U.S. belatedly and decisively joined the war against the Central powers, effectively tipping the result of the stalemated conflict.

In 2014, the world is again faced with a rising global power with narrowly defined national interests. In the span of a few decades, China has risen to a position of considerable economic power and influence. Yet, the return of an age-old power to great power status is proving problematic as many accuse the country of being a ‘free rider’ in the international system, benefiting from an existing global order and its resultant stability while failing to broaden its interests and involvement to shore up that order.

3. Growing competition over trade, territory, and the seas

World War I occurred amid growing competition between Great Britain and Germany. Germany’s decision to expand its navy, thus competing with British dominance of the seas, is often viewed as an important cause in the outbreak of the war as it threatened British power projection that was key to British dominance of international trade.

Here too, 2014 has witnessed worrisome trends. With the Arctic opening up, great powers from the United States to Russia and China (among others) are increasingly laying claim to shipping routes and areas for energy exploration. The South China Sea has lately witnessed territorial disputes, as a more assertive China lays conflicting claims with its neighbor nations.

4. Rising powers challenging the status quo

The half century before 1914 saw both the unification of the Germanic speaking principalities into the country of Germany as well as the unification of the United States after the Civil War. Both countries became economically rising powers upsetting a balance of power long dominated by England and France. Yet, while the U.S. failed to broaden its national interests, Germany became increasingly assertive.

Here too, 2014 offers interesting parallels as rising powers such as China, India, and Brazil, seek to offer a decidedly different take on the predominantly western normative values that have dominated the last century.

When looking backwards towards the various causes that created the chasm of World War I, other modern trends such as ethnic conflict, resurgent nationalism, and changing definitions of sovereignty also become clear. Looking forward from 2014 on, the various challenges confronting the world and the risks they starkly hint at should serve caution to those seeking to do business in the international arena.

Categories: Europe, Politics

About Author

Sean Durns

Sean Durns worked as a research assistant to a former high ranking Pentagon official and the Director of National Security Strategies at a DC based think tank. His analysis has been referenced by a variety of media outlets including The Wall Street Journal, Roubini’s EconoMonitor, OilPrice, and many more. He holds a M.Sc. in History of International Relations from the London School of Economics where he focused on US foreign policy, security studies, and energy security.